There is a better way: Let’s move away from resource-driven model

  • By Kevin Kreitz
  • Monday, February 18, 2013 3:06pm
  • News

“We cannot solve our problems with the same thinking we used when we created them.”
— Albert Einstein

“In times of profound change, the learners inherit the earth, while the learned find themselves beautifully equipped to deal with a world that no longer exists.”
— Eric Hoffer

We are in a time of profound change. It is obvious that the foundations of our social and business cultures can no longer support this rapid advancement of change. Yet many, “the learned,” hang on to past paradigms and models to project their beliefs into a future that will not exist.
Not only did Monte Davis’ recent opinion piece put him square in this “learned” category, it also carried with it a tone of divisiveness that is no longer useful if we are to solve these very real issues in Homer.
From Denmark to Germany, Vancouver to Oslo, governments are turning on a dime to convert sustainable resources into energy. They are redefining economic development and building the new foundations of the future. We can learn from them.
Mr. Davis is correct, Alaska has been a resource-driven state. This does not mean it has to continue to be one as it was. We do not need to keep hearing things like “jobs,” “responsible drilling, development or mining” and “for the benefit of the people of Alaska,” if these promises are not fully, and truly, implemented.
The oil, gas and mining industries have shown themselves to be what they are, multinational corporations and rag-tag Buccaneers driven by a quest for shareholder returns and extreme profits. They have placed Return on Investment (ROI) as the driving metric for success ahead of Return on Life (ROL). They cannot be blamed for this because this is the culture and structure of business past.
Continuing to buy into this structure, and the propaganda distributed by these industries, reminds me of the fable about the scorpion and the frog. A scorpion asks a frog to carry him across a river. The frog is afraid of being stung during the trip, but the scorpion argues that if it stung the frog, the frog would sink and the scorpion would drown. The frog agrees and begins carrying the scorpion, but midway across the river the scorpion does indeed sting the frog, dooming them both. When asked why, the scorpion explains that this is simply its nature.
As for natural gas, the environmental costs of extraction have yet to be completely understood by anybody. However, there is enough evidence to point to the fact that these costs are negative, not positive.
When it comes to the financials there is a basic fundamental we can use to point to the future. In order for the natural gas companies to profit, we will need to be paying a much higher price than we are today. Note the following:
The current spot price of natural gas is not profitable. The U.S. Energy Information Administration admits it doesn’t know how the economics will work out. According to industry reports, the spot price needs to increase by at least 43 percent, and in many instances more than double, in order for it to be profitable.
Natural gas is a global market. This global market will ultimately set the price. The estimated February 2013 price for natural gas in Europe, South America and Asia ranges from $10.41 to $17.90. In the U.S. our current price of $3.50 will adjust upward due to global pricing pressures.
In closing, questioning the status quo and industry-backed statistics is not, as Mr. Davis states, “fighting economic development that isn’t farming, at every turn.” It is, in fact, a way to successfully navigate a transition from an unhealthy, dependent, resource-driven economy to a healthy, independent and diverse one.
This “new” economy will materialize in towns, cities, states and countries where the people are willing to become learners who lead and let the learned peacefully retire with our gratitude for their past efforts.
Kevin Kreitz is a Homer resident who has had a successful and diverse entrepreneurial career. He now pursues creative endeavors in designing websites and writing.

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