Saturday, May 26, 2007

Iran, Oil, and Human Nature

For three hundred years, the human population of the Earth has been exploding while the numbers of many species around the world have been plunging. We know that a large number of species have simply disappeared—and yet I find it odd that there are very large numbers of people who have no curiousity about why such things are happening or if they have any bearing on their own lives or the future of their children.

We don't seem to have a good understanding of why human population starting growing in the 1700s but that rise was nothing compared to the rise that began in the 19th and 20th centuries. To some extent, the rise in human population in the last two hundred years have been driven by new technology but that technology often would not have been possible without finite, nonrenewable fossil fuels like coal and oil. The green revolution, for example, would not have been possible without the use of fossil fuels to make fertilizers.

But human nature is funny. When things are good, memories get very short. In the United States, there are many places in the far west where things were good for a time and memories were very short. I mean gold mining towns, logging towns, fishing villages and so on. During the good times, we forget that gold, trees, fish and a number of other resources are finite. The far west is littered with the remains of ghost towns and signs of old settlements that came and went in a matter of a few decades, or just a handful of years.

For some time, we have been behaving as if carbon-based fuels are infinite or at least some sort of renewable resource. They aren't. At least not the kind we keep pumping or digging out of the ground. If we're lucky, we may eventually be able to run a world economy on renewable resources. But that would require taking a good hard look at where we are and how susceptible we are to our own human nature and how to get around our own shortcomings. And, oh yeah, a lot of research.

Now the Iranians are like everybody else and they're suspect to the same foibles of human nature. Here's an AP story worth thinking about in the International Herald Tribune:
Iran's decision to hike gasoline prices has thrown new light on what could be its most-entrenched problem — a vulnerable, highly subsidized economy, and the political dangers that poses for its populist and hardline president as he faces international pressure over the country's nuclear program.

Even after Tuesday's decision to raise gasoline prices from 800 rials per liter to 1,000 rials per liter (0.059 euros/liter to 0.074 euros/liter, 30 cents/gallon to 38 U.S. cents/gallon), Iran has some of the lowest gas prices in the world. Those rock-bottom prices have led to unnaturally high demand and have saddled the government with fuel subsidies that cost billions of dollars a year.

Iran has any number of economic vulnerabilities, as do most nations around the world, the United States included. In Iran's case, there are vulnerabilities that should be on the negotiating table if the United States is serious about diplomatic breakthroughs (and there are times I doubt that the Bush Administration is in any way serious about any kind of diplomacy unless it's to put off a problem until some later time). Iran has an aging oil infrastructure in bad need of repair and updating. I've talked before about this as a possible venue for lowering tensions if Bush were to choose to do so.

But let's talk about human nature. Iran is very much going down the same path that we did in the 1950s when we had huge oil reserves and we had the notion that the age of oil would last a few hundred years and, therefore we had nothing to worry about. We all remember very cheap gasoline and cars that got ten miles to the gallon. In fact, several of the oil producing countries in the Middle East act as if the oil will last forever and in places like Saudi Arabia, gasoline too is subsidized. I suppose it's human nature to enjoy the good times—while they last. But we're not talking about boom towns of 6,000 people that later become ghost towns because everybody moves away; we're talking about a world of over 6 billion people, that if it doesn't start getting more realistic and pragmatic in its thinking about energy, could be in serious jeopardy.

To be honest, Americans haven't learned much from their own experience with being a major oil producer while once upon a time enjoying the luxury of cheap gasoline (make that twice, if we include the oddly low and deceptive prices of the 1980s and 90s). It's human nature to have short memories, and politicians tend to have even shorter memories. But there are Americans thinking about these things. And Europeans. And others. Of course, it's not clear that the oil producers of the Middle East are thinking about these things, or at least those in charge. I read various articles that suggest sometimes that they do think about these things and yet there are still those odd subsidies that will soon be difficult to maintain for some oil producing countries. That Iran is working to begin reducing the subsidies for gas is actually a good sign. In some ways, it's more than we're doing. If, as some argue, we're in Iraq because of oil, then we have been supporting our oil economy with over $500 billion in direct subsidies since 2003. And that doesn't count the oil subsidies that are already acknowledged.

It's human nature not to want to think about these things. But it's a flaw we can no longer afford.

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Anonymous S.W. Anderson said...

Indeed, the cost in money and lives of being assaulted by enemies from or in the Mideast and having to undertake military actions there periodically are directly linked to our oil addiction and energy attitude.

5:20 PM  

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