Oil price changes politics forever


Oil is the miracle that drove the twentieth century. It enabled an agricultural revolution that has doubled farm productivity since the Second World War. Incredible plastics have delivered cheap appliances, packaging, toys, furniture, shoes and synthetic fabrics. Cheap energy has enabled the globalisation of trade. All that is behind us.

Oil is not the only resource that has peaked. Australia, the United States, China and India now use fresh water faster than the supplies are replenished. Aquifers are falling, rivers are drying up, lakes are shrinking. New dams straddle dry rivers. We face peak fish and peak food.

The constant growth and permanent innovation that we have taken for granted will not continue.

Businesses that depend on endless expansion will fail. Financial institutions are already in crisis.

This will permanently alter the political landscape.

A century ago, labour movements challenged the entrenched power of capital and social democracy movements were born. Over the last fifty years, political thinking has converged around a supposedly benign economic rationalism that keeps us all comfortable, as long as governments do not interfere too much with the market.

That belief system has reached its use-by-date. The labour constrained economy is giving way to a resource constrained economy. We have reached the limits of a finite planet.

This is not some high faluting theory to be discussed over red wine after dinner. This is the practical reality for every school council, every family and every local, regional and federal government.

If you meet a political candidate who believes that housing estates designed around motor cars can solve the housing crisis, that new roads will improve traffic congestion or that regulation can bring down petrol prices, you have come face to face with a dinosaur facing extinction. Anyone who suggests that climate change can be solved by corporate investment in new technology or that growing algae or using sunlight to convert water into hydrogen will solve the fuel crisis, is dreaming and has not woken up.

To be sure, new sources of energy will emerge to power the society of the future, but they will never be as cheap as oil. Certainly we will learn to harness local sources of energy and water, process our waste and grow our food locally, but that will require new attitudes to work and consumption.

We will have to reduce our expectations, learn to fix things instead of throwing them away and clean up after ourselves.

The people implementing these practical solutions now are the leaders of the future. Find and follow them.

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