15 July, 2011
Post Carbon Institute

World energy policy is gripped by a fallacy — the idea that coal is destined to stay cheap for decades to come. This assumption supports investment in ‘clean-coal’ technology and trumps serious efforts to increase energy conservation and develop alternative energy sources. It is an important enough assumption about our energy future that it demands closer examination.

There are two reasons to believe that coal prices are likely to soar in the years ahead.

First, a spate of recent studies [1–5] suggests that available, useful coal may be less abundant than has been assumed — indeed that the peak of world coal production may be only years away. One pessimistic study [1] published in 2010 concluded that global energy derived from coal could peak as early as 2011.

Second, global demand is growing rapidly, largely driven by China. Demand rose modestly in the 1990s (0.45% per year), but since 2000 it has been surging at 3.8% per year. China is both the world’s biggest producer of coal (40% of global production) and its biggest consumer. Its influence on future coal prices should not be underestimated.

Economic shocks from rising coal prices will be felt by every sector of society. Better data on global coal supplies is long overdue and energy policies that assume a bottomless coal pit need rethinking urgently.

Forecasting future supplies of coal is a murky business, largely because of the unreliability of national estimates. China claims that it has enough coal to fuel its growing economy at current rates. According to data collected in the 2000–10 national resource survey by the China’s Ministry of Land and Resources, the country’s proven reserves of coal total 187 billion tonnes, the second-largest reserves after the United States. For China, that is about 62 years’ worth of coal — at 2009 rates of consumption (roughly 3 billion tonnes a year). This simple ‘lifetime’ calculation is popular with industry and politicians but it can generate a false sense of security over the actual state of reserves.

‘Proven recoverable reserves’ are estimates of the national coal resources that geologists believe are technically and economically feasible to mine. New mining technology and higher coal prices could, in principle, increase the size of those reserves. But the overwhelming global trend, as revealed by national coal surveys over the past few decades, is for the size of countries’ estimated reserves to shrink as geologists uncover restrictions — such as location, depth, seam thickness and quality — on the coal that can be practically extracted.

For example, both German and South African reserves have fallen by more than one-third between 2003 and 2008. The first British coal survey, in the nineteenth century, suggested that the nation had enough coal to last 900 years. The current reserves lifetime is only 12 years [6], and the British coal industry is a tiny fraction of its former size. Similarly, the first official US coal survey, in the early twentieth century, suggested that the country had enough coal for 5,000 years. That estimate shrank to about 400 years in 1974 and stands at 240 years today. There are exceptions to this trend: estimates of reserves in Indonesia and India have grown. However, in aggregate, estimates of global coal reserves have dropped at a faster rate in recent years than can be accounted for by mining alone.

[Insert Photo here]

OPTIMISTIC FORECASTS

China’s reserves were last surveyed in the early 2000s, and the US reserves in the 1970s. China does not possess, as the United States does, vast deposits of surface-minable coal. More than 90% of China’s coal comes from underground mines that can be as much as 1,000 metres deep, presenting increasing engineering challenges. We strongly suspect that the current reserves figures are too optimistic. The coal is certainly there, but — like the majority of coal elsewhere in the world — most of it is probably destined to stay put. One way to estimate future production is to look at past production trends. This method was pioneered by geophysicist King Hubbert, who used 1950s data from the US oil industry to predict that US oil production would peak in the early 1970s. It did. Hubbert production profiles plotted over time assume the shape of a distorted bell curve, with a short peak and gradual decline (see graphic). Applying Hubbert analysis to coal, Chinese academics Tao and Li [7] forecast in 2007 that China’s production will peak and begin to decline long before the simple 62-years estimate, perhaps as early as 2025. During and after the period when production peaks, resource quality will dwindle and mining costs will rise, pushing up coal prices, as is already beginning to happen with Asia-Pacific coal.

Tao and Li used the Chinese government’s latest official reserves figure of 187 billion tonnes to arrive at their peaking date between 2025 and 2032. Other forecasts are more pessimistic. A 2007 forecast3 by the Energy Watch Group, based in Berlin, used a reserves figure of 114.5 billion tonnes (reported by China to World Energy Council in 1992) to forecast a peak of production in 2015, with a rapid production decline commencing in 2020. Analogous concerns raised in 1998 about the end of cheap oil [8] proved prescient. The price of oil has grown substantially since then, as have the costs of finding and extracting new supplies. The current price of more than US$80 per barrel is about three times higher than the upper range in official forecasts for 2010 that were being issued in the late 1990s [9]. New technologies have made marginal oil reserves accessible, but deepwater drilling and oil-sands production entail high costs and risks.

Similarly, new technology — underground coal gasification — may eventually make marginal coal reserves accessible, but it will take time and substantial investment to commercialize on a large scale. Meanwhile, the world’s highest-quality and most-accessible coal reserves are disappearing as demand for the fuel grows.

[Insert photo here]

Coal consumption is accelerating fast, notably in China (see graphic). This renders meaningless reserves-lifetime figures calculated on the basis of flat demand. A 2009 report from China’s Energy Research Institute forecast that coal demand would rise by 700 million to 1 billion tonnes by 2020, reducing the reserves lifetime to about 33 years. If coal demand grows in step with projected Chinese economic growth, the reserves lifetime would drop to just 19 years [10].

COAL RELIANT

China has few options for reducing its reliance on coal. It uses coal in many more industries than the United States, where coal mostly fuels power generation. About half of China’s coal provides 80% of the country’s electricity supply; another 16% supplies the coke for its iron and steel industry, the largest in the world. Hundreds of millions of people in northern China consume another 6% for their winter heat supply. The remaining 28% is primarily used in industries such as cement, non-ferrous metals, and chemicals. Although China is rapidly expanding its supply of natural gas, to replace just the coal used for heating would double its total gas consumption.

Urbanization is also driving demand for coal. Less than half of China’s population now lives in cities (compared with 80% for the United States and the European Union). To improve living conditions and opportunities for its citizens, the government wants the urban population to grow by 350 million people over the next 15 years, all of whom will require infrastructure such as housing, energy, transport, water supply and waste treatment. This will necessitate a steady supply of building materials such as cement, steel, aluminium and copper, all of which depend on coal for their production. Over the next decade, economic growth and urbanization are expected to use at the very least 700 million tonnes of coal — assuming that aggressive energy-efficiency and alternative-energy targets are also met [7].

Can China go elsewhere for its coal? The United States has the world’s biggest reported reserves, but almost all its current production — 1 billion tonnes — is used domestically. The biggest exporters of coal, Australia, Indonesia and South Africa, have much smaller reserves and production rates — some 250 million to 400 million tonnes a year. In 2008 the entire seaborne trade in steam coal (mainly used by power plants) amounted to about 630 million tonnes. Although this could grow (Australia, Russia and Indonesia are expanding capacity), growth will be limited, and prices pushed up, by the need to construct mines, railways and ports.

Russia has large but mostly undeveloped coal resources in Siberia. They are not located near demand centres, and rail transport of coal is expensive (which is why the largest exporters are coastal and trade is waterborne). Nevertheless, Russia could export Siberian coal to China more easily than to Europe, especially if China helped to build the railways.

China alone could absorb all current Asia-Pacific exports with just three years of import growth at current rates. Because other countries in the region also depend on coal imports, China clearly cannot take all, but competition for imports drives up prices. And then there’s India, where imports are expected to nearly double to 100 million tonnes by 2012. India is one of the few countries to revise its reserves estimates upwards in recent years, but its higher-quality reserves are limited and it is importing increasing quantities.

The inevitable result of soaring demand and dwindling supply will be rising coal prices globally, even in nations that are currently self-sufficient in the resource.

The poor quality of coal data globally means that uncertainty clouds every forecast. Even in the technologically advanced United States — the ‘Saudi Arabia of coal’ — most experts rely on decades-old coal surveys. These are commonly interpreted as indicating that the nation has a coal supply with a 250-year lifetime. This figure is not reliable enough for strategic energy planning.

In terms of energy output, US coal production peaked in the late 1990s (volume continued to increase, but the coal was of lower energy content). In 1995 the US Geological Survey (USGS) promised a new national coal survey, but it has not been seen as a high priority by that organization or by Congress. The most recent surveys [11],[12] of two key mining regions show rapid depletion of high quality reserves. There is still an enormous amount of US coal, but whether future energy production can be increased is doubtful, even taking into account new mining areas in Montana, Alaska and the Illinois basin.

LIMIT CONSUMPTION

At the very least, the USGS should urgently complete a new national coal survey. And it is essential for the security of energy supplies globally that Chinese domestic coal production and the timing of its likely decline is better understood.

We believe that it is unlikely that world energy supplies can continue to meet projected demand beyond 2020. Therefore, new limits on energy consumption will be essential in all sectors of society — including agriculture, transportation and manufacturing — and will be imposed by energy prices and shortages if they are not achieved through planning and policy.

Supply limits also have implications for the development of clean-coal technology. Also known as carbon capture and storage (CCS), clean coal is one proposal for reducing greenhouse-gas emissions while growing energy supplies. Because maintaining economic growth while cutting coal out of the energy equation globally will be difficult, and because nearly everyone assumes that coal will remain cheap far into the foreseeable future, the idea is to keep the carbon dioxide produced by burning coal from going into the atmosphere.

There are two hitches: the difficulty of scaling up such an enterprise, and its effect on electricity prices. As many analysts have noted, the scale and cost of clean-coal infrastructure will be vast [13]. Energy analysts agree that this will boost the price of electricity, but the scheme could work if coal prices remain low. If they don’t, building new coal plants — conventional or clean — makes little economic sense, except to replace ageing inefficient infrastructure.

Nations should immediately begin to plan for higher fossil-fuel prices and to make maximum possible investments in energy efficiency and renewable-energy infrastructure. Even then the world will have to accept a slowdown in economic growth.

Richard Heinberg and David Fridley are at the Post-Carbon Institute in Santa Rosa, California 95404, USA. \

Heinberg is the author of nine books, including Blackout: Coal, Climate, and the Last Energy Crisis, The Party’s Over, Peak Everything, and the soon-to-be-released The End of Growth. He is widely regarded as one of the world’s most effective communicators of the urgent need to transition away from fossil fuels.

David Fridley: Since 1995, David Fridley has been a staff scientist at the Energy Analysis Program at the Lawrence Berkeley National Laboratory in California. He is also deputy group leader of Lawrence Berkeley’s China Energy Group, which collaborates with China on end-user energy efficiency, government energy management programs, and energy policy research. Mr. Fridley has nearly 30 years of experience working and living in China in the energy sector, and is a fluent Mandarin speaker. He spent 12 years working in the petroleum industry both as a consultant on downstream oil markets in the Asia-Pacific region and as business development manager for Caltex China. He has written and spoken extensively on the energy and ecological limits of biofuels.

This article was Originally published November 18, 2010 in Nature Vol 468. Republished with permission.

1. Patzek, T. W. & Croft, G. D. Energy 35, 3109–3122(2010).

2. Mohr, S. H. & Evans, G. M. Fuel 88, 2059–2067(2009).

3. Zittel, W. & Schindler, J. Energy Watch Group, Paper No. 1/07 (2007); available at http://go.nature.com/jngfsa

4. Rutledge, D. Hubbert’s Peak, The Coal Question, and Climate Change (2007): available at http://rutledge.caltech.edu

5. Höök, M., Zittel, W., Schindler, J. & Aleklett, K. Fuel 89, 3546–3558 (2010).

6. 2010 Survey of Energy Resources (World Energy Council, 2010); available at http://go.nature.com/hde5r7

7. Tao, Z. & Li, M. Energy Pol. 35, 3145–3154 (2007).

8. Campbell, C. J. & Laherrère, J. H. The End of Cheap Oil. Sci. Am. (March 1998).

9. Energy Information Administration. Annual Energy Outlook 1998 (DOE/EIA, 1997).

10. 2050 China Energy and CO2 Emissions Report (in Chinese) Science Press, 2009).

11. Luppens, J. A. et al. Assessment of Coal Geology, Resources, and Reserves in the Gillette Coalfield, Powder River Basin, Wyoming. Open-File Report 2008-1202 (USGS, 2008).

12. Coal Reserves of the Matewan Quadrangle, Kentucky — A Coal Recoverability Study. US Bureau of Mines Circular 9355 (USGS, 2003).

13. Strategic Analysis of the Global Status of Carbon Capture and Storage. (Global CCS institute, 2009).

For years, “not in my backyard” has been the battle cry of residents in Cape Cod who stand opposed to an offshore wind farm in Nantucket Sound. The giant turbines will forever mar the beauty of the landscape, they say.

Energy is ugly. Some forms more so than others, as nuclear near-meltdowns in Japan, the BP disaster in the Gulf of Mexico, and deaths in a West Virginia Coal Mine explosion have driven home in the last year. Energy kills plants, plankton, and people. It imperils the environment, poisons the oceans, and is threatening to turn part of Japan, one of the most advanced nations on the planet, into a contaminated zone for decades to come.

David Daniel knows this all too well. He built his dream home on 20 acres of lush wilderness, alive with panthers, wild boar, and deer, in Winnsboro, East Texas. Then a nightmare called tar sands appeared on his doorstep.

Tar sands are sandy soils laden with a tar-like substance called bitumen. Getting oil out of them is a dirty, dangerous, and deadly process. Daniel knew none of this when a neighbor phoned in the fall of 2008 to say that he’d seen trespassers on the property. “I went back [from work] and I found survey stakes that cut my property in half,” he recalls. Several months later, an eminent domain letter arrived, telling him that a pipeline carrying oil from Canada’s “oil sands” would cut through his pristine property. When he complained to TransCanada, the company in charge, its lawyer responded with a veiled threat: “Should I put the letter in the ‘cooperative’ or the ‘uncooperative pile?’”

So began the Daniel family’s struggles with TransCanada, whose powerful US backers include Koch Industries (best known for its stealth attacks on the federal government, and big spending on climate-change-denial campaigns). By the time TransCanada’s surveyors entered the Daniels’ lives, the corporation was already hard at work pushing a pipeline that would run from the Canadian border to Texas’s Gulf Coast, along the way slicing through the Daniels’ land and the properties of countless other Americans.

At no time did TransCanada’s representatives volunteer information about tar sands, leaving Daniel to do his own research. When he asked how tar sands oil would affect the pipeline, TransCanada responded only that the effects would be determined after the pipeline was put in place. “They made us feel like lab rats on our own property,” he says.

Behind his painful schooling in corporate arrogance lies a startling fact: Canada is the leading oil-supplier of the United States. Let me repeat that: the U.S. imports more oil from Canada than (yes) Mexico, which ranks second, and (believe it or not) Saudi Arabia, which ranks only third. Tar sands are largely responsible for Canada’s new petro-status. Nearly a million barrels of tar sands oil arrive in the U.S. every day. By 2025, Canada is expected to be producing 3.5 million barrels of tar sands oil daily. Most of that, says Ryan Salmon of the National Wildlife Federation, will be imported to the U.S. And believe me, when it comes to energy ugly, tar sands could take the cake.

Not Tar, Not Oil

In fact, “tar sands” is a colloquialism for 54,000 square miles of bitumen that veins sand and clay beneath the boreal forests of Alberta, one of Canada’s western provinces. Black as it is, bitumen isn’t actually tar, though it looks and smells like tar, and has its consistency on a very cold day — hence, that term “tar sands.” (The corporations that produce the stuff prefer “oil sands.”)

Unlike oil, bitumen does not flow. Gouged and steamed out from under the forest, it is wrenched from the soil, barreled, and then refined into synthetic crude oil — at shattering environmental costs. The tar sands industry has ravaged Alberta’s forests, poisoned its air and water, and wrecked the livelihoods of its indigenous peoples. Moreover, producing synthetic crude from a barrel of bitumen generates at least twice as much greenhouse gas as producing a barrel of normal crude oil. At 1.5 million barrels of tar sands oil a day, that’s a lot of global warming.

But for corporations intent on profits in a world rocked by Middle East and North African uprisings that might threaten global oil supplies, and by declining reserves of normal crude, environmental catastrophe is trivial collateral damage. The tar sands’ great selling point in the U.S. is that it comes from a friendly neighbor. Russ Girling, president and CEO of TransCanada, typically touts tar sands as improving “U.S. energy security and reduc[ing] dependence on foreign oil from the Middle East and Venezuela,” At a White House meeting in early February, Canadian Prime Minister Stephen Harper assured President Obama that “Canada is the largest, the most secure, the most stable, and the friendliest supplier of that most vital of all America’s purchases: energy.”

A complex alchemy turns bitumen into synthetic crude. Canadian journalist and tar sands expertAndrew Nikiforuk calls this final product “the world’s dirtiest hydrocarbon oil.” Canada used to transform bitumen from its rawest into its ultimate form, sending synthetic crude through pipelines to the U.S. Now, however, with Canada’s refineries maxing out, U.S. refineries are increasingly taking up the task of turning bitumen into the mock crude that makes even my Prius environmentally unfriendly. That means what’s coming to Americans in ever increasing quantities is a very raw form of diluted bitumen called DilBit, whose transport will make lab rats of us all.

Under jaunty names like “Lakehead,” “Alberta Clipper,” and “Keystone,” a vast pipeline network is already pumping this diluted bitumen to the Midwest and into the American heartland. The 1,900-mile-long Lakehead pipeline, owned by Canada’s Enbridge Inc., skirts one of the world’s largest stretches of fresh water, the Great Lakes.

Last June, Enbridge’s main competitor, TransCanada, opened a $5 billion, 2,147-mile pipeline it dubbed Keystone I, which plunges from Canada straight through the eastern parts of the Dakotas and Kansas to the Gulf Coast. Now, TransCanada is pushing hard for an extension, the Keystone XL, the one that will run through David Daniel’s land on its way to the Gulf coast.

In February, 2011, a landmark report by the National Resources Defense Council (NRDC) noted that diluted bitumen is “the primary product” carried by the Keystone I. The proposed Keystone XL, write the report’s authors, will be dedicated only to DilBit whose “combination of chemical corrosion and physical abrasion can dramatically increase the rate of pipeline deterioration.” So imagine this recipe for pipelines from hell: take thick, raw, corrosive, acid-ridden bitumen and add volatile natural gas to propel it since the bitumen doesn’t flow by itself; next, crank up the temperatures and pressures far higher than those needed to move ordinary crude oil (again, to help the stuff on its way). It doesn’t take a rocket scientist to understand some of the possible dangers of moving tar sands oil in this state through our communities.

The Tar Sands Come to Kellogg’s

Last July, as BP’s catastrophe in the Gulf was making news around the clock, the U.S. experienced its first big DilBit moment. Part of Enbridge’s Lakehead line broke, oozing black gunk into a tributary of the Kalamazoo River near Battle Creek, Michigan, iconic home to cereal-maker Kellogg’s. Twelve hours passed before workers responded to the surge of sludge, which by then had passed from the tributary into the river itself. The dark slop could be seen from bank to bank in the Kalamazoo, making its way to Lake Michigan.

High levels of benzene filled the air and local residents had to be evacuated from their homes. When the sludge passed through Battle Creek, the Kellogg’s factory even stopped making cornflakes. The spill was arrested before it could reach Lake Michigan, but not before a million gallons of DilBit had fouled a 30-mile-long stretch of the Kalamazoo, one of the biggest spills in Midwest history.

This was, however, no “ordinary” oil spill, as DilBit spills are much harderto clean up. Once DilBit hits water, the bitumen in it doesn’t float; it quickly sinks into river sediment. Exposed to sunlight, it forms a dense, sticky substance hard to remove from rock and soil.

Special dredging and other equipment is needed for any effective cleanup. The booms you saw skimming the Gulf last summer are inadequate, and the U.S. doesn’t yet have DilBit cleanup technology. So while cleanup crews worked on the Kalamazoo and its banks after the spill was discovered, they left a whole lot of DilBit behind. Adequate cleanup isn’t expected until at least late 2011, according to the NRDC’s Susan Casey-Lefkowitz.

At the time of the Kalamazoo spill, Enbridge’s CEO, Patrick Daniels,claimed that there had never been a leak “of this consequence” in the company’s history. According to Enbridge’s own reports, however, between 2000 and 2009 the company was responsible for 610 pipeline spills in Canada, totaling 5.5 million gallons. (Not all were DilBit, which makes the picture worse, not better, since ordinary crude is less corrosive and volatile than DilBit.) In Michigan, 12 spills from Enbridge’s pipelines preceded the larger one in the Kalamazoo. Two months after that spill, another part of Enbridge’s Lakehead pipeline leaked 256,000 gallons of DilBit into Romeoville, a suburb of Chicago.

Keystone’s underground pipeline to the Gulf Coast, which opened only nine months ago, has already leaked seven times. They have been small leaks, but significant nonetheless as they point to larger, more distressing problems. “It seems odd to us that a brand-new pipeline would have these little spills throughout,” says Casey-Lefkowitz. “It raises questions about the quality of construction.”

“TransCanada is building its pipelines according to strength regulations designed for conventional pipelines decades ago,” adds Anthony Swift, co-author of the NRDC report. Swift says the company “has not yet provided a meaningful strategy for dealing with some of the characteristics of diluted bitumen.”

The proposed Keystone XL, also underground, would carry up to 900,000 barrels of DilBit (37,800,000 gallons) south every day, passing through some of the most sensitive ecosystems in the U.S., including rivers, wildlife preserves, and wide expanses of prairie. In addition, it would run through the Ogallala aquifer, a 174,000-square-mile expanse of water that lies under eight states from the Dakotas to Texas and provides 30% of the nation’s irrigation for agriculture, as well as drinking water for 82% of the people within its vast boundaries.

The pipeline would pass through areas where landslides and earthquakes are known threats. Part of Keystone I already traverses an area of seismic activity in Nebraska, where a recent tremor — 3.5 on the Richter scale — shook the ground throughout the southeast part of the state. It also runs through the easternmost part of the Ogallala. Before Keystone I was built, a National Wildlife Federation report warned, “Some portions of the aquifer are so close to the surface that any pipeline leak would almost immediately contaminate a large portion of the water.”

TransCanada cannot begin constructing Keystone XL without both a presidential permission and a State Department environmental impact statement (EIS), made necessary because the project crosses international borders. The State Department issued that EIS in April, 2010 in the wake of public hearings in towns along the pipeline route. Environmental organizations, landowners, and the Environmental Protection Agency (EPA) were sharply critical of the EIS. Among other things, says the NRDC’s Anthony Swift, the statement failed to demonstrate “the need for the pipeline, its safety, and its greenhouse gas impacts.” Especially troubling, according to Susan Casey-Lefkowitz, was the failure to consider an alternate pipeline route that would not slash through the Ogallala aquifer.

Last month, under pressure from mounting opposition to the pipeline by a coalition of grassroots groups, the State Department held further meetings in Washington to hear their grievances. (The EPA also met with coalition leaders.) Ben Gotschall, a fifth generation Nebraska organic rancher, called the State Department’s environmental statement “insulting.” It suggested, he said, neither that stronger than normal pipeline materials should be used, nor that there might be alternative routes to the one currently proposed. TransCanada’s only concern, he insisted, was cost, while at stake was the “life and livelihood of millions of people.”

“My family has been producing grass-fed beef for five generations,” said Gotschall. “We do this organically, without chemicals and with minimum fossil fuel inputs… Nebraska farmers and ranchers were producing food long before we had the benefit of fossil fuels and we can and will find a way to produce food long after fossil fuels are gone. But we will never be able to produce food without clean water. To me, this pipeline is an issue of national security that threatens our domestic food and water supply.”

If the pipeline goes through, a handful of giant corporations will profit, among them Koch Industries which handles about 25% of tar sands imports to the U.S., and is among the biggest of U.S. tar sands refiners. Meanwhile, the grassroots opposition uniting farmers and ranchers, environmentalists and scientists is growing in the heartland states.

Last month, the coalition demanded that the State Department issue a supplemental environmental impact statement. On March 16th, Ben Gotschall e-mailed: “If you haven’t heard already, the State Department has called for a supplemental draft EIS… This is a victory for all of us who have been fighting this from the beginning.” On March 24th, 25 mayors sent a letter to Secretary of State Hillary Clinton: “We are concerned,” they wrote, “that expansion of high carbon projects such as the proposed Keystone XL tar sands pipeline will undermine the good work being done in local communities across the country to fight climate change and reduce our dependence on oil.”

Yet in the wake of the Fukushima nuclear disaster, domestic fears over nuclear energy are spiking, while months of turmoil in the Muslim world have highlighted a growing U.S. dependence on Middle Eastern oil. As a result, it will surely become harder to derail the efforts of TransCanada and Koch Industries to ram a pipeline filled with toxic tar sands oil right through David Daniel’s property.

Will a pipeline leak one day kill off his old growth hardwood trees, foul his three natural springs, and poison the deer now roaming his land? If TransCanada’s checkered history is any guide, it’s a real possibility. Energy kills. In Japan. In the Gulf. In Appalachian mines. And in the Corn Flake capital of the world. If Winnsboro, East Texas, is added to the list, it won’t be a surprise, not to David Daniel anyway. He knows what we all know now: in the hands of corporations whose only concern is profit, energy is ugly.

[Note on sources: Thanks to both Michael Klare, who suggested the tar sands topic, and Andrew Nikiforuk, who shared information by e-mail. Nikiforuk’s book Tar Sands: Dirty Oil and the Future of a Continent should be required reading on this topic. Thanks also to Anthony Swift and Susan Casey-Lefkowitz of The National Resources Defense Council for supplying additional information about the differences between DilBit oil spills and ones. NRDC’s crucial report, “Tar Sands Pipelines Safety Risks,” can be read in .pdf format by clicking here.]

This article was reposted from Turthout.

When nuclear reactors blow, the first thing that melts down is the truth. Just as in the Chernobyl catastrophe almost 25 years ago when Soviet authorities denied the extent of radiation and downplayed the dire situation that was spiraling out of control, Japanese authorities spent the first week of the Fukushima crisis issuing conflicting and confusing reports. We were told that radiation levels were up, then down, then up, but nobody aside from those Japanese bureaucrats could verify the levels and few trusted their accuracy. The situation is under control, they told us, but workers are being evacuated. There is no danger of contamination, but stay inside and seal your doors.

The First Atomic Snow Job

The bureaucratization of horror into bland and reassuring pronouncements was to be expected, especially from an industry where misinformation is the rule. Although you might suppose that the nuclear industry’s outstanding characteristic would be its expertise, since it’s loaded with junior Einsteins who grasp the math and physics required to master the most awesomely sophisticated technology humans have ever created, think again. Based on the record, it’s most outstanding characteristic is a fundamental dishonesty. I learned that the hard way as a grassroots activist organizing opposition to a scheme hatched by a consortium of nuclear utilities to park thousands of tons of highly radioactive fuel rods, like the ones now burning at Fukushima, in my Utah backyard.

Here’s what I took away from that experience: the nuclear industry is a snake-oil culture of habitual misrepresentation, pervasive wishful thinking, deep denial, and occasional outright deception. For more than 50 years, it has habitually lied about risks and costs while covering up every violation and failure it could. Whether or not its proponents and spokespeople are dishonest or merely deluded can be debated, but the outcome — dangerous misinformation and the meltdown of honest civic discourse — remains the same, as we once again see at Fukushima.

Established at the dawn of the nuclear age, the pattern of dissemblance had become a well-worn rut long before the Japanese reactors spun out of control. In the early 1950s, the disciples of nuclear power, or the “peaceful atom” as it was then called, insisted that nuclear power would soon become so cheap and efficient that it would be offered to consumers for free. Visionaries that they were, they suggested that cities would be constructed with building materials impregnated with uranium so that snow removal would be unnecessary. Atomic bombs, they urged, should be used to carve out new coastal harbors for ships. In low doses, they swore, radiation was actually beneficial to one’s health.

Such notions and outright fantasies, as well as propaganda for a new industry and a new way of war — even if laughable today — had tragic results back then. Thousands of American GIs, for instance, were marched into ground zero just after above-ground nuclear tests had been set off to observe their responses to what military planners assumed would be the atomic battlefield of the future. Ignorance, it turns out, is not bliss, and thousands of those soldiers later became ill. Many died young.

Unwary civilians who lived downwind of America’s western testing grounds were also exposed to nuclear fallout and they, too, suffered horribly from a variety of cancers and other illnesses. Uranium miners exposed to radiation in the tunnels where they wrestled from the earth the raw materials for the nuclear age also became ill and died too soon, as did workers processing that uranium into weapons and fuel. Many of those miners were poor Navajos from my backyard in Utah where a new uranium boom, part of the so-called nuclear renaissance, was — before Fukushima — set to take shape.

How Unlikely Risks Become Inevitable

In the future, today’s low-risk claims from industry advocates will undoubtedly seem as tragically naïve as yesterday’s false claims. Yes, the likelihood that any specific nuclear power plant reactor will melt down may be slim indeed — which hardly means inconceivable — but to act as though nuclear risks are limited to the operation of power plants is misleading in the extreme. “Spent fuel” from reactors (the kind burning in Japan as I write) is produced as a plant operates, and that fuel remains super hot and dangerous for hundreds, if not thousands, of years. As we are learning to our sorrow at the Fukushima complex, such used fuel is hardly “spent.” In fact, it can be even more radioactive and dangerous than reactor cores.

Spent fuel continues to pile up in a nuclear waste stream that will have to be closely managed and monitored for eons, so long that those designing nuclear-waste repositories struggle with the problem of signage that might be intelligible in a future so distant today’s languages may not be understood. You might think that a danger virulent enough to outlast human languages would be a danger to avoid, but the hubris of the nuclear establishment is equal to its willingness to deceive.

A natural disaster, accident, or terrorist attack that might be statistically unlikely in any year or decade becomes ever more likely at the half-century, century, or half-millennium mark. Given enough time, in fact, the unlikely becomes almost inevitable. Even if you and I are not the victims of some future apocalyptic disturbance of that lethal residue, to consign our children, grandchildren, or great-grandchildren to such peril is plainly and profoundly immoral.

Nuclear proponents have long wanted to limit the discussion of risk to plant operation alone, not to the storage of dangerous wastes, and they remain eager to ignore altogether the risks inherent in transporting nuclear waste (often called “mobile Chernobyl” by nuclear critics). Moving those spent fuel rods to future repositories represents a rarely acknowledged category of potential catastrophe. Just imagine a trainload of hot nuclear waste derailing catastrophically along a major urban corridor with the ensuing evacuations of nearby inhabitants. It means, in essence, that one of those Fukushima “pools” of out-of-control waste could “go nuclear” anywhere in our landscape.

Risk is about more than likelihood; it’s also about impact. If I tell you that your chances of being bitten by a mosquito as you cross my yard are one in a hundred, you’ll think of that risk differently than if I give you the same odds on a deadly pit viper. As events unfold in Japan, it’s ever clearer that we’re talking pit viper, not mosquito. You wouldn’t know it though if you were to debate nuclear industry representatives, who consistently downplay both odds and impact, and dismiss those who claim otherwise as hysterical doomsayers. Fukushima will assumedly make their task somewhat more difficult.

Hidden Costs and Wasted Subsidies

The true costs of nuclear power are another subject carefully fudged and obscured by nuclear power advocates. From its inception in federally funded labs, nuclear power has been highly subsidized. A recent report by the Union of Concerned Scientists found that “more than 30 subsidies have supported every stage of the nuclear fuel cycle from uranium mining to long-term waste storage. Added together, these subsidies have often exceeded the average market price for the power produced.” When it comes to producing electricity, these subsidies are so extensive, the report concludes, that “in some cases it would have cost taxpayers less to simply buy the kilowatts on the open market and give them away.”

If the nuclear club in Congress, led by Senate Republican leader Mitch McConnell, gets its way, billions more in subsidies will be forthcoming, including massive federal loan guarantees to build the next generation of nuclear plants. These are particularly important to the industry, since bankers won’t otherwise touch projects that are notorious for mammoth cost overruns, lengthy delays, and abrupt cancellations.

The Obama administration has already proposed an additional $36 billion in such guarantees to underwrite new plant construction. That includes $4 billion for the construction of two new nuclear reactors on the Gulf Coast that are to be operated in partnership with Tokyo Electric Power Company — that’s right, the very outfit that runs the Fukushima complex. Yet when I debate nuclear advocates, they always claim that, in cost terms, nuclear power outcompetes alternative sources of energy like wind and solar.

That government gravy train doesn’t just stop at new power plants either. The feds have long assumed the epic costs of waste management and storage. If another multi-billion dollar project like the now-abandoned Yucca Mountain repository in Nevada is built, it will be with dollars from taxpayers and captive ratepayers (the free market be damned). Industry spokesmen insist that subsidizing such projects will be well worth it, since they will create thousands of new jobs. Unfortunately for them, a definitive 2009 University of Massachusetts study that analyzed various infrastructure investments including wind, solar, and retrofitting buildings to conserve energy placed nuclear dead last in job creation.

Finally, the recently renewed Price-Anderson Nuclear Industries Indemnity Act limits the liability of nuclear utilities should a catastrophe like the one in Japan happen here in the United States. The costs of recovery from the Fukushima catastrophe will be astronomical. In the U.S., nuclear utilities would be off the hook for any of those costs and you, the citizen, would foot the bill. Despite their assurances that nothing can go wrong here, nuclear industry officials have made sure that in their business risk and reward are carefully separated. It’s a scenario we should all know well: private corporations take away profits when things go well, and taxpayers assume responsibility when shit happens.

Finally, nuclear power boosters like to proclaim themselves “green” and to claim that their industry is the ideal antidote to global warming since it produces no greenhouse gas emissions. In doing so, they hide the real environmental footprint of nuclear energy.

It’s quite true that no carbon dioxide comes out of power-plant smokestacks. However, maintaining any future infrastructure to handle the industry’s toxic waste is guaranteed to produce lots of carbon dioxide. So does mining uranium and processing it into fuel rods, building massive reactors from concrete and steel, and then behemoth repositories capable of holding waste for 1,000 years. Radiation from the Fukushima meltdown is now entering the Japanese food chain. How green is that?

The Watchdogs Play Dead

Over the course of nuclear power’s history, there have been scores of mishaps, accidents, violations, and problems that, chances are, you’ve never heard about. Beyond the unavoidable bad PR over the partial meltdown at Three Mile Island in 1979, the Chernobyl meltdown in 1986, and now the Japanese catastrophe, the industry has an excellent record — of covering up its failures.

The co-dependent relationship between the nuclear corporations and the Nuclear Regulatory Commission (NRC), the federal agency charged with licensing and monitoring them, resembles the cozy relationship between the Securities Exchange Commission and Wall Street before the global economic meltdown of 2008. The NRC relies heavily on the industry’s own reports since only a small fraction of its activities can be inspected yearly.

A report by the Union of Concerned Scientists, “The NRC and Nuclear Power Plant Safety in 2010,” which highlights the NRC’s haphazard record of inspection and enforcement, makes clear just why the honor system that assumes utilities will honestly report problems has never worked. It describes 14 recent serious “near miss” violations that initially went unreported. At the Indian Point Nuclear Power Plant, only 38 miles north of the New York metropolitan area, for instance, NRC inspectors ignored a leaking water containment system for 15 years.

After a leaking roof forced the shutdown of two reactors at the Calvert Cliffs nuclear facility in Maryland, plant managers admitted that it had been leaking for eight years. When Honeywell hired temporary workers to replace striking union members at its uranium refinery in Illinois, they were slipped the correct answers to a test required for those allowed to work at nuclear plants, because otherwise they had neither the knowledge nor experience to pass.

The regulation of Japan’s nuclear industry mirrors the American model. Japan’s legacy of regulatory scandals, falsified safety records, underestimated risks, and cover-ups includes an incident in 1999 when workers mixed uranium in open buckets and exposed hundreds of coworkers to radiation. Two later died. Other scandals involved hiding cracks in steam pipes from regulators in 1989, lying about a fire and explosion at a plant near Tokyo in 1997, and covering up damage to a plant from an earthquake in 2007.

In the wake of the Fukushima catastrophe, we will no doubt discover how there, too, so-called watchdogs rolled over and played dead. In recent years, in fact, the Fukushima complex had the highest accident rate of any of the big Japanese nuclear plants. We’ve already learned that an engineer who helped design and supervise the construction of the steel pressure vessel that holds the melting fuel rods in Reactor No. 4 warned that it was damaged during production. He had himself initially orchestrated a cover-up of this fact, but revealed it a decade later — only to be ignored. During the complex’s construction by General Electric some 35 years ago, Dale Bridenbaugh, a GE employee, resigned after becoming convinced that the reactors being built were seriously flawed. He, too, was ignored. The Vermont Yankee reactor in Vermont and 23 others around the U.S. replicate that design.

Stay tuned, since more examples of reckless management will surely come to light…

Risk Is Not a Math Problem

That culture of secrecy is a logical fit for an industry that is authoritarian by nature. Unlike solar or wind power, nuclear power requires massive investments of capital, highly specialized expertise, robust security, and centralized control. Any local citizen facing the impact of a uranium mine, a power plant, or a proposed waste depository will attest that the owners, operators, and regulators of the industry are remote, unresponsive, and inaccessible. They misinform because they have the power to get away with it. The absence of meaningful checks and balances enables them.

Risk, antinuclear advocates quickly learn, is not simply some complicated math problem to be resolved by experts. Risk is, above all, a question of who is put at risk for whose benefit, of how the rewards, costs, and liabilities of an activity are distributed and whether that distribution is fair. Those are political questions that citizens directly affected should be answering for themselves. When it comes to nuclear power, that doesn’t happen because the industry is undemocratic to its core. Corporate officers treat downwind stakeholders with the same contempt they reserve for honest accountings of the industry’s costs and dangers.

It may be difficult for the average citizen to unpack the technicalities of nuclear power, or understand the complex physics and engineering involved in splitting atoms to make steam to produce electricity. But most of us are good at detecting bullshit. We know when something like the nuclear industry doesn’t pass the smell test.

There is a growing realization that our carbon-based energy system is warming and endangering this planet, but replacing coal and oil with nuclear power is like trading heroin for crack — different addictions, but no less unhealthy or risky. The “nuclear renaissance,” like the “peaceful atom” before it, is the energy equivalent of a three-card monte game, involving the same capitalist crooks who gave us oil spills, bank bailouts, and so many of the other rip-offs and scams that have plagued our lives in this new century.

They are serial killers. Stop them before they kill again. Credibility counts and you don’t need a PhD or a Geiger counter to detect it.

Chip Ward was a founder of HEAL Utah, a grassroots group that has led the opposition to the disposal of nuclear waste in Utah and the construction of a new reactor next to Green River. A TomDispatch regular, he is the author of Canaries on the Rim: Living Downwind in the West and Hope’s Horizon: Three Visions for Healing the American Land. To listen to Timothy MacBain’s latest TomCast audio interview in which Ward discusses the endless legacy of nuclear power, click here, or download it to your iPod here.

25 November, 2010
Chrismartenson.com

Part I: It’s the End of the Oil As We Know It…

Once a year, the International Energy Agency (IEA) releases its World Energy Outlook (WEO), and it’s our tradition here at ChrisMartenson.com to review it. A lot of articles have already been written on the WEO 2010 report, and I don’t wish to tread an already well-worn path, but the subject is just too important to leave relegate to a single week of attention.

Because some people will only read the first two paragraphs, let me get a couple of conclusions out right up front. You need to pay close attention to Peak Oil, and you need to begin adjusting, because it has already happened. The first conclusion is mine; the second belongs to the IEA.

Okay, it’s not quite as simple as that; there are a few complexities involved that require us to dig a bit deeper and to be sure our terms and definitions are clear so that we are talking about the same things.

But if we can simply distinguish between two types of “oil” (you’ll see why that term is in quotes in a second), the story becomes much easier to follow.
“Conventional oil” is the cheap and easy stuff. A well is drilled, pipe is inserted and oil comes up out of the ground that can be shipped directly to a refinery. Whether the oil is “sour” or “sweet” doesn’t matter; it’s still conventional oil.

“Unconventional oil” refers to things like tar sands, ultra-deep-water oil, coal-to-liquids, oil shale, and natural gas liquids. In other words, oil that is much more difficult and expensive to produce.

The IEA has been producing annual reviews of the world energy situation for a long time and has not mentioned the term “Peak Oil” (as far as I know) until this year’s report. And not only did they mention it, they said that as far as conventional oil goes, it’s in the rear view mirror:

Crude oil output reaches an undulating plateau of around 68-69 mb/d by 2020, but never regains its all-time peak of 70 mb/d reached in 2006, while production of natural gas liquids (NGL) and unconventional oil grows quickly.

WEO 2010 – Executive Summary

I might quibble that the all-time peak remains 2005 in the US Energy Information Agency data set, but the main point here is that the IEA has not only used the words “Peak Oil” (finally!) but they’ve done so in the past tense, at least with regard to conventional oil.

The IEA now sees all forms of oil, conventional and unconventional, hitting a high of 99 million barrels per day (mbd) by 2035 (including 3 mbd of ‘refinery gains’). Of course, we may wish to take even this tepid estimate of growth in oil supplies with a grain of salt, because in every annual report, like clockwork, the IEA has been ratcheting down its estimate of how much oil we’ll have in the future:

Assuming that this trend will continue, our prediction is that next year the estimate of future oil supplies will be ratcheted down one more notch. Perhaps by another 6 mbd, to match the difference between the 2009 and 2010 reports?

It’s when we eyeball the graph that shows us the breakdown in petroleum sources by type that a few important details jump out at us:

First, pay close attention to the legend for the chart. Starting at the bottom, note that crude oil from “currently producing fields” (dark blue) is already in sharp decline and is expected to decline from a high of 70 mbd in 2006 to ~15 mbd in 2035; a loss of 55 mbd over 25 years, or 2.2 mbd per year. The next band up (gray) is crude oil from “fields yet to be developed,” which we largely know about but have not yet really started producing significantly.

My only comment here is that these fields cannot overcome the expected rate of loss in the dark blue band below them. All of the conventional oil that we know about is now past peak. In order to keep conventional oil flat, we have to move up to the third band (light blue), which goes by the spine tingling name “fields yet to be found” – which will apparently be delivering a very hefty 22 mbd by 2035. In other words, the IEA is projecting that in 25 years, more oil will be flowing from “fields yet to be found” than from all the fields ever found and put into production by the year 2010.

Colin Campbell, one of the earliest analysts of peak oil who has decades of oil field experience, is on record as saying that the “fields yet to be developed” category, originally introduced to the world as unidentified Unconventional in 1998, is a “coded message for shortage” and was, off the record, confirmed as such by the IEA. That coded message is getting easier and clearer to receive by the day.

But back to the main story line. Even if the final assessment of future oil production isn’t notched down even one more tick, we have all the information we need to spot an enormous problem in the global story of growth. Assuming that we stick with the 99 mbd by 2035 estimate going forward, this represents a growth rate in oil of only around one-half of one percent (0.5%) per year between now and then.

This means that over the next 25 years, the global economy will have to make do with less than half the rate of growth in oil that it enjoyed over the prior 25 years. How will the economy grow with less oil available? What will happen to the valuations of financial assets that explicitly assume that prior rates of growth stretch endlessly into the future?

To cut to the chase, the admission by the IEA that we will not be achieving past levels of energy growth should be the most gigantic red flag in history, at least to those who might care that their money or other paper-based forms of wealth be worth something in the future. What if that future growth does not emerge? What happens when the collateral for a loan goes sour? The IEA report indicates an enormous set of risks for an over-leveraged world reliant on constant growth.

The bottom lines are these:

-          The IEA now admits that conventional crude oil peaked in 2006. Permanently. Any gains from here are due to contributions from unconventional oil and natural gas-to-liquids.

-          Under no scenario envisioned will future growth in fossil fuel supplies be equal prior rates of growth.

-          Energy from here on out is going to be (much) more expensive.

I cannot state this strongly enough: The WEO 2010 report is an official admission that Peak Oil is not only real, but it’s already here.

“Tomorrow’s [economic] expansion was collateral for today’s debt.”

~ Colin Campbell

The implications from this report are too important to preserve just for the enrolled members who support this site’s mission, people, and goals. We’re going to open up most of this report to the general public because we feel it’s the right thing to do. For those unfamiliar with my work, the job I do most frequently is a combination of information scout (I connect dots) and analyst (I dig deep).

Okay, let’s head deeper into the World Energy Outlook (WEO) 2010 report. Here’s my quick summary of the report.

By 2035:

-          Between 2008 and 2035, total energy demand grows by 36%, or 1.2% per year; far less than the 2% rate of growth seen over the prior 27 years. (Note: This comes from the “New Policies Scenario,” which is the middle scenario of three in the report. We’ll discuss this one throughout.)

-          Renewables will be contributing very little to the overall energy landscape, just 14% of the total, and this includes hydro.

-          93% of all the demand increase comes from non OECD countries (mainly China and India).

-          Oil remains the dominant fuel (although diminishing in total percentage).

-          The global economy will grow by an average of 3.2% per annum.

-          It’s time to cut demand for oil by raising prices (they recommend ending energy subsidies for fossil fuels as the mechanism).

-          Conventional oil has peaked, and this is a permanent condition. All oil gains from here forwards will come from non-conventional sources and gas and coal-to-liquids programs.

There are enormous implications to that series of bullet points, if one stops to think about them in total. One glaring difficulty in all of this is that the IEA notes that China and India are going to consume nearly every drop of any potential future increases in oil production. Yet overall production is only going to grow by a meager 0.5% per year.

So how does the IEA suppose that oil growth can slow down to a paltry 0.5%/year, see China and India increase their consumption massively, and still have everything balance out? We all know that China and India (et al.) have been growing their oil consumption by massive percentages in the recent past, and there’s some evidence that we can expect more of that behavior in the years to come.

In fact, this was what India’s Premier told the world on November 1, 2010:

Premier Manmohan Singh told India’s energy firms on Monday to scour the globe for fuel supplies as he warned the country’s demand for fossil fuels was set to soar 40 percent over the next decade.

The country of more than 1.1 billion people already imports nearly 80 percent of its crude oil to fuel an economy that is expected to grow 8.5 percent this year and at least nine percent next year.

(Source)

So, yes, it’s pretty much expected that China and India, et al., will be increasing their consumption by rates much (much) higher than 0.5%, which means, logically, that some other countries will have to consume at negative rates in order for the equation to balance.

And this is exactly what the IEA has modeled and proposed:

I want to draw your attention to the green circles that I placed on there. Yes, you are reading that right. To balance everything out, the IEA has modeled the OECD as actually decreasing its consumption of coal and oil by significant amounts (that’s what a negative ‘incremental demand’ requires: a decrease in current consumption). The difference is made up from a mix of renewables, biomass, nuclear, and natural gas.

Never has such a thing happened in the entire industrial history of the OECD. Never. There are no models or examples to follow here. No guidance is offered to suggest how such a monumental feat will be accomplished, beyond tossing a few more bucks at renewables, as if money alone could correct for vast differences in energy quantity and quality.

To suggest that the next 25 years for the OECD will be characterized by a significant reduction in the use of the two primary industrial fuels is an astonishing claim, and so it deserves to be carefully examined. But, speaking bluntly, this is not going to happen.

Any suggestion that the OECD is going to reduce its use of coal for electricity and oil for liquid fuels has to be accompanied by evidence of massive programs of investment towards energy transitioning that, truth be told, have to have been started a decade or more before the arrival of Peak Oil. Hinting that it might possibly be a good idea to move these renewable dreams to the drawing board after the advent of Peak Oil is akin to playing tunes on a sinking ship; at best, you are providing a captivating diversion.

Regardless, no such programs operating at appropriate scale are even remotely in sight.

A point that I try to make clear in my upcoming book (due out in March 2011 from Wiley) is that such an energy transition would be evident by such things as the trillions of dollars being dedicated to it, by eminent domain actions to secure new land for natural gas pipelines, and by vehicles that could run on electricity or natural gas being churned out by the millions. While we can debate whether we might get there someday, there can be no doubt that we are not there today.

So if one is a card-carrying member of the mainstream media, what does one do with such a major event as the WEO 2010 report? In the case of the New York Times, the answer is to run a completely schizophrenic pair of articles, but bury the supportive one deep in the “blogs” section while placing the one that completely ignores the WEO 2010 report prominently in the business section.

The first of these two articles, separated by only a day and centering firmly on the IEA report, is titled “Is ‘Peak Oil’ Behind Us?” to which the article correctly answers “Yes”:

Is ‘Peak Oil’ Behind Us?

Peak oil is not just here — it’s behind us already

That’s the conclusion of the International Energy Agency, the Paris-based organization that provides energy analysis to 28 industrialized nations. According to a projection in the agency’s latest annual report, released last week, production of conventional crude oil — the black liquid stuff that rigs pump out of the ground — probably topped out for good in 2006, at about 70 million barrels a day. Production from currently producing oil fields will drop sharply in coming decades, the report suggests.

That’s pretty accurate. You’d think that such a stunning admission by the preeminent body responsible for preparing such reports for the OECD would have sparked a fury of investigation and maybe even self-investigation by the New York Times, which through the years has pooh-poohed the entire idea of Peak Oil rather religiously. But that didn’t happen.

The second article is entitled “There Will Be Fuel” and is chock full of comforting anecdotes and quotes from oil industry executives:

There Will Be Fuel

Just as it seemed that the world was running on fumes, giant oil fields were discovered off the coasts of Brazil and Africa, and Canadian oil sands projects expanded so fast, they now provide North America with more oil than Saudi Arabia. In addition, the United States has increased domestic oil production for the first time in a generation.

“The estimates for how much oil there is in the world continue to increase,” said William M. Colton, Exxon Mobil’s vice president for corporate strategic planning. “There’s enough oil to supply the world’s needs as far as anyone can see.”

Somebody get that man a pair of glasses (!)

Seriously, any country or corporation that cannot foresee the end of cheap and abundant oil is being run by dangerous people. To suggest that even the most optimistic assessment of oil, which has it peaking in 2030, is too far away to begin planning for today is just silly. Really, now…responsible planners considering major capital projects with multi-decade life spans (which can be 30 years or more for many things) should just ignore energy? That’s the message here? Goodness, gracious.

In fact, there are so many problems with “There Will Be Fuel” that I hardly know where to turn to next. I suppose we could note that the article quoted “100 years of natural gas” left in the US without mentioning the all-important phrase “at current rates of consumption.” To those who are familiar with exponential processes, and who know that energy consumption has been increasing exponentially for decades, such an oversight is an enormous red flag. It betrays either ignorance or deception on somebody’s part (perhaps the editor?), and neither are acceptable at this stage of the energy debate. Once we increase consumption at reasonable and prior rates, that 100 years can rapidly shrink to mere decades in a hurry.

What’s the difference between “100 years of gas” and “maybe a couple of decades”? Night and day.

Next, we might note that the article goes out of its way to make the case that “estimates for how much oil there is in the world continue to increase,” while somehow avoiding the essential point that it’s not the amounts that matter, but the rates at which the oil can be coaxed to flow out of the ground. Peak Oil is, has been, and always will be about flow rates, not amounts.

For example, if the very center of the earth were entirely filled with oil, but we could only get to it through a single, very thin tube (limiting how fast we could pull the oil out), it wouldn’t really matter how much was there – a hundred trillion barrels could be there – because how much we could do with it would be limited by the rate of extraction. Exponential economic growth requires increases in fuel consumption. It always has and it always will, until and unless a brand new model of economics is developed.

Again, the lack of awareness of this basic concept of the difference between rates and amounts leaves the New York Times piece very much in doubt.

I could go on, but it’s not all that helpful to once again catch the New York Times playing fast and loose with the facts in order to advance an agenda; for now, let’s just observe that Peak Oil refers to a condition where the rate of extraction cannot be increased. If it were about amounts, then I suppose we would call it “Peak Reserves,” but it’s not, and for a reason: We care about the flow rates.

It is on this matter of flow rates that the IEA report was especially jarring and succinct: Peak Oil has happened.

At this point, it may be good to remind ourselves that last year an IEA whistleblower said that the organization had willfully underplayed looming shortages due to political pressures from the US.

Please read the following very carefully; it represents very important context for what we are about to discuss next. (I’m quoting at length because it’s all essential):

The world is much closer to running out of oil than official estimates admit, according to a whistleblower at the International Energy Agency who claims it has been deliberately underplaying a looming shortage for fear of triggering panic buying.

The senior official claims the US has played an influential role in encouraging the watchdog to underplay the rate of decline from existing oil fields while overplaying the chances of finding new reserves.

The allegations raise serious questions about the accuracy of the organisation’s latest World Energy Outlook on oil demand and supply to be published tomorrow – which is used by the British and many other governments to help guide their wider energy and climate change policies.

Now the “peak oil” theory is gaining support at the heart of the global energy establishment. “The IEA in 2005 was predicting oil supplies could rise as high as 120m barrels a day by 2030 although it was forced to reduce this gradually to 116m and then 105m last year,” said the IEA source, who was unwilling to be identified for fear of reprisals inside the industry. “The 120m figure always was nonsense but even today’s number is much higher than can be justified and the IEA knows this.

“Many inside the organisation believe that maintaining oil supplies at even 90m to 95m barrels a day would be impossible but there are fears that panic could spread on the financial markets if the figures were brought down further. And the Americans fear the end of oil supremacy because it would threaten their power over access to oil resources,” he added.

A second senior IEA source, who has now left but was also unwilling to give his name, said a key rule at the organisation was that it was “imperative not to anger the Americans” but the fact was that there was not as much oil in the world as had been admitted. “We have [already] entered the ‘peak oil’ zone. I think that the situation is really bad,” he added.

(Source)

The idea expressed above is simple enough: The oil data has been fudged to the upside by the IEA. Pressure has allegedly been applied upon the IEA to paint a rosier picture than a strict interpretation of the data would warrant. To speculate, the reason why is that there are a host of interlocking vested interests in the financial but especially political spheres that would find the public recognition of Peak Oil to be disruptive and therefore unwelcome.

This is just another example of Fuzzy Numbers, but the consequences of fibbing to ourselves about oil are far more dire than when we lie about employment. If it weren’t so serious, it would be just another somewhat regrettable obfuscation of reality created to serve narrow and temporal political purposes.

Note: There is a well-recorded history, going back at least 13 years, of the IEA being fully aware of Peak Oil but bowing to political pressure to soften the message. Read paragraphs 4 & 5 of this piece by Colin Campbell for some more essential background.

Conclusion

Here’s where we are:

-          The IEA has known about looming Peak Oil issues for more than a decade and is only now explicitly recognizing the idea in their public documents.

-          People inside and outside of the IEA say that the organization has downplayed both the timing and potential severity of Peak Oil.

-          Peak Conventional Oil has already happened.

-          Any possible growth in future oil that the IEA can envision — and we might suspect that even this is fudged to the upside and will retreat in subsequent reports — is going to be almost entirely eaten up by China and India.

What this means is very, very simple. There will be an energy crisis in the near future that will make anything we’ve experienced so far seem like a pleasant memory.

The very best personal investments you can make at this stage will involve increasing your energy resilience. Make your house require less heating and cooling, use the sun wherever and whenever possible, and increase your personal storage of the fuels you use (if and when possible).

The potential knock-on effects of less energy to the complex system known as our economy are unpredictable in their exact details and timing, but are thoroughly knowable via their broad, topographical outlines. The economy will become simpler and less ordered.

In Part III of this report, we explore the the answer to: “What should the investor (individual, institutional, private equity, or hedge fund) do next with this information?”. Click here to access Part III (free executive summary; paid enrollment required to access).

Original article available here

There will be many bad memories from the summer of 2010. We’ve seen the worst oil disaster in U.S. history, record temperatures across the globe, calving ice chunks the size of Manhattan, record heat waves and wildfires in Russia, and floods in Pakistan submerging one-fifth of the country. These extreme weather events are consistent with scientists’ predictions about global warming, and they portend more catastrophes to come as greenhouse gas pollution spews unchecked from power plants, vehicles, and factories [1].

But as the case for action grew more urgent Big Oil, Dirty Coal, and other energy companies redoubled their efforts to block congressional adoption of global warming pollution reductions. With that effort successful they are now scheming to stop the Environmental Protection Agency from following the law and setting reduction standards for the largest polluters.

Reductions would effectively establish a price on carbon pollution that would increase incentives to invest in clean energy technologies, create jobs, and enhance international competitiveness. The United States needs these investments now more than ever as it falls further behind international competitors like China that are forging ahead with investments in clean energy technologies that create jobs, stimulate economic growth, and increase their international competitiveness.

This occurs while the United States still suffers high unemployment and slow growth as we emerge from the worst recession in eighty years. Clean energy and climate legislation would create jobs and stimulate the growth of clean energy industries as well as hold polluters accountable for their emissions. Unfortunately, the Senate was unable to muster a supermajority of 60 votes to limit the danger of burning fossil fuels after the House passed the American Clean Energy and Security Act.

This failure is no accident. Big Oil, Dirty Coal, and other special interests like the American Petroleum Institute combined spent hundreds of millions of dollars lobbying lawmakers and filling their campaign coffers. So far, these dirty energy corporations have gotten their money’s worth.

Companies and trade associations have two powerful tools to defeat measures they don’t like. They can spend millions of dollars on lobbying to strong arm legislators into opposing measures that they believe will cost them money. And these special interests can bequeath campaign cash to legislators who support their agenda while funding the opponents of those willing to oppose them.

So just how much are these groups spending to defeat climate legislation? We created a preliminary “political pressure” measure that combines the funds companies and trade associations spent on lobbying and on their political action committee donations. This measure, however, significantly underestimates special interests’ total advocacy efforts because there are no public reporting requirements for spending on many traditional pressure tactics such as earned media, polling, rallies, and television advertising (which these companies and associations heavily engage in). Further, companies’ donations to trade associations are kept secret, and the recent Citizens United Supreme Court decision empowers corporations to spend their money to elect or defeat candidates often without any disclosure or reporting requirements.

Lobbying activities ramped up in 2009 as the House of Representatives began debate on the American Clean Energy and Security Act. Senate deliberations began last fall and continued throughout 2010. The entire electric utility industry spent more than $264 million on lobbying alone in 2009 and the first half of 2010. Oil and gas interests spent a record $175 million lobbying in 2009—a 30 percent increase from 2008—and have spent $75 million already in 2010.

The oil, gas, and coal industries have spent over $2 billion lobbying Congress since 1999. These three industries combined spent a whopping $543 million on lobbying in 2009 and the first two quarters of 2010. Meanwhile, alternative energy companies spent less than $32 million on lobbying efforts in 2009 and have only spent $14.8 million this year.

The 20 biggest-spending oil, mining, and electric utility companies shelled out $242 million on lobbying from January 2009 to June 2010 [2]. Trade associations that generally oppose clean energy policies spent another $290 million during this time. This is over $1,800 in lobby expenditures a day for every single senator and representative.

Six of the seven companies with the largest lobbying expenditures are Big Oil companies—ExxonMobil (1), ConocoPhillips (2), Chevron (3), BP (5), Koch Industries (6), and Shell (7). Their 18-month lobbying expenditures total $143 million. Their agenda varies among companies, but generally they oppose most proposals to reduce global warming pollution from oil refineries and transportation fuels. And they seek to limit companies’ liability for oil spills like the BP oil disaster.

Southern Company, a major utility with significant coal-fired power generation, was the fourth-largest lobbying company at nearly $20 million. The company is a longtime opponent of efforts to reduce global warming pollution. American Electric Power, or AEP, was eighth, spending nearly $10 million. AEP played a (somewhat) more positive role by attempting to shape clean energy and global warming legislation to its benefit. But it also supported efforts to prevent EPA from limiting global warming pollutants from the largest sources in the absence of congressional action.

The largest trade association working to defeat clean energy and global warming legislation is the umbrella lobby organization the Chamber of Commerce, which spent nearly $190 million during this year and a half [3]. The Edison Electric Institute, which represents investor owned utilities spent $18 million—a million dollars a month—lobbying on global warming legislation. EEI was occasionally supportive of some proposals, but it strongly advocates halting EPA from reducing global warming pollution.

The American Petroleum Institute, or API—the trade association and lobbying arm for the biggest oil and gas producers—spent $11 million to lobby Congress to defeat pollution reductions and maintain their tax loopholes. The New York Times reported on some of their activities with their story, “Oil and Gas Interests Set Spending Record for Lobbying in 2009.”

API certainly got its money’s worth since no legislation was passed and the tax loopholes are still in place. Their spokesman Bill Bush said: “We had a lot of work to do trying to educate people on these issues…We hope we were successful.”

Lobby reports show that oil companies lobbied on a number of clean energy and global-warming-related issues. These included:
> The Blowout Prevention Act, H.R. 5626, to prevent future oil disasters

> BP federal royalty payments for oil captured from the Deepwater Horizon blow out, Spilled Oil Royalty Collection Act, H.R. 5513

> Clean Air Act pollution reduction requirements

> Efforts to cut global warming pollution: American Clean Energy and Security Act, H.R. 2454 and the American Power Act

> Opposition to closing tax loopholes that save oil companies $45 billion

> Opposition to a “Community Right to Know” requirement that shale gas producers publicly report on the toxic chemicals they use to “frack” rock to produce natural gas, Fracturing Responsibility and Awareness of Chemicals Act, H.R. 2766

> Restrictions on the use of oil produced from highly polluting “tar sands

>Increases in energy efficiency and deployment of wind, sun, and other renewable energy sources

> Other public health, job creation, oil reduction, and environmental protection policies

Twenty-first century campaigns are outrageously expensive. Senators and representatives must raise millions of dollars in campaign cash for their contested reelection campaigns. Legislators’ need for money combined with special interests’ access to cash makes campaign contributions a potent weapon in the hunt for votes. Trade associations, businesses, and their employees donate thousands of dollars to legislators willing to do their bidding.

Political action committees, or PACs, from the oil and gas industry gave $6.6 million to federal candidates from January 2009 to June 2010, with two-thirds going to Republicans. The mining industry donated $1.6 million so far, with $3 of every $5 going to Republicans.

The most generous individual energy PACs belong to Koch Industries and ConocoPhillips, who doled out $700,000 and $600,000, respectively. And this does not include Koch’s recent $1 million donation to pass Proposition 23 in California, which would repeal the state’s landmark clean energy and global warming law.

But the lobbying and campaign expenditures capture only part of the influence of spending by the oil, coal, utility, and other traditional energy industries. Many of these companies and trade associations are also spending millions of dollars that need not be reported to run expensive television, radio, and print “message” ads that do not explicitly mention energy or global warming legislation but are still designed to shape legislators and voters’ views.

BP, for example, is spending $5 million a week on advertising to restore its image after its oil disaster in the Gulf of Mexico. Between April and July BP spent $93 million, which is more than three times the amount it spent on ads during the same period last year. Meanwhile, Big Oil and its allies have spent more than $126 million on television ads this year to promote the expansion of offshore oil drilling and defeat efforts to eliminate their tax loopholes.

Companies are not required to report these expenditures like they are for lobbying or campaign spending. API, Koch, and others have also funded Astroturf rallies to spread their anti-global-warming and anti-safety-regulation platforms. These expenses are unreported, too.

The energy interests’ successful efforts to block clean energy investments, oil use reductions, and global warming pollution limits have real costs. It’s not clear, for example, whether or when there will be a declining limit on global warming pollution that establishes a carbon price. This doubt has in turn led investors to husband rather than invest their capital in the research, development, deployment, and commercialization of clean energy technologies. Fewer investments mean fewer jobs.

And while the United States dithers other nations continue to build their clean energy industries to bid for their share of the $1 trillion we’ll see in the worldwide clean energy market by 2030. For instance, China knocked the United States down to second place as the most attractive market for investing in renewable energy according to Ernst and Young’s new “Renewable Energy Country Attractiveness Indices.” Ernst and Young cite lack of clean energy policies like a renewable electricity standard and long-term stable incentive structures as reasons for the takeover.

The United States has economic, national security, and environmental imperatives to increase energy efficiency and renewable energy generation, reduce oil use, and cut global warming pollution. What’s more, Americans overwhelmingly support these measures, as many recent opinion polls demonstrate.

Yet the Big Oil and Dirty Coal lobbies are working hard to stop reforms so that they can protect their enormous profits. Legislators must ignore the pleadings of special interests and adopt comprehensive clean energy and global warming policies to enhance our economic competitiveness, safeguard our national security, and protect public health and our environment.

See full data on how much energy companies and trade associations spent on oil lobbying for 2009-2010 (.xls)

Daniel J. Weiss is a Senior Fellow and Director of Climate Strategy, Rebecca Lefton is a Researcher, and Susan Lyon is a Special Assistant for Energy Policy at American Progress.

Endnotes

[1]. See U.S. Energy Information Administration, “Annual Energy Outlook” (2010), p. 4.

[2]. Lobbying and PAC contribution figures from the Center for Responsive Politics at opensecrets.org.

[3]. The Chamber of Commerce undoubtedly spent many of these resources lobbying against the Patient Protection and Affordable Health Care Act, and other issues. Lobbying reports do not specify the various amounts per each issue.

See full data on how much energy companies and trade associations spent on oil lobbying for 2009-2010 (.xls)

http://www.alternet.org/story/148335/

Meeting the growing demand for energy in the U.S., even through sustainable means, could entail greater threats to the environment, new research shows.

The study was carried out by Circle of Blue, a network of journalists and scientists dedicated to water sustainability, and could have implications not just for the relationship between energy demand and water scarcity in the U.S. but elsewhere in the world, as well. “It is not just that energy production could not occur without using vast amounts of water. It’s also that it’s occurring in the era of climate change, population growth and steadily increasing demand for energy,” explained Circle of Blue’s Keith Schneider, who presented the findings in Washington Wednesday.

“The result is that the competition for water at every stage of the mining, processing, production, shipping and use of energy is growing more fierce, more complex and much more difficult to resolve,” he said. About half the 410 billion gallons of water the U.S. withdraws daily goes to cooling thermoelectric power plants, and most of that to cooling coal-burning plants, according to the U.S. Geological Survey.

Meanwhile, climate change is leading to decreased snowmelt, rains and freshwater supplies, says Circle of Blue.

One of the things missing from the discussion, then, is the recognition that saving energy also saves water, the group contends.

The U.S. government has not been blind to the conflict between energy and water needs. The first part of a report commissioned by the U.S. Congress in 2005 laid out the consequences of not paying enough attention to water supply issues in increasing energy production. The second part, which would have laid out a research agenda and begun developing solutions, has yet to be made public, says Schneider.

He says the U.S. Department of Energy has declined repeated requests to explain why the report has not been published.

Energy demand in the U.S. is expected to increase by 40 percent as the U.S. population rises above 440 million by 2050. The water supply will not be able to support that growth, Schneider says.

Renewable sources of energy will certainly be a large part of trying to meet that energy demand, but these, too, come with a hidden water cost.

In 2009, the U.S. dedicated 23 million acres of public lands in six states for new solar electricity-generating plants as part of its economic stimulus package, which apportioned nearly 100 billion dollars for clean energy projects. Though the plan appeared promising, environmentalists soon began to point it could have damaging, unintended consequences. Schneider notes that criticism of the impact the water-cooled solar plants could have on water priorities in the U.S. Southwest even came from within the government.

“In arid settings, the increased water demand from concentrating solar energy systems employing water-cooled technology could strain limited water resources already under development pressure from urbanization, irrigation expansion, commercial interests and mining,” wrote Jon Jarvis, then head of the National Park Service’s Pacific West Region, in a February 2009 internal memo. “Solar generating plants that use conventional cooling technology use two to three times as much water as coal- fired power plants,” Schneider noted.

In other countries, the threat of water scarcity is even more pertinent.

Egypt, for example, has a population of approximately 82 million, but an annual water quota of about 86 billion cubic metres – and the population is expected to rise by more than 10 million people in the next decade.

Yet 30 European blue chip companies are set to invest 560 billion dollars over the next 40 years to build solar power plants in North Africa as part of the Desertec Industrial Initiative. Egypt, Morocco and Tunisia have agreed to work with the initiative. Comparing this project with the U.S.’s, Schneider notes that in an environment that faces even greater water scarcity than the southwestern U.S., such projects could prove disastrous. Circle of Blue calls the intersection of a rising demand for energy and diminishing supply water a “choke point”, but energy development – whether of the fossil fuel or renewable variety – is just one aspect of the water scarcity crisis that is unfolding in various regions of the globe.

Yemen is widely seen as the place where this scarcity will hit first and hardest.

“Analysts are worried Yemen could be the first country in the world to effectively run out of water,” said Christine Parthemore, a fellow at the Center for a New American Security, where she studies the intersection of natural resources and security issues. She spoke at a separate event Wednesday.

Yemen, which has no rivers and cannot afford desalination, is drawing water at around 400 times its replacement rate, she says, and this looming crisis is compounding other issues in the region, like the fact that Yemen has become a key recruiting spot for groups like al Qaeda.

“We are about to see water wars in the future,” said U.S. General Anthony Zinni. “We have seen fuel wars; we’re about to see water wars.”

Posted on July 15, 2010, Printed on July 18, 2010

http://www.alternet.org/story/147572/

The dire threat of Iran is widely recognized to be the most serious foreign policy crisis facing the Obama administration. General Petraeus informed the Senate Committee on Armed Services in March 2010 that “the Iranian regime is the primary state-level threat to stability” in the U.S. Central Command area of responsibility, the Middle East and Central Asia, the primary region of US global concerns. The term “stability” here has its usual technical meaning: firmly under US control.

In June 2010 Congress strengthened the sanctions against Iran, with even more severe penalties against foreign companies. The Obama administration has been rapidly expanding US offensive capacity in the African island of Diego Garcia, claimed by Britain, which had expelled the population so that the US could build the massive base it uses for attacks in the Central Command area. The Navy reports sending a submarine tender to the island to service nuclear-powered guided-missile submarines with Tomahawk missiles, which can carry nuclear warheads. Each submarine is reported to have the striking power of a typical carrier battle group. According to a US Navy cargo manifest obtained by the Sunday Herald (Glasgow), the substantial military equipment Obama has dispatched includes 387 “bunker busters” used for blasting hardened underground structures. Planning for these “massive ordnance penetrators,” the most powerful bombs in the arsenal short of nuclear weapons, was initiated in the Bush administration, but languished. On taking office, Obama immediately accelerated the plans, and they are to be deployed several years ahead of schedule, aiming specifically at Iran.

“They are gearing up totally for the destruction of Iran,” according to Dan Plesch, director of the Centre for International Studies and Diplomacy at the University of London. “US bombers and long range missiles are ready today to destroy 10,000 targets in Iran in a few hours,” he said. “The firepower of US forces has quadrupled since 2003,” accelerating under Obama.

The Arab press reports that an American fleet (with an Israeli vessel) passed through the Suez Canal on the way to the Persian Gulf, where its task is “to implement the sanctions against Iran and supervise the ships going to and from Iran.” British and Israeli media report that Saudi Arabia is providing a corridor for Israeli bombing of Iran (denied by Saudi Arabia). On his return from Afghanistan to reassure NATO allies that the US will stay the course after the replacement of General McChrystal by his superior, General Petraeus, Chairman of the Joint Chiefs of Staff Admiral Michael Mullen visited Israel to meet IDF Chief of Staff Gabi Ashkenazi and senior military staff along with intelligence and planning units, continuing the annual strategic dialogue between Israel and the U.S. The meeting focused “on the preparation by both Israel and the U.S. for the possibility of a nuclear capable Iran,” according to Haaretz, which reports further that Mullen emphasized that “I always try to see challenges from Israeli perspective.” Mullen and Ashkenazi are in regular contact on a secure line.

The increasing threats of military action against Iran are of course in violation of the UN Charter, and in specific violation of Security Council resolution 1887 of September 2009 which reaffirmed the call to all states to resolve disputes related to nuclear issues peacefully, in accordance with the Charter, which bans the use or threat of force.

Some analysts who seem to be taken seriously describe the Iranian threat in apocalyptic terms. Amitai Etzioni warns that “The U.S. will have to confront Iran or give up the Middle East,” no less. If Iran’s nuclear program proceeds, he asserts, Turkey, Saudi Arabia, and other states will “move toward” the new Iranian “superpower.” To rephrase in less fevered rhetoric, a regional alliance might take shape independent of the US. In the US army journal Military Review, Etzioni urges a US attack that targets not only Iran’s nuclear facilities but also its non-nuclear military assets, including infrastructure — meaning, the civilian society. “This kind of military action is akin to sanctions – causing ‘pain’ in order to change behaviour, albeit by much more powerful means.”

Such inflammatory pronouncements aside, what exactly is the Iranian threat? An authoritative answer is provided by military and intelligence reports to Congress in April 2010 [Lieutenant General Ronald L. Burgess, Director, Defense Intelligence Agency, Statement before the Committee on Armed Services, US Senate, 14 April 2010; Unclassified Report on Military Power of Iran, April 2010; John J. Kruzel, American Forces Press Service, “Report to Congress Outlines Iranian Threats,” April 2010.

The brutal clerical regime is doubtless a threat to its own people, though it does not rank particularly high in that respect in comparison to US allies in the region. But that is not what concerns the military and intelligence assessments. Rather, they are concerned with the threat Iran poses to the region and the world.

The reports make it clear that the Iranian threat is not military. Iran’s military spending is “relatively low compared to the rest of the region,” and of course minuscule as compared to the US. Iranian military doctrine is strictly “defensive, … designed to slow an invasion and force a diplomatic solution to hostilities.” Iran has only “a limited capability to project force beyond its borders.” With regard to the nuclear option, “Iran’s nuclear program and its willingness to keep open the possibility of developing nuclear weapons is a central part of its deterrent strategy.”

Though the Iranian threat is not military aggression, that does not mean that it might be tolerable to Washington. Iranian deterrent capacity is considered an illegitimate exercise of sovereignty that interferes with US global designs. Specifically, it threatens US control of Middle East energy resources, a high priority of planners since World War II. As one influential figure advised, expressing a common understanding, control of these resources yields “substantial control of the world” (A. A. Berle).

But Iran’s threat goes beyond deterrence. It is also seeking to expand its influence. Iran’s “current five-year plan seeks to expand bilateral, regional, and international relations, strengthen Iran’s ties with friendly states, and enhance its defense and deterrent capabilities. Commensurate with that plan, Iran is seeking to increase its stature by countering U.S. influence and expanding ties with regional actors while advocating Islamic solidarity.” In short, Iran is seeking to “destabilize” the region, in the technical sense of the term used by General Petraeus. US invasion and military occupation of Iran’s neighbors is “stabilization.” Iran’s efforts to extend its influence in neighboring countries is “destabilization,” hence plainly illegitimate. It should be noted that such revealing usage is routine. Thus the prominent foreign policy analyst James Chace, former editor of the main establishment journal Foreign Affairs, was properly using the term “stability” in its technical sense when he explained that in order to achieve “stability” in Chile it was necessary to “destabilize” the country (by overthrowing the elected Allende government and installing the Pinochet dictatorship).

Beyond these crimes, Iran is also carrying out and supporting terrorism, the reports continue. Its Revolutionary Guards “are behind some of the deadliest terrorist attacks of the past three decades,” including attacks on US military facilities in the region and “many of the insurgent attacks on Coalition and Iraqi Security Forces in Iraq since 2003.” Furthermore Iran backs Hezbollah and Hamas, the major political forces in Lebanon and in Palestine — if elections matter. The Hezbollah-based coalition handily won the popular vote in Lebanon’s latest (2009) election. Hamas won the 2006 Palestinian election, compelling the US and Israel to institute the harsh and brutal siege of Gaza to punish the miscreants for voting the wrong way in a free election. These have been the only relatively free elections in the Arab world. It is normal for elite opinion to fear the threat of democracy and to act to deter it, but this is a rather striking case, particularly alongside of strong US support for the regional dictatorships, emphasized by Obama with his strong praise for the brutal Egyptian dictator Mubarak on the way to his famous address to the Muslim world in Cairo.

The terrorist acts attributed to Hamas and Hezbollah pale in comparison to US-Israeli terrorism in the same region, but they are worth a look nevertheless.

 On May 25 Lebanon celebrated its national holiday Liberation Day, commemorating Israel’s withdrawal from southern Lebanon after 22 years, as a result of Hezbollah resistance — described by Israeli authorities as “Iranian aggression” against Israel in Israeli-occupied Lebanon (Ephraim Sneh). That too is normal imperial usage. Thus President John F. Kennedy condemned the “the assault from the inside” in South Vietnam, “which is manipulated from the North.” This criminal assault by the South Vietnamese resistance against Kennedy’s bombers, chemical warfare, programs to drive peasants to virtual concentration camps, and other such benign measures was denounced as “internal aggression” by Kennedy’s UN Ambassador, liberal hero Adlai Stevenson. North Vietnamese support for their countrymen in the US-occupied South is aggression, intolerable interference with Washington’s righteous mission. Kennedy advisors Arthur Schlesinger and Theodore Sorenson, considered doves, also praised Washington’s intervention to reverse “aggression” in South Vietnam — by the indigenous resistance, as they knew, at least if they read US intelligence reports. In 1955 the US Joint Chiefs of Staff had defined several types of “aggression,” including “Aggression other than armed, i.e., political warfare, or subversion.” For example, an internal uprising against a US-imposed police state, or elections that come out the wrong way. The usage is also common in scholarship and political commentary, and makes sense on the prevailing assumption that We Own the World.

Hamas resists Israel’s military occupation and its illegal and violent actions in the occupied territories. It is accused of refusing to recognize Israel (political parties do not recognize states). In contrast, the US and Israel not only do not recognize Palestine, but have been acting relentlessly and decisively for decades to ensure that it can never come into existence in any meaningful form. The governing party in Israel, in its 1999 campaign platform, bars the existence of any Palestinian state — a step towards accommodation beyond the official positions of the US and Israel a decade earlier, which held that there cannot be “an additional Palestinian state” between Israel and Jordan, the latter a “Palestinian state” by US-Israeli fiat whatever its benighted inhabitants and government might believe.

Hamas is charged with rocketing Israeli settlements on the border, criminal acts no doubt, though a fraction of Israel’s violence in Gaza, let alone elsewhere. It is important to bear in mind, in this connection, that the US and Israel know exactly how to terminate the terror that they deplore with such passion. Israel officially concedes that there were no Hamas rockets as long as Israel partially observed a truce with Hamas in 2008. Israel rejected Hamas’s offer to renew the truce, preferring to launch the murderous and destructive Operation Cast Lead against Gaza in December 2008, with full US backing, an exploit of murderous aggression without the slightest credible pretext on either legal or moral grounds.

The model for democracy in the Muslim world, despite serious flaws, is Turkey, which has relatively free elections, and has also been subject to harsh criticism in the US. The most extreme case was when the government followed the position of 95% of the population and refused to join in the invasion of Iraq, eliciting harsh condemnation from Washington for its failure to comprehend how a democratic government should behave: under our concept of democracy, the voice of the Master determines policy, not the near-unanimous voice of the population.

The Obama administration was once again incensed when Turkey joined with Brazil in arranging a deal with Iran to restrict its enrichment of uranium. Obama had praised the initiative in a letter to Brazil’s president Lula da Silva, apparently on the assumption that it would fail and provide a propaganda weapon against Iran. When it succeeded, the US was furious, and quickly undermined it by ramming through a Security Council resolution with new sanctions against Iran that were so meaningless that China cheerfully joined at once — recognizing that at most the sanctions would impede Western interests in competing with China for Iran’s resources. Once again, Washington acted forthrightly to ensure that others would not interfere with US control of the region.

Not surprisingly, Turkey (along with Brazil) voted against the US sanctions motion in the Security Council. The other regional member, Lebanon, abstained. These actions aroused further consternation in Washington. Philip Gordon, the Obama administration’s top diplomat on European affairs, warned Turkey that its actions are not understood in the US and that it must “demonstrate its commitment to partnership with the West,” AP reported, “a rare admonishment of a crucial NATO ally.”

The political class understands as well. Steven A. Cook, a scholar with the Council on Foreign Relations, observed that the critical question now is “How do we keep the Turks in their lane?” — following orders like good democrats. A New York Times headline captured the general mood: “Iran Deal Seen as Spot on Brazilian Leader’s Legacy.” In brief, do what we say, or else.

There is no indication that other countries in the region favor US sanctions any more than Turkey does. On Iran’s opposite border, for example, Pakistan and Iran, meeting in Turkey, recently signed an agreement for a new pipeline. Even more worrisome for the US is that the pipeline might extend to India. The 2008 US treaty with India supporting its nuclear programs — and indirectly its nuclear weapons programs — was intended to stop India from joining the pipeline, according to Moeed Yusuf, a South Asia adviser to the United States Institute of Peace, expressing a common interpretation. India and Pakistan are two of the three nuclear powers that have refused to sign the Non-proliferation Treaty (NPT), the third being Israel. All have developed nuclear weapons with US support, and still do.

No sane person wants Iran to develop nuclear weapons; or anyone. One obvious way to mitigate or eliminate this threat is to establish a nuclear weapons-free zone (NWFZ) in the Middle East. The issue arose (again) at the NPT conference at United Nations headquarters in early May 2010. Egypt, as chair of the 118 nations of the Non-Aligned Movement, proposed that the conference back a plan calling for the start of negotiations in 2011 on a Middle East NWFZ, as had been agreed by the West, including the US, at the 1995 review conference on the NPT.

Washington still formally agrees, but insists that Israel be exempted — and has given no hint of allowing such provisions to apply to itself. The time is not yet ripe for creating the zone, Secretary of State Hillary Clinton stated at the NPT conference, while Washington insisted that no proposal can be accepted that calls for Israel’s nuclear program to be placed under the auspices of the IAEA or that calls on signers of the NPT, specifically Washington, to release information about “Israeli nuclear facilities and activities, including information pertaining to previous nuclear transfers to Israel.” Obama’s technique of evasion is to adopt Israel’s position that any such proposal must be conditional on a comprehensive peace settlement, which the US can delay indefinitely, as it has been doing for 35 years, with rare and temporary exceptions.

At the same time, Yukiya Amano, head of the International Atomic Energy Agency, asked foreign ministers of its 151 member states to share views on how to implement a resolution demanding that Israel “accede to” the NPT and throw its nuclear facilities open to IAEA oversight, AP reported.

It is rarely noted that the US and UK have a special responsibility to work to establish a Middle East NWFZ. In attempting to provide a thin legal cover for their invasion of the Iraq in 2003, they appealed to Security Council Resolution 687 (1991), which called on Iraq to terminate its development of weapons of mass destruction. The US and UK claimed that they had not done so. We need not tarry on the excuse, but that Resolution commits its signers to move to establish a NWFZ in the Middle East.

Parenthetically, we may add that US insistence on maintaining nuclear facilities in Diego Garcia undermines the NWFZ established by the African Union, just as Washington continues to block a Pacific NWFZ by excluding its Pacific dependencies.

Obama’s rhetorical commitment to non-proliferation has received much praise, even a Nobel peace prize. One practical step in this direction is establishment of NWFZs. Another is to withdraw support for the nuclear programs of the three non-signers of the NPT. As often, rhetoric and actions are hardly aligned, in fact are in direct contradiction in this case, facts that pass with as little attention as most of what has just been briefly reviewed.

Instead of taking practical steps towards reducing the truly dire threat of nuclear weapons proliferation, the US is taking major steps towards reinforcing US control of the vital Middle East oil-producing regions, by violence if other means do not suffice. That is understandable and even reasonable, under prevailing imperial doctrine, however grim the consequences, yet another illustration of “the savage injustice of the Europeans” that Adam Smith deplored in 1776, with the command center since shifted to their imperial settlement across the seas.

Read more of Noam Chomsky’s work at Chomsky.info.

The global economy is still hemorrhaging from the global economic crisis, and we can’t turn on the television or look at the Internet without being reminded of the ecological crises that are unfolding all around us (including, of course, the growing disaster in the Gulf). Yet the answer to both sets of problems — ecologically and economically — are one and the same.

We can’t talk about sustainable environments without talking about sustainable economies. And we can’t have any type of economic model that doesn’t take our fundamental ecology into consideration. We’re actually talking about two sides to the same coin.

Our changing climate continues to make profound impacts on how people live, work and play. Everything from our food systems, water sources, oceans and deserts is negatively influenced by our obsession with mining, transporting and burning carbon-based fossil fuels. Using energy security and independence as a mantra, the United States government and fossil fuel industries are aiming to pump billions of dollars into oil exploration and mining the last bit of accessible coal.

While our national attention may be focused on oil, our coal addiction is similarly threatening our environmental, economic and human health. Proponents of coal argue that it’s plentiful, cheap and readily available, and with carbon capture and sequestration (CCS), coal’s climate impacts can be mitigated.

In reality though, coal is anything but cheap when health and environmental costs are taken into consideration. Coal is responsible for over 30 percent of U.S. carbon emissions and yet the aim is to mine and burn more of it. The so-called magic bullet of CCS is very costly to implement and according to an MIT study titled “The Future of Coal” the first commercial CCS plant won’t be on stream until 2030 at the earliest. It may prove to be too little, too late — and even if the technology is ever viable, burning coal more cleanly will never solve the problem of the impacts of coal extraction.

In most parts of coal country (Appalachia, Wyoming, Montana, Colorado) local communities have not seen the direct benefits of coal. In fact most of these communities suffer from serious health impacts, limited supply of drinking water, restricted access to natural resources, poor education and health systems that are sorely lacking. It is no coincidence that some of the poorest counties in the U.S. are found in the coal-producing counties of eastern Kentucky. Coal has shown little economic promise and its economic, health and ecological legacy are devastating.

The impact of coal on health may be the best way to open the dialogue about the costs of coal. Coal combustion emissions damage the respiratory, cardiovascular and nervous systems and contribute to four of the top five leading causes of death in the U.S. A 2008 West Virginia University study published in the American Journal of Public Health has found that as coal production increases in an area, so does the “incidence of chronic illness in nearby communities.” The main findings from the study show that people in coal mining communities have a 70 percent increased risk for developing kidney disease; a 64 percent increased risk for developing chronic lung diseases such as emphysema; and are 30 percent more likely to report high blood pressure.

The data and evidence on coal’s impact on our health is mounting daily, and yet we fail to focus on coal as a health risk. Given the evidence, the time has come to turn coal into a pariah.

The true cost of coal, including the environmental and the health costs, will affect large swaths of the population. With emerging data in the last year and a half showing the consequences of coal on people’s health, the environmental justice movement needs to partner with the medical establishment to publicize the facts. We need to make coal the next tobacco..

We should start by waging a serious campaign that would involve doctors, nurses, public health officials and patients speaking out about the connection between consumers of coal energy and their immediate health concerns. By connecting the human element to the issue we can expand the climate discussion beyond the environmental community. From there we can have campaigns to divest from coal and shareholder actions, exposing the fiduciary risks of investing in coal. Perhaps even a national ad campaign akin to the anti-tobacco ads — using health as a vector to raise the public consciousness about climate and energy.

After all, climate change is not solely an environmental problem — it is a human/planetary problem. If we are going to rely on a small base of environmentalists to carry us through this crisis, we are in trouble. Our spokespeople on this issue have to come from a wide spectrum of citizens and leaders. The mainstream movement has lost sight of the justice element of the work and is less interested in building a broad, national movement to pressure and push for change. The problem is that the debate around climate is very wonky and policy-oriented, which leaves most communities out of the conversation. We have to build bigger and broader constituencies to make a difference. Without such a base, our future depends on Washington insiders and mainstream environmental groups. Compromise and backroom deals will prevail and we will make no significant progress in reversing climate change.

Of course, we have to go beyond a health campaign; without providing alternatives to and a transition from coal, an anti-coal campaign is weak. How coal is replaced as a base-load energy source requires political will and significant investments. Jobs that are dependent on the mining, transporting and burning of coal need to be replaced and workers retrained. This places us squarely in the green jobs/economy discussions. The new energy economy has a lot of potential for providing good, clean and green jobs — but that will not happen on its own and it will require strong voices to demand it and demonstrate how it can be done.

Rethinking a green economic model requires bringing together labor, community organizations, environmentalists, progressive economists, government leaders and policy makers, along with the private sector to have a conversation about sustainability, the economy and ecology.

Can old manufacturing centers be revamped to produce parts for wind turbines? Can resources go into developing new solar technologies with local production? This is where we should be focusing our expertise. Exploring and expanding on alternative energy sources and green manufacturing provides jobs and even expands the economy, while sustaining our environment — this should be a risk worth taking.

Heeten Kalan is senior program officer for the Environmental Health and Justice fund at the New World Foundation.

Posted on May 17, 2010, Printed on May 25, 2010

http://www.alternet.org/story/146879/

After considering laughably titled solutions like the top hat (a containment dome), the junk shot (a pressurized blast of golf balls and shredded tires) and worse, British Petroleum has proven one thing above all else: When the fossil fool hits the fan, it simply has no plan.

The fact that BP was allowed to drill along the shores of the United States in spite of its unwillingness to plan and prepare for accidents is only stunning to those haven’t been paying attention to the feverish pace of deregulation since the rapacious Reagan conservatives took global culture by blitzkrieg. It certainly isn’t surprising to anyone who has been paying even slight attention to BP, which boasts a decorated resume of spills and screw-ups.

According to recent revelations, a blowout preventer that could have halted the Deepwater Horizon clustergush failed a crucial pressure test hours before the April 20 explosion, and was never tested by the government engineer who approved BP’s drilling operation. Those kinds of safety lapses are standard operating procedure, an oil industry whistleblower told the Huffington Post, saying he routinely witnessed 100 such shortcuts on BP rigs and others throughout 18 years of service in the sector. The fallback plan, a relief well, won’t be finished until after the summer, by which there will be little reason left to live in New Orleans. Great. 

But if you’ve been railing for decades against the fossil fuel sector for everything from deliberately removing safeguards that could have prevented what will likely end up being the worst U.S. oil disaster in history to its lethal emissions that could, in the extreme, end up warming planet Earth to the point that human habitation is an impossibility, well, this is all old, sad news. 

Cold Oil Turkey 

“While this is a horrible disaster, it occurs to me that Americans cannot accept the fact that getting oil out of the earth is dirty, difficult, hazardous work, with great risks for society,” said James Kunstler, author of The Long Emergency and Geography of Nowhere. “We don’t want to know about it, as long as we can drive comfortably to the strip mall, enjoy NPR and an iced beverage. When something happens to prick our bubble of unreality, we’re indignant.” 

The counter-argument to Kunstler’s hard-eged realism — which is thankfully gaining steam every day the Deepwater Horizon disaster gushes hundreds of thousands, if not a million, gallons of crude into the Gulf — is that further regulation and safety enforcement could put at least a partial stop to the fossil foolishness. Which means legally proving that BP, Halliburton and Transocean deliberately obviated what safety requirements existed so that the United States can conduct criminal proceedings which could then levy heftier damages than $75 million cap on liability under the Oil Pollution Act of 1990, which itself was hastily enacted by Congress under President George H.W. Bush shortly after the 1989 Exxon Valdez disaster.

It also means exacting deeper regulation on the nation’s compromised Minerals Management Service, which the Department of the Interior is considering splitting into two separate agencies. From taking drugs and having sex with energy company reps to being exempted from delivering detailed environmental analyses, the MMS is a controversy-soaked frat house. And its parent agency at Interior is the same hot mess. It’s obvious that, when it comes to America’s oil regime, the lunatics are drilling the asylum into the bedrock. So it’s probably no surprise that neither agency returned several calls for comment. 

But add it up and it’s one hell of a cleanup for a country with an unceasing appetite for hyperconsumption but little stomach for hard work. Which is why the blame-game theory, while it makes for good theater and hopefully better punitive damages, is still a red herring distracting us from the environmental disaster’s prime suspect: All of us.

“BP, Haliburton and Transocean will all be financially punished for this, and they, along with other oil companies, will say, ‘Screw you, America, we’re moving our operations to Angola,’” added Kunstler. “All of this shucking and jiving over blame is a Chinese fire drill concealing the fact that we are all complicit in this disaster, and refuse to even consider changing our underlying behavior.” 

But this is what most junkies do, when the drugs start to wear off and run out: Keep tapping that vein. A new Associated Press/GfK poll on the spill released in mid-May supports that madness. While 42 percent of respondents felt that the Obama administration is properly prosecuting the spill, even more, 50 percent to be exact, are cool with further coastal drilling for oil and gas. In spite of all that has happened, they’d rather drill for what’s left of our domestic oil supply than prepare, plan and proselytize for our inevitable post-oil future. Itinerant laziness is the true culprit in this spill. BP, MMS and other alphabet nightmares are monsters of our own consumptive creation. 

“In the most general terms, I think the answer to drilling problems is better regulation and taxes to fund cleanup efforts,” explained Mother Jones and Washington Monthly journalist Kevin Drum, who like Kunstler is a peak oil theorist. “Because the plain fact is that drilling is going to happen one way or another, as long as we’re addicted to oil. And the answer to that is unrelated to drilling at all.” 

When it comes to killing addiction, the first stage is always acknowledging one. Optimistic estimations of peak oil theory explain that global supply will start dwindling in 2020, a clear-sighted metaphor if there ever was one. Even without factoring in the always reliable underestimation that leads to disasters like Exxon Valdez and Deepwater Horizon, that’s only a decade to get our heads and engines together. In other words, a light-speed snapshot of time compared to the insane workload. 

“The administration needs to take this opportunity to explain the multiple hidden costs to our addiction to fossil fuels,” argued Center for American Progress climate analyst Joseph Romm, the author of Straight Up: America’s Fiercest Climate Blogger Takes on the Status Quo Media, Politicians, and Clean Energy Solutions. “As we’re finding out with Goldman Sachs, you just can’t let the industry regulate itself. But ultimately we have to get off the addiction. If the administration doesn’t help us do that, it will be an incomprehensible missed opportunity.” 

“We need a serious carbon tax and serious climate legislation to reduce our reliance,” said Drum. “I care a lot more about that than I do about the specific issues related to oil rig safety.” 

Infinite Step Recovery 

The prospects for such serious campaigns against carbon are practically dead in the water, just like the collateral damage washing up in Louisiana and elsewhere in the Gulf. The current climate legislation drafted by senators John Kerry and Joseph Lieberman is a capitulation to the fossil fuel industry, offering concessions like increased offshore drilling and a doubtlessly unregulated cap-and-trade derivatives market in exchange for greenhouse gas limits. This mind-numbing arrogance and collusion between the energy sector and rich nations is precisely what led to the failure of last year’s climate summit in Copenhagen, according to ex-World Bank economist Sir Nicholas Stern, who crunched the numbers in 2006 and decided that doing nothing about global warming would end up costing the world around $5 trillion dollars and rising.

The prospects for this year’s retreat in Cancun similarly suck. The Obama administration’s special climate envoy Todd Stern admitted in May that the United States will probably have no climate bill in place by the time it gets to Mexico. Factor in robust public support for further coastal drilling in the midst of the Deepwater Horizon disaster and it becomes clear that the political will to change our energy game is weak.  

But the political capital to be reaped by anger over the spill is strong. On May 13, senators Barbara Boxer, Ron Wyden, Dianne Feinstein, Patty Murray, Maria Cantwell and Jeff Merkley introduced legislation to ban offshore oil drilling along the West Coast. California governor Arnold Schwarzenegger withdrew support for a drilling operation off the coast of Santa Barbara. On the other side of the country, Florida representative Corrine Brown has proposed similar legislation, while governor Charlie Crist has suggested a possible constitutional amendment mandating the same. 

Yet the Obama administration is openly supporting not an outright ban on offshore drilling, but Kerry and Leiberman’s weak-kneed concessions. Their bill does include provisions that allow states to ban operations within 75 miles of their coastlines, as well as a sweetener that allows them to siphon off larger revenue from those operations. But they should already have that anyway. And the Deepwater Horizon clustergush occurred over 40 miles offshore; Kerry and Lieberman’s bill would have bought the Gulf coast a few extra days before it was soaked in oil. Plus, fisheries and other natural environments utterly necessary to the economic and civic health of the entire country aren’t strictly on the coastline; some are miles offshore, closer to the rigs than you or I. 

Take a look at what the Department of the Interior calls “President Obama’s comprehensive energy plan for the country,” and it’s clear that we’re in for much more, not less, offshore drilling. The color-coded graphics tell it all: Exploration and production plans to cruise northeastward up from the Western and Central Gulf of Mexico to its Eastern region and up into the South and mid-Atlantic. Same goes for the comparatively oily Alaskan region. According to the World Wildlife Fund, Shell Oil starts  drilling in Alaska’s cold Chuchki and Beaufort seas starting in July. 

“The Arctic region is, in nearly every respect, the exact opposite of the temperate conditions of the Gulf of Mexico,” said WWF president and CEO Carter Roberts. “Technology simply does not exist to clean up a spill in Arctic waters. And, unlike the Gulf with its robust response apparatus close at hand, the Coast Guard lacks the capacity to adequately respond to a spill in the Arctic.” 

While the West Coast is currently off-limits, the Interior reminds, especially given the new legislation from Boxer and company, it’s just a matter of diminishing supply until we start tapping that vein. If not for the Deepwater Horizon disaster, we might already have. But with public support and White House support fully behind further offshore drilling, and the paranoid specters of foreign terrorism rearing their fear-inducing heads up in Times Square and Arizona, it’s probably going to be a long time before the United States does anything substantial about the Deepwater Horizon incident, much less greater oil exploration or even climate change.  

But one thing is most likely certain: We won’t be ready as a nation to mandate change until the peak oil gong rings in 2020, or earlier. And by then, it could be too late. 

“Big Oil has obviously funded major disinformation campaigns to mislead the public about the threat of global warming, and the worst-case scenarios for a spill,” Romm said. “But at some point, the painful reality of warming will be so clear that we will be desperate and start to do things differently. But what we need to do first and foremost is pass a climate and clean-energy bill. That is our top priority: Get off the unsafe dirty fuels of the 20th century and get on the safe fuels of the 21st century like wind and solar, which never run out.”

Scott Thill runs the online mag Morphizm.com. His writing has appeared on Salon, XLR8R, All Music Guide, Wired and others.

National Post

The “Peak Oil” concept — that the world’s petroleum-production rate will soon reach its maximum and commence an inevitable decline, with negative economic consequences — has been around in scientifically articulated form at least since 1998; long enough to see it confirmed in significant ways.

The rate of discovery of new oilfields has been falling since 1964. The biggest find in recent years is Tupi, in Brazilian waters, which is claimed to hold five-to-eight billion barrels of oil; but that’s only enough to slake the world’s thirst for 60 to 90 days. Most producing nations are past their domestic peaks and are experiencing slowing output, despite every effort to maintain flow rates.

Skeptics point out that total world oil reserves continue to grow. But this may not be a reliable indication of where we stand: Often, in nations that have seen a peak and subsequent decline in production, domestic reserves continued to rise right up to, or even past, the date of peak production. Why? Oil companies replace reserves of high-quality, cheaply-produced oil with reserves of low-quality, slow-, or expensive-to-produce oil or tar sands.

Rates of output decline in older, giant oilfields have proven to be more trustworthy indicators of long-term trends. (For instance, they’ve enabled successful peaking forecasts for the United States, the North Sea and other regions). For the world, the average decline rate from existing fields has been calculated by the International Energy Agency at 4.5% per year. The world needs to develop the equivalent of a Saudi Arabia’s worth of oil production capacity every four years to offset such declines. This is quite a burden for the industry, which must now look for oil in ultra-deep water, in polar regions, or in politically fractured nations, since all the easy-to-find, easy-to-extract oil already has been located and much of it pumped.

So far, the record year for world crude production was 2005, and the record month was July 2008. Tellingly, the leveling-off of extraction rates between 2005 and 2008 occurred in the context of rising oil prices; indeed, in July 2008, the price spiked 50% higher than the previous inflation-adjusted record, set in the 1970s. Yet as both oil demand and prices rose, production barely budged in response.

While many commentators believe the jury is still out on Peak Oil, the list of petroleum analysts who say world oil production has already peaked, or will do so in the next five years, lengthens almost daily, and includes CEOs and other well-placed leaders within the oil industry.

The argument that oil production could theoretically continue to grow past 2015 is mainly put forward by organizations such as Cambridge Energy Research Associates and Saudi Aramco, which explain away evidence of dwindling discoveries, depleting oilfields and stagnating total production by claiming that it is demand for oil that has peaked, not supply — a claim that hinges on the observation that oil prices are high enough to discourage potential buyers. But high prices for a commodity usually signify scarcity, so the “peak demand” argument doesn’t hold water.

Peak Oil has significant implications for our economy. In response to the 2008 price spike, the global airline industry nose-dived and auto companies suffered. Worldwide shipping slowed drastically and hasn’t recovered. Demand for oil plummeted in late 2008, and so did the price — temporarily. But today’s price is again high, almost to the point of nipping economic recovery.

What should we do about Peak Oil? Start with what the U.K. Industry Task Force on Peak Oil (which included Sir Richard Branson of Virgin Airlines) has done: Acknowledge the reality of supply limits. Then study the vulnerabilities of transport and food systems to high and volatile oil prices, and start making those systems more resilient and less oil-dependent.

But do it fast. Adaptation will take decades, and we are starting very late.

Originally published March 19, 2010 on National Post

Silly me. Here I had thought that world leaders would want to keep their nations from collapsing. They must be working hard to prevent currency collapse, financial system collapse, food system collapse, social collapse, environmental collapse, and the onset of general, overwhelming misery—right? But no, that’s not what the evidence suggests. Increasingly I am forced to conclude that the object of the game that world leaders are actually playing is not to avoid collapse; it’s simply to postpone it a while so as to be the last nation to go down, so yours can have the chance to pick the others’ carcasses before it meets the same fate.

I know, that sounds unbearably cynical. And in fact it may not accurately describe the conscious attitudes of leaders of some smaller nations. But for the U.S. and China, arguably the countries most likely to lead the way for the rest of the world, actions speak louder than words. (Mental health advisory: readers with a low tolerance for bad news should turn back now; there are lots of cheerier articles on the Internet and this might be a good time to find and enjoy one.)

For these two nations, avoiding collapse would require solving a range of enormous problems, of which at least four are non-negotiable: climate change; peak fossil fuels (in effect, stagnating and, soon, declining energy supplies); the inherent instability of growth-based financial systems; and the vulnerability of food systems to factors like fresh water scarcity and soil erosion (in addition to global warming and fuel scarcity). If they fail to address any one of these, societal collapse is inevitable—in a few decades certainly, but perhaps in just the next few years.

So how are our contestants doing? There’s not much to report on the climate score—just vague promises for future action. So their apparent strategy in this case is to delay (not to delay the impacts, mind you, but to delay efforts to address the problem).

Likewise, there is little positive action occurring regarding food systems: the assumption appears to be that conventional industrial agriculture—which is responsible for most of the global food system’s enormous and growing vulnerabilities—will somehow shoulder the task of feeding seven to nine billion humans. We just need to continue with what we are already doing, but on a larger scale and using more gene-engineered crop varieties.

Officially, peak energy is not even a concern, so evidently the strategy being adopted here is denial. We’ll see how that works out.

How about the financial mess? Here the U.S. and China are in situations so different that a more extended discussion seems justified.

China Surges to the Lead!

The U.S. is in debt up to its eyeballs and has mortgaged the paychecks of every generation approximately until hell freezes over in order to bail out its “too-big-to-fail” banks. In contrast, China has piles of cash (resulting from its enormous trade surpluses) and has bought a mountain of U.S. debt in order to keep its main customer’s currency from losing value. It would seem that, in this department, one nation is set to flag while the other is poised to leap into first place as world economic superpower.

And that happens to be the conventional wisdom on the subject. It’s not hard to find commentators who say the United States is a has-been for a variety of reasons. In addition to its huge debt burden, the U.S. also suffers from a shrinking manufacturing base, a big trade deficit, eroding quality of education, and a foreign policy that serves the interests of arms manufacturers while undermining the long-term interests of the nation. Regarding the last of these items, a 2006 World Public Opinion poll showed large majorities in four leading ally nations (Egypt, Morocco, Pakistan, and Indonesia), together accounting for a third of the Muslim world’s population, believe the U.S. is determined to destroy or undermine Islam. Within those countries, most people surveyed support attacks on American targets. And it just so happens that most of the world’s future oil supplies will be coming from Muslim nations. Brilliant.

By contrast, China is enjoying springtime on amphetamines. It now has the biggest car market in the world. And, according to Stuart Staniford in a recent fact-filled article, “if present trends continue, the Chinese expressway system will likely grow larger than the U.S. interstate highway system within the next couple of years, and Chinese car ownership will exceed U.S. car ownership by somewhere in the neighborhood of 2017.” As of 2010 China is the leading producer of hydroelectric and solar power and by 2011 will be the top producer of wind power. China’s smart grid investments dwarf those of the U.S. by 200 to one. The Chinese are also investing heavily in nuclear energy. Staniford goes on: “Oversimplifying greatly, it’s as though the U.S. borrowed a pile of money from China in order to fight a war to free up oil supply in Iraq in order that China could become the greatest industrial power the world has ever seen.”

China’s foreign policy consists largely of buying friends by purchasing rights to oil, gas, coal, and other resources (in Canada, Australia, Venezuela, Iraq, Kazakhstan, and throughout Africa), while the U.S. spends money it doesn’t have rooting out bad guys and making more enemies in the process.

In an October, 2009 lecture, George Soros showed refreshing candor about the seriousness of the continuing global financial crisis: “What differentiated [the recent economic crisis] from the Great Depression is that this time the financial system was not allowed to collapse, but was put on artificial life support. In fact [however], the magnitude of the credit and leverage problem we have today is even greater than the 1930s.” Soros then went on to discuss the relative positions of the U.S. and China:

In the short term, all countries were negatively affected. But in the long term, there will be winners and losers. . . . To put it bluntly, the U.S. stands to lose the most, and China is poised to emerge as the greatest winner. . . . China has been the primary beneficiary of globalization, and it has been largely insulated from the financial crisis. For the West, and the U.S. in particular, the crisis was an internally-generated event [that] led to the collapse of the financial system. For China, it was an external shock [that] has hurt exports, but left the financial, political, and economic system unscathed.

China Stumbles!

But remember: without solutions to climate change, peak energy, and the looming food crisis, winning the financial contest is only temporary solace. Consider just the energy conundrum: China may be building nukes and windmills, but there’s no way it can maintain 8 percent annual growth for long with flat or declining energy from coal. China and India, between them, are currently planning to build 800 new coal-fired power plants by 2020. Where will the coal come from? Both countries are already experiencing domestic production shortfalls and are starting to import the fuel. But coal-exporting countries will be unable to keep up with their growing combined demand.

Moreover, there is a school of thought that says China’s apparently unstoppable economic miracle is a bubble waiting to burst. Beijing’s housing market is overheated, like that of Las Vegas circa 2006. Last year, the Chinese economy enjoyed 9 percent GDP growth—on paper. But in order to achieve that goal, the government and banks had to loan out 30 percent of China’s GDP (the rate of growth in loans accelerated during the latter part of the year; at year-end rates, banks were on track to loan out an amount equal to the nation’s entire GDP in 2010). In any case, much of that growth probably occurred through speculation on real estate and questionable stocks.

Generally, China is at a Wild West stage of economic development: it is a collection of powerful local capitalist power bases unaccountable to anyone, all jockeying to create and inflate assets and credit. While the central government has recently exerted control over the banks, its ability to halt regional Ponzi schemes is still limited.

In January the Chinese banking regulatory commission attempted to rein in lending in order to slow the rapid increase in real estate and stock market values. (On the other hand, during the same month, China’s cabinet agreed to permit margin trading and short selling of stocks and to launch a stock futures index.) Significantly, there is evidence that China’s central bank’s attempts to harmlessly deflate the housing and stock market bubbles may be going badly. The sudden suspension in lending has, according to Joe Weisenthal in Business Insider, “caught importers, along with many other companies, by surprise and could cause turbulence in China’s import orders. Letters of credit (LoC) suddenly became unavailable, despite previous agreements. We believe that this will inevitably lead to delays or cancellations in China’s imports. Import orders for commodities and machineries could be affected most.” Translation: the government was faced with the options of letting a rapidly growing bubble burst, taking the economy down; or deliberately deflating the bubble, risking taking the economy down by another route. The central bank chose the latter, and the risked takedown may be unfolding.

Meanwhile Google and the Obama Administration have been exerting external pressure on China to relax its censorship of electronic communications—moves that some see as reducing the central government’s options for controlling both information flow and the economy.

In a recent op-ed, New York Times columnist Tom Friedman countered worries about a bursting of the China bubble with a robust display of confidence in Beijing’s unstoppable expansionary momentum. Given Friedman’s record (remember his columns in 2003 extolling the benefits that would flow to America from an invasion of Iraq?), this alone should be cause to doubt whether the Chinese locomotive can stay on its tracks much longer.

What Does It Mean to “Win”?

In his book Reinventing Collapse: The Soviet Example and American Prospects, Dmitry Orlov discusses the “collapse gap” between the United States and the old Soviet Union: the latter, he argues, was in effect much better prepared for economic crisis and the fall of its central government; when the U.S. eventually goes the way of the U.S.S.R., the pain and suffering of its citizens will be much greater. (I can’t adequately summarize Orlov’s evidence and reasoning here, but they are persuasive; if you haven’t read the book, do yourself a favor.)

So: How is the U.S. doing today in terms of collapse preparedness as compared to China?

After six decades of nearly uninterrupted economic growth, Americans have developed unrealistic expectations about the future. They are urbanized consumers whose manufacturing capability has shriveled and whose practical survival skills are in most cases vestigial. The Chinese, in contrast, have less of a steep fall ahead of them. Most still dwell in the countryside, and many who live in the cities are only one generation removed from subsistence agriculture and can still draw on their own, or their parents’, practical skills learned during decades of poverty and immersion in a traditional farming culture.

Both nations face fierce political challenges. In the U.S., the central government has reached nearly complete paralysis: it is evidently incapable of solving even relatively minor problems, and confidence in it among the citizenry has largely evaporated. Political leaders have succeeded in polarizing the people geographically with “hot-button” issues, few of which have anything to do with the factors currently undermining the nation’s ability to survive. The Chinese central government appears far more capable of acting decisively and strategically, but it is confronted with nasty facts of geography and history: there is an extreme and growing economic and social division between the wealthy coastal cities and the poor, rural interior; and a demographic schism between those 40 years old or younger who have high economic expectations, and the older generation who grew up under Mao, with an ethic of collectivism and self-sacrifice. The young, especially, have accepted a trade-off between civil freedoms and economic prosperity. If the latter is not delivered, there will be shrill demands for the former. These divisions are so deep and profound that they could tear society apart if expectations are dashed—and the leaders know this.

Thus, in the event of collapse, both nations face the possibility of a breakdown in their political systems, entailing widespread violence (uprisings and crackdowns).

China still maintains a crucial advantage in one key area: its food system. Far more of its citizens still grow food, even taking into account recent trends toward rapid urbanization (in the U.S., full-time farmers make up only about two percent of the population and the average farmer is approaching retirement age). This is not to say that China will have the capacity to feed all its people; it is already moving in the direction of being a major net food importer. Meanwhile, the U.S. remains a significant food exporter. The key difference has to do with the resiliency of the two nations’ respective food systems: that of the United States is more centralized, more highly fuel dependent, and therefore probably more vulnerable.

The Geopolitics of Collapse

It’s easy to see the advantage of collapse preparedness for the citizenry—with better preparation, more will survive. But does a higher survival rate during and after collapse translate to some sort of geopolitical advantage?

The process of collapse will be determined by many factors, some hard to predict, and so it is difficult to know the size or scope of the political power structure that might re-emerge in either country. It’s possible that one nation, or both, could devolve into smaller political units squabbling among themselves and unable to engage much in global jockeying for resources. All new political units emerging within the present territories of China or the U.S. would be immediately beset with enormous practical problems, including poverty, hunger, environmental disasters, and mass migrations.

Presumably some potent weaponry from the age of global warfare would remain intact and usable, so it is possible in principle that one or another of these smaller political entities could assert itself on the world stage as a short-lived, bargain-basement empire of limited geographic scope. But even in that case “winning” the collapse race would be small comfort.

The possibility of armed conflict between the two powers prior to mutual collapse is not to be entirely excluded if, for example, U.S. efforts to contain Iran’s nuclear ambitions were to set off a deadly chain reaction of attacks and counter-attacks possibly involving Israel, with world powers being forced to choose sides; or if the U.S. were to persist in arming Taiwan. But neither the U.S. nor China wants a direct mutual military confrontation, and both nations are highly motivated to avoid one. Thus all-out nuclear war—still the worst-case imaginable scenario for homo sapiens and planet Earth—seems thankfully unlikely, though in the few decades ahead the use of some of these weapons, on some occasions, by one nation or another, is probable.

Trade wars are another matter, and we might even see one this year, according to Michael Pettis at Financial Times, who notes that

. . . trade imbalances are more necessary than ever to justify increased investment in surplus countries [i.e., China], but rising unemployment makes them politically and economically unacceptable in deficit countries [i.e., the U.S.]. Rising savings in the U.S. will collide with stubbornly high savings in China. Unless a long-term solution is jointly worked out immediately, trade conflict will worsen and it will become increasingly hard to reverse offensive policies. Most importantly, if deficit countries demand structural change faster than surplus countries can manage, we will almost certainly finish with a nasty trade dispute that will . . . poison relationships for years.

How likely is the prospect for the last nation standing to be able to, as I put it in the first paragraph above, “pick the carcasses” of its competitors? Such a scenario presupposes that one nation will be able to stay on its feet for at least a few years after others fall. But this may not be possible. Recall the prophetic words of Joseph Tainter in The Collapse of Complex Societies (1988):

“A nation today can no longer unilaterally collapse, for if any national government disintegrates, its population and territory will be absorbed by some other [or bailed out by international agencies]. . . . Collapse, if and when it comes again, will this time be global. No longer can any individual nation collapse.”

When the U.S.S.R. crashed, the U.S. and various multinational corporations were able to sweep in and gobble up some of the treasure left lying around. One example: U.S. nuclear power plants have for many years been using uranium fuel cannibalized from old Soviet missile warheads. Soon, international institutions such as the World Bank and IMF helped organize new financial structures for Russia, Ukraine, Belarus, Lithuania, Estonia, and the other nations born from Soviet political and economic disintegration, so as to limit and reverse the process of social disintegration that had already passed beyond its early stages.

But now the game has changed. A collapse of the U.S. would leave China devastated. Not only would Beijing lose its main customer, but the hundreds of billions of dollars’ worth of treasury notes it has accumulated would be rendered worthless. If China were internally stable, such impacts could be absorbed with difficulty. But in light of China’s own simmering social and financial predicaments, a U.S. collapse would almost certainly be enough to tip Beijing’s economy into a tailspin, resulting in both social and political crises.

A collapse of China would similarly devastate the U.S. Obviously, the loss of a source of cheap consumer products would discomfit WalMart shoppers, but the shock soon would go much deeper. The Treasury would lose its main foreign buyer of government debt, which means that the Fed would be forced to step in and monetize that debt (in common parlance, “turn on the printing presses”), undermining the dollar’s value. The result: a hyperinflationary economic crash. Such a crash is probably inevitable at some point anyway, but a collapse of the Chinese system would hasten and worsen it.

In neither instance would international institutions be capable of preventing substantial social and political fall-out. The last nation standing would not stand for long. We have reached the stage where, as Tainter says, “World civilization will disintegrate as a whole.”

The Transition Marathon

Okay, so there is no serious effort on the part of U.S. or Chinese leaders to avoid collapse in the long run (say, over the next 10 to 20 years). Perhaps this is because they have concluded that it is impossible to do so—there are just too many trends leading in the same direction, and actually dealing with any of those trends head-on would entail huge, immediate political risks. In reality, however, it is much more likely that they simply refuse seriously to think about these trends and their implications, because they do have another option—to postpone collapse through deficit spending, bailouts, and more financial bubbles, while enacting their parts in a climate-policy kabuki play and engaging in resource geopolitics. This way blame will at least fall on the next set of leaders. Postponing collapse is itself a big job, enough so as to take all of one’s attention away from having to contemplate the awfulness and inevitability of what is being postponed.

Do these short-term efforts in any way reduce the risk of dissolution? Hardly. In fact, the longer the reckoning is delayed, the worse it will be.

What would make more sense than just trying to put off the inevitable is quite simply to build resilience throughout society, re-localizing basic social systems involving food, manufacture, and finance. There is no need to rehearse the existing discourse about this strategy: readers who are not familiar with it can find plenty of useful pointers at www.transitiontowns.org, or in the books and articles of authors such as Rob Hopkins, Albert Bates, David Holmgren, Pat Murphy, and Sharon Astyk (and in some of my own writings, including Museletter #192).

It is understandably hard for national politicians to think along those lines. Building societal resilience means disregarding the dictates of economic efficiency; it means systematically reducing the power of the central government and national/global commercial institutions (banks and corporations). It also means questioning the central dogma of our modern world: the efficacy and possibility of unending economic growth.

So if the best outcome lies in a strategy of resilience and re-localization, and our national leaders can’t even contemplate such a strategy, that means those leaders are, in one sense at least, irrelevant to our future.

Some blog readers are so in tune with this line of thinking that they no longer see any point in paying attention to the global scene. They may even think this article is a waste of time (and I expect to get an email or two to that effect). But following world events is more than a matter of infotainment: when and how China and the U.S. come apart at the seams is a question of far greater consequence than that of whether the New Orleans Saints or the Indianapolis Colts will win the Superbowl. The reality is that no nation, and no community will be able to completely protect itself from the sudden, harsh winds that will rush to fill the vacuum left by an implosion of either superpower.

By the way, my apologies to the other 190 or so nations of the world, large and small: my singling out of the U.S. and China for discussion does not signify that other countries are unimportant, or that their destinies will not be as unique as their cultures and geographies; merely that those destinies will probably unfold in the context of a global collapse spreading from the two nations we have been discussing. For any nation—India, Bolivia, Russia, Brazil, South Africa—and for any community or family, survival will require some comprehension of the direction of large events, so as to get out of the way when debris is flying and to anticipate opportunities to regroup.

So: Pay attention to the weather reports from Washington and Beijing, but meanwhile build local resilience wherever you are. If the roof needs mending, don’t dawdle.

Meanwhile, after a long day of organizing neighborhood Transition gardens, you may want to get a foretaste of post-collapse America by reading James Howard Kunstler’s A World Made by Hand; or savor an entertainingly erudite discussion of collapse as an extended process (which it will likely be), rather than as a sudden, all-out event, by reading John Michael Greer’s books The Long Descent and The Ecotechnic Future.

Just because the sky is falling, that doesn’t mean it’s time to stop thinking.

It was the pivotal international conference of the new century. Tens of thousands showed up, including heads of state, officials at all levels of government, representatives of environmental organizations, and ordinary citizens from nearly 200 countries. Scientists had warned that, without a strong agreement to reduce carbon emissions, the consequences for civilization and the world’s ecosystems would be cataclysmic.

On the sidelines sat powerful forces (including pro-growth business interests and fossil fuel companies) that preferred a weak agreement or none at all. Their strategic public relations efforts (“by far and away the biggest public relations campaign that I’ve ever seen,” according to PR veteran James Hoggan, cofounder of DeSmogBlog.com and author of Climate Cover-Up: The Crusade to Deny Global Warming) paid off when, only days before the meeting, thousands of private emails between climate scientists were hacked and released to the public; during the next few days, prominent right-wing commentators assured one and all that “climategate” completely undercut any scientific basis for thinking that human actions cause global warming. While nothing in the emails did in fact call established climate science into question, the desired and actual effect of the exercise was to destabilize public support for a strong agreement in Copenhagen.

On the streets were tens of thousands of mostly young activists and NGO campaigners, and even a few scientists, who were prepared to raise hell if world leaders didn’t act boldly to reduce carbon emissions.

So, on the whole, heads of state still felt obliged to come up with some results—but nothing too radical.

U.S. President Barack Obama’s role in the proceedings seems to have been pivotal. He jetted in on the final day of negotiations and gave a tepid speech stating his country’s modest bargaining position. This was greeted coolly (some accounts mention choruses of boos). Then, later in the day, he apparently burst in on a meeting including heads of state or high-level negotiators from China, India, Brazil, and South Africa, insisting that an agreement be reached (up to this point, according to most accounts, the Chinese had been obstructing any deal). Obama managed to persuade the other leaders to sign onto a three-page, non-binding Accord, which, at a midnight press conference, he presented to the other 189 nations attending the conference for their acceptance (no changes to the text were to be permitted). The full text of the document can be found at [UNFCC Framework Convention on Climate Change].

Environmental activists and representatives of poor nations most vulnerable to rising sea levels or desertification were unhappy with these results. Bill McKibben of the organization 350.org called it “an end far worse than most [climate activists] had imagined.” Ian Fry of the drowning island nation of Tuvalu likened it to “being offered 30 pieces of silver to betray our people and our future.” Kumi Naidoo, the head of Greenpeace International, called Copenhagen simply “a crime scene.”

On the other hand, U.N. secretary-general Ban Ki-moon told a press conference that he welcomed the Accord as “an important beginning,” and Sierra Club executive director Carl Pope released a statement calling it “an historic, if incomplete, agreement.”

What was agreed—and what wasn’t

The main points of the Copenhagen Accord are easy to summarize:

• Industrial countries must list their individual emissions reductions targets, and less-industrialized countries must list the actions they will take to cut emissions by specific amounts.
• All countries must accept a transparent system for monitoring their emissions.
• Poor countries will be paid to prevent deforestation.
• Wealthy nations will establish a fund (growing from 30 billion dollars per year to $100 billion per year by 2020) to help poor and vulnerable nations adapt to climate change.
• Signatory nations accept a goal of limiting global warming to 2 degrees Celsius by 2050.
• The Accord creates a Technology Mechanism to accelerate development of low-carbon technology, but supplies no details.

It is important to emphasize that this is not a binding legal or political agreement. The Accord is not a U.N.-sanctioned document, though the U.N. has officially moved to “take note” of it, which essentially means it may be considered in future climate gatherings as the framework for a legally binding agreement. The U.S. delegation made it clear that the U.N. cannot modify the Accord. While it was negotiated effectively in secret by five countries, many other nations have now signed on to it, and the signing countries together account for over 80 percent of total global emissions. Some countries, including the island nation of Tuvalu, have strongly repudiated the document.

Criticisms of the Accord’s substance (leaving aside complaints about the exclusion of most nations from negotiations, its abandonment of the U.N. framework, and so on) include the following:

• The limit of 2 degrees C is too high. A limit of 1.5 degrees was already supported by over 100 countries and is necessary to avert catastrophic climate impacts.
• The Accord offers no cap for CO2 concentrations. The scientific consensus a few years ago was that an atmospheric CO2 level of 450 parts per million would translate to a temperature increase of 2 degrees over pre-industrial levels. But that conclusion has been called into question due to the likelihood of feedbacks (e.g., as arctic ice melts, it reflects less sunlight back into space, causing even more global warming). This is one of the reasons most scientists now support a 350 ppm cap on atmospheric CO2. By setting a limit of 2 degrees temperature increase without specifying a CO2 cap, the Accord may implicitly be adhering to the older scientific consensus, which would mean a 45o ppm cap and 3 degrees or more of real temperature increase. Any scientific assessment of temperature and CO2 targets is delayed until 2015.
• There is no target date for peaking of emissions mentioned in the Accord, just a vague suggestion that emissions should “peak as soon as possible.”
• There are no global emissions targets for 2020 or 2050. Instead, the Accord merely proposes listing the voluntary targets of developed and developing countries. Based on current assessments of country promises, these 2020 targets will put the world on a track toward 3.5 to 4 degrees of warming.
• The Accord makes general statements about need for adaptation and an end to deforestation, but there is no concrete deal on reducing emissions from deforestation and forest degradation (although this may be a relatively good thing, as the negotiations were veering toward offset loopholes).
• The promised finances for poor nations are too small. For example, African countries had sought $400 billion in short-term financing for climate change adaptation, with an immediate amount of $150 billion needed. In the longer term they say 5 percent of the industrial world’s GDP is needed (about $2 trillion). Not only were much smaller amounts offered, but U.S. negotiators including Hillary Clinton implied that poor nations needed to “associate” themselves with the Accord in order to be eligible for funds.

On the bright side: the Clean Development Mechanism negotiated in Copenhagen seems to have excluded carbon capture and storage, thus reducing the incentive for wasting money on this dead-end technology. Expect pushback from the coal industry on that.

Why agreeing was hard (and will continue to be)

The battle to rescue the planet from climate calamity has been waged uphill from the start. That’s essentially because we humans tend to discount future events, whether they’re perceived favorably or unfavorably: immediate profits are worth more to companies than similar profits ten years hence; similarly, the immediate cost of averting climate change looms large compared to the estimated cost of dealing with its consequences decades from now. This attitude was exemplified, for example, in the comment of U.S. House of Representatives member Joe Barton, who told Reuters on the sidelines of the Copenhagen conference, “We’re not going to let jobs be destroyed in America for some esoteric environmental benefit 100 years from now.”

But there’s more to it than that. Over the past couple of centuries economic growth has been closely tied to increased burning of fossil fuels. And economic growth has become the universal measure of national well-being. Thus when talking to politicians, climate scientists often try to gain traction by describing the impact of future CO2 emissions in terms of the cost to future economic growth. Their hope is that this future cost will be high enough to justify the immediate economic sacrifice that would result from phasing out the use of fossil fuels. This is a tough argument to win, though it plays differently according to the audience: relative receptivity depends on who will be impacted most by climate change and who will bear the highest immediate costs during the energy transition. (Sometimes environmentalists go so far as to suggest that the transition from fossil fuels to “green” energy sources will result in enormous economic growth; however, this ignores the very real economic benefits of cheap fossil fuels and the problems with most of the renewable alternatives, as outlined for example in the report  “Searching for a Miracle”.

And so, at the climate talks in Copenhagen, bargaining positions closely reflected countries’ relative vulnerability to long-range environmental impacts versus short-range economic costs for adaptation.

As mentioned, China evidently obstructed any agreement from the start. No doubt this was largely due to the fact that this nation is the world’s top greenhouse gas emitter, uses over twice as much coal as the next country in line (the U.S.), and requires at least 8 percent economic growth per annum to stave off domestic political unrest. While China is quickly becoming the world leader in renewable energy technologies, it has no realistic prospect of phasing out coal without giving up its high GDP growth rates. China produces half the world’s cement and 40 percent of its iron and steel; over the next 15 years, it plans to urbanize a number of its people about equal to the total population of North America—a continent that took more than a century to accomplish a similar-sized task. That means more cement, steel, appliances, power plants, and all the other energy-guzzling accouterments of urban existence. Mark Lynas, an environmental writer who was present at the final Friday night negotiations at Copenhagen, summarized the situation this way: “China knows it is becoming an uncontested superpower; indeed its newfound muscular confidence was on striking display in Copenhagen. Its coal-based economy doubles every decade, and its power increases commensurately. Its leadership will not alter this magic formula unless they absolutely have to.” [How do I know China wrecked the Copenhagen deal? I was in the room]. In effect, by subverting a strong, binding climate agreement while directing blame for failure toward western nations, China is playing brilliant climate politics—with deadly consequences for all.

India’s economy is also highly coal dependent, also growing rapidly, also on a trajectory of rapid urbanization. And so it should come as no surprise that this country largely echoed China’s position.

There are many who correctly point out that wealthy western industrial nations are responsible for the vast bulk of historic greenhouse gas emissions, and who then go on to conclude that future climate policy must therefore center on achieving economic justice by requiring rich nations to reduce fossil fuel consumption much faster than poor ones while financing climate change mitigation and adaptation in those less-industrialized countries. If China and India have now grown big enough to bully their way around international negotiations, we should applaud them, say climate justice activists, because this means the already-rich countries are no longer in the driver’s seat. Those who hold this view tend to blame western nations (especially the U.S.) for lack of progress in the Copenhagen talks. The problem with this framing is that it doesn’t take account of the reality that China and India have little real interest in forging a strong, binding climate accord, and without them there can be no global agreement.

There’s plenty of blame to go around for slow progress on climate policy, but the bottom line is this: once we’re done fairly apportioning that blame, is there still a viable path toward an agreement?

Not if Russia gets a veto. This nation played a less visible role in wrecking the Copenhagen process, but that may be because it allowed China to play the spoiler on its behalf. Russia is the world’s top oil producer, the world’s biggest gas exporter, has the world’s second-largest coal reserves, and can claim hardly even a token renewable energy sector.

Some fossil fuel exporting nations are rich (think Australia or Kuwait) but most are poor (think Nigeria or Angola). Prior to Copenhagen, OPEC floated the proposal that fossil fuel importers should pay exporters for the oil, coal, or gas that the latter keep in the ground to avoid greenhouse gas emissions. It’s a nice idea, in the same way that that it’s nice to imagine money trees or horns of plenty. But in the real world nations grow their economies by using energy to produce goods and services, not by paying for energy they’ll never use.

Among the fossil fuel exporters, Venezuela was most vocal in promoting strong climate policy in Denmark: the politics and personality of that nation’s president, Hugo Chavez, in this instance evidently led to a bargaining position contrary to what would be expected based on his country’s economic interests. Or maybe Chavez was the originator of that OPEC policy proposal—which, by ensuring that his county’s oil was paid for even if it isn’t burned, would obviate almost all the economic sacrifice implied by strong climate policy.

Anyway, Venezuela’s oil production is generally declining, a situation this nation holds in common with Britain—which also favored a strong global climate agreement. The European countries (with the exception of Norway) are fossil fuel importers, which means they are more or less forced to plan for a future of ever more expensive fossil fuels. For them, a climate agreement that would phase out fossil fuels globally is not as scary as it is for those that make money from fuel exports.

Small island nations and very poor countries with few indigenous fossil fuel resources were of course the countries most in favor of a strong climate agreement. They have the least to lose from increased prices for fuels they hardly use anyway, the most to lose from climate change, and the most to gain when wealthy nations establish a climate adaptation fund.

That leaves the U.S., the biggest per capita carbon emitter (well, almost—Australia and a couple of OPEC members actually rank higher), but also the world’s top fossil fuel importer. With its domestic oil production long in decline but its oil and coal companies still powerfully wielding domestic political influence, the U.S. is deeply conflicted. This ambivalence is reflected in domestic climate politics and was also on display in President Obama’s efforts at Copenhagen.

The nations that negotiated the Accord included the world’s first and second foremost coal burners (China and the U.S.); the country home to the world’s largest coal company (India); a prominent coal exporter (South Africa); and what will probably prove to be the last nation to have luck finding large amounts of oil (Brazil). It should be noted that Brazil, which is also a major biofuels producer, has just (as of December 28) announced that it has unilaterally made its ambitious 2020 emissions reduction targets legally binding. Nevertheless, with the rest of this cast of characters at the table, it should have surprised no one when the Accord turned out to be non-binding and weak.

Further, the Accord’s implementation could turn out to be a joke. The document says nothing about how voluntary targets are to be achieved—whether through carbon taxes, cap-and-trade, or other mechanisms. And, as climate scientist James Hansen has pointed out tirelessly during the past few months, cap-and-trade programs, unless set up and managed flawlessly, can easily be “gamed” by fossil fuel producers by buying phony offsets while continuing to increase total emissions.

If all of this sounds shamefully self-interested and corrupt, just put yourself in the shoes of a high-level politician. No would-be leader who fails to promise economic growth is taken seriously to begin with, so the only politicians we have are ones committed to producing growth. Those who succeed at this are rewarded; those who fail are sidelined and forgotten.

Should we ever seriously have expected a much different outcome from Copenhagen?

What nobody talked about

Normally we humans like to focus on one problem at a time. It’s how our brains are wired, and it’s how the political process is set up to function. But reality is not always so simple and clear-cut.

Climate change is just one of several enormous interrelated dilemmas that will sink civilization unless all are somehow addressed. These include at least five long-range problems:

• topsoil loss (25 billion tons per year),
• worsening fresh water scarcity,
• the death of the oceans (currently forecast for around 2050 based on current trends),
• overpopulation and continued population growth, and
• the accelerating, catastrophic loss of biodiversity.

As events are unfolding now, these problems, together with climate change, will combine over the next few years or decades to trigger a food crisis of a scale and intensity that will dwarf to insignificance any famine in human history.

To make matters even more grim, there are two near-term dilemmas that may make climate change and these other problems much harder to address: peak oil and economic collapse.

Some of my friends who were on the streets of Copenhagen in early December assure me that most activists and concerned citizens they talked to there knew about peak oil. But the media offered no clue that the officials negotiating in the Bella Center ever mentioned fossil fuel supply limits. For many years the default assumption in all climate negotiations has been that the world has enough conventional fossil fuels to enable it to continue increasing oil, coal, and gas consumption (and hence carbon emissions) up until at least the end of this century. In fact, global oil production has probably already entered its terminal decline and coal and gas extraction will likewise do so in about 15 years—which means that the world may have seen its all-time peak of total energy production from fossil fuels during the years 2005 to 2008. Earth probably has enough economically extractable conventional fossil fuels to raise atmospheric CO2 levels to about 470 ppm—high enough to trigger human and environmental catastrophe (remember, the “safe” level is 350 ppm), but not nearly as high as the projections commonly mentioned in U.N. climate literature. (The potential amount of carbon emissions from unconventional fossil fuels, such as tar sands and oil shale, is immense, but actual production of those fuels is likely to be constrained by a variety of economic factors, as discussed in  “Searching for a Miracle”.)

Because petroleum has been the driver of most economic expansion during the past few decades and there is no ready substitute for it, peak oil basically means the end of economic growth as we have known it. And without economic growth, our entire financial system comes apart. Indeed, that’s exactly what we’ve been seeing over the past 18 months in the failure of trillions of dollars’ worth of bets on future economic expansion. (For a discussion of the role of peak oil in the financial crisis, see  “Temporary Recession or the End of Growth?”.

No politician can ignore the worldwide economic crisis, yet its significance for the climate talks is rarely discussed. Now that people can’t afford to drive as much, or even heat their homes in many cases, global carbon emissions have declined during the past year. That means that if the economy is in only a temporary state of “recovery” and resumes its swoon (as many financial analysts anticipate), and if global oil production has indeed peaked, then global carbon emissions have probably already peaked too. In which case, the world has achieved its first major goal in mitigating climate catastrophe.

Economic crisis makes climate change much harder to solve in the way everyone wants to see—i.e., with lots of green-tech growth. But it makes almost inevitable a “solution” that nobody wants: dramatic economic contraction leading to sharply declining energy demand. This is similar to famine “solving” overpopulation.

Responsible officials can discuss none of this in public lest investors lose their nerve and head for the exits. But a conversation that excludes such essential realities is delusional.

How might that pivotal Friday night negotiation in the Bella Center have gone if it had been grounded in reality?

President Obama might have said something like this: “Colleagues, global oil production has peaked and we have witnessed the resulting carnage in the global economy. We have likely seen the last of economic growth, in an overall sense. We are in an entirely new era. Adopting strict carbon emissions caps will help us end our dependence on fossil fuels—which we must do both to mitigate climate change and also to reduce the economic impacts of fuel scarcity. While giving up fossil fuels means reducing opportunities for growth, continuing to use them is no longer an option. We must adapt to this new reality.”

The Chinese delegate would have objected: “But our nation needs to continue using coal in ever-increasing amounts. If we don’t continue to grow our economy at 8 percent annually, the people will revolt. We’re doing all we can to develop renewable energy, but only coal can give us the growth we need.” To which Obama might have replied: “Your coal production will be peaking during the next few years anyway, and you won’t be able to import enough from Australia and Indonesia to maintain growth in total energy production. Your economy is about to stall in any case—it is heavily dependent on exports, and Americans just aren’t going to be buying a lot more Chinese goods. Your only hope, as ours, is to build renewable energy infrastructure at top speed, provide as much of a basic safety net for citizens as we can, try to enlist them in the overall energy transition, and hope for the best. Meanwhile, a strong climate agreement can at least help us change direction toward reducing our reliance on fossil fuels, and we are obligated to produce such an agreement anyway for the sake of the planet and future generations. Let’s get this done.”

But that’s evidently not what transpired. Instead, all accounts suggest the negotiations amounted to a theatrical set piece in which each player stayed rigidly on script.

If governments are having a difficult time addressing climate change in any serious fashion, they’re not doing much better with regard to any of the other problems mentioned. Key nations are going about “solving” their financial crises by shoveling money by the billions and trillions at bankers who were largely responsible for creating the mess to begin with. Peak oil is regarded by heads of state as a subject unworthy of mention. The crisis of fresh water scarcity is being dealt with by pumping ancient aquifers until they’re dry. Topsoil erosion has slowed in a few places, but overall continues at a staggering pace.

These problems, which will shape our destiny over the next few years and decades, are for the most part discussed only by experts in relevant fields. Meanwhile citizens are subjected to a steady stream of “infotainment” and political rhetoric utterly divorced from crumbling physical reality. This is easy to illustrate with ludicrously disinforming statements from industry-backed climate-change deniers. But responsible advocates of a strong climate policy are often nearly as soaked in delusion.

Here’s just one example. Professor Mark Maslin, Director of the Environment Institute at University College London, was recently quoted as saying: “The science tells us that we must drastically cut the amount of carbon going into the atmosphere to avoid catastrophic climate change. But we must also protect the moral and ethical right of countries to develop and achieve the same standard of living as we have in the west.” This is a completely unremarkable statement with which nearly everyone at the climate talks in Copenhagen would probably have agreed—at least publicly. But think about it: what does this “development” consist of? The assumption is that poor countries can and should use more fossil fuels while rich ones wean themselves. But there just aren’t enough fossil fuels available to enable that to happen. Poor countries will never achieve “the same standard of living as we have in the west.” Rather, in the decades ahead, as nonrenewable resources deplete, people in the west will involuntarily give up their material standard of living until their way of life is supported only by renewable resources and the recycling of non-renewables. That means economic contraction, big time. We have a very long downward ramp to negotiate until that sustainable baseline is achieved.

Economic justice or leveling is to some extent inevitable during the energy transition. But it won’t consist of poor families in Senegal adopting the living standards of folks in Seattle or Stuttgart. It will be a matter of industrialized countries seeing a huge increase in rates of absolute poverty.

In the meantime, countries of the global north could do a lot of good just by canceling the southern nations’ debts and by ceasing to enforce trade rules that continue to transfer wealth mostly from poor countries to rich. Moreover, if our goal is to achieve global equity, there is one other thing that actually might make a significant difference: that is the shifting of wealth and income away from truly rich individuals—from bankers, CEOs, and hedge fund managers—and from the global weapons industry. The money could be used to fund public programs for food, shelter, and medical care in the industrialized nations as these careen into economic depression, and to bankroll Asia, Central and South America, and Africa, not in “development” as conventionally conceived (meaning urbanization), but in adopting simple, cheap technologies to avoid burning wood, charcoal, and dung for cooking and home heating; in helping them replace slash-and-burn agriculture with small-scale ecological farming; and in supporting them in scrapping and (where possible) replacing inefficient, polluting, hand-me-down diesel vehicles and factories. None of these things would be easy to achieve, but they are all at least within the realm of the possible.

In summary, the discussions in Denmark took place in a conceptual fantasy world in which climate change is the only global crisis that matters much; in which rapid economic growth is still an option; in which fossil fuels are practically limitless; in which a western middle class staring at the prospect of penury can be persuaded voluntarily to transfer a significant portion of its rapidly evaporating wealth to other nations; in which subsistence farmers in poor nations should all aspire to become middle-class urbanites; and in which the subject of human overpopulation can barely be mentioned.

Once again: it’s no wonder more wasn’t achieved in Copenhagen.

Where does that leave us?

Copenhagen was a watershed event. Climate change has become, in many people’s minds, the central survival issue for our species, and the Copenhagen talks provided a pivotal moment for addressing that issue. The fact that the talks failed to produce a binding agreement is therefore of some significance.

The next opportunity to forge a binding global climate treaty will be the 2010 U.N. climate conference in Mexico City. Many see this as a chance to achieve what proved elusive in Copenhagen. But the same challenges will face leaders there. And if the global economy relapses in the meantime, national politicians may be even more reluctant to take bold action to limit fossil fuel consumption, as they’ll want to keep all their economic options open. Indeed, it seems likely that for the foreseeable future economic implosion will be sucking the air from any room in which heads of state are gathered.

So, international policies are needed if we are to deal with a potentially game-ending global issue like climate change, yet there is now convincing evidence that national and supra-national institutions are incapable of producing effective climate policies.

The same could be said for other crises mentioned above. It’s not enough that national governments can’t get together to solve climate change. They can’t solve economic meltdown, peak oil, water scarcity, soil erosion, or overpopulation either. Yes, there are individual nations like Tuvalu that can muster a decent policy on one issue or another. Denmark is probably the shining example among industrial nations: it has reduced its greenhouse gas emissions by 14 percent since 1990 while maintaining constant energy consumption and growing its GDP by more than 40 percent. But these are the rare exceptions, and apparently destined to stay that way. We have no global means of dealing with the toxic debt that is strangling the world economy. We have no agreements in place to prevent the death of the oceans. There is no global policy to avert economic impacts from fossil fuel depletion. There is no worldwide protocol to protect the precious layer of living topsoil that is all that separates us from famine. There is no effective global convention on fresh water conservation.

This is not to say there is nothing that can be done about these problems. In fact, there are organizations and communities in many nations doing path-breaking work to address each and every one of them. Some examples:

• Agronomists at the Land Institute in Salina, Kansas, led by Wes Jackson, have for years been patiently developing perennial grain crops capable of feeding billions without destroying topsoil.
• The city of Zurich has decided through popular vote to become a 2000-Watt society. This means cutting energy consumption from the current 6000 Watts per person to one-third that amount over the next three or four decades. This was evidently a response both to climate change and the problem of energy security.
• Here in Sonoma County, California, a Go Local Co-op has formed; it’s an extension of the national organization, Business Alliance for a Living Local Economy (BALLE). One of its projects is “Sustaining Capital”—a community cooperative capital formation model that, if successful and replicated widely, could end local economies’ dependence on Wall Street banks.
• At Sunga in Madhyapur Thimi, Nepal, a community-supported project has built a water treatment plant based on reed-bed constructed wetlands that also serves as the main source of irrigation for farmers in the region.

These are just a few items out of hundreds, maybe thousands that could be cited. But, in aggregate, are they enough? Obviously not—even in the estimation of the folks who are doing this admirable work. Some problems are more easily tackled at the local level than others (local efforts can help maintain biodiversity, but without international agreements it’s not obvious how the oceans could be rescued). And many local success stories actually depend on global systems of finance and provisioning (for example, the Nepalese water treatment plant mentioned above was built with financial support from the United Nations Human Settlements Program, U.N.-Habitat’s Water for Asian Cities Program, the Asian Development Bank, and Water Aid, and received technical support from the Environment and Public Health Organization).

Discouraging? Of course. But absent global agreements, local efforts are what we’ve got, and we will simply have to make the most of them that we can.

Meanwhile, given the amount of carbon emissions already in the atmosphere, climate impacts are in store no matter what happens at the U.N. negotiations in Mexico City. Something similar could be said with regard to all the other problems mentioned: even if strong policies could somehow be forged tomorrow, serious challenges will arise in the years ahead with regard to water, food, energy, and the economy.

If such impacts are unquestionably coming, then we should be doing something to prepare. Since we don’t know exactly what the impacts will be, or when or where they will land, the most sensible strategy is simply to build resilience throughout the system. Resilience implies dispersed control points and dispersed inventories, and hence regional self-sufficiency—the opposite of economic efficiency, the central rationale for globalization—and so it needs to be organized primarily at the local level.

To summarize: three factors—the need for resilience, the lack of effective policy at national and global levels, and the tendency of the best responses to emerge regionally and at a small scale—argue for dealing with the crushing crises of the new century locally, even though there is still undeniable need for larger-scale, global solutions.

Does this mean we should give up even trying to work at the national and global levels? Each person will have to make up her or his own mind on that one. To my thinking, Copenhagen is something of a last straw. I have no interest in trying to discourage anyone from undertaking national or global activism. Indeed, there is a danger in taking attention away from national and international affairs: policy could get hijacked not just by parties even less competent than those currently in command, but by ones that are just plain evil. Nevertheless, this writer is finally convinced that, with whatever energies for positive change may be available to us, we are likely to accomplish the most by working locally and on a small scale, while sharing information about successes and failures as widely as possible.

A final note: As 2010 begins we are about to enter the second decade of the 21st century. Historians often remark that the character of a new century doesn’t make itself apparent until its second decade (think World War I). Perhaps peak oil, the global financial crash, and the failure of Copenhagen are the signal events that will propel us into the Century of Decline. If these events are indeed indicative, it will be a century of economic contraction rather than growth; a century less about warnings of environmental constraints and consequences than about the fulfillment of past warnings; and a century of local action rather than grand global schemes.

I suspect that things are going to be noticeably different from now on.

Republished from Postcarbon.org.

Everyone agrees: our economy is sick. The inescapable symptoms include declines in consumer spending and consumer confidence, together with a contraction of international trade and available credit. Add a collapse in real estate values and carnage in the automotive and airline industries and the picture looks grim indeed.

But why are both the U.S. economy and the larger global economy ailing? Among the mainstream media, world leaders, and America’s economists-in-chief (Treasury Secretary Geithner and Federal Reserve Chairman Bernanke) there is near-unanimity of opinion: these recent troubles are primarily due to a combination of bad real estate loans and poor regulation of financial derivatives.

This is the Conventional Diagnosis. If it is correct, then the treatment for our economic malady might logically include heavy doses of bailout money for beleaguered financial institutions, mortgage lenders, and car companies; better regulation of derivatives and futures markets; and stimulus programs to jumpstart consumer spending.

But what if this diagnosis is fundamentally flawed? The metaphor needs no belaboring: we all know that tragedy can result from a doctor’s misreading of symptoms, mistaking one disease for another.

Something similar holds for our national and global economic infirmity. If we don’t understand why the world’s industrial and financial metabolism is seizing up, we are unlikely to apply the right medicine and could end up making matters much worse than they would otherwise be.

To be sure: the Conventional Diagnosis is clearly at least partly right. The causal connections between subprime mortgage loans and the crises at Fannie Mae, Freddie Mac, and Lehman Brothers have been thoroughly explored and are well known. Clearly, over the past few years, speculative bubbles in real estate and the financial industry were blown up to colossal dimensions, and their bursting was inevitable. It is hard to disagree with the words of Australian Prime Minister Kevin Rudd, in his July 25 essay in the Sydney Morning Herald: “The roots of the crisis lie in the preceding decade of excess. In it the world enjoyed an extraordinary boom…However, as we later learnt, the global boom was built in large part…on a house of cards. First, in many Western countries the boom was created on a pile of debt held by consumers, corporations and some governments. As the global financier George Soros put it: ‘For 25 years [the West] has been consuming more than we have been producing…living beyond our means.’” (1)

But is this as far as we need look to get to the root of the continuing global economic meltdown?

A case can be made that dire events having to do with real estate, the derivatives markets, and the auto and airline industries were themselves merely symptoms of an even deeper, systemic dysfunction that spells the end of economic growth as we have known it.

In short, I am suggesting an Alternative Diagnosis. This explanation for the economic crisis is not for the faint of heart because, if correct, it implies that the patient is far sicker than even the most pessimistic economists are telling us. But if it is correct, then by ignoring it we risk even greater peril.

Economic Growth, The Financial Crisis, and Peak Oil

For several years, a swelling subculture of commentators (which includes the present author) has been forecasting a financial crash, basing this prognosis on the assessment that global oil production was about to peak. (2) Our reasoning went like this:

Continual increases in population and consumption cannot continue forever on a finite planet. This is an axiomatic observation with which everyone familiar with the mathematics of compounded arithmetic growth must agree, even if they hedge their agreement with vague references to “substitutability” and “demographic transitions.” (3)

This axiomatic limit to growth means that the rapid expansion in both population and per-capita consumption of resources that has occurred over the past century or two must cease at some particular time. But when is this likely to occur?

The unfairly maligned Limits to Growth studies, published first in 1972 with periodic updates since, have attempted to answer the question with analysis of resource availability and depletion, and multiple scenarios for future population growth and consumption rates. The most pessimistic scenario in 1972 suggested an end of world economic growth around 2015. (4)

But there may be a simpler way of forecasting growth’s demise.

Energy is the ultimate enabler of growth (again, this is axiomatic: physics and biology both tell us that without energy nothing happens). Industrial expansion throughout the past two centuries has in every instance been based on increased energy consumption.(5) More specifically, industrialism has been inextricably tied to the availability and consumption of cheap energy from coal and oil (and more recently, natural gas). However, fossil fuels are by their very nature depleting, non-renewable resources. Therefore (according to the Peak Oil thesis), the eventual inability to continue increasing supplies of cheap fossil energy will likely lead to a cessation of economic growth in general, unless alternative energy sources and efficiency of energy use can be deployed rapidly and to a sufficient degree. (6)

Of the three conventional fossil fuels, oil is arguably the most economically vital, since it supplies 95 percent of all transport energy. Further, petroleum is the fuel with which we are likely to encounter supply problems soonest, because global petroleum discoveries have been declining for decades, and most oil producing countries are already seeing production declines. (7)

So, by this logic, the end of economic growth (as conventionally defined) is inevitable, and Peak Oil is the likely trigger.

Why would Peak Oil lead not just to problems for the transport industry, but a more general economic and financial crisis? During the past century growth has become institutionalized in the very sinews of our economic system. Every city and business wants to grow. This is understandable merely in terms of human nature: nearly everyone wants a competitive advantage over someone else, and growth provides the opportunity to achieve it. But there is also a financial survival motive at work: without growth, businesses and governments are unable to service their debt. And debt has become endemic to the industrial system. During the past couple of decades, the financial services industry has grown faster than any other sector of the American economy, even outpacing the rise in health care expenditures, accounting for a third of all growth in the U.S. economy. From 1990 to the present, the ratio of debt-to-GDP expanded from 165 percent to over 350 percent. In essence, the present welfare of the economy rests on debt, and the collateral for that debt consists of a wager that next year’s levels of production and consumption will be higher than this year’s.

Given that growth cannot continue on a finite planet, this wager, and its embodiment in the institutions of finance, can be said to constitute history’s greatest Ponzi scheme. We have justified present borrowing with the irrational belief that perpetual growth is possible, necessary, and inevitable. In effect we have borrowed from future generations so that we could gamble away their capital today.

Until recently, the Peak Oil argument has been framed as a forecast: the inevitable decline in world petroleum production, whenever it occurs, will kill growth. But here is where forecast becomes diagnosis: during the period from 2005 to 2008, energy stopped growing and oil prices rose to record levels. By July of 2008, the price of a barrel of oil was nudging close to $150—half again higher than any previous petroleum price in inflation-adjusted terms—and the global economy was beginning to topple. The auto and airline industries shuddered; ordinary consumers had trouble buying gasoline for their commute to work while still paying their mortgages. Consumer spending began to decline. By September the economic crisis was also a financial crisis, as banks trembled and imploded. (8)

Given how much is at stake, it is important to evaluate the two diagnoses on the basis of facts, not preconceptions.

It is unnecessary to examine evidence supporting or refuting the Conventional Diagnosis, because its validity is not in doubt—as a partial explanation for what is occurring. The question is whether it is a sufficient explanation, and hence an adequate basis for designing a successful response.

What’s the evidence favoring the Alternative? A good place to begin is with a recent paper by economist James Hamilton of the University of California, San Diego, titled “Causes and Consequences of the Oil Shock of 2007-08,” which discusses oil prices and economic impacts with clarity, logic, and numbers, explaining how and why the economic crash is related to the oil price shock of 2008. (9)

Hamilton starts by citing previous studies showing a tight correlation between oil price spikes and recessions. On the basis of this correlation, every attentive economist should have forecast a steep recession for 2008. “Indeed,” writes Hamilton, “the relation could account for the entire downturn of 2007-08…If one could have known in advance what happened to oil prices during 2007-08, and if one had used the historically estimated relation [between price rise and economic impact]…one would have been able to predict the level of real GDP for both of 2008:Q3 and 2008:Q4 quite accurately.”

Again, this is not to ignore the role of the financial and real estate sectors in the ongoing global economic meltdown. But in the Alternative Diagnosis the collapse of the housing and derivatives markets is seen as amplifying a signal ultimately emanating from a failure to increase the rate of supply of depleting resources. Hamilton again: “At a minimum it is clear that something other than housing deteriorated to turn slow growth into a recession. That something, in my mind, includes the collapse in automobile purchases, slowdown in overall consumption spending, and deteriorating consumer sentiment, in which the oil shock was indisputably a contributing factor.”

Moreover, Hamilton notes that there was “an interaction effect between the oil shock and the problems in housing.” That is, in many metropolitan areas, house prices in 2007 were still rising in the zip codes closest to urban centers but already falling fast in zip codes where commutes were long. (10)

Why Did the Oil Price Spike?

Those who espouse the Conventional Diagnosis for our ongoing economic collapse might agree that there was some element of causal correlation between the oil price spike and the recession, but they would deny that the price spike itself had anything to do with resource limits, because (they say) it was caused mostly by speculation in the oil futures market, and had little to do with fundamentals of supply and demand.

In this, the Conventional Diagnosis once again has some basis in reality. Speculation in oil futures during the period in question almost certainly helped drive oil prices higher than was justified by fundamentals. But why were investors buying oil futures? Was the mania for oil contracts just another bubble, like the dot.com stock frenzy of the late ’90s or the real estate boom of 2003 to 2006?

During the period from 2005 to mid-2008, demand for oil was growing, especially in China (which went from being self-sufficient in oil in 1995 to being the world’s second-foremost importer, after the U.S., by 2006). But the global supply of oil was essentially stagnant: monthly production figures for crude oil bounced around within a fairly narrow band between 72 and 75 million barrels per day. As prices rose, production figures barely budged in response. There was every indication that all oil producers were pumping flat-out: even the Saudis appeared to be rushing to capitalize on the price bonanza.

Thus a good argument can be made that speculation in oil futures was merely magnifying price moves that were inevitable on the basis of the fundamentals of supply and demand. James Hamilton (in his publication previously cited) puts it this way: “With hindsight, it is hard to deny that the price rose too high in July 2008, and that this miscalculation was influenced in part by the flow of investment dollars into commodity futures contracts. It is worth emphasizing, however, that the two key ingredients needed to make such a story coherent—a low price elasticity of demand, and the failure of physical production to increase—are the same key elements of a fundamentals-based explanation of the same phenomenon. I therefore conclude that these two factors, rather than speculation per se, should be construed as the primary cause of the oil shock of 2007-08.”

Aftermath of the Peak

There is also controversy over to what degree troubles in the automobile, trucking, and airline industries should be attributed to the oil price spike or the economic crash. Of course, if the Alternative Diagnosis is correct, the latter two events are causally related in any case. However, it may be helpful to review the situation.

Everyone knows that GM and Chrysler went bankrupt this year because U.S. car sales cratered. The current forecast is for sales of about 10.3 million vehicles in the U.S. for 2009, down from last year’s 13.2 million and 16.1 million in 2007. U.S. car sales have not been this low since the 1970s. Sales of light trucks, the most profitable vehicles, took the biggest hit during 2008, as fuel prices soared and car buyers avoided gas-guzzlers. It was at this point that the auto companies really began feeling the pain.

The airline industry’s ills are summarized in a recent GAO document: “After 2 years of profits, the U.S. passenger airline industry lost $4.3 billion in the first 3 quarters of 2008 [as jet fuel prices climbed]. Collectively, U.S. airlines reduced domestic capacity, as measured by the number of seats flown, by about 9 percent from the fourth quarter of 2007 to the fourth quarter of 2008…To reduce capacity, airlines reduced the overall number of active aircraft in their fleets by 18 percent…Airlines also collectively reduced their workforces by about 28,000, or nearly 7 percent, from the end of 2007 to the end of 2008…The contraction of the U.S. airline industry in 2008 reduced airport revenues, passengers’ access to the national aviation system, and revenues for the Trust Fund.”(11)

For the trucking industry, fuel accounts for nearly 40 percent of total operational costs. In 2007, as diesel prices rose, carriers began losing money and added fuel price surcharges; meanwhile the volume of freight began falling. After July 2008, as oil prices crashed, tonnage continued to decline. Overall, the cumulative decrease in loads for flatbed, tanker, and dry vans ranged between 15 percent and 20 percent just in the period from June to December 2008. (12)

This last set of statistics raises a couple of questions crucial to understanding the Alternative Diagnosis: Why, if global oil production had just peaked, did petroleum prices fall in the last five months of 2008? And, if oil prices were a major factor in the economic crisis, why didn’t the economy begin to turn around after the prices softened?

Why Did Oil Prices Fall?

And Why Didn’t Lower Oil Prices Lead to a Quick Recovery?

The Peak Oil thesis predicts that, as world oil production reaches its maximum level and begins to decline, the price of oil will rise dramatically. But it also forecasts a dramatic increase in the volatility of prices.

The argument goes as follows. As oil becomes scarce, its price will rise until it begins to undermine economic activity in general. Economic contraction will then result in substantially reduced demand for oil, which will in turn cause its price to fall temporarily. Then one of two things will happen: either (a) the economy will begin to recover, stoking renewed oil demand, leading again to high prices which will again undermine economic activity; or (b), if the economy does not quickly recover, petroleum production will gradually fall due to depletion until spare production capacity (created by lower demand) is wiped out, leading again to higher prices and even more economic contraction. In both cases, oil prices remain volatile and the economy contracts.

This scenario corresponds very closely with the reality that is unfolding, though it remains to be seen whether situation (a) or (b) will ensue.

Over the past three years, oil prices rose and fell more dramatically than would have been the case if it had not been for widespread speculation in oil futures. Nevertheless, the general direction of prices—way up, then way down, then part-way back up—is entirely consistent with the Peak Oil thesis and the Alternative Diagnosis.

Why has the economy not quickly recovered, given that oil prices are now only half what they were in July 2008? Again, Peak Oil is not the only cause of the current economic crisis. Enormous bubbles in the real estate and finance sectors constituted accidents waiting to happen, and the implosion of those bubbles has created a serious credit crisis (as well as solvency and looming currency crises) that will likely take several years to resolve even if energy supplies don’t pose a problem.

But now the potential for renewed high oil prices acts as a ceiling for economic recovery. Whenever the economy does appear to show renewed signs of life (as has happened in May-July this year, with stock values rebounding and the general pace of economic contraction slowing somewhat), oil prices will take off again as oil speculators anticipate a recovery of demand. Indeed, oil prices have rebounded from $30 in January to nearly $70 currently, provoking widespread concern that high energy prices could nip recovery in the bud.(14)

A barrel of oil from newly developed sources costs in the neighborhood of $60 to produce, now that all of the cheaper prospects have been exploited: finding new oilfields today usually means drilling under miles of ocean water, or in politically unstable nations where equipment and personnel are at high risk. (15) So as soon as consumers demand more oil, the price will have to stay noticeably above that figure in order to provide the incentive for producers to drill.

Volatile oil prices hurt on the upside, but they also hurt on the downside. The oil price collapse of August-December 2008, plus the worsening credit crisis, caused a dramatic contraction in oil industry investment, leading to the cancellation of about $150 billion worth of new oil production projects—whose potential productive capacity will be required to offset declines in existing oilfields if world oil production is to remain stable. (16) This means that even if demand remains low, production capacity will almost certainly decline to meet those demand levels, causing oil prices to rise again in real terms at some point, perhaps two or three years from now. Volatile petroleum prices also hurt the development of alternative energy, as was shown during the past few months when falling oil prices led to financial troubles for ethanol manufacturers. (17)

One way or another, growth will be highly problematic if not unachievable.

Big Picture Diagnosis: Continuing the Trail of Logic

At this point in the discussion many readers will be wondering why alternative energy sources and efficiency measures cannot be deployed to solve the Peak Oil crisis. After all, as petroleum becomes more expensive, ethanol, biodiesel, and electric cars all start to look more attractive both to producers and consumers. Won’t the magic of the market intervene to render oil shortages irrelevant to future growth?

It is impossible in the context of this discussion to provide a detailed explanation of why the market probably cannot solve the Peak Oil problem. Such an explanation requires a discussion of energy evaluation criteria, and an analysis of many individual energy alternatives on the basis of those criteria. I have offered brief overviews of this subject previously and a much longer one is in press. (18)

My summary conclusions in this regard are as follows.

About 85 percent of our current energy is derived from three primary sources—oil, natural gas, and coal—that are non-renewable, whose price is likely to trend sharply higher over the next years and decades leading to severe shortages, and whose environmental impacts are unacceptable. While these sources historically have had very high economic value, we cannot rely on them in the future; indeed, the longer the transition to alternative energy sources is delayed, the more difficult that transition will be unless some practical mix of alternative energy systems can be identified that will have superior economic and environmental characteristics.

But identifying such a mix is harder than one might initially think. Each energy source has highly specific characteristics. In fact, it has been the characteristics of our present energy sources (principally oil, coal, and natural gas) that have enabled the building of an urbanized society with high mobility, large population, and high economic growth rates. Surveying the available alternative energy sources for criteria such as energy density, environmental impacts, reliance on depleting raw materials, intermittency versus constancy of supply, and the percentage of energy returned on the energy invested in energy production, none currently appears capable of perpetuating this kind of society.

Moreover, national energy systems are expensive and slow to develop. Energy efficiency likewise requires investment, and further incremental investments in efficiency tend to yield diminishing returns over time, since it is impossible to perform work with zero energy input. Where is there the will or ability to muster sufficient investment capital for deployment of alternative energy sources and efficiency measures on the scale needed?

While there are many successful alternative energy production installations around the world (ranging from small home-scale photovoltaic systems to large “farms” of three-megawatt wind turbines), there are very few modern industrial nations that now get the bulk of their energy from sources other than oil, coal, and natural gas. One example is Sweden, which obtains most of its energy from nuclear and hydropower. Another is Iceland, which benefits from unusually large domestic geothermal resources not found in most other countries. Even for these two nations, the situation is complex: the construction of the infrastructure for their power plants mostly relied on fossil fuels for the mining of the ores and raw materials, for materials processing, for transportation, for the manufacturing of components, for the mining of uranium, for construction energy, and so on. Thus a meaningful energy transition away from fossil fuels is still a matter of theory and wishful thinking, not reality.

My conclusion from a careful survey of energy alternatives, then, is that there is little likelihood that either conventional fossil fuels or alternative energy sources can be counted on to provide the amount and quality of energy that will be needed to sustain economic growth—or even current levels of economic activity—during the remainder of this century. (19)

But the problem extends beyond oil and other fossil fuels: the world’s fresh water resources are strained to the point that billions of people may soon find themselves with only precarious access to water for drinking and irrigation. Biodiversity is declining rapidly. We are losing 24 billion tons of topsoil each year to erosion. And many economically significant minerals—from antimony to zinc—are depleting quickly, requiring the mining of ever lower-grade ores in ever more remote locations. Thus the Peak Oil crisis is really just the leading edge of a broader Peak Everything dilemma.

In essence, humanity faces an entirely predictable peril: our population has been growing dramatically for the past 200 years (expanding from under one billion to nearly seven billion), while our per-capita consumption of resources has also grown. For any species, this is virtually the definition of biological success. And yet all of this has taken place in the context of a finite planet with fixed stores of non-renewable resources (fossil fuels and minerals), a limited ability to regenerate renewable resources (forests, fish, fresh water, and topsoil), and a limited ability to absorb industrial wastes (including carbon dioxide). If we step back and look at the industrial period from a broad historical perspective that is informed by an appreciation of ecological limits, it is hard to avoid the conclusion that we are today living at the end of a relatively brief pulse—a 200-year rapid expansionary phase enabled by a temporary energy subsidy (in the form of cheap fossil fuels) that will inevitably be followed by an even more rapid and dramatic contraction as those fuels deplete.

The winding down of this historic growth-contraction pulse doesn’t necessarily mean the end of the world, but it does mean the end of a certain kind of economy. One way or another, humanity must return to a more normal pattern of existence characterized by reliance on immediate solar income (via crops, wind, or the direct conversion of sunlight to electricity) rather than stored ancient sunlight.

This is not to say that the remainder of the 21st century must consist of a collapse of industrialism, a die-off of most of the human population, and a return by the survivors to a way of life essentially identical to that of 16th century peasants or indigenous hunter-gatherers. It is possible instead to imagine acceptable and even inviting ways in which humanity could adapt to ecological limits while further developing cultural richness, scientific understanding, and quality of life (more of this below).

But however it is negotiated, the transition will spell an end to economic growth in the conventional sense. And that transition appears to have begun.

How Do We Know Which Diagnosis Is Correct?

If the patient is an individual human and the cause of distress is uncertain, more diagnostic tests can be prescribed. But to what sorts of blood tests, x-rays, and CAT scans can we subject the national or global economy?

In a sense, the tests have already been done. During the past few decades thousands of scientific surveys of natural resources, biodiversity, and ecosystems have showed increasing rates of depletion and decline. (20) The continuing increase in human population, pollution, and consumption are likewise well documented. This information formed the basis for the Limits to Growth studies, previously mentioned, which use computer modeling to show how current trends are likely play out—and most resulting scenarios show them leading to an end of economic growth and a collapse of industrial output some time in the early 21st century.

Why are the results of such diagnostic tests not universally accepted as a challenge to expectations of continued growth? Primarily because their conclusion runs counter to the beliefs and proclamations of most economists, who maintain that there are no practical limits to growth. They deny that resource constraints provide an eventual cap on production and consumption. And so their diagnostic efforts tend to ignore environmental factors in favor of easily measured internal features of the human economy such as money supply, consumer confidence, interest rates, and price indices.

Ecologist Charles Hall, among many others, has argued that the discipline of economics, as currently practiced, does not constitute a science, since it proceeds primarily on the basis of correlative logic rather than through the building of knowledge by a continuous, rigorous process of proposing and testing hypotheses. (21) While economics uses complex terminology and mathematics, as science does, its basic assertions about the world—such as the principle of infinite substitutability, which holds that for any resource that becomes scarce, the market will find a substitute—are not subjected to careful experimental examination. (It is worth noting that Hall and others have made the effort to lay the conceptual foundations for a new economics based on scientific principles and methods, which they call “biophysical economics.” (22)

Moreover, mainstream economists failed on the whole to foresee the current crash. There was no consistent or concerted effort on the part of Secretaries of the Treasury, Federal Reserve Chairmen, or “Nobel” prize-winning economists to warn policy makers or the general public that, sometime in the early 21st century, the global economy would begin to come apart at the seams. (23) One might think that this predictive failure—the inability to foresee so historically significant an event as the rapid contraction of nearly the entire global economy, entailing the failure of some of the world’s largest banks and manufacturing companies—would cause mainstream economists to stop and re-examine their fundamental premises. But there is little evidence to suggest that this is occurring.

At the risk of repetition: physical scientists from several disciplines have indeed foreseen an end to economic growth in the early 21st century, and have warned policy makers and the general public on many occasions.

Whom should we believe?

The specifics of the Alternative Diagnosis are falsifiable. If economic activity were to rebound above 2007 levels, or if oil production were to rise above the July 2008 high-water mark, then the attribution of the current economic crisis to resource-tied limits to growth may be considered at least partly disproven. However, even if these things were to occur, the underlying reasoning behind the Alternative Diagnosis might still be correct. If the world oil production peak is delayed until, let us say, 2015 or 2020, and if another—this time bottomless—global economic crash results then, the ultimate outcome will be essentially the same. But if, meanwhile, the Alternative Diagnosis were to be taken seriously and acted upon, the consequences of doing so would be beneficial: a decade would have been spent preparing for the event.

Could the Alternative Diagnosis be altogether wrong? That is, might conventional economists be right in thinking that growth can continue forever? It is often said that anything is possible, but some things are clearly much more possible than others. The perpetual growth of human population and consumption within the confines of a finite planet seems like a very long shot indeed, especially since warning signs are everywhere apparent that ecological limits are already being reached and surpassed. (24)

What Not to Do: Prescribe Punishingly Expensive Placebos

If the physical scientists who warn about limits to growth are right, confronting the global economic meltdown implies far more than merely getting the banks and mortgage lenders back on their feet. Indeed, in that case we face a fundamental change in our economy as significant as the advent of the industrial revolution. We are at a historic inflection point—the ending of decades of expansion and the beginning of an inevitable period of contraction that will continue until humanity is once again living within the limits of Earth’s regenerative systems.

But there are few signs that policy makers understand any of this. Their thinking appears to be shaped primarily by mainstream economists’ assurances that growth can and must continue into the indefinite future, and that the economic contraction the world is currently experiencing is only temporary–a problem that can and must be solved.

Still, the problem is not a minor one in the eyes of economists and policy makers. Consider the gargantuan size of the Treasury and Federal Reserve bailouts and stimulus packages that have been deployed in the possibly futile attempt to end contraction and restart growth. According to the special inspector general of the U.S. government’s Troubled Asset Relief Program (TARP), in remarks submitted to the House Committee on Oversight and Government Reform on July 21, $23.7 trillion have been committed in “total potential federal government support.” This is expensive medicine indeed. It takes a moment to even begin to comprehend the enormity of the figure. It represents about half of annual world GDP, and is over three times the total amount spent by the U.S. government, in inflation-adjusted dollars, on all wars combined, from 1776 to the present. It is nearly fifty times the cost of the New Deal.

Other nations, including Britain, China, and Germany have committed to paying for stimulus packages and bailouts that, while much smaller in absolute terms, represent an impressive (or should we say frightful?) share of national GDP.

If the Alternative Diagnosis is valid, none of this will work in the end, because existing financial institutions—with their basis in debt and interest and their requirements for constant expansion—cannot be made to function in a context where energy and resource constraints impose effective caps on manufacturing and transport.

Are the bailouts and stimulus packages working? Much evidence suggests that they are not, except in limited ways. In the U.S., unemployment continues to increase, while real estate values continue to fall. And most of the reputed “green shoots” in the economy so far sighted amount merely to an arguably temporary decline in the rate of contraction. For example, the home price index released July 28 of this year showed that in May, seasonally adjusted prices fell just 0.16 percent from the previous month. That represents an annual rate of decline of a little under 2 percent, which is a substantial improvement over the annualized rate of more than 20 percent that prevailed from September 2008 through March of 2009. Many commentators seized upon this news as a sign of an imminent turnaround. Nevertheless, new home sales are down from 1.4 million per year in 2005 to 350,000 per year today, and house prices are down 50 percent from the bubble peak and still declining in most places. Moreover, manufacturing is still shrinking, small businesses are in trouble, there are still significant danger signs on the horizon, including a new round of mortgage resets, a likely dive in commercial real estate values, and the looming reality that toxic assets at the center of the banking crisis have yet to be dealt with. (25)

President Obama has made the argument that bailouts are justified to stabilize the system long enough so that leaders can make fundamental changes to institutions and regulations, enabling the economy to then go forward healthier and more immune to similar crises in the future. But there is little to suggest that the kinds of systemic changes that are actually needed (ones that would enable the economy to function during a prolonged period of contraction) are under way or even contemplated. Meanwhile, as growth-based institutions are temporarily propped up, the ultimate scale of the damage is likely only to increase: when the inevitable collapse of those institutions does come, the consequences will likely be even worse because so much capital will have been squandered in attempting to salvage them.

In using up non-renewable resources like metals, minerals, and fossil fuels, we have stolen from future generations. Now in effect we are stealing from those generations the financial wherewithal that could have been used to build a bridge to a sustainable economy. The construction of a renewable energy infrastructure (including not only generating capacity, but distribution and storage infrastructure, as well as post-petroleum transport and agriculture systems) will require enormous investments and decades of work. Where will the investment capital come from if governments are already buried in debt? If we have committed nearly $24 trillion to propping up an old economy with no real survival prospects, what’s left with which to finance the new one?

If the current prescription for our economic malady is wrong-headed, the same is true of many proposed cures for our energy problems. According to the Conventional Diagnosis, today’s high oil prices are due to speculation; the cure must therefore lie in the tighter regulation of oil futures trading (which may be a good idea, though it doesn’t get to the heart of the problem), while providing more opportunities to oil companies to explore for domestic oil (even though the likely production rates from currently off-limits reserves would be relatively paltry, and would have a negligible effect on oil prices). In fact, though, investing further in fossil fuel energy systems (including “clean coal” technology) will yield declining returns, given that the highest quality resources have already been used up; meanwhile, doing so takes investment capital away from the development of renewable energy, which we will have to rely on increasingly as fossil fuels deplete. (26)

What is required but is still utterly lacking is a fundamental recognition that circumstances have changed: what worked decades ago will not work now.

What To Do: Adapt to the New Reality

If the Alternative Diagnosis is correct, there will be no easy fix for the current economic breakdown. Some illnesses are not curable; they require that we simply adapt and make the best of our new situation.

If humanity has indeed embarked upon the contraction phase of the industrial pulse, we should assume that ahead of us lie much lower average income levels (for nearly everyone in the wealthy nations, and for high wage earners in poorer nations); different employment opportunities (fewer jobs in sales, marketing, and finance; more in basic production); and more costly energy, transport, and food. Further, we should assume that key aspects of our economic system that are inextricably tied to the need for future growth will cease to work in this new context.

Rather than attempting to prop up banks and insurance companies with trillions in bailouts, it would probably be better simply to let them fail, however nasty the short-term consequences, since they will fail anyway sooner or later. The sooner they are replaced with institutions that serve essential functions within a contracting economy, the better off we will all be.

Meanwhile the thought-leaders in society, especially the President, must begin breaking the news—in understandable and measured ways—that growth isn’t returning and that the world has entered a new and unprecedented economic phase, but that we can all survive and thrive in this challenging transitional period if we apply ourselves and work together. At the heart of this general re-education must be a public and institutional acknowledgment of three basic rules of sustainability: growth in population cannot be sustained; the ongoing extraction of non-renewable resources cannot be sustained; and the use of renewable resources is sustainable only if it proceeds at rates below those of natural replenishment.

Without cheap energy, global trade cannot increase. This doesn’t mean that trade will disappear, only that economic incentives will inexorably shift as transport costs rise, favoring local production for local consumption. But this may be a nice way of putting it: if and when fuel shortages arise, fragile globe-spanning systems of provisioning could be disrupted, with dire effects for consumers cut off from sources of necessary products. Thus a high priority must be placed on the building of community resilience through the preferential local sourcing of necessities and the maintenance of larger regional inventories—especially of food and fuel. (28)

It currently takes an average of 8.5 calories of energy from oil and natural gas to produce each calorie of food energy. Without cheap fuel for agriculture, farm production will plummet and farmers will go bankrupt—unless proactive efforts are undertaken to reform agriculture to reduce its reliance on fossil fuels. (29)

Obviously, alternative energy sources and energy efficiency strategies must be high priorities, and must be subjects of intensive research using a carefully chosen spectrum of criteria. The best candidates will have to be funded robustly even while fossil fuels are still relatively cheap: the build-out time for the renewable energy infrastructure will inevitably be measured in decades and so we must begin the process now rather than waiting for market forces to lead the way.

In the face of credit and (potential) currency crises, new ways of financing such projects will be needed. Given that our current monetary and financial systems are founded on the need for growth, we will require new ways of creating money and new ways of issuing credit. Considerable thought has gone into finding solutions to this problem, and some communities are already experimenting with local capital co-ops, alternative currencies, and no-interest banks. (30)

With oil becoming increasingly expensive in real terms, we will need more efficient ways of getting people and goods around. Our first priority in this regard must be to reduce the need for transport with better urban planning and re-localized production systems. But where transport is needed, rail and light rail will probably be preferable to cars and trucks. (31)

We will also need a revolution in the built environment to minimize the need for heating, cooling, and artificial lighting in all our homes and public buildings. This revolution is already under way, but is currently moving far too slowly due to the inertia of established interests in the construction industry. (32)

These projects will need more than local credit and money; they will also require skilled workers. There will be a call not just for installers of solar panels and home insulation: millions of new food producers and builders of low-energy infrastructure will be needed as well. A broad range of new opportunities could open up to replace vanishing jobs in marketing and finance—if there is cheap training available at local community colleges.

It is worth noting that the $23.7 trillion recently committed for U.S. bailouts and loan guarantees represents about $80,000 for each man, woman, and child in America. A level of investment even a substantial fraction that size could pay for all needed job training while ensuring universal provision of basic necessities during the transition. What would we be getting for our money? A collective sense that, in a time of crisis, no one is being left behind. Without the feeling of cooperative buy-in that such a safety net would help engender, similar to what was achieved with the New Deal but on an even larger scale, economic contraction could devolve into a horrific fight over the scraps of the waning industrial period.

However contentious, the population question must be addressed. All problems that have to do with resources are harder to solve when there are more people needing those resources. The U.S. must encourage smaller families and must establish an immigration policy consistent with a no-growth population target. This has foreign policy implications: we must help other nations succeed with their own economic transitions so that their citizens do not need to emigrate to survive. (33)

If economic growth ceases to be an achievable goal, society will have to find better ways of measuring success. Economists must shift from assessing well-being with the blunt instrument of GDP, and begin paying more attention to indices of human and social capital in areas such as education, health, and cultural achievements. This redefinition of growth and progress has already begun in some quarters, but for the most part has yet to be taken up by governments. (34)

A case can be made that after all this is done the end result will be a more satisfying way of life for the vast majority of citizens—offering more of a sense of community, more of a connection with the natural world, more satisfying work, and a healthier environment. Studies have repeatedly shown that higher levels of consumption do not translate to elevated levels of satisfaction with life. (35) This means that if “progress” can be thought of in terms of happiness, rather than a constantly accelerating process of extracting raw materials and turning them into products that themselves quickly become waste, then progress can certainly continue. In any case, “selling” this enormous and unprecedented project to the general public will require emphasizing its benefits. Several organizations are already exploring the messaging and public relations aspects of the transition. (36) But those in charge need to understand that looking on the bright side doesn’t mean promising what can’t be delivered—such as a return to the days of growth and thoughtless consumption.

Can We? Will We?

It is important to state the implications of all this as plainly as possible. If the Alternative Diagnosis is correct, there will be no full economic “recovery”—not this year, or the next, or five or ten years from now. There may be temporary rebounds that take us back to some fraction of peak economic activity, but these will be only brief respites.

We have entered a new economic era in which the former rules no longer apply. Low interest rates and government spending no longer translate to incentives for borrowing and job production. Cheap energy won’t appear just because there is demand for it. Substitutes for essential resources will in most cases not be found. Over all, the economy will continue to shrink in fits and starts until it can be maintained by the energy and material resources that Earth can supply on ongoing basis.

This is of course very difficult news. It is analogous to being told by your physician that you have contracted a systemic, potentially fatal disease that cannot be cured, but only managed; and managing it means you must make profound lifestyle changes.

Some readers may note that climate change has not figured prominently in this discussion. It is clearly, after all, the worst environmental catastrophe in human history. Indeed, its consequences could be far worse than the mere destruction of national economies: hundreds of millions of people and millions of other species could be imperiled. The reason for the relatively limited discussion of climate here is that (assuming the Alternative Diagnosis is correct) it is not climate change that has proven to be the most immediate limit to economic growth, but resource depletion. However, while there is not as yet general agreement on the point, climate change itself and the needed steps to minimize it both constitute limits to growth, just as resource depletion does. Moreover, if we fail to successfully manage the inevitable process of economic contraction that will characterize the coming decades, there will be no hope of mounting an organized and coherent response to climate change—a response consisting of efforts both to reduce climate impacts and to adapt to them. It is important to note, though, that the measures advocated here (including the development of renewable energy sources and energy efficiency, a rapid reduction of reliance on fossil fuels in transport and agriculture, and the stabilization of population levels) are among the steps that will help most to reduce carbon emissions.

Is this essay likely to change the thinking and actions of policy makers? Unfortunately, that is unlikely. Their belief in the possibility and necessity of continued growth is pervasive, and the notion that growth may no longer be possible is unthinkable. But the Alternative Diagnosis must be a matter of record. This essay, composed by a mere journalist, in many ways represents the thinking of thousands of physical scientists working over the past several decades on issues having to do with population, resources, pollution, and biodiversity. Ignoring the diagnosis itself—whether as articulated here or as implied in tens of thousands of scientific papers—may waste our last chance to avert a complete collapse, not just of the economy, but of civility and organized human existence. It may risk a historic discontinuity with qualitative antecedents in the fall of the Roman and Mayan civilizations. (37) But there is no true precedent for what may be in store, because those earlier examples of collapse affected geographically bounded societies whose influence on their environments was also bounded. Today’s civilization is global, and its fate, Earth’s fate, and humanity’s fate are inextricably tied.

But even if policy makers continue to ignore warnings such as this, individuals and communities can take heed and begin the process of building resilience, and of detaching themselves from reliance on fossil fuels and institutions that are inextricably tied to the perpetual growth machine. We cannot sit passively by as world leaders squander opportunites to awaken and adapt to growth limits. We can make changes in our own lives, and we can join with our neighbors. And we can let policy makers know we disapprove of their allegiance to the status quo, but that there are other options.

Is it too late to begin a managed transition to a post-fossil fuel society? Perhaps. But we will not know unless we try. And if we are to make that effort, we must begin by acknowledging one simple, stark reality: growth as we have known it can no longer be our goal.

Notes

1. “Pain on the Road to Recovery”. (http://www.smh.com.au/national/pain-on-the-road-to-recovery-20090724-dw6q.html?page=-1).

2. Here, for example, are a few relevant excerpts from the present author’s book The Party’s Over: Oil, War and the Fate of Industrial Societies (Gabriola Island, BC: New Society, 2003): “Our current financial system was designed during a period of consistent growth in available energy, with its designers operating under the assumption that continued economic growth was both inevitable and desirable. This ideology of growth has become embodied in systemic financial structures requiring growth…Until now, this loose linkage between a financial system predicated upon the perpetual growth of the money supply, and an economy growing year by year because of an increasing availability of energy and other resources, has worked reasonably well—with a few notable exceptions, such as the Great Depression… However, [when global oil production peaks] the financial system may not respond so rationally…This might predictably trigger a financial crisis…”

3. See Albert Bartlett, “Arithmetic, Population and Energy” (lecture transcript). (http//www.globalpublicmedia.com/transcripts/645).

4. Donella H. Meadows, Dennis L. Meadows, Jorgen Randers, and William W. Behrens III, Limits to Growth (New York: Universe Books, 1972); Donella H. Meadows, Dennis L. Meadows, and Jorgen Randers, Beyond the Limits (Post Mills, VT: Chelsea Green, 1992); Donella H. Meadows, Dennis L. Meadows, and Jorgen Randers, Limits to Growth: The 30 Year Update (White River Junction, VT: Chelsea Green, 2003). See also the recent CSIRO study, “A Comparison of the Limits to Growth with Thirty Years of Reality” (2009) (http://www.csiro.au/files/files/plje.pdf).

5. See, for example, Robert U. Ayers and Benjamin Warr, The Economic Growth Engine: How Energy and Work Drive Material Prosperity (Cambridge, UK: Edward Elgar Publishing, 2005); and Robert Barro and Xavier Sala-i-Martin, Economic Growth (Cambridge, MA: MIT Press, 2003) (http://www.bookrags.com/research/economic-growth-and-energy-consumpt-mee-01/).

6. See Richard Heinberg, The Party’s Over: Oil, War and the Fate of Industrial Societies (2003, 2005); Powerdown: Options and Actions for a PostCarbon World (2004); and The Oil Depletion Protocol: A Plan to Avert Oil Wars, Terrorism, and Economic Collapse (2006); as well as books by Kenneth Deffeyes, Colin Campbell, and Matthew Simmons; and websites www.theoildrum.com and www.energybulletin.net. The Association for the Study of Peak Oil organizes international conferences to study issues related to oil and gas depletion (www.peakoil.net and www.aspo-usa.com), and the U.S. chapter of ASPO publishes a weekly survey of relevant news, “Peak Oil Review,” compiled by former CIA analyst Tom Whipple. At the annual Association for the Study of Peak Oil conference in Cork, Ireland, in September 2007, former U.S. Energy Secretary, James Schlesinger, said: “Conceptually the battle is over. The peakists have won. We’re all peakists now.” See also Steve Connor, “Warning: Oil supplies are running out fast,” The Independent, August 3, 2009 (http://www.independent.co.uk/news/science/warning-oil-supplies-are-running-out-fast-1766585.html).

7. The declining rate of discovery of new oilfields, and the list of past-peak oil producing countries, are widely documented; e.g.: Roger D. Blanchard, The Future of Global Oil Production: Facts, Figures, Trends and Projections by Region (Jefferson, NC: McFarlane and Co., 2005).

8. A May 4, 2009 report from Raymond James Associates (“Stat of the Week”) argued that world oil production peaked in July 2008 (http://blogs.wsj.com/environmentalcapital/2009/05/04/peak-oil-global-oil-productions-peaked-analyst-says/). In a subsequent interview, Marshall Adkins, author of the report, suggested that most knowledgeable players within the petroleum industry now accept the Peak Oil thesis in some form, whether or not they acknowledge it publicly (http://www.aspousa.org/index.php/2009/07/interview-with-marshall-adkins/).

9. Brookings Papers on Economic Activity, March 2009 http://eepurl.com/cSPu.

10. See Joe Cortright, “Driven to the Brink: How the Gas Price Spike Popped the Housing Bubble and Devalued the Suburbs,” Discussion paper, CEOs for Cities, 2008 (http://www.ceosforcities.org/).

11. U.S. Government Accountability Office, “Commercial Aviation: Airline Industry Contraction Due to Volatile Fuel Prices and Falling Demand Affects Airports, Passengers, and Federal Government Revenues,” April 21, 2009 (http://www.gao.gov/products/GAO-09-393). For a detailed discussion of the likely future impacts of high oil prices and oil shortages on the airline industry, see Charles Schlumberger, “The Oil Price Spike of 2008: The Result of Speculation or an Early Indicator of a Major and Growing Future Challenge to the Airline Industry?” Annals of Air and Space Law, Vol. XXXIV, [2009], McGill University (http://www.globalpublicmedia.com/the_oil_price_spike_of_2008).

12. American Trucking Association (http://www.truckline.com/Pages/Home.aspx).

13. This scenario is implied in Robert L. Hirsch, Roger Bezdek, and Robert Wendling, “Peaking of World Oil Production: Impacts, Mitigation and Risk Management” (U.S. Department of Energy: 2005): “As peaking is approached, liquid fuel prices and price volatility will increase dramatically…” (http://www.netl.doe.gov/publications/others/pdf/Oil_Peaking_NETL.pdf).

14. See, for example, “Troubling Signs That Oil Prices Could Hamper Recovery,” Wall Street 24/7, May 8, 2009 (http://247wallst.com/2009/05/08/troubling-signs-that-oil-prices-could-hamper-recovery/)

15. See, for example, James Herron, “Low Oil Prices, Credit Woes Could Spell Trouble for UK North Sea,” Rigzone, November 14, 2008 (http://www.rigzone.com/news/article.asp?a_id=69507).

16. Jad Mouawad, “Big Oil Projects Put in Jeopardy by Fall in Prices,” New York Times, December 15, 2008 (http://www.nytimes.com/2008/12/16/business/16oil.html).

17. See David R. Baker, “Low oil prices take wind out of renewable fuels,” San Francisco Chronicle, October 27, 2008 (http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/10/26/MNSK13NNK4.DTL).

18. See The Party’s Over, Chapter 4; Powerdown, Chapter 4; The Oil Depletion Protocol, pages 23-31. A longer treatment of the subject, tentatively titled Energy Limits to Growth, will be published by International Forum on Globalization and Post Carbon Institute in September.

19. This conclusion is echoed in, for example, Ted Trainer, Renewable Energy Cannot Sustain a Consumer Society (Dordrecht, The Netherlands: Springer, 2007); and (with some reservations), David J. C. McKay, Sustainable Energy Without the Hot Air (Cambridge, UK: UIK Cambridge, 2008), (www.withouthotair.com).

20. Just one example, from a press release April 20, 1998 describing the results of a poll commissioned by the American Museum of Natural History: “The American Museum of Natural History announced today results of a nationwide survey titled Biodiversity in the Next Millennium, developed by the Museum in conjunction with Louis Harris and Associates, Inc. The survey reveals that seven out of ten biologists believe that we are in the midst of a mass extinction of living things, and that this loss of species will pose a major threat to human existence in the next century.”

21. Charles A. S. Hall and Kent A. Klitgaard, International Journal of Transdisciplinary Research, Vol. 1, No. 1 (2006) (http://www.peakoil.net/files/the%20need%20for%20a%20new%20biophysical-based%20paradigm%20in%20economics%20….pdf) “The Need for a New, Biophysical-Based Paradigm in Economics for the Second Half of the Age of Oil,”, Charles A. S. Hall, D. Lindenberger, R. Kummell, T. Kroeger and W. Eichorn, “The Need to Reintegrate the Natural Sciences with Economics.” Bioscience 51:663-673, 2001 (http://web.mac.com/biophysicalecon/iWeb/Site/Downloads_files/Hall_2001_NeedtoReintegrate.pdf).

22. Cutler J. Cleveland, “Biophysical Economics,” The Encyclopedia of Earth (http://www.eoearth.org/article/Biophysical_economics). See also the related field of Ecological Economics, especially the books of Herman Daly, including Toward a Steady State Economy (New York: Freeman, 1973); and, with Joshua Farley, Ecological Economics: Principles and Applications (Washington: Island Press, 2004).

23. The quotation marks around the Nobel name are justified because the Nobel family has never acknowledged economics as a science: the so-called “Nobel prize in economics” is awarded by a Swedish Bank.

24. See The Millennium Ecosystem Assessment (http://www.millenniumassessment.org/en/index.aspx).

25. See, for example, J. S. Kim, “Irrational Exuberance of the Green Shoots,” July 24, 2009 (http://seekingalpha.com/article/151101-irrational-exuberance-of-the-green-shoots).

26. See Richard Heinberg, Blackout: Coal, Climate and the Last Energy Crisis (Gabriola Island, BC: New Society, 2009), pages 137-143, 145-168.

27. The opinion that banks and insurance companies should be allowed to fail rather than being bailed out was voiced by many knowledgeable observers throughout late 2008 and early 2009. See for example Ambrose Evans-Pritchard, “Let banks fail, says Nobel economist Joseph Stiglitz,” London Daily Telegraph, Feb. 2, 2009 (http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/4424418/Let-banks-fail-says-Nobel-economist-Joseph-Stiglitz.html).

28. See Jeff Rubin, Why Your World Is About to Get a Whole Lot Smaller: Oil and the End of Globalization. (New York: Random
House, 2009).

29. See Richard Heinberg and Michael Bomford, “The Food and Farming Transition” (Sebastopol, CA: Post Carbon Institute, 2009) (http://postcarbon.org/food).

30. See Bernard Lietaer, “White Paper on All the Options for Managing a Systemic Bank Crisis” (http://www.lietaer.com/images/White_Paper_on_Systemic_Banking_Crises_final.pdf). JAK in Sweden is a cooperative, member-owned bank that operates without interest (http://en.wikipedia.org/wiki/JAK_members_bank).

31. See Richard Gilbert and Anthony Perl, Transport Revolutions: Moving People and Freight Without Oil (Gabriola Island, BC: New Society, 2009).

32. The Passivhaus Institute pioneers construction methods that reduce energy input to buildings in many cases to zero. Roughly 20,000 Passivhauses have been built in Europe, only about 12 in the U.S. (http://www.passivehouse.us/)

33. See websites of Population Media Center (http://www.populationmedia.org/issues/), and SUSPS (http://www.susps.org/overview/immigration.html).

34. The organization Redefining Progress has developed a Genuine Progress Indicator (GPI) that incorporates many such indices ( http://www.rprogress.org/sustainability_indicators/genuine_progress_indicator.htm).

35. See, for example, “Understanding Human Happiness and Well-Being,” The Sustainable Scale Project (http://www.sustainablescale.org/AttractiveSolutions/UnderstandingHumanHappinessandWellBeing.aspx).

36. The burgeoning Transition Town movement (www.transitiontowns.org/) proceeds from the premise that “life can be better without fossil fuels.” YES! Magazine (www.yesmagazine.org) is a publication of the Positive Futures Network and highlights examples of low-impact ways of living that bring personal and social benefits. And the Simple Living Network (www.simpleliving.net/) provides “resources, tools, examples and contacts for conscious, simple, healthy and restorative living.”

37. See Jared Diamond, Collapse How Societies Choose to Fail or Succeed (New York: Viking, 2005); Joseph Tainter, The Collapse of Complex Societies (Cambridge, UK: Cambridge University Press, 1988); and John Michael Greer, The Long Descent (Gabriola Island, BC: New Society, 2008).

Richard Heinberg is a Senior Fellow of the Post Carbon Institute and author of five books on resource depletion and societal responses to the energy problem. www.richardheinberg.com, www.postcarbon.org.

This piece was also published as Richard Heinberg’s Museletter #208. To subscribe to the Museletter visit http://richardheinberg.com/Museletter.html. Interestingly it was also picked up by Business Week.

This is a preliminary attempt to explore the relationship between the current predicament facing humanity arising out of an exploding population facing planetary resource limitations, in other words known as overshoot, and the psychology of work inherent in the human species. One reason to explore this connection is that the question of overshoot is normally framed in standard Darwinian terms. In the Darwinian framework overshoot begins with the availability of abundant resources that allows the population of a species to increase exponentially. This exploding population eventually depletes irreversibly the very resources that sustain the population and this leads to a large scale die-off and a precipitous fall in the species population sometimes leading to extinction. In this rise and fall, the behavior of the individuals of the species is often typical of any organism seeking to maximize its chances of survival and procreation.

However the human species, aided by a generalized intelligence, is perhaps unique in its ability to extensively craft its environment in order to garner a much larger portion of the ecological resource base to sustain itself. In the evolution of humans, there have been two signal revolutions that brought about a very large increase in humanity’s ecological valence leading to profound changes in the human mode of existence and its environment. The first was the agricultural revolution that is now understood as having begun some 10000-12000 years ago. This allowed the hunter-gatherer humans to transition to a settled agrarian lifestyle eventually paving the way for the rise of urban civilizations. The second revolution was the industrial revolution that is a mere 200-300 years old but which allowed humans to rapidly dominate the planet as perhaps no other species had managed to before.

There can be no doubt that the availability of ecological resources played a defining role in these transitions – in the case of the agricultural revolution the key resource was fertile top soil of river valley ecosystems. The nutrient laden silt deposited in the flood plains of riverine systems such as the Nile, the Euphrates and the Indus ensured the initial success and widespread replication of settled agriculture. Similarly it was the availability of concentrated forms of different resources chiefly energy but also ores of various metals that were the principal enablers of the industrial revolution.

While the role of ecological resources in these signal revolutions is fairly well understood, the role of human mental faculties in their myriad manifestations is either unclear or the subject of severe controversies. But there can also be little doubt that human mental faculties – through innate predisposition and learnt skills and behavioral responses – must have played a fundamental role in these changes as well. My interest lies in understanding how our mental faculties contributed to these fundamental transformations, with the hope that this understanding will enable us as individuals and collectives to be better prepared for the inevitable turmoil that results from the decline in the availability of concentrated energy resources. In particular in this essay I want to explore how the human mind views and deals with the concept of work – both as an idea in the mind and as a felt necessity of human existence.

In physics work is the same as energy. In fact energy is defined as the ability to do work and therefore they are measured in the exact same units. In the biological world, all organisms have to do work in order to change and exploit their environment for their benefit. But it is not uncommon in the animal kingdom to have sharply differentiated work burdens across different members of a species, e.g. the work differential between the worker ants vs the drones, or the lioness vs the lion.

However, what work means to the human mind is something quite different from both the physical concept, and the forms observed in other animal species. The intrinsic tendencies towards work in humans (like most other mental faculties) have always influenced and defined their cultural and political systems and thus contributed to the rise and fall of civilizations. It is not difficult to see that both the agricultural and industrial modes of human existence principally involve the organization and concentration of matter using energy to overcome the inevitable tendency towards disorganization and diffusion (in other words overcome the second law of thermodynamics). The main difference lies in the fact that in the agricultural mode human work is an integral part of the energy flow whereas in the industrial mode human energy is replaced to a large extent by energy obtained from burning fossil fuels.

It is normally acknowledged in peak-oil circles (at least amongst those who do see the decline in fossil fuels as leading to a decline in industrial civilization) that the aftermath of peak-oil would witness the come-back of human labour as a prominent source of energy for economic activities. And this may very well happen for the simple reason that individuals would have no other choice. But it is worth looking at the psychological context in which this might happen if for no other reason but that our sanity may depend on doing so. And history is a good place to begin doing that.

It appears to me that throughout history humans have always distinguished between physical and mental work. It is a felt experience for most of us that we would rather be doing mental work as opposed to physical work. One could argue that most of us would rather do no work at all if our sustenance and comforts are somehow guaranteed. While that may be the case at the psychological level, at an empirical level it appears to me that a farmer would rather take up the job of a bank teller given the same remuneration, than continue with farming. Irrespective of why this might be the case, this phenomenon implies that it ought to be easier to find humans willing to do work involving less physical labour compared to more. And yet, most human societies historically have privileged mental work over physical work. Almost universally work involving a greater component of mental work lead to greater surplus accumulation and a more comfortable life. To me this is a conundrum and has serious implications for the coming post-peak world.

A clear indication of this preference can be seen in the themes found in the world’s folk literature. No matter which corner of the world one looks at, one is likely to find many folk tales that begin with a clever and intelligent weaver or woodcutter who uses his mental prowess to end up as the prince or the prime minister of his country. On the other hand the chances of finding a tale in which the king ends up living happily as a labouring peasant are almost nil. This relative popularity of mental work compared to physical work has been a tremendous force – a kind of psychological energy – that has fueled our transition from a hunter-gatherer to agrarian and then to industrial modes of existence.

A significant example of how the relative popularity of mental work compared to physical work has defined the very fabric of most societies is to look at India. In India the principal form of social stratification, namely the caste system, appears to be based on the crucial distinction between mental and physical work. For those who are unaware of the main elements of the caste system (or varnashram as it was referred to in Sanskrit), humans were divided into four varnas (categories) which was determined by their profession or the kind of work done by them. This division was hierarchical and defined (for as long as it was possible to move from one varna to another) a direction for human aspiration. Thus at the top were the Brahmanas (the Brahmins) whose work was predominantly intellectual in nature, as teachers, priests, philosophers, etc. In the next category were the Kshatriyas who had jobs in administration and governance. At a lower level were the Vaishyas who were involved in business and trade. At the lowest level were the Shudras who consisted of artisans, farmers and other professions all involving a significant amount of manual labour.

It should be of interest that each of these varnas were further divided into several sub-castes also organized in an internal hierarchy. The relative position of the sub-caste within the varna had much to do with the manual labour component of the work that its members did. So for instance, the priests involved in conducting the rituals in a temple had higher status than those who were tasked with keeping the temple premises in pristine condition.

Throughout the pre-industrial period various ecological and cultural limitations kept a lid on the natural human aspiration of moving away from physical labour and towards mental labour and this contributed to maintaining societal homeostasis. It is well understood that in India the ossification of the caste system into a rigid and oppressive form determined by birth, served to severely curb the aspirations of ordinary people for millennia, but that it also provided stability and continuity to the political economy of the country even in the face of various invasions and political upheaval. Across the world, the fall of empires and civilizations resulted mostly from political overreach (as in Rome) or straightforward ecological overshoot (as in Easter Island) or some combination of these reasons. The relative role of physical and mental labour might have had only a marginal influence on the decline phase of pre-industrial civilizations.

Yet the industrial civilization has seen the most drastic change in the composition of people doing and willing to do physical work vis-a-vis mental work. The proportion of America’s population doing agriculture has declined from around 50% near the beginning of the 20th century to less than 5% towards its end, no doubt aided by the explosion of less manual labour intense employment in the secondary and tertiary sectors of the economy. But in addition and most importantly, it has opened up newer aspirational possibilities to ordinary humans that one could not even dream of in the pre-industrial age.

A recent survey indicates that 40% of India’s farmers are willing to quit farming since they find it unprofitable. However in my own experience the number is closer to 100% when real alternatives are available, and economics is only part of the reason. Aspirational changes brought about by education and mass-media are at least as crucial a component as the economic crisis afflicting agriculture. A subtle version of this same phenomenon is the shift, amongst those who continue to be in agriculture, from food crops to cash crops. Even when cash crops are plagued by highly uncertain and volatile price swings, cash crops are preferred since they involve less manual labour.

A deindustrialising society will therefore need to not only deal with the scarcity of material resources but also work against the prevailing cognitive current of privileging non-manual labour on a scale unprecedented in human history. The problematic part is that this is not merely a political arrangement, but a manifestation of the individual’s preference and is central to the aspirations of millions of humans today. What this implies is that the breakdown of the industrial civilization will also witness an unprecedented cognitive breakdown as well.

A variety of questions can be asked on how this will play out and what adaptive mechanisms we have at our disposal at both the individual and the collective levels. I hope to explore these and other issues concerning the relationship between our material and cognitive predicaments in future essays, and I hope that it will help the TOD readership to address these questions with much greater intensity than what it has done so far.

Reposted from TheOilDrum.

This work is licensed under a Creative Commons Attribution-Share Alike 3.0 United States License.