Grumbling at the pumps
In the run up to the Scottish election last month, each and every candidate standing in the islands identified the price of fuel as one of, if not the most important issue facing Shetland at the moment.
This is understandable. The cost of petrol and diesel has become astronomical. Filling up the car is now a traumatic experience – seriously damaging on the wallet – and this has significant implications not just for individuals and families but also for businesses and for the islands’ economy as a whole.
It was a relief to hear politicians (and wannabe politicians) addressing this issue and taking it seriously. But at the same time there was a fairly crucial point missing from the debate.
All the talk currently about the cost of fuel seems to revolve around the difference between the price in Shetland and the price elsewhere: Why do we pay so much more? Why are we being ripped off? What can be done about it?
Now, I’m no different from anyone else. I flinch every time my car runs low on diesel, and it irks that the extra cost of a litre here is so inexplicably high. But at the same time, that doesn’t seem to me to be the matter most in need of consideration.
There may be good reasons for the price discrepancy between Shetland and the mainland, or there may be bad reasons for it. But the more important point, surely, is the ever-rising price itself.
Markets are complicated things, and the cost of natural resources can be affected by many factors, both economic and environmental; but what appears to be happening now is something rather simpler – something that has been predicted for more than half a century.
Oil is a finite resource, expensive and challenging to retrieve, and a reliable world supply is entirely dependent on finding more and more places to extract it. But the extent of new discoveries has in fact been slowing over the past few decades, and many of the sources now being relied upon are in difficult places such as the tar sands of Canada and the deep water drilling in the Gulf of Mexico and elsewhere. Many analysts now believe that we are reaching, or have already reached, a peak in world oil production. And when that peak is reached, basic economic logic steps in: demand begins to outstrip supply, and prices rise accordingly.
If this is indeed the case, then the future is quite clear. There may continue to be wobbles in the cost of fuel – it may go down a little, or it may remain stable for a while; we may even see a slight reduction in taxes to help mask the problem – but the trend is almost certain to be upwards, and far faster than our incomes are going to rise. In other words, fuel is going to become ever less affordable and we’re going to have to make do with much less of it.
So where was the mention of this at election time?
Since the financial crash of 2008, politicians have been telling us that we must start living within our means. Cuts to public services, to jobs and to incomes, are necessary we’ve been told. Times have changed, money is scarce, and we now have to live in “the real world”. But the same, apparently, does not apply to oil.
The continuing rise in oil prices is a threat to our “way of life” every bit as serious as that from climate change, and it is a threat that really does not have any solution. We cannot avoid it, we will simply have to deal with it. And here in Shetland, where prices are already higher than virtually anywhere else, we will need to start dealing with it soon.
The current head-in-the-sand attitude that exists around this issue is madness. Shetland has relied, like everywhere else, on cheap, plentiful oil to build the infrastructure on which we now rely. If that foundation is removed, things are going to change. We would be wise, I think, to consider this fact carefully, and to begin thinking about what can be done to ease the difficulties that may ensue. Grumbling at the pumps is not a solution, but we should at least be grumbling about the right thing.