Don’t belive the experts, they have no clue…I suggest using chicken bones for scenario planning
Fazil Mihlar, Vancouver Sun
Published: Saturday, June 07, 2008
Anyone who predicts what the future holds beyond a three-year horizon is a fool. Anyone who believes the predictions of these futurists is a bigger fool. Any politician or business executive who makes decisions on the basis of these predictions is the biggest fool of all.Consider the following prognostications and what actually transpired.
Commentary
Fazil makes some astonishing remarks in this article. This is par for the course for him and other starry-eyed cheerleaders of endless growth. Three of his examples highlight the power of technological progress over that last 100 years and how history has missed their potential impact. If ‘A’ is a prediction and turned out wrong, then if ‘B’ is also a prediction then it will be wrong by virtue of ‘A’. The logical fallacy of this approach would garner him a failed mark in 12th grade Philosophy. He then goes on to include failed predictions of metal commodity shortages and asserts that a good economics course would explain what we should all know - shortages drive up prices which spur investment which adds to supply, which drives prices down. And just in case you want to talk about using up a resource, economists like to dismiss this as ‘poppycock’ since commodities are fungible.
Most nuanced analysts understand that running out is not the problem or the reality. Many economic reporters use the red herring of ‘running out’ or the ‘exact timing of the peak’ to distract from the larger conversation on trends. Paradoxically, some economic journalists gloss over the economic fallout that rapid and/or sustained loss of cheap oil would exact on the economy, the very subject about which they profess to be so knowledgeable. The short-term difficulty is when supply flows of a needed commodity cannot meet demand because there are real world limits to their availability (regardless of investment). I would hardly call 1000 barrels a second of crude oil a shortage but I would call it a shortage if the world was set up to expect (a better adjective would be ‘perceived to need’) higher flows for an expected economic expansion. We face a collective ‘crisis of scale’ in transportation fuel dictated by real world limitations to supply and bounded by competing goals for human well-being.
Fazil goes on to point out the Tar Sands as evidence that we will transition to unconventional sources of oil. However he conveniently neglects to point out that the outflow is a meagre 2 million barrels a day at a significant cost to the environment compared to traditional drilling. Expansion plans are limited by available natural gas, labor and water. It’s not the size of the resource …its the size of the spigot. Next, Fazil makes the most egregious of Western-centric statements about food - ‘The net result is that there’s plenty of food, but not in the right places at the right time.’ Is this a glaring admission of the failures of the economic system so revered by Mr. Mihlar? He also fails to highlight the input risks to the food production system. Prudence suggests that one must at least consider the fact that natural gas is the lynch pin holding the industrial agricultural system together as it is the precursor to nitrogen based fertilizer.
According to the premises of the article, to speculate about the future (no matter how rigorous the exercise) is to join a litany of ‘doomsday environmentalists, economists, business executives, preachers and astrologers.’ I’m glad Mr. Mihlar isn’t running my business. I want market analysis, future trends and scenario planning. According to Fazil we only need ‘faith’ in the market and a warm cozy feeling that ‘everything is gonna be allright.’ Market analysis, risk management and a rigorous field-by-field supply study or throwing the chicken bones…you decide.
