Monday, July 27, 2015

Risk, Reward, and Your Gas Pedal



Who wouldn’t want to understand the risks? Of any activity really.  You don’t bungie jump from a bridge without checking the ropes.  And you wouldn’t leave your kid with a sitter without checking their references. (Well maybe the second kid.)

I fasten my seat belt and floss my teeth.  I over buy insurance and have to exercise restraint when my boys climb trees.  By any measure, I am risk averse.

So when people say, we shouldn’t drill or frack or develop oil and gas without understanding all the risks, I’m sympathetic. Really sympathetic.

We have to understand our relationship with risk to thoughtfully contemplate our tolerance for oil and gas development.  Yet most conversations about fracking or oil and gas development are happening in a vacuum, a vacuum where there are only risks, and no rewards.  And that is a dead end conversation.

Even the most risk averse among us (ie me) takes zillions of risks daily: every step, every drive (heaven help us!), every bite of food.  If you have children, you know that it feels like one of your organs is out in the world taking risks incessantly, and its terrifying.  So what risks do we tolerate and why?

We tolerate risks whose benefits are immediate and comprehensible.  If I don’t leave the house, I don’t work.  If I don’t let my child out and about, they wither. We take all kinds of silly risks for fun (yes I’m talking about you climbers and mountain bikers! Stay away from my boys!).

There’s really no more all-pervasive benefit than those provided by oil and gas.  Oil and gas is the lifeblood of our commerce, economy, transportation, nutrition, enjoyment, and consumption.  Without it, traffic would literally stop and we’d be bereft of most food, water, heat, cooling, electronics, plastics, and shelter.

So why do we often see such a low tolerance for the risk of oil and gas? There will be those that argue that the risks are so extreme and high, but I don’t think that’s it.  I think it’s that we take our oil and gas resources so completely for granted, that we assume they will be there, even if we oppose their production.

Which leaves us with a couple of choices:

One: Limit oil and gas development to where we can’t see it; or,

Two: Develop a thoughtful risk-reward conversation about oil and gas development, more akin to the relationship we have to driving our cars.  (The incessant, mortal threat of driving is much higher!)

I suppose there is a third – get off fossil fuels all together.  But let’s work with what we’ve got in front of us right now, which is a world where 84% of all energy comes from fossil fuels.  And that doesn’t mention all those awesome by-products like fertilizer, plastics, and electronics.

For the sake of limiting the blog to a size you can read over your cup of coffee, I’m going to dismiss the first as unfair and total bullshit (although unfortunately common) and the third as visionary but not realistic.  So let’s focus on number 2.