Wars for oil. The Iraq war, the Congressional Budget Office( CBO) estimates, will cost the United States economy $2.4 trillion, with negligible return- even if the Obama administration had committed even more money, lives and years to the conflict. That does not include nearly a billion dollars in benefits and medical care to veterans.
Those (habitually low CBO) estimates do not include the monumental cost in lives, and the complete decimation of Iraq’s social, political and economic fabric, nor does it include a dime of what is spent in a lassaiz-faire prosecution of the so-called war on ISIS. From Ukraine and the downing of Malaysia Airlines Flight 17, price fluctuations that drive recessions, unrest in Venezuela, the Fracking controversy, XL Keystone pipeline, Gulf disasters, corruption, the risk of an oil pipeline rupture that could imperil the Great Lakes and a Canadian town nearly incinerated in a massive wildfire, oil has hardly proved itself as a stable commodity much less a partner in the global economic equation.
BP actually made a profit from the Deep Water Horizon spill disaster, offsetting fines and lawsuits. States struggling to meet needs of its citizens or upgrade infrastructure pay hundreds of millions and billions in some instances to oil producers and refiners. Louisiana, facing a &1.6 billion deficit this year awarded ExxonMobil’s upgrades to its Baton Rouge refinery $119 million. ExxonMobil posted a $41 billion profit last year. Taxpayers shelled out $1.6 billion in tax breaks for a Shell petrochemical refinery, despite the state’s own $2 billion budget shortfall. Shell, even with the down turn in oil prices, posted strong profits of roughly $20 billion year over year.
That volatility is not entirely market driven-simple supply and demand- but is effected by political and corporate manipulation and the emotional rollercoaster of speculators and investors. that may be good news for shrewd hedge fund managers and professional investors it is calamitous for working families, fixed incomes and consumer segments of the economy. With oil prices poised and predicted by conservative analysts to more than $70 dollars a barrel, the reciprocal impact to an already fragile domestic economy could produce a further burden on the already struggling job market. That volatility was always there.
In a piece by Byron King, writing for The Daily Reckoning, titled, “Investing In Oil: A History” King noted that, “in the Pennsylvania oil patch during the Civil War… Too many fiat dollars led to too many investment boondoggles, too many oil leases, too many oil wells, and too much production. Drillers produced oil at rates far beyond the ability of the economy to absorb. Oil prices fluctuated from an early $50 per barrel to about 10 cents within one six-month period. And the derrick-floor solution to low prices was, sad to say, more production.”
That sort of volatility is anathema to a stable economy, but indispensable for robber-barons.
By contrast the only volatility real in the renewables energy sector has been due to interference through government and media surrogates from oil and coal interests. In fact, according to a 2014 Department of Energy report, DOE’s investment in renewable projects significantly outperformed capital investments made by private venture capital groups. While the venture capital record held an average 40% failure rate, the DOE’s failure was only 2.28% from a portfoli0 of more than $34 billion dollars.
In 2004 global renewable energy investments topped out near $40 billion Dollars. In just 4 tears that number more than quadrupled to $171 billion, and peaked in 2011 at $279 billion. While 2012 and 2013 saw a year over year decline, that decline was driven by innovation and cost reductions. In each year, 80% or more of that cost was borne not by taxpayers, but by private sector investment. Compare that to between $15 and $21 billion in annual oil subsidies by the US government alone.
It is hardly about the Free market. Fossil fuel leaders like The Koch Brothers fund dozens of groups, attacking renewable energy policy and investment through groups like ALEC, 60 Plus Association, Institute for energy research and more. In fact, groups like The Heritage Foundation and Heartland Institute work tirelessly against free market competition when it comes to renewable energy with pretend experts like Stephen Moore and others.
Between 2003 and 2006 alone Fossil Fuel lobbying groups spent more than $58 million, predominantly to Republican candidates and politicians. Since the 2008 election oil companies spent $761 million on lobbying, and just under 124 million on campaign contributions. While Republicans decry quid pro quo favors to donors for Hillary Clinton’s charitable foundation, Big Oil reaped staggering benefits or some $20 Billion in tax breaks amid 1/2 a trillion in profits. And so much of those domestic profits are sheltered in overseas tax havens that the American taxpayer must shoulder an additional $1300 dollars in state and federal taxes.
But just how stable is the renewable market? A 2015 Goldman Sachs report predicted that by 2030 ” renewable sources could account for as much as half the world’s electricity production-but technology innovation, falling costs and accelerating demand are not the only drivers. Equally important is interest among a growing base of investors who are drawn not only by sustainable growth opportunities but also financial innovations that make investing in renewables easier and more attractive.”
Sachs, hardly a liberal or progressive bastion-ask Ted Cruz’ wife-set a goal that would nearly double their own financing and investment in Renewables, in less than 20 years. Meanwhile oil, which became a catalyst in the Ukrainian and Crimean détente between the US and Russia continued its rollercoaster ride and victimization of the global economic market. The plunge last year decimated the Fracking industry in the United States and helped drive unemployment. It is a reactionary market plagued by a host of variable pressures, from war and terrorism to interest rates and, as we have seen, the propensity for the fossil fuel industry to corrupt the political process, free markets and the media. China has already outpaced Europe in renewable energy investment.
So the question becomes in an increasingly integrated global economic environment whether or not sunset energies like fossil fuels, that is fuels with a finite life expectancy, should continue to be a burden on markets? Wars, terrorism, emotion driven speculation and other factors affecting the price and availability of oil maintain a system of volatility that at some point threatens collapse or catastrophe under a system addicted to oil.
There is no such volatility in the clean renewable energy market. Wind blows everywhere on the planet. The sun shines everywhere more or less equally. In fact, the price has dropped precipitously for green renewables, owing to innovation, greater efficiency in solar and growing demand. Both India and China have set very aggressive emissions reduction standards and renewable energy targets, goals mischaracterized or worse by the Fossil fuel industry via media surrogates such as Rush Limbaugh, Mark Stein, Sean Hannity and others. They pretend that the US should do away with emission standards because emerging markets like China and India are not curbing emissions, which is factually and provably false.
The fact is, despite being under-reported or unreported is that green renewable energy is here to stay. In a recent article for The Guardian, Paul Stephens, a fellow at Chatham House think-tank and one of Britain’s most influential energy experts warned that, “International oil companies such as Shell and BP must completely change their business model or face a “nasty, brutish and short” end within 10 years.” But the reality to that short and brutish end portends a global economic catastrophe, or at the very least a period of extraordinary economic chaos, including war and unrest. That means consumers and voters must also be informed, engaged and empowered to benefit from the unstoppable shift from fossil fuels and coal towards stable green and sustainable sources of energy.