A Parable of Harpoons and Holes in the Ground

Long ago and not really that far away a great country was faced with a problem. They were threatened with losing a major energy source. This was a clean burning fuel that almost everyone used to light their houses.

Year after year, the energy companies reported more and more difficulty finding their oil. As sources nearer to the great country ran dry, the great whaling ships circled the globe in search of their oil-filled prey.

Whale oil was becoming more and more expensive every year. A growing great country needed an energy source that had the capacity to grow with the country. A dwindling source of energy would not do.

Other sources of energy existed at the time, however none were as easy to use as whale oil. Provincials in the country's southern plains were experimenting with a viscous and tarry black liquid that seeped out of the ground. When they could get the liquid to burn, it produced a lot of heat, along with clouds of black smoke that would never do for lamps. The supply of this petroleum seemed unlimited. The more holes the people drilled, the more this strange black petroleum liquid gushed.

The great country's government needed to take action. They knew the country needed more energy soon. There was a choice; would government policy support greater and greater efforts to pursue fewer and fewer whales, or would the government support development of new energy sources and technologies?

Possibly some argued that the maximum resources possible should be directed towards pursuing and harvesting more whale oil more efficiently. After all, whale oil was the only proven liquid energy source. Who could tell what that messy petroleum would be good for. Only a nut would want to burn petroleum to heat and light his house. That stuff stinks!

Others may have argued that the nascent petroleum industry was the way to a great future. Perhaps they saw the futility of spending more and more of a nation's treasure in the pursuit of a finite and dwindling energy resource.

In that day, long, long ago, the forward looking view ruled the day. Rather than providing subsidies to the proven but dwindling whaling industry, the government adopted several policies, including lucrative tax incentives, that rewarded investment and development of petroleum.

Everyone got lucky. Petroleum refinement technologies came online to make many versatile fuels, plus it turned out even the gases that leaked from the holes in the ground were an efficient and valuable fuel. As if that wasn't enough, petroleum's unique properties provided the basis for a chemical industry that revolutionized everyday life. “Better living through chemistry” was the mantra of the age.

The decades passed.

The great country's supplies of petroleum dwindled. In order to keep growing, the great country needed to scour the world for petroleum, not unlike globe-traversing whaling fleets of a previous age. Every year, explorers went further and further afield, drilled deeper and deeper holes. The price of fuel rose without relief.

There were some developments in new and untried energy resources.

By this time, after many generations of generous subsidies to the petroleum industry, the government could not find the courage to meaningfully subsidize the new frontiers of energy. The government made token subsidies to the new energy industry, while other countries leaped forward with bold initiatives. The politicians traveled the country to boast about their token programs that provided a few million dollars toward developing new energy sources, while subsidizing the petroleum industry with 10s of billions of dollars.

Other countries developed new and daring technologies while the great country's citizens sat home and watched it all on their giant flat screen TVs (manufactured by the very same other countries), wondering if it was their fate to remain a great country, or if they would fade away like the whalers of old.

That's my story and I'm sticking to it.