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What should the next President do about oil prices?
By Lauren | May 16, 2008
Continuing with my series on ethical issues facing the next President, let’s turn to a subject that has everyone talking: the skyrocketing price of oil. Oil prices have doubled in the past eight years, making it very expensive for anyone who has to drive any distance (and most of us do every day) to get to where they have to go. Not only that, the rising price of oil is affecting the price of everything else that has to be shipped, so consumers are getting clobbered not only at the pump, but whenever they buy food, clothes, and other necessities.
The Presidential candidates have various proposals to lower the price of gasoline in the short term, and President Bush is in Saudi Arabia right now, pressuring the Saudis to pump more oil so prices will drop. But before we start working to lower oil prices, we need to look at the long-term consequences. Whether we want to admit it or not, there’s a finite amount of oil on the planet. We may not have found it all yet, but someday the well is going to run dry and we don’t yet have any viable technology to replace petroleum as our primary energy source. And we don’t just use petroleum as fuel - it’s a critical ingredient in plastics which, in turn, are an essential ingredient in fuel cells, solar energy panels, and a lot of the other technology that we hope will eventually help us reduce our petroleum use. If we run out of oil, those energy alternatives may prove to be completely unworkable. I’d love to believe that technology will solve this dilemma, but until it does, we can’t just assume that the solution will magically appear.
In other words, oil is an extremely precious and non-renewable resource. If we really looked at its immediate importance, future scarcity and the lack of readily available alternatives, we might conclude that $3 is much less than a gallon of oil is actually worth. (They’ve been paying twice as much in Europe for years.) Is it ethical to artificially lower the price of oil today, encouraging people to use more of it now so that future generations have to struggle with scarcity issues? Then again, if we can find a way to relieve people of the economic difficulties that they’re facing today as oil prices soar, is it ethical not to use it?
Would your Presidential candidate have the courage to take this issue on? If so, what would s/he do, and are you comfortable with that? You decide.
Topics: For Actuaries, Presidential Campaign, Social Ethics |
May 16th, 2008 at 1:18 pm
I’d be curious to hear your ethical take on the concept of generational accouting as noted in BU economist Larry Kotlikoff and Scott Burns’ book The Coming Generational Storm. I think there are similarities with the ethical question you just posed since the younger generations of today will be hit hard by this lapse. Additionally, the past methods of “growing” to a solution to the economic problem runs against the scarcity and environmental issues of oil and food production and global warming etc…
May 18th, 2008 at 2:21 pm
Hi Chris,
Sounds to me as though you’ve chosen the topic for my next Presidential election post. Thanks for writing in!
Lauren