Bring on the Chinese consumers!

The price of oil broke $50. Let's party like it's 1986.

By Andrew Leonard
Published January 18, 2007 10:13PM (EST)

Did a shudder just go through the entire renewable energy industry? At around 2:30 p.m. EST, the price traders were willing pay on the New York Mercantile Exchange for a barrel of light, sweet crude oil to be delivered in February fell below $50 a barrel. It didn't go far, just down to $49.90, and it didn't stay there long -- within minutes it was back up over $50 -- but the "plunge" was enough to make headlines.

SUV drivers might be rejoicing, but investors in biofuel start-ups are wincing. In the world of renewable energy, $50-a-barrel oil is a magic number. Roughly speaking, corn-based ethanol and soy-based biodiesel are thought to be cost-competitive when the price of oil is above $50 a barrel. A whole bunch of business plans suddenly don't look so good when the price of crude heads south. Vinod Khosla may be rejiggering his ethanol spreadsheets even as we speak.

It happened before, it could happen again. The OPEC-induced oil shocks of the '70s inspired oodles of conservation and a trickle of investment into developing alternate sources of energy. But when the price of oil sank down to around $10 a barrel by 1986, investor interest in renewables vanished. Are we set for a replay? Is another stretch of world-destroying energy profligacy upon us?

I, for one, am not worried. Because just before the news on oil prices broke, I was contemplating some statistics on auto ownership in China.

According to the China Association of Automobile Manufacturers, car sales in China in the first half of 2006 climbed almost 50 percent, year-on-year, to 1.8 million.

The gains come on the heels of 21.4 percent growth in car sales for 2005, with sales of luxury cars doing particularly well. Before the 1980s China did not allow private citizens to purchase vehicles for private use and there were few automobiles on the roads. By 2005, there were 20 million cars in use. By 2020, it is estimated, there will be 140 million.

Most environmentalists get all bent out of shape when they try to wrap their minds around the reality of China's emerging consumer society (and right on China's heels, India!). But I say, bring it on! The sooner everyone in China buys an SUV, the sooner the world will pump out all the oil physically possible, and the sooner we will be forced to come up with sustainable alternatives.

What? What's that you say about the world's ecosystems not being able to cope with a few billion more Chevy Tahoe drivers fighting for a parking spot at Best Buy? Come on, people! At times like these, it's best to emulate Monty Python's Eric Idle, nailed to the cross at the end of the movie "Life of Brian."

He knows how to whistle a happy tune: "Always Look on the Bright Side of Life."

Some things in life are bad
They can really make you mad
Other things just make you swear and curse.
When you're chewing on life's gristle
Don't grumble, give a whistle
And this'll help things turn out for the best...

And ... always look on the bright side of life...
Always look on the light side of life...

Andrew Leonard

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.

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