You shouldn’t be surprised about gas prices

For those of us who watch global events, sometimes obsessively, it is no surprise gas prices are the highest they’ve ever been in some places. For those who are shocked that gas prices are so high and think this is temporary greed by your local gas station cartel, let me burst your bubble. Over the next days, months, years your gas prices could go up because supplies could be cut off from the markets. Greed is merely an opportunist exploiting these supply fluctuations.

Let’s start where the pop news outlets are actually covering events, Iraq and the rest of the Middle East. Today one of Iraq’s major oil refineries was attacked by a group called ISIS and the Iraqi government is now asking for U.S. airstrikes. There is worry of Iraq breaking up if Baghdad falls, which could happen soon if worst case predictions are correct. The situation is to a point the UK and US are asking Iran for diplomatic assistance in solving the growing crises.

Okay, it won’t be one event that pushes oil prices sky high and causes a recession that makes 2008’s look like a wonderful golden age. The death will be from a thousand cuts, Iraq just one potentially deep cut. Take Saudi Arabia, actually the Islamic Extremists would like too and that would mean Saudi oil supplies removed from the global market place. Syria’s civil war is becoming Iraq’s civil war and it could become a regional, sectarian conflict that stops the flow of oil from the Middle East. Hey, just get oil from somewhere else, right? Yes, but everyone is scrambling for that oil too pushing demand/prices up.

On the African Continent there is oil, but where there is oil there is also growing insurgency and civil war. Libya could be heading towards civil war which would cut supplies to Europe and the eastern part of Canada. Algeria, Mauritania, Mali, Niger, Chad and Nigeria all have various levels of insurgencies that threaten regional stability and the flow of oil from Western and Northern Africa. The oil producing region of Central Africa is already suffering civil war in South Sudan, which might have extended into the Central African Republic and parts of Uganda.

Not just the oil producing areas of Africa are threatening you oil supply but also threatening the shipping routes. Somalia’s al Shabab has taken to attacking Kenya’s coastal region. The British have already ordered their citizens evacuated from Kenya while al Shabab is vowing to punish Kenya further for its role in Somalia huntin al Shabab’s leaders. If Kenya and Ethiopia withdraw forces from Somalia it could give al Shaba the means to strike shipping lanes again. On the opposite coast of Africa, around Nigeria piracy has exploded in recent years which threatens the flow of Nigeria oil. Also Nigeria’s oil doesn’t always reach the ports from theft and corruption. Egypt too isn’t exactly stable and that could jeopardize pipelines, oil loading facilities and the Suez Canal.

Asia’s oil producing regions extend beyond the Middle East and they to have growing tensions and potential for conflict. The incidents between China and Vietnam, Japan, or the Philippines over potential oil producing areas all have the potential to spark a global conflict if mismanaged by anyone involved. Hopefully diplomacy wins over the Nationalism, greed and histories of past offences against each other. Central Asia also has potential for oil conflict with disruption of supplies and the corresponding price hikes. The Caspian Sea has huge oil reserves but is bordered by dictatorships, the Afghan conflict and a little further away the Pakistani insurgency. Difficult to pump oil to ships in the Indian Ocean when the pipelines have to pass through these conflicts.

On the European side of the Caspian Sea the oil would flow through the Caucuses and the Black Sea. With Russia using salami tactics to snatch Black Sea ports and regions where oil flows from or through to the sea. This brings me to another point, expect higher natural gas prices too, Moscow has cut pipelines through Ukraine to Europe. If the pipelines stay closed until winter Europe will be scrambling for alternative sources, which will affect everyone’s costs. One of these alternate sources for Europe is the Eastern Mediterranean Sea, with growing tension with Israel and Greece on one side and Turkey and Egypt on the other and the Syrian civil war caught in the middle.

Norway recently announced it is nearing the end of its oil reserves and may need to make massive cuts in the generous social welfare programs government has been spending oil royalties on. Searching the Arctic for more sources of oil to keep the inevitable away a little longer would put Norway in a tense situation with Russia. Russia hasn’t started heavily militarizing its claimed Arctic territories to protect polar bears. All Arctic bordering nations that make a claim on Arctic resources are being looked upon as threats by Moscow’s elite these days.

Venezuela is another oil producing country that is seeing waves of protests, instability and a regime crackdown on opponents. The oil that has been propping up the current government is no longer enough to satisfy a people who are not seeing prosperity and democracy as promised. Whereas previous situations in Venezuela might have been a few right wing nutters, now former supporters of the current regime are realizing the mistakes made.

Even in North America growing tensions over oil production or shipping could get out of control. If local concerns are ignored or government and industry bully people to get projects through a volatile situation could result and even explode into violence. Everywhere in the world where fossil fuels are abundant there seems to be tensions, violence, human rights abuses, and some form of extremism to go with them. Add to these the disruptions nature can cause with hurricanes, earthquakes, volcanoes, tsunamis, et cetera and we shouldn’t be surprised gas prices are so high. In fact we should be wondering why they’re so low.

Even in conflict zones or disaster zones not directly affecting the price of gas there is an indirect influence on price. Those NATO air patrols in Eastern Europe don’t fly on diplomatic communiques, the armies fighting throughout Africa don’t run on solar cells, and the Coast Guards watching each other in the West Pacific aren’t running on whale blubber. The entire global economy runs on fossil fuels, as does every military, and relief effort.

Humanity has two choices as I see it:

The first is to stop complaining about prices and accept the costs in blood and treasure for the decadent lifestyle we live. Accept ten cents a litre more and the loss of jobs, prosperity and even lives that could go with it. It is a perfectly acceptable thing for foreigners to die in battle, terrorist attacks, and the neighbour down the street committing suicide after losing his job, so long as we never have to make the changes that could prevent those deaths. We can keep acting like the addict in denial with jobs and economy as the lies we tell ourselves to justify what is happening in the world.

or

We could take the second, more sustainable option and have a radical, cold turkey break from fossil fuels. The short term economic pain of this would be worth it for the long term health of humanity. All oil could be considered conflict oil, and are we so psychotic as a society to keep sacrificing human life for short term gain? This is an opportunity to create new cities, economies and technologies, because the current boom bust cycle tied to oil prices is holding us back.

*Note: It’s late and I didn’t edit this very well

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2 comments on “You shouldn’t be surprised about gas prices

  1. Ge.Ma says:

    Well-done article. I would only add that, in addition to the aforementioned crises around the world, the prices of gas and oil, especially the latter, are undeniably controlled by a cartel of exporting countries. Russian or Saudi Arabian economies depend vitally on this, and therefore price reductions are very unlikely to take place (unless one wants to commit suicide). As for solutions, I fully agree with your opinion about the self-destructive effort to have a short term gain at the expense of everyone’s life.
    I’ll re-post it on my blog.

    Like

  2. kbeezyisviral says:

    Wonderful article. Regardless of the edit; this was needed. I would really appreciate it if you would check out my Facebook page: https://www.facebook.com/kbeezyisviral

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