In the developed world, the Left knows what it wants. Conservatives, on the other hand don’t really know what they want. They just know what they don’t like – which is whatever the Left wants.
Since Conservatives don’t have a coherent world view of where we came from and the whys and wherefores of social customs – there is a tendency, to reflexively adopt the opposite view of the left on any and all subjects.
Socialism/ Communism means taking other people’s stuff by force of the state. This ideology was widely discredited by the collapse of the Soviet Union in 1991 and more recently by the implosion of Venezuela.
Since those events, the Left have been hunting around for another raison d’etre. The cause they have settled upon is global warming.
Global warming allows the left to paint the future as dystopian – plagued by shortages and great suffering.
Thus, we are told that we will have to give up meat, live mostly on beans with the occasional insect for animal protein.
You may laugh and say that is not going to happen; but think about this. The Left has been able to malign a trace gas, at only a little above survival levels in the atmosphere, for over 30 years.
If society can accept one fairy story it will accept any number of them. In fact, some people are unsure of things they can see with their own eyes. If you don’t believe me try asking a committed Lefty how many genders there are.
Unfortunately, the Left thinks ahead, and plots and plans. Conservatives assume that tomorrow is going to be much like today only better; because new technology, not yet dreamt of, will make things cheaper.
Conservatives also believe that when the price of something increases, production will rise. When that happens, they assume that the price will fall back to where it started from.
Generally, that view has been correct and the doomsayers – starting with the Club of Rome in 1972 – have been false prophets.
But there is one major commodity in which the doomsayers have been right, as shown by the following graph.
It charts the inflation-adjusted gold price since 1990 (blue line) against world gold production (red line):
In in the first quarter of 2001, the gold price was US$375 in current day dollars. Eighteen years later it is US$1,475. That represents a rise of 393%.
According to the conservative theory of a wonderful world of ever-increasing awesomeness, that can’t happen.
There has been plenty of time for production to respond to the market’s price signal and gold production has increased 38% over the same time interval.
That hasn’t been enough. Nevertheless, with the price up near 400% the gold mining companies should be making money hand over fist. That is not happening either.
The reason for this is explained by ore grades. Most of the high grade, shallow, easy-digging gold dirt has been mined.
Now, gold mine grades continue to decline. For example the average grade of South African gold mines has declined from approximately 12 grams per tonne in the 1970s to approximately 3 grams per tonne currently.
I’d like put that into context in a way that Conservatives can understand. We have an ancient social custom of wearing a gold ring. This signifies that we have mated for life, in the manner of geese or the like.
At an average gold content of 8.5 grams, that wedding ring will take 2.8 tonnes of South African gold ore to make.
Some surface gold operations mine ore at half that grade and might have three tonnes or more of overburden to move for each tonne of ore mined and processed.
So the making of some rings will require the shifting of more than 20 tonnes of rock.
What holds true for gold, in terms of grade and production, holds for all other things from the earth, eventually.
The price of gold doesn’t affect many of us in our daily lives, apart from that once-in-a-lifetime purchase. The price of oil does. So, what is happening there?
The oil price was following the scarcity script up until 2014 when it fell out of bed thanks to a boom in fracking in several basins in the US.
It had looked like the law of ever-increasing awesomeness and earthly bounty had re-asserted itself. A few years have passed, however, and the oil price is now back over US$60 per barrel.
What happened over the last five years is explained in this article. In short, when the oil price fell out of bed, a lot of fraccing equipment was sold cheaply.
This meant that the new owners were able to bid cheaply on completing wells for production.
Only 15% of the cost of a tight oil well is spent on drilling. Most of the balance is the cost of the frack job.
But for the oil industry to justify investment in new fraccing equipment it needs an oil price of US$100 per barrel, much higher than the current US$60.
So, the oil price will be somewhere in between – the article suggests US$75 per barrel.
As the oil price rises, natural gas will start rising to match the oil price in energy content terms, as it did in the previous decade.
When oil and natural gas production decline then we will begin converting coal to liquid fuels.
But let’s skip to the end. When we have run out of economic grades of carbon-based fuels from the ground, we will be relying 100%upon nuclear energy.
There will be solar panels – but only because nuclear energy will be used to make them.
All the solar panels currently in use, exist because of cheap Chinese coal; the panels themselves don’t make power cheaply enough to manufacture anything – including more solar panels.
As for wind turbines, the animal sacrifices of bats and birds to the pagan God of global warming will be all for naught.
Whether or not we have a civilisation when the fossil fuels run out depends upon how cheaply we can make power from the nuclear reactors at the time.
This is a fact, because we are going to need cheap power to scrape up leaves, newspapers and wheat stubble to provide the carbon to make liquid fuels, plastics and everything else.
The other fuel component will be hydrogen produced by electrolysis – using nuclear power.
Nothing much has been done in nuclear power reactor design for 50 years. Research ground to a halt after President Nixon shut down the thorium liquid fuel reactor research at Oak Ridge.
He did that to save money for the plutonium breeder reactor which in turn was cancelled.
In an ideal world, to which we Conservatives aspire, all the money being wasted on global warming and renewable energy would instead be used to get to the best possible nuclear reactor design.
We are nearing the end of the age of abundance. What has happened to gold will happen to oil and then things will get more expensive.
The polity of the Western World is happy to waste money on everything except the one thing that counts – getting our energy future sorted for when the fossil fuels run out.
Even the $445 million that former PM, Malcolm Turnbull flick-passed his mates in the coral reef business would have gone a long way to getting us to where we need to be.
David Archibald is the author of American Gripen: The Solution to the F-35 Nightmare