Investment rags exist to fetishize the bottom line. They promise insights and information that can make their readers rich. People on the hunt for lucre need a clear-eyed view of how the world works — the better to exploit conditions for profit.
That’s the progressive case for monitoring the financial/business press. It’s true, as far as it goes, though financial journalists are as susceptible as any others to hype, as their generally euphoric reaction to the dot-com bubble shows.
Business publications are also worth reading because they offer a window into the minds of captains of industry — the people who yank the global economy’s levers.
Forbes recently published a special issue titled Energy Outlook 2007. It’s worth a look.
I haven’t had a chance to plow through all the pieces yet. But the opening overview is loaded with bracing tidbits. For example:
A world in search of cheaper-priced energy has turned to natural gas, and, to a lesser extent, coal and nuclear power. It has not, for all the hype, taken in any great measure to alternatives such as ethanol and other biofuels or to renewables such as solar, wind and wave power. Their share of world energy supply has stayed barely changed over the past three decades, at around 11%.
Coal’s share of global energy supply has held steady at about 25 percent, but total output has nearly doubled. How is that possible for a filthy fuel that leaves ecological and social devastation in its wake? “It’s the consumption, stupid,” as the article’s title states.
Simply put, the world’s appetite for high bang-for-the-buck non-renewable energy sources continues unabated. Industries have become more efficient on a per-output basis, but those gains are more than offset by ever-surging production.
Forbes doesn’t see that changing much: “With a world seemingly unwilling to cut back its energy demand, it remains likely that the fossil fuels of today — oil, natural gas and coal — will remain the primary fuels of tomorrow.”
What about climate change? Disturbingly, the special issue barely mentions it. And when it does, it’s not a big deal, because technology holds the trump card:
The good news is that technologies that exist or are in development have the capacity to reduce the growth of carbon dioxide emissions so that in 2050, those emissions will be just 6% above today’s levels, according to Claude Mandil, the IEA’s executive director.
Nor do peak-oil scenarios, which got so much play in financial media a year ago, carry much weight. The magazine gives heavy play to an analyst who claims that $45/barrel oil, and $1.95/gallon gas, are on their way. Recent price hikes reflected fear and speculation, not supply-and-demand conditions, the analyst argues.
I find all this very disturbing. Say Forbes is right about peak oil — and wrong about climate change.
I can well imagine, with crude prices still many times higher than they were in the late 1990s, that oil companies will invest heavily in new discoveries. That could mean more supply and lower prices for a while.
Meanwhile, I see little real investment in technology that lowers emissions, and little real will to conserve, especially if gas prices continue falling. That’s a scary combination.