“If I were running oil and gas for the U.S., I would leave most of the oil we have here and pay whatever the Arabs charge for their oil and conserve my own….I think it’s going to be very precious stuff over the next 200 years.” – Charlie Munger
What do you think of that statement?
I must admit that, until I read those words in one of the newsletters I subscribe to, I had never heard of Charlie Munger. No idea how I missed the 98-year-old billionaire investor. I have heard of his business partner, Warren Buffet, who is considered by many to be the wisest investor in the world, the so-called “Oracle of Omaha.”
We’ve been told for decades that we are going to run out of fossil fuels. Not to mention that burning the stuff is literally killing the planet.
Canadians, as major produicers, are very much aware of the issues surroundng fossil fuels. We have a government dedicated to eliminating them sooner as opposed to later.
I have heard it suggested that Canda should be increasing its fossil fuel production. The theory is that there is a market now, and it is a valuable resource that should be used before technological change and new energy sources dry up the market.
All my life I have heard some variation on that. Before fracking became widespread there was speculation that we were at or approaching “peak oil” – the point where oil extraction has reached its maximum rate, which would be followed by a decline and the world eventually running out of oil.
Underlying the discussion was the uinspoken belief in human ingenuity. Yes, we are running out of oil and gas, but we will come up with alternative energy sources when we need them. Except so far we haven’t.
Nucklear energy has its fans, but also its foes. Solar power might work in the desert, but there are a lot of places that are more often cloudy than sunny. Wind power only works when the wind blows . So far alternative energy sources have proven to be expensive alternatives that don’t meet our needs.
Therre are those who say hydrogen power will solve our problems, but effective commercial production seems to be decades away. We need an alternative energy breakthrough, but do you see one on the horizon? I thought not.
Which makes Munger’s idea food for thought. Instead of selling the oil we have now, why not hoard it and instead buy from others for today’s needs. Then, when their wells run dry, we’ll still have enough to meet our needs. We might pay a slighly higher price in the short term, but this is long term thinking.
For this discussion, let us leave aside the ecological issues surrounding fossil fuels. That will be a debate for another day. My question is: how responbsible is it to hoard a limited resource?
If the world runs low on oil before an alternative is found then the stuff will become precious beyond imagination. If we acknowledge that now, are there ethical considerations in hoarding our oil while burning that produced by others?
If the Saudis drain their reserves, do those who still have oil in the ground have a responsibility to see that Saudi Arabia has enough oil to meet its needs? Even if that means oil rationing in the United States?
Where is our responsibility to others? Or do we even have such a responsibility? How far do we take it? When the wells run dry, how soon does the worldwide famine start?
With a limited resource such as fossil fuels, is it better to stand by and alllow oither nations to die so that yours may survive? Or do we pool our limited resources hoping that science can find us some way out of this mess?
I don’t have answers today – but I would love to hear your suggestions.