It’s back—$4-a-gallon gasoline.
As oil prices rise amidst instability in the Middle East and, as the results of our “mission accomplished” in Iraq are tallied by people with Nobel Prizes on their resumes, it appears we have made several bad bets in the region.
It’s back—$4-a-gallon gasoline.
But given the energy-policy alternatives, it’s equally clear we should now double down on the oil war strategy, but this time go after reserves that aren’t so far away—Canada.
According to the Congressional Budget Office, the nation’s annual deficit will grow to about $1.5 trillion this year. If that figure sounds familiar, it’s roughly the amount Oprah’s surprise half-sister will get if the Queen of All Things Stylish coughs up, say, a quarter of her bank account for the new sibling.
Oh, and it may also be a familiar number if you remember what experts said was the cost of the war in Iraq, which financial gurus like Alan Greenspan admitted some time ago was entirely about securing our supply of oil.
Now if you’re good at math and tend to multiply everything times two (for example, when my wife goes shopping and pledges not to spend more than X, I automatically multiply that to 2X in my mind and pray it doesn’t go to 3X or 4X), a figure twice that will sound familiar as the price tag of our Iraqi oil shopping spree.
"The Three Trillion Dollar War: The True Cost of the Iraq Conflict” by the Nobel-Prize winning economist and Columbia professor Joseph E. Stiglitz and Harvard University's Linda J. Bilmes arrives at that figure by including unplanned expenses like the cost of treating disabled veterans.
OK, so the Iraqi thing hasn’t worked out so well. Oil production in Iraq is half what it was before the war and the price of oil is 3X what it was in 2003 when we went, uh, “shopping” over there.
You may recall in 2008 it went as high as 6X, a phenomenon that also happens when my wife shops in NYC instead of our modest Santa Monica neighborhood. And I doubt the “mission” we had in mind when President Bush declared it “accomplished” was our current national debt of over $10 trillion, exacerbated by the high cost of oil and the credit card war to get it.
But perhaps the basic premise made sense, like the idea of betting your kid’s college fund on red at the roulette wheel to afford that Ferrari. Keep doubling down each time you lose and at some point the darn ball will fall in a red slot, right?
So applying that infallible Las Vegas approach to our energy policy suggests we should invade Canada next. After all, it has lots of oil buried mostly under the empty spaces on the map named, I’m guessing, after some 19th century explorer’s wife (“Alberta”).
Second, we won’t need costly C130s to carry the troops and tanks, because it’s right across the border from our empty spaces in Montana. We can just load up a few SUVs and drive up there and start loading up the oil. And remember they mostly speak English in Canada (there’s no oil in the French-speaking part).
Oh sure, some finicky environmentalists will complain that the tar sands in Canada will consume 2X or 3X the amount of energy to extract and refine as we will get in useable fuel energy. And they’ll whine about greenhouse gases, toxic wastelands and the extinction of polar bears, but with all the all the money we save we can buy, say, Greenland and enjoy Nature there (I may have that wrong—isn’t Iceland actually green and Greenland covered in ice?).
Of course, energy experts have pointed out that $3 trillion would have retrofit every major building in America to cut its energy consumption as much as 40 percent (as the Empire State Building did recently) or build a network of natural gas or hydrogen fueling stations for a new generation of cars that run on clean fuels. But like the roulette wheel example, there is the immediate thrill of a bet on red rather than a bet our kid will actually complete four years of college and get a job.
Terry Tamminen, former secretary of the California Environmental Protection Agency, is president of Seventh Generation Advisors and an operating partner at Pegasus Capital Advisors. He is author of "Cracking The Carbon Code: The Key to Sustainable Profits in the New Economy." Palgrave Macmillan)