Skip to content

Atlas, Shrugging

March 16, 2011

Atlas is the Greek god who supported the heavens on his back, sometimes shown as the Earth instead of the celestial spheres.  Whether you are a classical mythologist or not (probably not, but you never know), you know this is how we got the word atlas for books that show maps of the earth.

All very interesting, but where is this going?  We have our own Atlas today: oil.  Oil is holding up the earth as nothing before has ever done.  From global industry (and hence the economy) to your car, everything runs on oil.  Even your toothpaste probably has oil products in it, and if it doesn’t, it got to your supermarket using energy from oil.

As the price of oil fluctuates, responding to the political crisis in the Middle East and the earthquake/tsunami in Japan, energy security in the long run suddenly seems much more important.  The price of oil is higher than it has ever been, excluding the high of 2008.  That makes a lot of things prohibitively expensive, like airline tickets.  At the recent GMIC conference in Portland, Ian Lee of the Sprott School of Business talked about research on airlines that saw many major airlines in Europe fail starting at oil prices of $125.00/barrel.  As Jeff Rubin claims, your world is about to get a whole lot smaller.

When Atlas shrugs (apologies to Ayn Rand), where will we fall?  On renewable energy?  On nuclear (which most of us are thinking hard about, after the recent events in Japan )?  On energy efficiency, the panacea of the 1980’s?  How are you adjusting your business to be sustainable in the long run without the lubricant of cheap oil?

Oil has the power to change the map of your world.

This is not a statement of good or bad, just one of business:  when your frame of reference changes, when your longitude and latitude shift, are you going to be ready?  Because Atlas is shrugging.

2 Comments leave one →
  1. March 16, 2011 3:55 pm

    Well, it takes a lot to get me to admit that I read Atlas Shrugged when I was in my mid-teens. (‘Sokay. I am *not* a covert adherent to the Ayn Rand view of the world. I promise.) But I have to say that I have a bit of trouble with the analogy.

    The intent behind the book title was that a beneficent, endlessly patient Atlas had finally shrugged off an ungrateful earth, after being saddled with a load heavier than even a Greek god could bear. It was a foolish, overstated (and over-written) narrative when Rand produced it. But it applies even less to oil than it did to the glorified captains of industry in her book.

    Surely the lasting lesson of the petro-economy is that *the rest of us* are carrying oil on our backs, by mechanisms as diverse as massive environmental contamination, huge hidden subsidies, unacknowledged human health impacts, and the opportunity costs we’ve all incurred by seeing our governments waste money on exotic oil production (think tar sands) when it could have been invested in renewable technologies. And that doesn’t even touch the geopolitical hazards that journalist Peter Maass documented in Crude World: The Violent Twilight of Oil (http://www.petermaass.com/books/crude_world/), a stunning survey of petro-states that shows how few of them have managed to retain even a shred of democracy or decency. (Hello, Libya?)

    How much better off would we be today if western governments had opted for aggressive energy efficiency targets and viable renewable alternatives, rather than going into the first Gulf War in battle tanks that measured their fuel performance in gallons per mile rather than miles per gallon? (And the U.S. military has become something like 80% more energy-intensive since then.) Who’s the Atlas here, and who’s being weighted down by whom?

  2. March 17, 2011 2:44 pm

    Mitchell, thank you for an impassioned response! To clarify, the point was not to make any comparison at all with Ayn Rand, which (full disclosure) I have never read. But I take your point about “who is carrying whom”? I think that both apply — oil does carry the world at the moment, because that is where history has left us due to our choices in the past. And I believe we will find it extremely difficult to change, just like stopping a very heavy object at high velocity is difficult. It is also true that we carry the weight of oil due to the negative externalities it produces. The world we have is the product of both, and what we see in the future will depend on the choices we make now.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: