Burying our heads in the sand on oil

The oil price crisis is one we should have seen coming - because an oil crisis has come around at least once every decade for the past 70 years.

The solution every time should be simple: reduce the demand for petrol by significantly improving non-automotive infrastructure; build more extensive public transport with plenty of capacity and high frequencies while also providing safe and attractive routes for cyclists and pedestrians.

But for as long as we’ve had oil crises, we’ve done the exact opposite. We have searched desperately for more supply while virtually ignoring ever-growing demand. Our never-ending search for more oil has only continued to deepen our dependence on petrol.

And now, we’ve taken yet another step in the wrong direction by reducing the petrol tax. This move is worse than the cries to drill more that we heard during the last oil crises. When the supply of fuel is the root cause of rising prices, lowering the cost of petrol only increases demand when we should be working to curtail the use of oil.

The new three-month reduction of the fuel tax, in total a loss of revenue in the range of $350 million, is enough to fund free public transport for all of Auckland for nearly three years.

When we should be doing everything possible to get people out of cars, we’re doing everything we can to make those in cars more comfortable at the pump.
 

When oil was rationed during WWII, we could have heeded the warnings over oil dependence and weened ourselves off petrol while cars were still in their infancy. Instead, we built suburbs, locking generations into car dependence.

In the 1970s, the Organization of Petroleum Exporting Countries (OPEC) flexed its muscles and embargoed oil to several western nations, resulting in global fuel supply shortages and skyrocketing prices. We could have washed our hands of petrol but instead imported millions of higher efficiency German and Japanese cars so we could keep driving.

When Iraq invaded Kuwait in 1990, the world was shocked by the sudden spike in gas prices. Rather than expanding public transport, we gritted our teeth as the bills racked up, spent a fortune sending armed forces to the Middle East and celebrated relief at the pump by inventing and binge-buying gas-guzzling SUVs in 1990, the same year the Gulf War ended.

In the late 1990s, oil prices once again started a steady march upwards. As prices rose by the month, we could have taken a pragmatic long-term approach and worked to make cities denser and serve a broader range of needs without being dependent on a car. We could have reinvested in our neglected public transport systems, giving access to cheap transportation to millions of people. Instead, automakers introduced hybrid vehicles to make it feel like the tide was turning on oil dependence.

Those with enough money bought ever-larger vehicles with increasingly worse gas mileage. We again feigned shock when fuel prices suddenly shot up between 2007-2008 amid the Global Financial Crisis. This new crisis could have been the big one - the turning point amid a global upheaval where we could have let go of cars and embraced more active and equitable modes of transport.

Our time to head off this latest oil crisis was 70 years ago, then it was 50 years ago, then three decades ago or even 15 years ago. But it seems we once again are destined to bury our heads in the sand and wait for prices to settle down once more.

But again, industry stepped in. We dug deeper into the Earth’s crust, injecting massive quantities of chemicals deep into the ground to extract increasingly less accessible and lower quality oil.

Then, in 2014 the floor dropped out of the oil market. Extremely dirty yet surprisingly cheap fracked and tar sands oil flooded the market. OPEC retaliated and opened the oil taps. Prices plummeted, and we dropped all the pretence of a “green vehicle revolution” favouring massive SUVs and trucks - with manufacturers even dropping the production of smaller two and four-door cars in some major markets.

Here we are today - oil prices on their way back up after nearly a decade of insanely low prices. We’re met with international conflict, a climate crisis, and a potential global economic crisis.

Our time to head off this latest oil crisis was 70 years ago, then it was 50 years ago, then three decades ago or even 15 years ago. But it seems we once again are destined to bury our heads in the sand and wait for prices to settle down once more. If we ignore history again, we face our way of life also becoming history.

Those with the power to do so must recognise the significance of this moment and be willing to make the difficult decisions now so that our children won’t have to spend a lifetime moving through one oil crises after another.