Remember peak oil? This was supposed to be the time when the earth’s oil supply began to run dry. Green energy buffs told us that one reason for subsidizing expensive green energy boondoggles was that the oil would soon be gone and we had to have something to put in its place.As Aragorn might have put it if he was in the oil business, “A day may come when the hydrocarbon supply of men fails, when we forsake our internal combustion engines and break all pipelines and refineries, but it is not this day. An hour of woes and solar cells, when the age of oil comes crashing down! But it is not this day! This day we frack! By all that you hold dear on this good Earth, I bid you drill, Men of the West!”These days we hear much less about peak oil, and the energy buzz is about the new “golden age of oil” instead. All over the world, from Madagascar to Brazil to Cuba to the South China Sea, oil (and gas) is being discovered in huge amounts in places no one could get to before. Sorry greens, fossil fuels still reign. But what, asks Michael Levi, a former WRM colleague at the CFR, does the golden age of oil mean for the environment? In our happy fracking and drilling, will we bring on “climate doom”?Michael makes the point that the golden age of oil isn’t necessarily going to make a big difference to the CO2 numbers; data from the International Energy Outlook shows that low oil prices don’t make a big difference to the carbon trend. Here’s the graph Michael posted:
Lots of oil intuitively means lots of emissions. How, though, does this shake out economically? The likely impact is smaller than you might think, in part because oil is only part of the emissions picture, and in part because oil consumption is driven by a lot more than how easy the fuel is to produce.
He moves on to raise the key question: what will an era of abundant oil, particularly in the U.S., do to the politics of climate change?One variable we would add to his analysis: with more regions in the U.S. benefiting from the oil boom, there will be more political clout for the energy lobby in U.S. politics. States like Ohio, Pennsylvania, and ultimately even New York might join Texas, Oklahoma and Lousiana as pro-extraction states on some issues, for example. When oil is abundant, the urgency on climate change influence dissipates, and when oil lobbies grow more powerful, the greens will see their agenda evaporate that much faster.