The price of oil and the century-old cheap ride

The screech of brakes outside my house often sends me scurrying to the porch. The four-way stop at a nearby corner is often the cause of the smell of burnt rubber and worn brake linings that greets my nose.

Unfortunately, there is no worrisome screech of brakes as the global economy quickly slows as a result of rising oil prices. A loud screech might actually wake some of us up to the fact that we’re entering tough times.

Thanks to meticulous book-keeping records re oil prices, we know that we’ve been on a wonderfully cheap ride for at least 110 years. From 1865 to about 1975 the price of a barrel of oil was under $5. Now it costs, on average, 20 - 30 times as much and continual increases in price per barrel are likely for the next several decades.


[Please click here for more oil facts and figures]

While the family wallet expanded in many places around the world, particularly in Canada, USA, Europe and some oil-producing nations, and material goods went from experimental (early automobiles) to exciting (the first colour TVs) to excessive (remember the Hummer?), generations of people learned - what seemed to be inevitable truths for many - several adages:

hard work will lead to prosperity

economies will grow annually and forever

bigger is better

Earth’s resources belong to industry

a free market economy is the way up

and sustainability... not so much

... and so on. (Please, chip in your own ideas about other lessons learned during the era of cheap oil).

Today the price of oil stands at $99.81 and our Canadian Prime Minister is in China trying very hard to keep our resource-based economy alive (by, in large part, selling tar sands oil to Asia), thereby keeping Canada’s petro-dollar, healthy lifestyle and dreams afloat.

Since oil is so integral to our economy’s success, i.e., here in Canada, the nature of the line that represents the price of oil on the graph above seems to me to suggest what our future holds. In fact, I would predict violent shifts and ups and downs in our economy, uncertainty related to prospects for jobs and wealth, increases in costs for food, clothing, shelter, transportation, communication and recreation, and higher prices in almost every other area of life that we’ve slowly grown used to since the 1860s.

Though I don’t think we’ll hear the actual screech of brakes, we’ll continually feel, as if we’re riding in an aging car, a significant difference in the ride over the next few decades.

We’ll certainly hear many howls of discontent, e.g., from those who have grown used to many privileges, creature comforts and material goods over the last many decades of growth). We’ll hear more abrasive and often short-sighted calls for deep cuts in public spending, especially from those who think only the public sector is at fault and that the private sector has no need to sacrifice more for the sake of others around us who will need support in these tough times and more ahead.

Over the next number of years, as we transition from an “oil-based, economy first” society to a more sustainable one, I look forward to hearing admissions from Canadians from coast to coast that less is actually more, that by living small one is able to live more fully in intellectual, social, emotional, spiritual ways, etc.


[“Live small, get out of the LIVE BIG clamp”]

Truthfully, someone is bound to learn in the next year or so that they are actually a slave to their house or car and other material goods, and the ‘must-have’ lifestyle and associated debt is giving them stomach indigestion!

A loud screech might be needed for others, and it will come.

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Please click here for more about ‘live small and prosper.’

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