Thanks for inviting me.
I sent you a PDF file with a few pictures and images. I intend to follow them. I'll go quickly.
The few comments I will make now are based on the two policy papers I wrote in the last couple of years. They're freely available online.
One paper covers the history of the petroleum industry and innovation throughout the history of petroleum. Why was it that petroleum was developed in the first place? Why did it create fewer problems than things that existed before? What new possibilities were created? How did the industry become spontaneously cleaner over time? I stretch that history all the way to the Alberta oil sands and discuss innovations there.
The other paper deals with the petroleum refining industry in this country, the economics, the changing markets, and where the industry stands today.
Both papers have plenty of statistics that should be of interest to this committee, but really that's not what I wanted to emphasize this morning. If you look at the second page, at the slide that follows, these are just refinery statistics. They're widely available. Again, they might be useful, but that's not what I want to do.
My sense of the document that was sent to me is that a lot of the benefits of oil and gas are taken for granted, and a lot of people tend to forget that because these resources are not renewable, they need to be developed over time. The emphasis that I want to put on this today is simply to show the environmental, economical, and social benefits that petroleum and natural gas gave us historically.
There are two slides that follow that essentially show subsistence farmers in Europe. I just showed them to you to show you how miserable people were before carbon fuels came along. The first is from Finland; the other is from Germany. By and large, at the beginning of the 19th century, these people had the standards of living of subsistence farmers in the third world today. It's about a dollar a day in terms of standard of living, a chance in three of being malnourished, a life expectancy in the early thirties, and of course when you rely on nature for everything, you take what you need. You can then scroll down to an image that I like a lot, of Dutch whalers going north of Norway to kill everything that they see, charismatic species like polar bears, whales, and stuff. When you don't have carbon fuel products, you take what you need from nature. I like this image so much that I have it in my office.
Then in the early 19th century, something wonderful happened for humanity. Carbon fuels came along. In the next image you'll see that life expectancy in advanced economies in the year 1800 was about 33 years of age. Around 1900 it was about 45 to 47 years of age. Today, as you know, we're pushing on 80 years of age. It's not only that we're living longer, but there are about seven times more of us.
Our bodies have also changed more in the last 150 years than in the previous tens of thousands of years before.
These are statistics that are widely known by people who do historical demography. We're much taller, we live a lot longer, and we're less susceptible to disease than our ancestors were. That's why I use the expression super-human. I mean, our ancestors would be shocked if they were here today to see not only how fat we are, but how big we are and how healthy we are overall. Of course there were no miracles behind that.
The next slide shows you how little energy was available to human beings before carbon fuels came along. Then coal, natural gas, and petroleum came and suddenly humans could do all these things that gave us our modern standards of living.
The next image is about the fact that we're born surrounded by plastic, and we die surrounded by plastic and other petroleum products, and we're so much better off for it.
The image in the bottom right corner is an African woman carrying a big jug of water on her head. If you're not familiar with the history behind that, those big plastic jugs are viewed as nothing short of a minor miracle in less advanced economies, because of course, the alternatives were big clay pots. Plastic came along and it made life better in countless ways.
But the real emphasis, the real benefit, is long-distance transportation. On the next slide, the white lines are the trade routes that were possible in the age of sail when you had to rely on wind patterns and ocean currents. Then fossil fuels came along and globalization really began in the 19th century.
What were some of the benefits of long-distance trade for the first time in human history? We put an end to famine, because regions that had bad years could rely on regions that had good years. We could concentrate food production in the best locations, so food became a lot more abundant and lot cheaper than before. People could move out of the countryside and into cities. Once we got people off of the farm, they could become medical scientists, they could become engineers, they could become all sorts of other useful things.
And nature benefited in the process.
The next image is a cartoon from 1861, a bunch of whales celebrating the development of the oil industry, because kerosene is putting an end to the massacre of whales about a century and a half before Greenpeace came along.
The following slide is probably the most interesting. I'm a geographer; I like to show maps, as you saw. You see four maps of the United States. The dark areas are the extent of the forest covering the United States. The top left corner is 1620, and then people began to move in. The top right corner is 1850; people are still living along the coastlines and rivers. The low point is 1920. I don't know if you can see the transition from 1920 to 1992. People left the farm. We produced a lot more food on a lot less land than before. The forest made a huge comeback in all advanced economies. Every economy that is at the level of development of Chile and above, so about $5,000 a year per capita, has seen a huge extension of its forest cover, and it's largely because of fossil fuels.
In the next image you see kids playing next to a dead horse, urine, dung, but cars that are so despised were a huge benefit in terms of public health.
The most controversial point, though, is the next slide, which is climate change. We've had a lot of climate change in the last 150 years. Things warmed up from roughly 1850 to the 1940s, and then they cooled down from the 1940s to the 1970s, and then they warmed up again, until about 15 years ago. We've had basically no warming for 15 years. Throughout all of that, because of increased wealth, our capacity to deal with extreme weather has improved dramatically over time. Wealthier is not only healthier, but it's also much better in dealing with climate change. I could expand on that later on, but the statistics are pretty clear. So today climate change is not really a problem.
The last one I want to show is that there were alternatives all along. You see an image of someone advertising the fact that you could pump your water for free a century ago. Why buy gasoline? Henry Ford wanted the first Model T to run on ethanol. Electric cars were around a century ago. Fossil fuels defeated them because they were better: more energy density and they created fewer problems than those that were solved.
My final message is that a lot of people today complain about our addiction to fossil fuels, but the case I want to make is that when you look at the data in the broad historical context, fossil fuels are more like a nutritious food. Saying we're addicted to fossil fuels is like saying we're addicted to whole wheat bread, and I don't think addiction is the proper word in that context.
Thank you.