Archive for the 'peak oil' Category

Whither Peak Oil?

Sharon October 5th, 2009

There’s a fascinating essay by Nate Hagens over at The Oil Drum about the future of peak oil analysis and the future of The Oil Drum.  In it, Hagens argues that an oil peak will almost certainly turn out to be past us, given the lack of incentive for further investment (this is, of course, the same analysis as the IEA’s recent case), and that perhaps our preoccupation with it as a defining factor is a mistake:

“I would hypothesize that each of us participating in the online muckraking/analysis sphere spends time on their websites of choice for some of the following reasons: 1)to increase our own social capital (through either social recognition or through an increase in our own understanding of a complex situation which will then in turn improve ours and our families future), 2) because we are puzzle solvers (meaning it’s fun/meaningful to figure all this out, 3) because we want to make a difference to steer society away from making poor long term choices, and 4) being right. I would guess that all of TOD staff and most who hang out have done so for some combination of the above. My fear is that we, the analysts, are neither advocates, nor doers, generally speaking, which means we put stuff up continually in subtle hope that someone at a higher level will incorporate and implement it. To what end, we don’t know. My gut feel is that a plurality of TOD staff fall under the number 2) above, and that increases in social status and/or societal transformation due to our work are only externalities of our passion for puzzle solving. I suppose things could be worse…;-)

As usual, this essay represents my own musings, and is not reflective of the philosophy or objectives of anyone else on staff, but as one of the senior contributors to this site, I’ve begun to ask myself the purpose of a peak oil movement, in a post-peak environment where financial issues are likely to dominate for the forseeable future, objectives and beliefs about the future are increasingly disparate, and synthesis of information is only as good as ones understanding of the weakest link (ergo – there is TOO much information for most people if not everyone). Furthermore, our ability to plan and change for the long term diminishes in negative correlation with how badly real time events erode. As such, in my view the highest leverage lies in the integration and subsequent implementation of systems analysis. What is needed is a 2010 version of Limits to Growth that not only improves on the 1970s natural resource type model, but integrates two new layers: knowledge on human demand/neuroscience and the current status of our economic/financial system, into a holistic scientific project that can be used for serious and urgent global policy change. Perhaps a site like this could be a public forum to discuss and hone in on aspects of such a project. I don’t know. I must admit I’ve learned as much from the relatively uneducated on this site than from those with stellar resumes. In the end we’re all in this together.

Finally, I think ‘Peak Oil’ has eponymously outlived its usefulness. Too many now associate doom, gloom and fundamentalism when they hear those 2 words. Though doom and gloom may possibly be the end reality of Peak Oil, such an immediate emotive reaction can’t be productive among people of influence. As such, the energy community, and broader natural resource paradigm change movement probably needs to rebrand the whole discussion. Peak Oil is not only past, but it’s terminology is passe.”

This is rather fascinating to me, because several times in the last four years, I’ve suggested that an increasing irrelevance is the likely result of PO study groups and site’s focus on the quantitative analysis end of Peak Oil – it isn’t that that’s not valuable material, but focusing on the data, on the dates, on another 50 possible depletion scenarios isn’t really all that relevant.  In 2007 I wrote:

“Peak Oil is Real Soon Now” was pretty much the theme of last year’s Boston ASPO conference, and I admit, I see no real evidence that it won’t be repeated at every ASPO meeting, until we can officially change it over to “Peak Oil Was Just a While Back.” Looking over the list of panels, virtually all of them focus on one of three things.

The first is whether peak oil was Yesterday, is Tomorrow or next Thursday. Now this sounds like very important work, and is important if you have millions invested in oil wells, run India, or run Shell. To anyone else, it is largely a matter of complete and utter irrelevance. The reality is that real people are already experiencing the costs of peak oil – for example, it is the end of cheap oil that has led to the biofuels boom and to my grocery bill going haywire. This is only going to get worse – because of peak oil and climate change. But whether it gets worse slightly faster or slower really isn’t the point – the point is that we’re not doing anything about it. I’m willing to bet, however, that most of the Very Important People speaking at ASPO don’t actually buy their own groceries, so maybe they haven’t noticed….

….if ASPO has just one chance to pull people together to talk about peak oil, the date is far less urgent a subject than “where do we go from here?” It isn’t that there isn’t anything to talk about, it isn’t that people still aren’t debating peak oil. It is that the focus of the discussion has moved on from when to what to do, and ASPO hasn’t caught up.

This is not only bad for the public discourse, but IMHO, it isn’t very good for ASPO, either. Because they risk being rendered obsolete by their own data. ASPO has done the important work of establishing dates and reserves, but shortly, if their own estimates are right, when peak oil is will be an established, documentable fact – if it isn’t already. And while ASPO will then have the satisfaction of being right, it will also have the problem of being irrelevant, if it hasn’t taken a lead on the next step – where do we go from here?”

ASPO and the The Oil Drum are much the same – the speakers list tends to be taken heavily from TOD, the institutional elements are similar – and they have the same set of presumptions – that peak oil would be a defining and readily visible moment, in which their expertise would be needed, and that whatever changes would be made, ultimately, they would be driven by technical analysis.  Not everyone believed it, but the whole point of setting up a think tank, one that served mostly affluent elites, and that focused on articulating the problem, rather than moving on to the solutions, was this theory that if technical people just got it right enough everyone would listen.  Unfortunately, that would be a first.

And lo and behold, what’s pretty much happened is this – peak oil, instead of being the big, shiny thing that everyone can pin their future disaster concerns upon happened – and was buried in the financial mess – and is simply part and parcel of a larger collective crisis that includes our overextension financially, ecologically and biologically.  That doesn’t mean it didn’t happen.  It doesn’t mean it isn’t actually a defining factor – I continue to think not only does peak oil matter a great deal (for example, almost all our mitigation strategies for our crisis assume we have plenty of energy to work with), but I think that the reason our world economic crisis wasn’t just a crisis of the developed world – the reason that it struck so deeply all over the world is because of the food crisis, which was itself an energy crisis.  The UN estimates that 60% of the rise in world food prices that gave us a great deal of political instability, more hungry people than ever before and helped grind the poor world economies to a halt came from biofuel growth – which boomed in response to rising energy prices, and was an attempt to compensate for rising oil consumption and declining ability to pump more.  I’ve written about this in more detail in my essay “Peeling the Onion”

What’s funny is that the people who got it right – the ones who described what would actually most likely occur, seem to have been not the technical specialists, but the non-technical analysts who presented the material to the general public.  Richard Heinberg warned everyone in pretty much every book he wrote that what we could expect would not be consistent price signals, but “extreme volatility” – prices rising and collapsing, with complex results playing out in the financial arena.  Jim Kunstler may have gotten a bunch of things wrong (still no Pirates in Seattle) in _The Long Emergency_, but his refusal to single peak oil out as a sole root cause was absolutely on target – it was just one of several urgent factors that are driving us forward.  In his analysis of how collapse proceeds, Dmitry Orlov observed that only rarely do we correctly articulate the causes of collapse – instead, it takes on a life of its own.

I’ve noticed that there is a tendency for people who come at this through the numbers and data to listen to those who offer big-picture analysis, to praise them for their analysis, but honestly, not to really, seriously believe what they say.  That is, I think there’s a tendency to assume that there will be time at least for their pet projects, that the most important part of our crisis won’t be the messy, fuzzy parts that are hard to analyze – the finances, the politics, the human reactions – but the tidy bits that can be neatly graphed.  And thus, there’s shock when it turns out that the system is messy.

Over the years, I’ve watched one trend that particularly disturbs me – the tendency of some (not all) technical analysts to emphasize the importance of peak oil over any other factor – there seemed to be a sense that they had to advocate for their crisis, over say, climate change or the financial mess or political instability.  This one, they would cry, defines everything.  And of course, when one is trying to get the media and funding sources to pay attention to harsh realities, that’s probably reasonable – but then the forest gets lost for the trees.  Pet solutions get the same treatment – the answer is wind!  No, the answer is X plan!  No, there’s no plan at all – we’re all totally, utterly doomed!

Don’t get me wrong, this does not characterize all the analysis that has come out of TOD or ASPO – there’s been some extremely good and clear material, some of which I’ve found very valuable – Jeffrey Brown’s Export Land Model, Gail the Actuary’s analyses, etc….  And I can’t overstate my debt to the people who put ASPO together to do the figures initially and raise awareness of a profound and real problem – there is no real doubt that peak oil either will or has happened.  All we have to do is look around at the history of US oil to prove that sooner or later (sooner, actually) we peak, and after that, there are serious constraints on supply.  World oil peaks may be controversial, but their reality is undeniable.

But as I said two years ago, the problem is not when exactly – we were never going to be able to raise the red flag on that day anyway.  The problem is what to do now – and what to do now has always been a complex question that had to fully take into account other factors – climate change, money, politics, and the fact that there has never yet been a revolution or radical change led by technical specialists ;-) .

Nate’s conclusion is that the tech folk simply aren’t suited to the next relevant steps – that the analysis seems to be what matters mostly to them.  I rather hope that that’s not the case – I’d hate to see those brilliant intellects go offline when there’s so much useful work to do. 

Now peak oil has always been a poor and inadequate terminology – one uses it because it is useful, because word’s are often poor and inadequate, but the reality was that oil was never a solo problem – sure, oil is nice and liquid, but given no other ecological problems, we could deal with an oil peak.  The problem was always that our other resources are stretched too, and that whether we hit the actual peak or not, we live in a world where resource use is so tight that there’s little leeway for rapidly repurposing one major fuel source to cover the loss of another.

But saying that “peak oil’s day is over” (which may or may not be true) doesn’t really help us any more than saying that peak oil is going to crash civilization.  Neither thing is accurate – instead, our collective crisis is upon us – we aren’t speculating about the future any more, we are talking about the present.  Whichever aspect is most urgent at the moment isn’t really the issue.  The issue is still, as it was two and three and five years ago – where do we go from here.  For that, we need to know the realities, we need a basic grounding in data.  But we also need to be able to think about politics and money, human emotion and human response – and we need to remember that the answers will not be neat or easy ones.

In _The Limits to Growth:The 30 Year Update_ we get, I think, a deeply coherent description of our present difficulty – one done by people with both technical skills and the ability to grasp the deep complexity of our situation, and in some small way, to describe and model it:

“The most common criticisms of the original World3 model were that it underestimated the power of technology and that it did not represent adequately the adaptive resilience of the free market.  It is true that we did not include in the original World3 model technological prgress at rates that would automatically solve all problems associated wtith exponential growth in the human ecological footprint….[But] in several scenarios we test accellerated technological advance and possible future technical leaps beyond these ‘normal’ improvements.  What if materials are almost entirely recycled?  What if land yield doubles again and yet again?  What if emissions are reduced at 4% per year over the coming century?

Even with such assumptions, the model world tends to overshoot its limits.  Even iwth teh most effective technologies and the greatest economic resilience that we believe is possible, if these are the only changes, the model tends to generate scenarios of collapse.” (TLTG:TTYU p. 204-5)

They go on to observe that in the end, what brings down the system is never a single factor – it isn’t oil, or money, or pollution or climate change.  It is this:

“….the more successfully society puts off its limits throughe conomic and technical adaptations, the more likely it is to run into several of them at the same time.  In most World3 runs, including many we have not shown here, the world system does not totally run out of land or food or resources or pollution absorption capability.  What it runs out of is the ability to cope.” (TLTG:TTYU 223)

It is, and has always been this problem of competing crisis, of the inability of systems (us) to deal with two many things hitting us at once that put us most deeply in danger – peak oil alone can be adapted to.  Climate change alone might be addressable.  Our precarious financial situation alone might have been soluble – but together they are beyond our capacity to address in terms of “solutions” as we mean them.  Focusing on energy to the exclusion of other issues – focusing on numbers instead of the moral and political, narrative and social elements has never been enough.

Now we all do what we can, and if that’s what TOD and ASPO can do, well, I’m grateful they did it.  But again, it is all hands on deck, folks – and I’m not convinced that just because people are happiest discussing the technical difficulties, they can’t also bear a good other chunk of the load – enough are doing so already that the future of the study of peak oil in its context – not in competition with our other problems, but in its intersections with them – and our response to it – could be extremely bright.

Sharon

Palin's Face, Klein's Language and the Problem of Self-Diagnosis

Sharon August 5th, 2009

I don’t like Sarah Palin, and I do very much admire Naomi Klein, whose book _The Shock Doctrine_ was one of the most important books of the decade.  Had you asked me a few days ago whether I’d write an essay criticizing Naomi Klein for, among other things, her representation of Sarah Palin, I would have suggested that the odds were, to say the least, extremely low.  And yet I find myself doing precisely that, which just, as they say in the song, just ”goes to show you never can tell.”

The problem with Naomi Klein’s essay, originally given as a speech, is not that we disagree about many of her basic observations about the problems we face, but rather that I think she’s allowing a cheap shot, and a false description of a moment to blind her to the scope of the real problem, and to throw up barriers to what needs doing.  In the end, Klein and I agree about a lot – but the devil is always in the details, and in this case, her use of details troubles me.

Klein begins her essay using Sarah Palin as the embodiment of a moment in time, as the human version of the idea that our culture can go on as it is forever.  She writes:

“I usually talk about the bailout in speeches these days. We all need to understand it because it is a robbery in progress, the greatest heist in monetary history. But today I’d like to take a different approach: What if the bailout actually works, what if the financial sector is saved and the economy returns to the course it was on before the crisis struck? Is that what we want? And what would that world look like?The answer is that it would look like Sarah Palin. Hear me out, this is not a joke. I don’t think we have given sufficient consideration to the meaning of the Palin moment. Think about it: Sarah Palin stepped onto the world stage as Vice Presidential candidate on August 29 at a McCain campaign rally, to much fanfare. Exactly two weeks later, on September 14, Lehman Brothers collapsed, triggering the global financial meltdown.

So in a way, Palin was the last clear expression of capitalism-as-usual before everything went south. That’s quite helpful because she showed us—in that plainspoken, down-homey way of hers—the trajectory the U.S. economy was on before its current meltdown. By offering us this glimpse of a future, one narrowly avoided, Palin provides us with an opportunity to ask a core question: Do we want to go there? Do we want to save that pre-crisis system, get it back to where it was last September? Or do we want to use this crisis, and the electoral mandate for serious change delivered by the last election, to radically transform that system? We need to get clear on our answer now because we haven’t had the potent combination of a serious crisis and a clear progressive democratic mandate for change since the 1930s. We use this opportunity, or we lose it.

So what was Sarah Palin telling us about capitalism-as-usual before she was so rudely interrupted by the meltdown? Let’s first recall that before she came along, the U.S. public, at long last, was starting to come to grips with the urgency of the climate crisis, with the fact that our economic activity is at war with the planet, that radical change is needed immediately. We were actually having that conversation: Polar bears were on the cover of Newsweek magazine. And then in walked Sarah Palin. The core of her message was this: Those environmentalists, those liberals, those do-gooders are all wrong. You don’t have to change anything. You don’t have to rethink anything. Keep driving your gas-guzzling car, keep going to Wal-Mart and shop all you want. The reason for that is a magical place called Alaska. Just come up here and take all you want. “Americans,” she said at the Republican National Convention, “we need to produce more of our own oil and gas. Take it from a gal who knows the North Slope of Alaska, we’ve got lots of both.”‘

And to a degree, all of this is true.  But the problem with holding Sarah Palin up as the embodiment of business as usual, is that it is a cheap shot.  I don’t like Sarah Palin, and I sure as heck don’t want her to be in charge of anything bigger than the local Elks Club.  But if we are going to use Sarah Palin as the embodiment of our failure, to imply that our doom comes from the right, we need to ask what alternatives the left has proposed?   That is, who isn’t Sarah Palin?  Is there someone out there who stands up as the essence of this new, progressive movement that Klein claims is in progress, and that undermines our situation?

The logical candidate, of course, would be Obama.  And while I am always a fan of the lesser of two evils, and give Obama sincere credit for some of his actions, I think an attempt to imply that our disaster comes from an ignorant right is a deeply false and troubling one.  The contrasting figure, Obama, was a senator from the midwest, fully complicit in the massive ethanol boondoggle that helped create a new starving class worldwide, as cars competed with people for food.  He is and was an advocate of so-called “clean coal” – despite the fact that there is no such thing, despite the fact that carbon capture and storage is a non-starter.  He is certainly an advocate of continued economic growth, and I find myself queasily forced to admit (since I like George W. Bush a whole lot less than Sarah Palin) that I think Bush’s stimulus package, which at least put money in the hands of ordinary people who needed it, was more populist, more successful and more humane than Obama’s funding of the auto industry and a whole lot of re-paving and highways projects. 

It would be just as accurate, and far less petty for Klein to state that the figure that represents business as usual, going on as we are, is Barack Obama.  And in giving a speech to a group of people at a celebration of _The Progressive_ it would have been a whole heck of a lot more honest and more just.  That is, the problem is not just the world vision embodied by the people you already don’t like, it is the problem embodied by the people you do, and in fact, by the people you are. 

Klein claims that last August, we were actually “having that conversation” about the urgency of dealing with our ecological crisis.  After all, polar bears were on the cover of Newsweek.  I’m casting my memory back to last summer, and trying to recall a sense of invigorated national dialogue on the subject of climate change.   I’m not finding it.  If the subject was coming up in discussion more, which it probably was, although not nearly as much as Obama’s birth certificate or McCain’s fits of temper, or who would be VP, well,  great.   But the terms in which the discussion was occurring were still completely unrelated to the scale of action that we must function on to address climate change – and they still are.  Yeah, there were polar bears on the cover of a national magazine – why not, they are cute, and as long as the issue is framed in terms of how much we care about fuzzy bears, it is conveniently placed outside of our own future and our own survival.

Now Klein goes on to frame our discussion in precisely necessary terms – she turns us to the basic idea that we have to end growth, that we can’t live on a planet that engages in the kind of rapine, endless growth modern capitalism that we have.  I’m thrilled that she did so, and I think this is the important essence of the discussion – and Klein’s use of her platform to have it matters a great deal.  She says,

“The President tells us he wants to look forward, not backwards. But in order to confront the lie of perpetual growth and limitless abundance that is at the center of both the ecological and financial crises, we have to look backwards. And we have to look way backwards, not just to the past eight years of Bush and Cheney, but to the very founding of this country, to the whole idea of the settler state.Modern capitalism was born with the so-called discovery of the Americas. It was the pillage of the incredible natural resources of the Americas that generated the excess capital that made the Industrial Revolution possible. Early explorers spoke of this land as a New Jerusalem, a land of such bottomless abundance, there for the taking, so vast that the pillage would never have to end. This mythology is in our biblical stories—of floods and fresh starts, of raptures and rescues—and it is at the center of the American Dream of constant reinvention. What this myth tells us is that we don’t have to live with our pasts, with the consequences of our actions. We can always escape, start over.

These stories were always dangerous, of course, to the people who were already living on the “discovered” lands, to the people who worked them through forced labor. But now the planet itself is telling us that we cannot afford these stories of endless new beginnings anymore. That is why it is so significant that at the very moment when some kind of human survival instinct kicked in, and we seemed finally to be coming to grips with the Earth’s natural limits, along came Palin, the new and shiny incarnation of the colonial frontierswoman, saying: Come on up to Alaska. There is always more. Don’t think, just take.

This is not about Sarah Palin. It’s about the meaning of that myth of constant “discovery,” and what it tells us about the economic system that they’re spending trillions of dollars to save. What it tells us is that capitalism, left to its own devices, will push us past the point from which the climate can recover. And capitalism will avoid a serious accounting—whether of its financial debts or its ecological debts—at all costs. Because there’s always more. A new quick fix. A new frontier.”

Why on earth am I quibbling with someone who gets so much right in this speech?  She goes on to call our modern economic models a leaky pirate ship, and suggests we need to destroy the ship and buid a whole new vessel.  And she’s absolutely right – that is, our economic models, our whole way of life, our assumptions that there are always more resources, have to change – they will change, one way or another, by virtue of climate change and energy limitations.  Our only choice for a softish landing is to change them voluntarily, before we have no other options, and our window for doing so is getting very, very, very narrow.  And the only possible option is to change as we must – that is, not as we want to, not as we are comfortable with, not as would be easy for us, but as the facts demand.  And that change is going to be quite profound.

Klein gets the problem right.  She gets that we can’t continue to live this way.  But she still is attached to old enlightenment political categories that simply do not function well in the face of our crisis.  She imagines a rapine right, selling the Business As Usual model, and a at least partially critical left.  There is some truth in this analysis (and there is often some truth in the criticisms of the left from the right) - but not enough to take us where we need to go.  Because the left has been complicit in creating other myths, just as false.  It is the left who created the idea that we could buy our way out of this, simply because we want to retain our identity as consumers.  It is the affluent left that has told us that if we just buy better products, if we just recycle more, it will be enough. 

 It is leftist environmentalists who have understated the scope of the problem, and who have told us over and over again that our economy will grow again, this time with plenty of green jobs for everyone, that sacrifice is not necessary. But when you look closely at the studies that support this idea, they all involve radically lower emissions cuts than those that are necessary, radically longer time frames, the viability of technologies that do not presently fully exist and the assumption that we have all the energy in the ground and all the money in the world to do it.  All of those assumptions are fundamentally false – they are still working with old numbers, often with 450 ppm rather than 350 ppm, and without acknowledging that many of the things we thought we had a lot of time for – the melting or arctic ice, the leaking of methane out of the permafrost – are happening now, decades or centuries before even the IPCC reports expected them.

Left and right, working together, have conspired to create a culture of denial, have declined, for the most part, to offer clear terms to the general public.  The right has claimed that we can drill our way out, the left that we can build solar panels in the desert and capture our coal emissions.  Neither one has a remote handle on climate change, much less climate change intersecting with peak oil and economic crisis.

And this is why her talk bothers me so much – she gets the answers right.  But until you frame the discussion correctly, we’re back to banging on the same old drums – back to arguing over who is better, Obama or McCain.  Sure there’s a difference, and an important one, but that’s not the central question – the central question is how do we get to a leader who will actually deal with realities.  Sarah Palin is one face of our disaster.  Barack Obama is another one.  And all of us wear that face too – every one of us who does not want the solutions to be too hard, too extreme, and thus, declines to fully understand the evidence in front of our faces; every one of us who desperately wants the solutions offered on both sides to be true, and thus, chooses lies over truth.

We do have to end growth.  We do have to sink the pirate ship and build again.  We also have to acknowledge the true state of our ability to do that – the pressing limitations on our capacity to rebuild.  We do have to acknowledge what that actually means, and find a way to make it politically palatable to people on both sides of the aisle, because it is the vast middle, those people who are mostly neither left nor right, but who move with our political tides towards where they think their future lies, that matter most. As a leftist, of course, I’d prefer that wasn’t true – but we don’t have the time to change the world in every respect before we deal with the impending crisis.  So the question becomes this – in what terms do we speak?  How do we move the majority in the direction of the painful and necessary alterations that we face?  And I don’t think we do it by making Sarah Palin the rhetorical face of our failure. Not when that wears so many other familiar faces.

 Sharon

Rock vs. Hard Place vs. Immovable Object

Sharon June 11th, 2009

Rock, meet hard place.  Hard place, meet rock.  Rock, over here is known as “the economy.”  Hard place, on the other side, can be described as “our energy situation.”  Because while green shoots might look awfully good to a lot of people who are desperate to have the economy go back to what it was, we should remind ourselves that “what it was” involved awfully high energy prices.  Sure, some of it was speculation, and some of it was the Chinese Olympics, and some of it was the falling dollar.  And of course, the good news is that none of those things will ever happen again…we don’t have speculators in the energy markets anymore, of course – we took care of that right off, nor does the dollar ever…oh, wait.  But I can promise that Beijing won’t host the Olympics again for a while, if that helps.   

 $70 isn’t that bad, you argue.  With the economy in recovery, we can afford our gas and heat bills, right?  People won’t decide that they have to save for next winter’s oil bill.  And this recovery is so solid that it won’t matter that tax burdens are headed up to compensate for falling revenues and increasing debt – people will have plenty of money to pay for gas and food and those higher taxes, now that new jobs are being…oh, wait.  It also won’t matter that at higher energy prices, the stimulus money buys less stuff – asphalt paving prices go up, and they hire two fewer guys.  The energy costs of all this highway work and other infrastructure investment goes up, the number of salaries goes down.  But we don’t need those jobs that bad, right?

Nor will the volatility of energy prices and debt servicing matter – a couple of years of people never knowing if they will have enough money for a summer’s a/c, or a winter’s heat, if they’ll be making enough to cover their commute and daycare costs, whether they can afford enough food to keep the pantry full, whether the unemployment benefits will run out or be extended… none of those measures of insecurity will affect consumer behavior at all.  We’re all going to go back to buying stuff.  Nor will the cutting of credit lines, and the addition of bad debt to the balance sheets of the banks, or rising interest rates. And we never did care about the trade deficit, right? 

Rock, you know Hard Place.  Now, let’s meet Immovable Object.  This is climate change – she’ll be with us all the time now.  Think of the current situation as you trapped, rock on one side, hard place on the other, and immovable object is now suspended very slightly above your head.  And oh, yeah, it can move after all – you can’t move it, but it can come crashing down and squash you like a bug. 

Now one of two things is going to happen in the next couple of years – in the climate talks occurring in Europe now, in the painful negotiations with China, in Congress in the US and in Copenhagen.  We’re either going to do something about climate change, or we’re not.  And one of two results is possible if we do something – either it will be sufficient, or it won’t. 

Now I won’t lay odds here on these two bets, although I think I could.  But let’s consider just our choices.  “Do something” on a scale that actually would matter, means that we face higher energy prices.  I realize that a lot of climate activists don’t like to talk about this part, but the truth is the truth – even if we attempt to offset those costs for lower income people with carbon trading revenues or whatever, energy prices will go up.  In general, I think this is wise – however, it will have an effect on the larger economy.  Yes, yes there are dozens of studies that presume that shifting to renewables will grow the economy.  Each of those studies assumes growth – assumes we’re going to be getting richer, not poorer as it happens.  None of those suggest that renewable energies can fix our economic crisis.  And, quite bluntly, a lot of those used energy reduction targets that were far lower than anything we have to actually deal with – the Yale study that showed growth across the board topped out emissions reductions at 40%. 

Unfortunately more likely is that we don’t do enough soon enough – the Waxman-Markey bill making its way through Congress right now is a good example – they keep trimming emissions targets.  Even though 80% by 2050 will, we know, absolutely not mitigate climate change, we’re now down to about 45% by 2050, as Charles Komanoff demonstrates.  In which case, we’ll probably see a drag on revenues and unmitigated climate change.  Goody.

Sir Nicholas Stern’s famed Stern report estimated that unchecked, climate change could cost every single world economy 20% of its GDP – that is, we’d be using one fifth of our GDP just to fix the damage climate change was causing (this was a world average – those people whose countries won’t be there anymore probably find it hard to create a GDP at all).  The statistics are probably higher for the US, which as Joseph Romm notes, has more wealth on its coastlines than almost any other nation.

In four years, two American cities have effectively been destroyed – New Orleans and Galveston.  What about the next one?  What happens when it is Miami or some other major city?  Besides the enormous human and communal costs, where will the money come from to rebuild, to evacuate, to deal with the economic costs?  Anyone want to bet that we won’t see any more major hurricanes?  Add on to that the little costs – the rising food prices from drought and flooding around the world, the costs of health care, of everything from new disease to increased low birth weight babies (yup, even that goes with climate change).  Are we all set to grow our way out of that?

But even in the best scenarios, where we do limit emissions and get back down to 350 ppm, we cannot expect economic growth and radical emissions reduction simultaneously – they are are not compatible.  Let’s say we do finally grasp how immovable this object is – and that we’re about to slam into it.  Actually addressing climate change will require us to reduce total emissions by nearly 100% worldwide.  We know that building out enough renewables just to keep up with basic needs will be a huge challenge, and may not be done fast enough to prevent a major energy bottleneck – moreover, as I keep pointing out, we may not be *able* to do this as fast as we’d like, even if we could build out renewables quickly – that is, since all our renewables are build with fossil fuels at every stage, we may not be able to do a massive buildout without risking crossing our tipping points – that is, we may have to say “ok, for the next decade we’re all going to do with a lot less energy, so that the future has some hope” and build out much more slowly.  And we’re not going to be growing our economy.

Not to mention that fact that in such a case, where we allocate much of our fossil fuel production to a renewable build out, because we’re facing peak oil, we’re going to have to take the energy *from* somewhere – that is, we’re going to have to get our energy by not using it elsewhere – probably in the consumer economy.  I’ve written much more about the fact that doing this would be a lot like WWII – no luxuries, no false usage, state controlled economy – than anyone has liked to admit.

I haven’t even talked about the ways that rock, our financial crisis, hits immovable object – because all of this requires enormous amounts of capital, and secure state economies.  In order for nations to take on the enormous indebtedness required to push through this massive shift in our economy, we would have to have the ability to service that debt (each American now owes an additional 155K, btw), and buyers for that debt.  Where is the money for this build out going to come from?

Rock, hard place and immovable object are going to continue to bang up against one another, and the space we’ve got to move in gets smaller and smaller – as does our hope of finding a way out.  Roughly, our financial crisis makes it harder to finance the renewable energy we so desperately need to address both climate change and peak oil.  Meanwhile, peak oil means that every time we start to climb out of the financial hole, we fall back in – we can’t grow without cheap oil, and we only have cheap oil when the economy is crashing.  And climate change comes ’round and says “oh, and some of what money you do have will be needed to deal with me now – don’t plan on using it for anything affirmative, you’ll want it for the next city, or the next drought, or the next…”  If we do address climate change, we push up energy prices, and create lots of ugly temptation for the government to take the revenues from cap and trade and spend them on debt servicing and bailing out rich people, rather than offsetting costs. High energy prices would be good – except that they come with high taxes, high price volatility for basic needs, high unemployment, high bankruptcy rates and declining credit, not to mention our energy intensive infrastructure.

Round and round and round she goes, and wherever she stops, we crash into something heavy and hard.  My husband once said “isn’t it ironic that we’re facing all these crises simultaneously?”  No, I don’t think it is ironic at all – I think it is inevitable – that is, as long as there was one way out of the hall of mirrors you could put off the crisis for a while, or at least, off thinking about it.  That is, it seemed perfectly feasible to convert, someday, when we got around to it, to renewables as long as we were flush with wealth.  It seemed perfectly possible to deal with the oil crisis as long as we were rich, and it was someday.  It seemed perfectly possible to take on debt and build a credit card economy as long as we had energy to make the economy go.  It seemed perfectly possible to address climate change, as long as we could switch to lower emissions natural gas and dig a little deeper… Again, I am reminded of the conclusions of the 30 year Update of The Limits to Growth – in most scenarios, the crisis point does not come because of one single thing, but because “the system runs out of the ability to cope.”

Our ability to cope has, to put it starkly, run out.  I don’t mean that the end of the world is now here – I mean that we can no longer put off our problems.  And we are stuck where we put ourselves.

Is there an out from this ugly trio?  The only one I can see is this.  If our ambitions became smaller, in proportion to our reality, we might be able to slip out of our trap in the cracks around our triple crisis.  That is, if we acknowledged now that we cannot, as the Rolling Stones put it, get what we want, that we must settle for what we need, and content ourselves with the hope that our actions now can enable a decent future, we might be able to go forward.

The first item on that agenda would be a realistic assessment of what we need to do for climate change.  The odds are this would be painful, and politically unpopular.  And we need to do it anyway – emissions targets must be set lower and sooner, and while we can all hope that economic growth will magically begin, we must begin from the assumption that it will not.  That is, we must cut much of our emissions simply by not making them.  That means a massive shift in our society – ideally with tradable rationing as George Monbiot has proposed, which is the sanest of a lot of mediocre options.  Thus, the poor who already make fewer emissions than the rich, get to trade off their emissions allotment, and get a little richer, if they are willing.  But there must be absolute, strict caps.

The bailing of the rich and its corporations must stop – if we accept that economic growth in any sustained way is manifestly unlikely in the coming years, we can’t keep borrowing.  So what money we spend has to be spent on protecting the people, and reviving the domestic and informal economy – because, after all, if people’s basic needs are met, growth itself isn’t as important – this doesn’t mean that such a contraction will be easy, but it can be far less painful than it will be.  And the political difficulties could be navigated by a leader powerful enough to make the case for self-sacrifice for a larger goal. I don’t claim this is easy – merely necessary.

Finally, we would simply need to use vastly less energy, while gradually allocating as many of our resources as humanly possible to renewables and infrastructure investments, not primarily for the short term, but for the long term.  We must begin from the assumption that all of our densest energy sources are in decline – we face peak oil, coal and natural gas, and that our supplies of all are uncertain – so reducing our reliance on these *and* preserving a supply of these valuable materials for the future is essential.

Most of us reading this blog have thought for a bit about the implications of needing less energy, and they realize that in and of itself, this need not be unmitigated suffering – that is, we are not going back to banging rocks together in caves.  But we must invest our resources in making this possible, both at the personal and at the national, state and regional levels.  And we need to make compelling the vision of the future that we are offering – hope for our children and grandchildren, vs. no hope; a simpler life, harder in some ways, better in others; an honest truth, with some good and some bad. 

All this would entail convincing the American public that at this point, the most important thing we can do is to protect our future.  We have done this in the past – in World War II, that was our narrative.  We asked millions to risk death, to be parted from their families. Hundreds of thousands actually died for this goal.  The story we were told is this – we face a vast and terrible threat, one that risks destroying everything we value, we must fight it with everything in our power- and your sacrifice now buys you a future.  As Franklin Roosevelt said in 1941,

“We are now in this war.  We are all in it all the way.  Every single man, woman and child is a partner in the most tremendous undertaking in American history.  We must share together the bad news and the good news, the defeats and the victories – the changing fortunes of war.”

I do not claim that getting the American or the world’s people to share in this project would be easy. I do claim that it is possible - every time I mention this many observe that we are now lazier, softer, more selfish than our grandparents ever were.  And that may be true.  But more than our grandparents, even, I think we long for meaning and purpose, for a vision of the future,  even if it is difficult.  Nor are we as soft as we like to say – Americans are very much invested in their own image of themselves as tough, as willing, as courageous - so invested that I have little doubt that they will rise to the occasion. I have no doubt this would be very hard. I also have no doubt it is possible.

That said, I don’t find it probable, much as I would like to, that our present leadership will lead us there.   And there is a real chance that even if we made the shift, we might fail to mitigate climate change, we might fail to create a decent future – we’re pretty close to the edge here.  But then again, we might have failed in World War II as well – at the start, it seemed very unlikely that Britain would not fall to the Germans at the very least.  The fact that you might fail might not be as important as we think it is.  In the end, if we face up to our realities, and acknowledge them, the very best any of us can do is everything we can.

Our present position, is, to put it mildly, unenviable.  We are trapped, proverbially, between rock and hard place, with immovable object pressing down on top.  We have squandered our chance to find the easy ways out, and our best options aren’t that appealing to most of us. 

The only possible case for them is that they are real.  That is, that outside the world of fantasy, outside those invested in raising consumer confidence or denying our ecological predicament for their own purposes, we have the choices we have.  Nobody chose this.  Nobody wanted it, and yet, it happened, and we allowed it. And now, we go from where we are.  Or we do not, and we never go anywhere at all worth going – we spend the rest of our lives in a trap, with the walls slowly moving together. 

Sharon 

The Ponzi Scheme As Way of Life

Sharon December 19th, 2008

I’m sorry, I’m having a bit of trouble getting all outraged about Bernie Madoff and his ponzi scheme.  Yes, I’m shocked.  Shocked and appalled.  You mean, someone was offering a scheme in which you pay present day participants with the funds of those who come in later, and then it fell apart.  Gosh, that seems so unprecedented.

Yeah, I feel bad for those who were taken in, particularly for charities that lost their funds.  But no worse than for those who lost their 401Ks or their pension funds on the stock market, for cities and states that can’t sell municipal bonds, and I feel far worse for the poor, who never had a glimmer of getting to participate in the get-rich-quick ponzi scheme that was a stockmarket that everyone said could have perpetual growth forever. 

Madoff may be a criminal, but he’s a criminal in large part because he’s engaging in a particular form of ponzi scheme that we look down upon, one small enough to be called illegal.  In general, we’re pretty comfortable with ponzi models -we live, quite happily, in a ponzi economy, one in which the concept of perpetual economic growth is sold, divvied up again and resold.  We live in a Ponzi ecology where we borrow constantly against the future to pay for our present affluence.

Is this truly a Ponzi scheme?  I think the answer is yes – a Ponzi scheme never really generates new wealth, it simply relies on a constant stream of new money.  And since the eco-Ponzi economy relies most of all on reducing the capacity of future generations to live well – because natural resources and associated wealth are already drawn down, I think that it does meet the criteria at both the economic and ecological levels.

 Most of us have been putting our money into 401Ks and Mutual funds,  and now that money is disappearing – and it is disappearing again, because we live in a Ponzi economy, one in which new funds can, for a while, conceal the bankruptcy of a society that draws down its natural resources and leverages both its ecology and economy past bearing.  Thus we get the mantra, as Bob Waldrop wisely observes, investing is saving that we all belong in the stock market:

“Lie the First: Money in the stock market is “savings”.

Reality: Money in the stock market is “speculation”. You buy a stock on the speculation that it will go up and you will sell it later at a profit and in the meantime, maybe get a regular dividend. It can also be considered casino gambling. It is not savings as we generally define the term, since it can be here today and gone five minutes later.

Lies the Second and Third: Everyone should be in the stock market. You can’t afford to NOT be in the stock market.

Reality: The stock market is only for people with money to gamble. People with debts and small savings should not be in the stock market. The former should pay the debts, including their mortgages first. The latter should wait until they have substantial savings before they decide to risk a small amount of their assets in the stock market.

The stock market game is rigged against the average small investor. With the way accounting rules and etc are these days, there are lots of ways that corporations can hide important information. Just ask some of the Lehman’s stockholders about that.

Lie the Fourth: Buy and hold is the smart strategy. Over time, the stock market always goes up.

Reality: That’s not the way the rich make their money in the stock market. They buy stocks when they are cheap and sell them when they are expensive. The “always goes up” comment is usually coupled with a comparison of two dates and the stock market index values on those dates. Compared to the history of economics, there is no way that we can say with total truth that the market over time will always go up. Where are the investments in the stock exchanges of the Roman Empire these days? And a rise in a stock market index may have nothing to do with the performance of individual stocks or mutual funds. Ask the stockholders of Enron about that. Or the stockholders of corporations that made horse-drawn carriages.”

I don’t blame people who were constantly told that they’d need X million dollars to keep living into their old age, and if they didn’t have it, would find themselves freezing and starving for believing this, but it is how the Ponzi economy works.  It relies on the idea that you are doing something good by feeding your dollars into corporate coffers, and that your money is still really yours.  Those are both false truths.  And they are built on ponzi model they pay out to the earliest investors (why, for example, wealth is increasingly concentrated in the hands of older folks) while offering nothing to those unlucky enough to get in late.

I had one of those “duh” moments yesterday as I was doing a radio show – I made a point I’ve made many times before – that growth capitalism in general and the real estate bubble in particular depended heavily on the idea that we can’t live together, that everyone has to own their own separate household.  So the rise in average material living space from 250 square feet per person in 1950 to 850 square feet for each warm body in 2000 was in part a product of the constant message that living together with one’s family or friends was a measure of failure. 

This point I’ve written about a number of times – but somehow I’d never quite fully grasped the corollary point, which I found myself articulating on the fly - that the Ponzi economy depends on an endless supply of laborers, laborers who wouldn’t quit because they can’t.  And that means that the cost of living – of basic needs like housing, food and transportation have to be kept high – because otherwise people might notice that serving corporate masters isn’t the best or only way to live their lives.  Those 850 square feet, and the costs associated with them, and the problems of housing the ordinary stuff we “require” for daily life in 250 square feet means that the cost of housing for ordinary people is dramatically  high – so high that we must devote most our time to the corporate economy, so high we then have no time to do work in the informal economy, so high that we can never, ever think about whether there are any better choices out there.

We’re going to try and rescue the economy with another Ponzi scheme – with borrowing against our children’s future wealth to protect financial institutions and invest in some good things and some bad ones.  This, of course, is the oldest ponzi scheme of all, and you can make the argument that some human societies have been playing this game for a very long time.  We’ve been doing it with natural resources and are continuing to do so, and we’re also expanding the share of our children’s wealth we’re willing to borrow against.  After all, what have future generations ever done for us?  They might as well serve some purpose – to pay off our debt.

And of course we’ve got the best possible reason for this – we’re in a crisis.  There’s always a good reason for taking just a little more of what belongs to the future – to bring people out of poverty, to resolve this or that crisis.  Of course, the crisis was caused by borrowing against our children’s inheritence of natural resources, but more of the same is now necessary.  A good Ponzi scheme always needs new investors – and if none are going to volunteer, well, let’s volunteer them.  We’ll use the to prop up the stock market and today’s version of the Roman chariot business.

Our ecology and our economy all fundamentally are built on a Ponzi scheme in which we can never make enough to keep up – we are always losing ground, always having to steal from further down the line of our posterity.  At the same time, we justify their forcible participation in this speculation by saying that we are protecting them – we have to protect them from a Depression, so it is worth risking their future.  But, of course, if you actually care about your children and grandchildren, you don’t ask them to make sacrifices you aren’t prepared to make.  Fundamentally, we’re covering our own asses, and asking our kids to do it for us.

And that’s, well, evil, to put it bluntly.  It is precisely the opposite of what parents are supposed to do for their children, and what present generations are supposed to do for the future.  As David Orr observes in his superb essay “Loving Children: A Design Problem” living in a world in which we do not act as though we love our children (despite our endless assertions that we do) does them deep, moral harm.  It lessens us, but more importantly, it doesn’t just physically impoverish our children, it morally impoverishes them too.

“The Skymall catalogue, conveniently available to bored airplane passengers, recently offered an item that spoke volumes about our approach to raising children. For a price of several hundred dollars, parents could order a device that could be attached to a television set that would control access to the television. Each child would be given a kind of credit card, programmed to limit the hours he or she could watch TV. The child so disciplined, would presumably benefit by imbibing fewer hours of mind numbing junk. They might also benefit from the perverse challenge to discover the many exciting and ingenious ways to subvert the technology and the intention behind it, including a flank attack on parental rules and public decency via the internet.

My parents had a rather different approach to the problem. It was the judicious and authoritative use of the word “no.” It cost nothing. My brother, sister, and I knew what it meant and the consequences for ignoring it. Still, I sometimes acted otherwise. It was a way to test the boundaries of freedom and parental love and the relation between the two. 

The Skymall device and the word “no” both represent concern for the welfare of the child, but they are fundamentally different design approaches to the problem of raising children and they have very different effects on the child. The device approach to discipline is driven by three factors that are new to parenting in the postmodern world. It is a product of a commercial culture in which we’ve come to believe that high-tech gadgetry can fix human problems, including that of teaching discipline and self-control to children. Moreover, the device is intended mostly for parents who are absent from the home for much of the day because they must (or think they must) work to make an expanding number of ends meet. And, all of our verbal assurances of love notwithstanding, it is a product of a society that does not love its children competently enough to teach them self-discipline. The device approach to parenting is merely emblematic of a larger problem that has to do with the situation of childhood within an increasingly dysfunctional society absorbed with things, economic growth, and self. 

We claim to love our children, and I believe that most of us do. But we have, sheep like, acquiesced in the design of a society that dilutes the expression of genuine love. The result is a growing mistrust of our children that easily turns to fear and dislike. In a recent survey, for example, only one-third of adults believed that today’s young people “will eventually make this country a better place” (Applebome, 1997). Instead, we find them “rude” and “irresponsible.” And often they are. We find them overly materialistic and unconcerned about politics, values, and improving society. And many are too materialistic and detached from large issues (Bronner, 1998). Not infrequently they are verbally and physically violent, fully adapted to a society that is saturated with drugs and violence. A few kill and rape other children. Why are the very children that we profess to cherish becoming less than likable and sometimes less than human? 

Some will argue that nothing of the sort is happening and that every generation believes that its children are going to Hell. Eventually, however, things work out. Such views are, I think, fatuous because they ignore the sharp divide imposed between the hyper-consumerism of the post-modern world and the needs of children for extended nurturing, mentoring, and imagining. It’s the economy that we love, not our children. The symptoms are all around us. We spend 40% less time with our children than we did in 1965. We spend, on average, 6 hours per week shopping, but only 40 minutes playing with our children (Suzuki, 23). It can no longer be taken for granted that this civilization can pass on its highest values to enough of its children to survive. Without intending to do so, we have created a society that cannot love its children, indeed one in which the expression of real love is increasingly difficult.”

Our love for our economy leads us to seek any path out of the crisis we are now facing – whether it will work or not, whether it does harm or good.  We say we are doing it for our children – but much of what we have done mean that their own Depressions will be deeper and they will be poorer.  The Ponzi scheme is coming to an end – we have drawn in generations at a huge remove from us.  500 years from now, when no one remembers our names, our descendents will still be living with the consequences of climate change, will still be paying the debt from our overdrawn ecology.

It may well be the case that we will have to borrow against both resources and wealth to adapt our infrastructure – but we shouldn’t put a penny of borrowed money into anything that won’t serve the next generation, as well as us or better.  That means not a cent for Detroit to keep building gas guzzlers and personal cars.  Not a penny for highways that they won’t be driving on anyway.  We cannot afford to waste what’s left of their inheritance – we need to leave our children buildings worth occupying, that will last long enough to house them, and energy resources that will serve them, and some accessible oil in the ground for the things they may not be able to produce without it. 

I was born in 1972.  By the time I was six or seven, it was well known that we desperately needed to take action to address future needs for energy, economic and climate stability.  In 1979, Jimmy Carter’s Year 2000 report identified Global Warming as a major threat, and the need for growth in renewable energy as a primary national project.  Some nations, including Sweden, took their posterity as a priority and began seriously investing in alternative energies.  And in the US, we had morning in America, and the decision to offer some temporary prosperity at the price that my generation, coming of age, with children on our knee, would face the coalescing problems passed down to us.

I don’t blame the baby boomers as a unit – many I know did their damnedest to make it happen, but they were not the majority.  I admire and respect all of those who fought the good fight to keep priorities straight.  But that said,  our parents and grandparents failed us, they passed the problem down to my peers, and those younger than us.  And those same people (because most of the powerful are baby boomers still) are planning on passing the problem down to the children we hold at breast or watch play at our knees.  They will impoverish their grandchildren to keep the Ponzi scheme going.

The question is whether we, and the baby boomers and older folk who had it right from the beginning, actually love our children and grandchildren enough to stop the buck here?  I don’t minimize how difficult that is - and I don’t doubt that trying to live on a fair share, and get through the necessary economic crisis so we can start better next time will be difficult for children as well as adults.  And yet, passing the buck again ensures them a darker, warmer, more bitter world with fewer natural resources, and a crushing economic debt.  Sometimes when there are no easy answers, one has to move to “what is right.”

The burden of addressing our world-wide Ponzi scheme falls, I fear upon all of us who are adult enough to demand it stop, to refuse to participate to the extent we can, to work to end it, and most of all, to shield with our bodies the children and grandchildren we do love, and in whom we must reposit our hopes, our endurance and our courage.

Sharon

Doing the Numbers: What You Need to Know About Oil Depletion

Sharon November 1st, 2008

Some people take drink or eat chocolate when bad news strikes. I go out to the barn and milk the goats (ok, I eat chocolate too sometimes ;-)).  You see goats, (whose motto is “We’re people too, and would you mind if we came inside with you and stood on your dining room table for a bit.”) do best if you keep their routines intact (think of them as toddlers with hooves) – so no matter what is on your mind, how busy you are with other things or what kind of mood you are in, you have to go out to them.  They have to be brushed, fed, enticed to their spots, you have to lean your body against their warm one, and you must immerse yourself in the rhythym of milking.  And it is almost impossible, by the end, to be in the same place in your head that you were when you started.  They are too real, too concrete – the abstractions tend to settle down.

What on earth does this have to do with oil depletion?  Well, not much, actually – except that the last couple of days, what I’ve taken out to the barn to my two little fuzzy therapists has been the new IEA depletion rate.  And the problem I keep taking out there is this – how can I or anyone else make something as resolutely unsexy, as deeply, eye-glazingly dull-seeming as oil depletion rates, appear engaging enough to actually get people to understand how much this matters.  I thought I could do worse than starting with the cute goats ;-) . 

Earlier this week, the Financial Times leaked the International Energy Agency’s figures that show the rate of decline in production of the 400 largest oilfields in the world – and they concluded that without large scale, above normal investment, the annual decline will be 9.1%.

It is hard to understand how important that number is, particularly given the situation we are in right now.  In an excellent essay on the subject, Richard Heinberg observes,

“Considering regular crude oil only, this means that 6.825 million barrels a day of new production capacity must come on line each year just to keep up with the aggregate natural decline rate in existing oilfields. That’s a new Saudi Arabia every 18 months.”

This is huge news, and it got very little media attention.  If you did read it online or in your morning newspaper, your eyes probably did glaze over a bit, unless the implications were teased out in the article. 

In order to fully understand these implications, you have to have some background about what we’ve known or suspected about oil for a while.  The first thing most articles don’t tell you is that we’re not discovering anything like enough oil to keep up with that figure.  Now I’m something of an energy geek, so I keep track of this stuff, but most of us, if we read the papers, hear about big discoveries in Brazil or the Gulf of Mexico, about offshore drilling and ANWR and think we’re pretty well set on discoveries.  In fact, that’s not true.  We’re not replacing the oil we’re extracting with new discoveries, mostly becauses we pretty well know where the oil is.  Oh, we find new barrels – but only one for every six we consume.

And the other thing you would have to know is that we’re shifting from what we might call “easy” oil – the kind that comes pumping out of the ground without too much effort, to oil that is pretty tough to extract. In some cases, our new discoveries, like the Bakken oil shale are places we knew there was energy that could theoretically be extracted, but it was so expensive, and so difficult, and so energy and water intensive that it wasn’t worth bothering.  We can talk about new discoveries, or new technologies, but it is really important to realize that when we compare a newly discovered barrel of oil with a played out field in Saudi Arabia, we aren’t necessarily comparing equivalents.  First of all, it may take a lot more energy and money to get at that oil in the first place – and that money may not be available when we want it.  When oil prices shot up to $125 barrel, some of this new oil started to look pretty good – but falling back under $70, its not so easy.  We’re already seeing new energy projects being put into mothballs due to the financial crisis.

Second, a lot of what we’ll be getting isn’t the easiest oil to use – there are multiple kinds of oil out there.  The most desirable sort is light, sweet crude.  That needs refining, but not nearly as much as heavy, dirty oils – and now we’re getting a lot more heavy, dirty oils that cost more energy to clean up, and are expensive to produce, and not that efficient.  The two kinds of oil aren’t really equivalent – think of it as though someone took your beer and replaced it with an equal volume of Tab – they are both somewhat carbonated liquids, but they don’t really produce the same results.

Now I’m unashamedly a peak oil activist.  The media is presently declaring peak oil to be a hoax, something that they were willing to consider when oil prices were high, but now that they are low, something to be dismissed.  That’s because they’ve never understood what peak oil was – no one has ever claimed we were running out of oil.  What has been claimed is that we were running out of cheap oil – the days of stable low prices and easy supplies are over.  Peak oil was never about price – yes, if we’ve passed the halfway point of extraction, prices will probably go up.  But the key word is not “expensive” but “volatile” – that is, of course if rising energy prices help tank the economy, the cost of energy that people can’t afford to buy will go down.  And they’ll probably go up again, too, just at the moment most of us find it hard to pay.  That’s pretty much common sense.  The idea that it is only peak oil if the price goes up every time is just wrong.

Now here’s what you most need to know about these numbers – I can’t speak for any other peak oil activist, but they are much higher than I expected.  And that’s really bad news.  There has been a lot of speculation over the years about what the decline rate really is, and there are a lot of smart people out there who have good and useful cases on this subject.  Matt Simmons, for example, author of _Twilight in the Desert_ and Jeffrey Brown, the creator of the Export Land Model have both been telling as many people as they can that the decline rates, for a host of reasons, are going to be higher than most people expected.  Maybe they anticipated this.  But I sure didn’t.  And I don’t think most people did. 

We’re not going to find the equivalent of a new Saudi Arabia every 18 months – most of the new discoveries you’ve heard about in the media are a long way from development.  And the biggest thing needed to keep up oil production is a lot of investment money – precisely the sort of thing that is disappearing in the credit crisis.  Peak oil folks get accused of having too bleak an outlook – but right now, I don’t think it would be inaccurate to say that most of us have actually had too rosy an outlook – we’ve been expecting a depletion rate considerably lower than that.

What about renewable energies?   Can they take up some of the slack?  Well, they could if we were building them rapidly enough – we aren’t.  And they are facing the same failures of investment capital that new oil extraction techniques are.  They need money. Not only that, they need a lot of fossil fueled energy.  That last part may sound kind of crazy – solar and wind need a lot of fossil fueled energy?  Absolutely – there’s not a plant out there making solar panels that doesn’t depend on a stable supply of oil, and certainly most of the US ones depend heavily on coal-fired electricity as well.  Getting those wind turbines set up means a whole lot of trucks using diesel fuel.  In itself, that isn’t a problem – but let’s imagine you have to replace 9% of our oil production every year with those renewables – that is, that not only is our oil production likely to see a decline, not only are we already struggling to match demand from other places, but now a large percentage of our incoming fossil fuels have to be allocated to a build out of renewable energy.  Could that be done?  Sure – it would be a lot like living in World War II, where everyone was serving a greater project, but it could be.  But it hasn’t been, and I have my doubts that it will.

Now everyone in the peak oil community has their project, and their particular niche.  Some folks chase down the data, deal with media or start up this project or that – and there’s so much to do that I personally can’t help but be grateful to everyone.  Here’s what I’ve been doing – in the simplest possible terms, I looked at the scale of the problem, and I looked at our response (not much so far), and I came, broadly, to this conclusion.  We might screw it up.  Oh, it is possible that I’m underestimating human ingenuity, and that we’ll do everything right.  On the other hand, it seemed like having some kind of contingency plan for a scenario in which we did not replace all our energy infrastructure rapidly, where we did face tight supplies, volatile prices and perhaps an economic depression, in part created by our situation was a good idea.

So that’s what I’ve been doing all along – at the same time that I nightly pray that we’ll get our act together, my own relationship to this (since the other best cure for worry, besides goats, is action) is to get as many people, and communities, neighborhoods and other groups ready to deal with less energy, less wealth, less security as possible.  And I have to say, learning that the decline rate is 9.1% makes me feel that my strategy has mostly been the right one. Because that’s a huge and shocking number – we’re already running as fast as we can to keep in place.  We can reduce our demand some (in fact, it seems that the economic situation will probably do that), and we can increase our investment as much as possible, given the constraints of our debt and resources.  But in the end, we’re probably going to have to make our transition to new energy supplies more gradually than most of us like or are prepared for.  We’re probably going to have to make do with a lot less.

The good news is that that’s not such a bad thing.  There is hope here – yes, the cheap energy is going away (whether in the form of rising prices or our simple inability to pay the bills) – but that’s not the end of the world.  Merely a vast challenge – and challenges can be met – maybe we won’t have all the energy we want, but we have the courage to live differently.  But before we can meet that challenge, we have to know what we’re facing.

Sharon

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