My congressman has selective science disorder. He's been much in the news of late as chairman of the Committee on Energy and Commerce of the U.S. House of Representatives. His name is Fred Upton, and he told us as recently as April 24, 2009 that "[c]limate change is a serious problem that necessitates serious solutions."
But now that he has finally gotten a little power, he has contracted selective science disorder. And, who can blame him? He's been in the wilderness for so long. He held no important posts even when his own party was in power in Congress from 1995 to 2007 because Republicans considered him too moderate. It seems his first taste of real power has thrown off his mental balance.
When it was clear that he would become the chairman of the Energy and Commerce Committee, I told friends that the country could do a lot worse, that others who were being considered for the post were flat-out climate change deniers who didn't believe in science as a basis for public policy. I was relieved when Upton was finally confirmed as the choice of the Republican leadership.
But my relief was short-lived. The signs of selective science disorder began to show up immediately. Now, I suppose you are all wondering what this strange, new-fangled, but fast-spreading disease is. It consists simply in accepting the fruits of science when it provides you the comforts and conveniences you desire (and comports with the financial interests of your campaign donors) and rejecting particular findings of science when those findings conflict with your continuing desire for those comforts and conveniences (and run counter to the financial interests of your campaign donors).
It's an affliction that also strikes many religious conservatives who reject compelling geological evidence of Earth's 4.5-billlion-year history in favor of the creation story, and then get on their computers or cellphones to tell you about it--not reflecting that if they reject science as a basis for modern society, then, to be consistent, they would have to give up all the gadgets that modern science has made possible. (I don't blame these people for not abandoning their conveniences. But I do fault them for being so oblivious to the logical conclusions of what they are saying, namely, that since science can't be trusted, the products of science can't be trusted. And, yet they trust them!)
Now, Fred Upton is no religious conservative, and he is no troglodyte when it comes to science. In fact, Upton embraces the complex findings of science when it comes to nuclear energy. And, he supports scientific research to develop so-called carbon capture and sequestration technology that is being touted as a way to make coal "clean." He also likes other energy-producing products of science such as wind turbines and solar panels.
So when the overwhelming evidence from scientific inquiry concluded that humans were making a very large contribution to global climate change through the burning of fossil fuels, Upton embraced this conclusion. After all, he was on the side of technologies that could potentially address that problem.
But now he says he is not convinced that anything needs to be done to regulate carbon emissions. He describes the greenhouse gas regulations that the U.S. Environmental Protection Agency (EPA) is promulgating as a "power grab." He is, of course, being disingenuous. He knows full well that the U.S. Supreme Court ruled in 2007 that the EPA has the authority to regulate greenhouse gas emissions under the existing Clear Air Act. Actually, it would be a power grab to undo this.
With his newfound revulsion for science, will Mr. Upton now toss his cellphone into the trash or turn off the fuse box in his house or refuse to fly on airplanes back to his district because the science of flight is still evolving and may not be completely settled in every respect? Of course, he will do none of these things. That's because selective science disorder creates a built-in blindness to contradictory thinking and a susceptibility to campaign campaign contributions from special interests who only like science when it increases their own wealth.
P.S. If you are a climate change denier, before you comment on this post, read my Comments Policy. You may decide it's not worth your time to comment here.
Sunday, February 20, 2011
Wednesday, February 16, 2011
Prelude interview on WJR now online
My interview on Detroit radio station WJR about my peak oil novel, Prelude, is now online. The interview, which aired February 13 as part of the regular Sunday night program “The Greening of the Great Lakes,” can now be heard by clicking here and then clicking on the arrow underneath “Kurt Cobb talks with Kirk Heinze on WJR.”
Sunday, February 13, 2011
The week of the game changer in oil, or was it?
This past week was supposedly the week of the game changer in the world of oil. Leaked U.S. diplomatic cables from Saudi Arabia called into question the ability of the globe's largest oil exporter to raise production to satisfy a world increasingly thirsty for petroleum. In the United States a technique called hydraulic fracturing--which has seemingly unlocked vast natural gas resources--will now be applied to oil trapped in shale deposits. Are these two developments really the so-called game changers they are claimed to be?
Let's take the Wikileaks revelation that Saudi Arabian oil reserves--thought to be the biggest in the world--have been vastly overstated. It turns out that what the former head of exploration and production at Saudi Aramco--the state-owned oil company that controls all oil and gas development in the country--told American diplomats in late 2007 was too nuanced for their unbriefed brains to capture correctly in diplomatic cables.
Sadad al-Husseini, the man in question, did tell the diplomats that world oil reserves are probably overstated by 300 billion barrels. The diplomats got confused and thought he was talking about Saudi Arabia alone. (Al-Husseini responded with a press release last week to clarify the matter.) Al-Husseini probably did tell the diplomats that Saudi Arabia would likely never exceed its planned expanded output of 12.5 million barrels a day, something he said publicly during that period. Perhaps back in 2007 al-Husseini saw the bottleneck in construction resources needed for such an expansion and equivocated about whether the Saudis would actually meet their 2009 deadline for developing that capacity. In the end they did.
This should all be seen against the backdrop of U.S. Energy Information Administration projections at the time that had Saudi Arabia supplying the world with 15.4 million barrels a day of oil in 2030. This number seemed like mere fantasy to anyone who was reading the news carefully as the Kingdom of Saudi Arabia in the person of the king himself appeared to affirm the 12.5 million barrel limit previously hinted at by his oil minister.
But U.S. diplomats did catch the basic message of al-Husseini. He was trying to warn them that projections for oil production out of Saudi Arabia were too optimistic and that this had serious implications for world supply. And, yet few countries seem to be preparing for this eventuality.
In a rather contradictory way al-Husseini told the diplomats that while he "does not subscribe to the theory of 'peak oil'...a global output plateau will be reached in the next 5 to 10 years and will last some 15 years, until world oil production begins to decline." That's a rather clear statement of peak oil theory. Probably al-Husseini was trying to distance himself from the doomers in the peak oil community, and the diplomats did not have enough background to understand what he was trying to do.
That was 2007. Oil flows may have recently just barely exceeded their 2008 highs, but world oil production has essentially been stagnant since 2005. One doesn't need secret diplomatic cables, however, to understand a story last week on the Saudi plan to require insulation in homes to reduce energy demand. Why would a country regarded as the most energy-rich in the world have to embark on an efficiency program? It was right there in the story: "Without reducing the rate of energy consumption growth, the kingdom could see oil available for export drop some 3 million barrels per day (bpd) to less than 7 million bpd in 2028, Khalid al-Falih, the chief executive of state oil firm Saudi Aramco said last year."
Were the Wikileaks revelations a game changer in the world of oil? Hardly. All the basic, but horribly muddled, information in the cables was already public. And, the flat trend of oil production for the last several years has been plain for all to see. Still, governments and societies largely prattle on as if nothing is wrong. Well, perhaps one thing did change. U.S. government officials are now known to have spoken the words "peak oil," albeit in secret cables. At last the feckless corporate media has reason to ask them why. But will they?
But wait, there was another supposed game changer last week as well. This one was supposed to allay our fears about future oil supplies. Oil companies have discovered that the same fracturing technologies used to extract natural gas trapped in shale can now be applied to certain deposits of oil trapped in shale. In the United States alone the new process could mean 2 million barrels a day by 2015 from previously neglected fields once thought too difficult to develop. “It could potentially be a real game changer,” Peter Tertzakian, chief energy economist at Calgary-based ARC Financial Corp, told The Globe and Mail.
But is it really a game changer? Well, it certainly is if you are an oil company on the prowl for the last scraps of oil hidden in hard-to-reach places under the earth. And the hype serves to entice investors into putting money into ventures to extract oil locked tightly in shale, referred to as "tight oil."
But if you are merely a consumer of oil, these new finds won't mean much to you. If the projections are correct, then oil flows from tight oil in the United States will represent about 2 percent of world production in 2015. And if the more pessimistic estimates of the U.S. Energy Information Administration come closer to actual U.S. tight oil production in 2015, that production will represent about 0.5 percent of world production. Neither amount is enough to move the price of oil. Of course, not one word is spoken about declines in production from other U.S. fields which in aggregate have been in decline for 40 years. Will this supposed new bounty reverse that ongoing decline? Not a word in the press about this.
There is reason, however, to doubt the claims now being made for tight oil supplies--reasons beyond the fact that the companies making them are often publicly traded and therefore have incentive to manipulate their stock prices. The original shale gas promoters believed that natural gas would be uniformly available from the giant shale basins found in the United States. They were wrong. Only a few sweet spots have been profitable.
As humans have done throughout the age of oil, tight oil developers will target the sweet spots first since they are the cheapest and easiest to exploit. Then, they'll move on to areas that are progressively harder and thus more expensive to exploit. Over time tight oil won't become easier to get; it'll become harder to get just like shale gas.
Another caution is that tight oil development only thrives in high oil price environments. The shale gas technology which is being applied to tight oil was supposed to herald an ongoing boom in natural gas. Instead when natural gas prices plummeted in 2008 and stayed low, shale gas drilling became far less economical and much of the industry teetered on bankruptcy. The fact that Chesapeake Energy Corp., one of the darlings of the shale gas boom that fell on very hard times, is now focusing on tight oil extraction tells you all you need to know about the viability of tight oil. The technology works when prices are high. But, as we've seen above, it won't be a panacea for strained world oil supplies even if high prices persist.
One final stumbling block will be concerns about drinking water aquifers because of the water and chemicals forced under high pressure into the oil formations to fracture the shale and release the oil. Already several states are considering tougher regulations--which will, of course, drive up costs--and one municipality, Buffalo, New York, banned hydraulic fracturing within the city limits and banned as well "storing, transferring, treating or disposing fracking waste within the city." The measure was largely symbolic since there are no plans for such drilling in the city. But it marks a watershed for municipal regulation and provides a template for others who feel uneasy about the millions of gallons of wastewater mixed with chemicals injected into each well that never return to the surface.
In the end it is the flow rate of oil that matters, not the size of the putative resource. No matter how big each new find is, no matter what new technology is applied, if we can't achieve production rates consistent with our need for economic growth, we will be in trouble. Look at the rebound of oil prices since the 2008 crash, and you will know that we already are in trouble.
I've said this before, but it bears repeating: If you inherit a million dollars with the stipulation that you can only draw out $500 a month, you may be a millionaire, but you will never live like one. When it comes to oil, there may still be very large resources left. Yes, we may technically all be the equivalent of "oil millionaires." But it looks very much as if we are still destined to have lower and lower flow rates for that oil in the decades ahead--which was the already the situation before this week of game changers that weren't.
Let's take the Wikileaks revelation that Saudi Arabian oil reserves--thought to be the biggest in the world--have been vastly overstated. It turns out that what the former head of exploration and production at Saudi Aramco--the state-owned oil company that controls all oil and gas development in the country--told American diplomats in late 2007 was too nuanced for their unbriefed brains to capture correctly in diplomatic cables.
Sadad al-Husseini, the man in question, did tell the diplomats that world oil reserves are probably overstated by 300 billion barrels. The diplomats got confused and thought he was talking about Saudi Arabia alone. (Al-Husseini responded with a press release last week to clarify the matter.) Al-Husseini probably did tell the diplomats that Saudi Arabia would likely never exceed its planned expanded output of 12.5 million barrels a day, something he said publicly during that period. Perhaps back in 2007 al-Husseini saw the bottleneck in construction resources needed for such an expansion and equivocated about whether the Saudis would actually meet their 2009 deadline for developing that capacity. In the end they did.
This should all be seen against the backdrop of U.S. Energy Information Administration projections at the time that had Saudi Arabia supplying the world with 15.4 million barrels a day of oil in 2030. This number seemed like mere fantasy to anyone who was reading the news carefully as the Kingdom of Saudi Arabia in the person of the king himself appeared to affirm the 12.5 million barrel limit previously hinted at by his oil minister.
But U.S. diplomats did catch the basic message of al-Husseini. He was trying to warn them that projections for oil production out of Saudi Arabia were too optimistic and that this had serious implications for world supply. And, yet few countries seem to be preparing for this eventuality.
In a rather contradictory way al-Husseini told the diplomats that while he "does not subscribe to the theory of 'peak oil'...a global output plateau will be reached in the next 5 to 10 years and will last some 15 years, until world oil production begins to decline." That's a rather clear statement of peak oil theory. Probably al-Husseini was trying to distance himself from the doomers in the peak oil community, and the diplomats did not have enough background to understand what he was trying to do.
That was 2007. Oil flows may have recently just barely exceeded their 2008 highs, but world oil production has essentially been stagnant since 2005. One doesn't need secret diplomatic cables, however, to understand a story last week on the Saudi plan to require insulation in homes to reduce energy demand. Why would a country regarded as the most energy-rich in the world have to embark on an efficiency program? It was right there in the story: "Without reducing the rate of energy consumption growth, the kingdom could see oil available for export drop some 3 million barrels per day (bpd) to less than 7 million bpd in 2028, Khalid al-Falih, the chief executive of state oil firm Saudi Aramco said last year."
Were the Wikileaks revelations a game changer in the world of oil? Hardly. All the basic, but horribly muddled, information in the cables was already public. And, the flat trend of oil production for the last several years has been plain for all to see. Still, governments and societies largely prattle on as if nothing is wrong. Well, perhaps one thing did change. U.S. government officials are now known to have spoken the words "peak oil," albeit in secret cables. At last the feckless corporate media has reason to ask them why. But will they?
But wait, there was another supposed game changer last week as well. This one was supposed to allay our fears about future oil supplies. Oil companies have discovered that the same fracturing technologies used to extract natural gas trapped in shale can now be applied to certain deposits of oil trapped in shale. In the United States alone the new process could mean 2 million barrels a day by 2015 from previously neglected fields once thought too difficult to develop. “It could potentially be a real game changer,” Peter Tertzakian, chief energy economist at Calgary-based ARC Financial Corp, told The Globe and Mail.
But is it really a game changer? Well, it certainly is if you are an oil company on the prowl for the last scraps of oil hidden in hard-to-reach places under the earth. And the hype serves to entice investors into putting money into ventures to extract oil locked tightly in shale, referred to as "tight oil."
But if you are merely a consumer of oil, these new finds won't mean much to you. If the projections are correct, then oil flows from tight oil in the United States will represent about 2 percent of world production in 2015. And if the more pessimistic estimates of the U.S. Energy Information Administration come closer to actual U.S. tight oil production in 2015, that production will represent about 0.5 percent of world production. Neither amount is enough to move the price of oil. Of course, not one word is spoken about declines in production from other U.S. fields which in aggregate have been in decline for 40 years. Will this supposed new bounty reverse that ongoing decline? Not a word in the press about this.
There is reason, however, to doubt the claims now being made for tight oil supplies--reasons beyond the fact that the companies making them are often publicly traded and therefore have incentive to manipulate their stock prices. The original shale gas promoters believed that natural gas would be uniformly available from the giant shale basins found in the United States. They were wrong. Only a few sweet spots have been profitable.
As humans have done throughout the age of oil, tight oil developers will target the sweet spots first since they are the cheapest and easiest to exploit. Then, they'll move on to areas that are progressively harder and thus more expensive to exploit. Over time tight oil won't become easier to get; it'll become harder to get just like shale gas.
Another caution is that tight oil development only thrives in high oil price environments. The shale gas technology which is being applied to tight oil was supposed to herald an ongoing boom in natural gas. Instead when natural gas prices plummeted in 2008 and stayed low, shale gas drilling became far less economical and much of the industry teetered on bankruptcy. The fact that Chesapeake Energy Corp., one of the darlings of the shale gas boom that fell on very hard times, is now focusing on tight oil extraction tells you all you need to know about the viability of tight oil. The technology works when prices are high. But, as we've seen above, it won't be a panacea for strained world oil supplies even if high prices persist.
One final stumbling block will be concerns about drinking water aquifers because of the water and chemicals forced under high pressure into the oil formations to fracture the shale and release the oil. Already several states are considering tougher regulations--which will, of course, drive up costs--and one municipality, Buffalo, New York, banned hydraulic fracturing within the city limits and banned as well "storing, transferring, treating or disposing fracking waste within the city." The measure was largely symbolic since there are no plans for such drilling in the city. But it marks a watershed for municipal regulation and provides a template for others who feel uneasy about the millions of gallons of wastewater mixed with chemicals injected into each well that never return to the surface.
In the end it is the flow rate of oil that matters, not the size of the putative resource. No matter how big each new find is, no matter what new technology is applied, if we can't achieve production rates consistent with our need for economic growth, we will be in trouble. Look at the rebound of oil prices since the 2008 crash, and you will know that we already are in trouble.
I've said this before, but it bears repeating: If you inherit a million dollars with the stipulation that you can only draw out $500 a month, you may be a millionaire, but you will never live like one. When it comes to oil, there may still be very large resources left. Yes, we may technically all be the equivalent of "oil millionaires." But it looks very much as if we are still destined to have lower and lower flow rates for that oil in the decades ahead--which was the already the situation before this week of game changers that weren't.
Saturday, February 12, 2011
Prelude makes The Huffington Post
Prelude has been mentioned in a peak oil-related commentary on The Huffington Post by writer Kelpie Wilson. I met Kelpie at a conference a couple years ago. She's currently the communications editor at the International Biochar Initiative. In that regard I recently wrote a piece reviewing Albert Bates' The Biochar Solution. Albert is active in the IBI as you might expect. The Huffington Post mention offers by far the most visibility for Prelude to date.
Sunday, February 06, 2011
Is the modern anti-tax movement a product of increasing complexity?
The anti-tax movement in the United States has evolved from a fringe component of American politics 40 years ago into one that is central today. And certainly, the country has had a long history of tax protests, right? Actually, wrong.
While the Boston Tea Party is often cited as the inspiration for today's so-called Tea Party, the Boston Tea Party was an outgrowth of a movement to end "taxation without representation." The American colonists didn't object to taxes per se; they objected to taxes levied by a body--in this case the British Parliament--in which they had no representatives. That's hardly the situation with the modern Tea Party. The members of the modern movement may not like their elected representatives, but they do have them.
The Whiskey Rebellion is the only significant tax revolt in American history prior to California's Proposition 13, a 1978 ballot initiative which limited property taxes. The Whiskey Rebellion of the 1790s was about the unfair way in which the distilled spirits tax was structured. It was deeply regressive (i.e., small operators paid significantly higher effective tax rates than large ones) and designed by then Treasury Secretary Alexander Hamilton to drive small farmers and distillers in the West out of business in favor of large farmers and distillers in the East. Far from desiring a smaller federal government, the protestors wanted money spent on greater government protection against Indian raids and better roads to transport their goods to eastern markets.
And so, the historical animus that Americans supposedly have toward taxes has been largely manufactured to facilitate the propaganda machine of the modern anti-tax movement. This means that the long hiatus between the Whiskey Rebellion and Proposition 13 must be considered the norm in American history and that some recent change in American circumstances must be responsible for the modern anti-tax movement.
Joseph Tainter, author of the Collapse of Complex Societies, may have an answer. In a 1996 essay entitled "Complexity, Problem Solving, and Sustainable Societies" he explains the basics of his theory, namely, that increased complexity is a mode of problem solving; that it requires additional inputs, especially energy inputs; and that it eventually leads to diminishing and then negative returns. Diminishing returns make a society less resilient in the face of shocks and more subject to collapse--not complete destruction, Tainter says, but a simplification process that can be very painful and harrowing to live through and result in many casualties.
It is Tainter's notion of diminishing returns that sheds light on the modern anti-tax movement. It seems no accident that the movement grows up in an era, the 1970s, of constrained energy supplies. These supplies are essential to maintaining the complex functioning of industrial societies. In the earlier part of the century the colossal achievements of the Federal Government led people to respect its efficacy. It softened the blow of the Great Depression, led the country to victory in World War II, and built a superhighway system that connected the entire country as well as other infrastructure to power the economy and to protect the environment. But these were the low-hanging fruit.
Today, adding lanes to highways relieves congestion only until enough development takes place next to it to clog it all over again. We've reached the point of diminishing returns.
When the astronauts first set foot on the Moon, it was a staggering achievement. But the achievements in space since then have been less spectacular and more incremental. We have reached the point of diminishing returns.
Government spent lavishly on higher education and public schools in order to educate a new generation for a more complex society. There were dreams as recently as the mid-1990s that so-called distance learning would make college-level classes available to nearly everyone. But the dynamics of learning worked against this new complexity. People, it turns out, learn best in small groups with an actual teacher present. And, the increasingly complex information and techniques which students must now master call for even more personal attention, not less. We have reached the point of diminishing returns.
We need ever more educated people, but we have no way of turning them out more efficiently. So we must invest ever greater funds into educating the ever growing number of specialists we need. And, in education as in many other areas, these funds are showing diminishing returns. The returns are not zero, but no longer so hefty as they were.
Public health systems virtually wiped out many infectious diseases including polio through mass vaccination and better health practices. The results were profound and the costs were small. Now we spend lavishly on medical research to make incremental advances in treating chronic conditions such as heart disease and cancer which are in some respects products of industrial civilization.
A public used to such grand strides in all areas of life--strides aided in many ways by government expenditures--became increasingly frustrated by the declining returns for each additional dollar spent on government programs. They attributed this decline, however, to poor teachers or lazy civil servants. They could not think in terms of declining marginal returns; nor could they imagine that in a complex society the failure to maintain increasing investments in infrastructure and education would only make matters worse. So, they revolted. They looked for enemies and found them, namely, public employees. And, they began a campaign to defund them believing that they were taking too many of society's resources and not producing the results the public wanted.
The defunding campaign has weakened our infrastructure and left our children undereducated for the complex world they now find themselves in. The stresses created by increased complexity have caused Americans to embark on a path that can only lead to collapse, the kind that Tainter imagines. The public has been lulled into believing that "efficiency" in government such as we supposedly see in large corporations will solve the problem of declining marginal returns from investment in complexity. But corporations, as Tainter points out, face the same headwinds. The easy and obvious technical discoveries have been made. Huge investments are now needed just to obtain incremental progress. That doesn't mean technical progress isn't possible, only that it will not leap forward in the way it did in the first half of the last century.
There are those who will point to the computer revolution and now the biotech revolution and say that in these fields the leading businesses have overcome the problem of declining marginal returns. First, it is worth pointing out that both of these industries have significantly added to the complexity of society. And so, their connection to the declining marginal returns and even negative returns of technology cannot be dismissed. The effects of these industries must not simply be judged in a vacuum but within the context of the society they serve.
In fact, we have already seen some of the negative returns of a highly networked society in the form of the worst economic crash since the Great Depression and in the dangerous effects of biotechnology produced by companies that understand nothing of ecology and are therefore blind to the unintended effects of their inventions.
Tainter suggests that declining marginal returns from complexity may not be a soluble problem for a society structured as ours is. We have relied on copious amounts of fossil fuels to allow us to overcome many of our challenges. This cheap energy source has been perhaps the key input enabling increased complexity as an efficacious problem-solving strategy.
It is not obvious how we as a society could climb down off the cliff of complexity gracefully in the absence of increasing supplies of fossil fuels. But it is obvious that the anti-tax movement is pushing us toward that cliff more quickly because of its failure to comprehend that we need to plan for a less complex future using tools that are not so blunt as a simple-minded tax revolt. And, yet given the poor level of understanding among the public and the ruling elite about complexity and society, it is completely understandable that the debate is being governed by the false premises propagated by the anti-tax movement.
While the Boston Tea Party is often cited as the inspiration for today's so-called Tea Party, the Boston Tea Party was an outgrowth of a movement to end "taxation without representation." The American colonists didn't object to taxes per se; they objected to taxes levied by a body--in this case the British Parliament--in which they had no representatives. That's hardly the situation with the modern Tea Party. The members of the modern movement may not like their elected representatives, but they do have them.
The Whiskey Rebellion is the only significant tax revolt in American history prior to California's Proposition 13, a 1978 ballot initiative which limited property taxes. The Whiskey Rebellion of the 1790s was about the unfair way in which the distilled spirits tax was structured. It was deeply regressive (i.e., small operators paid significantly higher effective tax rates than large ones) and designed by then Treasury Secretary Alexander Hamilton to drive small farmers and distillers in the West out of business in favor of large farmers and distillers in the East. Far from desiring a smaller federal government, the protestors wanted money spent on greater government protection against Indian raids and better roads to transport their goods to eastern markets.
And so, the historical animus that Americans supposedly have toward taxes has been largely manufactured to facilitate the propaganda machine of the modern anti-tax movement. This means that the long hiatus between the Whiskey Rebellion and Proposition 13 must be considered the norm in American history and that some recent change in American circumstances must be responsible for the modern anti-tax movement.
Joseph Tainter, author of the Collapse of Complex Societies, may have an answer. In a 1996 essay entitled "Complexity, Problem Solving, and Sustainable Societies" he explains the basics of his theory, namely, that increased complexity is a mode of problem solving; that it requires additional inputs, especially energy inputs; and that it eventually leads to diminishing and then negative returns. Diminishing returns make a society less resilient in the face of shocks and more subject to collapse--not complete destruction, Tainter says, but a simplification process that can be very painful and harrowing to live through and result in many casualties.
It is Tainter's notion of diminishing returns that sheds light on the modern anti-tax movement. It seems no accident that the movement grows up in an era, the 1970s, of constrained energy supplies. These supplies are essential to maintaining the complex functioning of industrial societies. In the earlier part of the century the colossal achievements of the Federal Government led people to respect its efficacy. It softened the blow of the Great Depression, led the country to victory in World War II, and built a superhighway system that connected the entire country as well as other infrastructure to power the economy and to protect the environment. But these were the low-hanging fruit.
Today, adding lanes to highways relieves congestion only until enough development takes place next to it to clog it all over again. We've reached the point of diminishing returns.
When the astronauts first set foot on the Moon, it was a staggering achievement. But the achievements in space since then have been less spectacular and more incremental. We have reached the point of diminishing returns.
Government spent lavishly on higher education and public schools in order to educate a new generation for a more complex society. There were dreams as recently as the mid-1990s that so-called distance learning would make college-level classes available to nearly everyone. But the dynamics of learning worked against this new complexity. People, it turns out, learn best in small groups with an actual teacher present. And, the increasingly complex information and techniques which students must now master call for even more personal attention, not less. We have reached the point of diminishing returns.
We need ever more educated people, but we have no way of turning them out more efficiently. So we must invest ever greater funds into educating the ever growing number of specialists we need. And, in education as in many other areas, these funds are showing diminishing returns. The returns are not zero, but no longer so hefty as they were.
Public health systems virtually wiped out many infectious diseases including polio through mass vaccination and better health practices. The results were profound and the costs were small. Now we spend lavishly on medical research to make incremental advances in treating chronic conditions such as heart disease and cancer which are in some respects products of industrial civilization.
A public used to such grand strides in all areas of life--strides aided in many ways by government expenditures--became increasingly frustrated by the declining returns for each additional dollar spent on government programs. They attributed this decline, however, to poor teachers or lazy civil servants. They could not think in terms of declining marginal returns; nor could they imagine that in a complex society the failure to maintain increasing investments in infrastructure and education would only make matters worse. So, they revolted. They looked for enemies and found them, namely, public employees. And, they began a campaign to defund them believing that they were taking too many of society's resources and not producing the results the public wanted.
The defunding campaign has weakened our infrastructure and left our children undereducated for the complex world they now find themselves in. The stresses created by increased complexity have caused Americans to embark on a path that can only lead to collapse, the kind that Tainter imagines. The public has been lulled into believing that "efficiency" in government such as we supposedly see in large corporations will solve the problem of declining marginal returns from investment in complexity. But corporations, as Tainter points out, face the same headwinds. The easy and obvious technical discoveries have been made. Huge investments are now needed just to obtain incremental progress. That doesn't mean technical progress isn't possible, only that it will not leap forward in the way it did in the first half of the last century.
There are those who will point to the computer revolution and now the biotech revolution and say that in these fields the leading businesses have overcome the problem of declining marginal returns. First, it is worth pointing out that both of these industries have significantly added to the complexity of society. And so, their connection to the declining marginal returns and even negative returns of technology cannot be dismissed. The effects of these industries must not simply be judged in a vacuum but within the context of the society they serve.
In fact, we have already seen some of the negative returns of a highly networked society in the form of the worst economic crash since the Great Depression and in the dangerous effects of biotechnology produced by companies that understand nothing of ecology and are therefore blind to the unintended effects of their inventions.
Tainter suggests that declining marginal returns from complexity may not be a soluble problem for a society structured as ours is. We have relied on copious amounts of fossil fuels to allow us to overcome many of our challenges. This cheap energy source has been perhaps the key input enabling increased complexity as an efficacious problem-solving strategy.
It is not obvious how we as a society could climb down off the cliff of complexity gracefully in the absence of increasing supplies of fossil fuels. But it is obvious that the anti-tax movement is pushing us toward that cliff more quickly because of its failure to comprehend that we need to plan for a less complex future using tools that are not so blunt as a simple-minded tax revolt. And, yet given the poor level of understanding among the public and the ruling elite about complexity and society, it is completely understandable that the debate is being governed by the false premises propagated by the anti-tax movement.
Sunday, January 30, 2011
Razor blades and the limits of complexity
A friend of mine once remarked that if current trends continue, razor cartridges will have at least 100 blades each by the end of the century. The razor blade wars are among the most visible absurdities illustrating how the limits of complexity clash with our blind faith in the idea that more complexity will always solve our problems or improve our lives.
The race among blade manufacturers has gotten so heated that you can skip right over the now obsolete three-blade models and go directly to one with six blades on each cartridge. And for laughs, you can watch these fake commercials, one for a 7-blade razor and one for an 18-blade razor.
My friend, by the way, uses a single-blade safety razor and says he gets a better shave from it than anything else. He just had to learn how to use it correctly, he explained. And, that may be part of the reason people prefer more complex tools. Using simpler ones requires learning skills that most of us never learned because we never had to learn them. How many people below age 50 even started shaving with an old-style safety razor?
Beyond this there is the historical experience that more complexity does frequently solve problems. Food was being prepared under unsanitary conditions, and so governments began to regulate the way food is made. The air and the water were polluted, so governments added environmental agencies to regulate that pollution.
Think about how much more complex automobiles have become in the last quarter century, so much so that fewer and fewer people are able to fix those automobiles themselves. All those electronics were added to solve problems, for example, to enhance safety and comfort.
Today, the average citizen in wealthy countries is obliged to own or have access to computers and know how to use them or miss out on much of what constitutes modern life. We have access to machines that can calculate millions of times faster than we can ever hope to, that can connect us literally to a world of information, and that can allow us to communicate in an instant with people on the opposite side of the globe. And, yet how many of us even understand how those machines work, let alone how the Internet to which they are connected functions?
Our inability to understand the systems we create puts a limit on the level of complexity that is beneficial to us. Recently established and poorly understood systems can bring unwelcome surprises. Witness the financial meltdown of 2008. Up to that point many economists (who were supposedly able to understand the complex global economy) believed that the world's economic planners had mastered the business cycle and created a "Great Moderation" in its volatility and therefore consequences.
Joseph Tainter, the great historian of collapse theory, explains in his classic study, The Collapse of Complex Societies, that increased complexity incurs costs. As complexity increases, costs usually increase faster resulting in diminishing returns and then finally negative returns. (See Tainter's "Complexity, Problem Solving and Sustainable Societies" for a condensed discussion of these ideas.)
That we are a society of advanced complexity is a given. That our society is now experiencing negative returns from increasing complexity is not often discussed. For example, we use systemic pesticides--which means they flow from the inside of the plant outward--to kill and repel crop pests and thereby protect yields. But this new complexity in our food system may be the cause of Colony Collapse Disorder which is wiping out bees at such a fast rate that crops such as nuts and fruits may soon be compromised because there are not enough bees to pollinate them.
Glyphosate, known commercially as Roundup, is probably the world's most widely used herbicide. It is particularly well-known for its use with Roundup Ready crops, crops genetically-engineered to be unaffected by glyphosate applications. All this highly complex technology has the benefit of enabling a farmer to weed his or her crop chemically and thus save much labor. Now it seems that repeated applications of glyphosate to farm fields can disturb the microbial balance in the soil so much that it leads to Sudden Death Syndrome in crops. Using products to enhance yields which actually undermine the fertility of the soil is a strategy that must be categorized as having negative returns.
On the seas ocean-going factory ships have enhanced our ability to catch and process fish for human consumption. But the efficacy of such technology has led to overfishing and the collapse of many fish species. Wild fish catches have leveled off and don't look like they will turn up soon despite our advanced technology. It's another case of diminishing and probably negative returns if one considers that large predatory fish are now scarce forcing fishing boats to go after species that used to be considered too small to bother with. Genetic diversity and thus survivability among fish species are being threatened as a result.
The alternative to scaling the walls of complexity continuously would be to simplify society when the returns on complexity diminish or turn negative. One of the essential inputs for increased complexity is increased energy input, according to Tainter. Thus, peaks in fossil fuels may force global society to simplify. Why not recognize now that the solution to our problems may not involve higher degrees of complexity? Why not get ready ahead of time and make the transition less painful?
I heard Tainter speak at a recent conference, and he was asked a closely linked question: Is there an historical example of a society that reduced its complexity voluntarily before it absolutely had to? He had a one-word answer: No. Will that be our answer, too?
The race among blade manufacturers has gotten so heated that you can skip right over the now obsolete three-blade models and go directly to one with six blades on each cartridge. And for laughs, you can watch these fake commercials, one for a 7-blade razor and one for an 18-blade razor.
My friend, by the way, uses a single-blade safety razor and says he gets a better shave from it than anything else. He just had to learn how to use it correctly, he explained. And, that may be part of the reason people prefer more complex tools. Using simpler ones requires learning skills that most of us never learned because we never had to learn them. How many people below age 50 even started shaving with an old-style safety razor?
Beyond this there is the historical experience that more complexity does frequently solve problems. Food was being prepared under unsanitary conditions, and so governments began to regulate the way food is made. The air and the water were polluted, so governments added environmental agencies to regulate that pollution.
Think about how much more complex automobiles have become in the last quarter century, so much so that fewer and fewer people are able to fix those automobiles themselves. All those electronics were added to solve problems, for example, to enhance safety and comfort.
Today, the average citizen in wealthy countries is obliged to own or have access to computers and know how to use them or miss out on much of what constitutes modern life. We have access to machines that can calculate millions of times faster than we can ever hope to, that can connect us literally to a world of information, and that can allow us to communicate in an instant with people on the opposite side of the globe. And, yet how many of us even understand how those machines work, let alone how the Internet to which they are connected functions?
Our inability to understand the systems we create puts a limit on the level of complexity that is beneficial to us. Recently established and poorly understood systems can bring unwelcome surprises. Witness the financial meltdown of 2008. Up to that point many economists (who were supposedly able to understand the complex global economy) believed that the world's economic planners had mastered the business cycle and created a "Great Moderation" in its volatility and therefore consequences.
Joseph Tainter, the great historian of collapse theory, explains in his classic study, The Collapse of Complex Societies, that increased complexity incurs costs. As complexity increases, costs usually increase faster resulting in diminishing returns and then finally negative returns. (See Tainter's "Complexity, Problem Solving and Sustainable Societies" for a condensed discussion of these ideas.)
That we are a society of advanced complexity is a given. That our society is now experiencing negative returns from increasing complexity is not often discussed. For example, we use systemic pesticides--which means they flow from the inside of the plant outward--to kill and repel crop pests and thereby protect yields. But this new complexity in our food system may be the cause of Colony Collapse Disorder which is wiping out bees at such a fast rate that crops such as nuts and fruits may soon be compromised because there are not enough bees to pollinate them.
Glyphosate, known commercially as Roundup, is probably the world's most widely used herbicide. It is particularly well-known for its use with Roundup Ready crops, crops genetically-engineered to be unaffected by glyphosate applications. All this highly complex technology has the benefit of enabling a farmer to weed his or her crop chemically and thus save much labor. Now it seems that repeated applications of glyphosate to farm fields can disturb the microbial balance in the soil so much that it leads to Sudden Death Syndrome in crops. Using products to enhance yields which actually undermine the fertility of the soil is a strategy that must be categorized as having negative returns.
On the seas ocean-going factory ships have enhanced our ability to catch and process fish for human consumption. But the efficacy of such technology has led to overfishing and the collapse of many fish species. Wild fish catches have leveled off and don't look like they will turn up soon despite our advanced technology. It's another case of diminishing and probably negative returns if one considers that large predatory fish are now scarce forcing fishing boats to go after species that used to be considered too small to bother with. Genetic diversity and thus survivability among fish species are being threatened as a result.
The alternative to scaling the walls of complexity continuously would be to simplify society when the returns on complexity diminish or turn negative. One of the essential inputs for increased complexity is increased energy input, according to Tainter. Thus, peaks in fossil fuels may force global society to simplify. Why not recognize now that the solution to our problems may not involve higher degrees of complexity? Why not get ready ahead of time and make the transition less painful?
I heard Tainter speak at a recent conference, and he was asked a closely linked question: Is there an historical example of a society that reduced its complexity voluntarily before it absolutely had to? He had a one-word answer: No. Will that be our answer, too?
Sunday, January 23, 2011
Is the global economy approaching an inflection point?
It's hard to make predictions, especially about the future.
During a presentation last week a questioner asked me what I thought about predictions that gasoline prices would reach $5 a gallon this summer. I offered this critique. I said that the oil prices implied by $5-a-gallon gas could probably not be attained in such a weak global economy. And, something short of that price would probably send the economy into a tailspin.
I don't foresee such an event soon, but it does seem to me that at some point high energy prices will lead to another economic decline. Perhaps there might even be a crash since the financial sector--which is even more fragile than it was in 2008 in my view--might face another crisis as a result of too much money flowing into the energy sector and therefore not enough flowing into the financial sector.
I warned everyone not to rush out and phone their brokers.
And yet, there are signs of the same kind of overheated bullishness on commodities and bearishness on bonds that we saw in the first half of 2008. And, we've seen the same kind of massive central bank easing again that preceded the commodity run-up that year.
The most recent easing has shown up in food prices as the UN food price index reached a record level earlier this month. In metals, tin rose to an all-time record. Copper prices are over $4 a pound for the first time since the 2008 run-up. Base metals in general have more than doubled since the 2008 lows. Cotton reached a new, all-time high this year and hovers near record territory. While interest rates are low by historical standards, long-term bond yields have been rising (and bond prices falling), supposedly in anticipation of further economic growth and inflation. And, of course, the consensus is that China, the great consumer of commodities, will do nothing but grow.
Could commodity prices go significantly higher? I took a stab at answering the same question in February 2008 during the last run-up in commodity prices. For a while they did climb. Could soybeans reach their old inflation-adjusted high of $61 a bushel ($12.90 in 1973 dollars)? I wondered. Could wheat vault beyond its old inflation-adjusted high of $28 ($6.35 in 1974 dollars)? In the end only oil obliged by besting the old inflation-adjusted high of $104 a barrel ($38 in 1979 dollars) to reach $147. (The Shadow Government Statistics newsletter, however, estimates that inflation has been seriously underestimated by the U.S. government and that therefore oil would have had to surpass $280 a barrel in 2008 to reach an all-time inflation-adjusted high.)
What I learned from that thought experiment is that it matters how robust the underlying financial economy is. In early 2008 the subprime loan crisis was morphing into a general credit crisis, something I recognized at the time. But I assumed that the U.S. Federal Reserve also understood this and would simply continue to flood the world with liquidity adequate to avoid a seize-up in the markets. That turned out to be an incorrect assumption. The Fed did finally realize what was happening, but acted too late to head off a financial crash.
Did the Fed and the other central banks learn their lesson in 2008? Will they pump endless amounts of liquidity into the financial markets in order to avoid another seize-up? Will that send commodity prices to the almost unimaginable levels I thought they might reach in 2008? Or, as some observers wonder, have the central banks learned the wrong lesson and will they simply find themselves helpless in the face of ongoing deleveraging (shedding of debt) that will create another credit crisis and take down the economy? Have the central banks simply created two more bubbles in Chinese real estate and commodities? Will these bubbles pop placing unstoppable downward pressure on an already crippled financial sector and lead to a panic that will crush markets worldwide?
Famed short seller Jim Chanos believes that the Chinese economy is experiencing a huge property bubble as 60 percent of the economy is now construction. He made the call last year, but hasn't changed his tune. Chanos seems to be testing the saying by economist John Maynard Keynes that "[m]arkets can remain irrational longer than you can remain solvent." Chanos did, however, apparently make some money as the Chinese stock market fell about 14 percent last year.
Blogger Nicole Foss of the Automatic Earth cautions that whatever interim steps the world's governments and central banks take, they cannot stop the shedding of debt which is now in process among households and businesses in North America and Europe. That process will overwhelm any attempts to maintain economic growth and send us into a deflationary depression before long, she believes. Australian economist Steven Keen, who was one of the few who foresaw the subprime loan debacle and the end to the U.S. real estate bubble, agrees.
Naturally, if one makes an economic prediction without specifying a particular date, one will--like a stopped clock--be right at some point. The tricky part about prediction is always timing. So, we must not only listen to Yogi Berra when making predictions, but also perhaps William Shakespeare:
There is a tide in the affairs of men,Translation: Timing is everything!
Which, taken at the flood, leads on to fortune;
Omitted, all the voyage of their life
Is bound in shallows and in miseries.*
__________________________________________________
*From Julius Caesar, Act IV, Scene III
Sunday, January 16, 2011
A dramatic shift in the peak oil discussion: "You don't have to take my word for it"
If you write about, speak about, or talk with your family, friends and co-workers about peak oil, you've almost certainly been asked: "Well, who else is saying what you're saying?"
It's wise not to rely on just one source of information. Humans are fallible creatures. Knowing that, we feel much more comfortable when we can confirm something someone tells us either directly through observation or indirectly by going to a well-vetted source. We can, for instance, easily verify whether the Empire State Building has 103 stories, either by going there and counting the stories or referring to some reputable source of information. Furthermore, whether the Empire State Building has 103 stories is not really a matter of opinion. It's either true or it isn't.
When it comes to murkier matters such as peak oil, we must admit that our perceptions and conclusions are always based on incomplete information. In such instances, humans, being social creatures, seek confirmation from others when they receive information that is new and not easily verified. They wonder, quite rightly, whether other people accept such information as correct.
Now, as we know, the mere fact that large numbers of people accept a certain conclusion is not necessarily proof of its veracity. Still, with little to go on and little time to do independent research, many people essentially resort to polling. Does my reference group, the people I hang out with most, accept a particular conclusion? Does the broader public, reflected through the media, accept it?
This confirmation strategy has worked against the peak oil movement for many years as very few highly placed people dared to utter the words "peak oil" in public--even if they believed the issue was important. That has changed rather radically in the last 12 months, and it hands peak oil activists another important rhetorical tool, namely, the phrase: "You don't have to take my word for it."
In rhetorical terms this phrase is, of course, an appeal to authority. Those who argue the peak oil case most often rely on appeals to reason. That works with some people. But others can find such argumentation tedious and difficult to follow. A shortcut for them is to check out what experts and officials are saying. Increasingly, those experts and officials are saying that peak oil is near, that it is a serious danger, and that we are unprepared for it.
Perhaps the most important announcement in this respect is the turnabout at the International Energy Agency (IEA) late last year in its 2010 World Energy Outlook. The Paris-based IEA is an intergovernmental energy research and policy organization serving its 28 member states including Australia, Canada, France, Germany, Japan, the United States, and the United Kingdom. It was formed in the wake of the 1973 Arab Oil Embargo to advise member states, most of which are oil importers, on energy policy.
Consistently optimistic in the past about future energy supplies, the IEA undertook its own field-by-field survey of oil reserves in 2008 and has become increasingly concerned about oil supplies. This year the agency explicitly discussed peak oil for the first time and proclaimed that conventional crude most likely peaked in 2006. It continues to believe unconventional oil from the tar sands, the Arctic and deepwater fields along with natural gas liquids can make up for declining conventional oil and lead to increases in world oil production for two more decades. But it warns that this is no longer a foregone conclusion without the necessary and rather large investment required.
There were earlier indications that the IEA was about to change its official views. In 2008 the chief economist of the IEA, Fatih Birol, wrote in a guest editorial in the British newspaper The Independent that "we should leave oil before it leaves us."
This turnabout is significant because the public listens much more closely to officials who change their minds than it does to those who've advocated a position consistently. The public feels that an insider who changes his or her mind about an important policy topic must have special inside knowledge that confirms the change. More important is that IEA officials are changing their minds not because it is merely fashionable to do so, but because mounting evidence has convinced them that our energy future, particularly our oil future, will not be smooth sailing.
That has been the case again and again in official circles recently. In 2005 the so-called Hirsch Report, a report about peak oil commissioned by the U.S. Department of Energy, stood practically alone as an official pronouncement about the dangers and proximity of peak oil.
But last year the U.S. military released a report raising warnings about a nearby oil supply crunch that would seriously affect military operations. "A severe energy crunch is inevitable without a massive expansion of production and refining capacity," the report said. But even in the measured language of the report there can be no mistaking that there is concern about oil production peaking worldwide. "The world would need to add roughly the equivalent of Saudi Arabia’s current production every seven years" to meet expected oil demand in 2030. I sat next to the author of that report at a meeting last summer--a peak oil meeting.
The American military was not the only defense establishment that got interested in peak oil in 2010. The German military commissioned a report, leaked to the media, assessing the dangers of world peak oil production. Parts of the British government including the Ministry of Defense huddled in meetings last year about peak oil. The content of the meetings remains secret. But their existence sent a minor shock wave through the British public who had been consistently told by high government officials not to worry about peak oil.
A private report put together by some major industry players in Britain was also released last year. The group called itself the Industry Taskforce on Peak Oil and Energy Security. The message couldn't have been more blunt: "Our message to government and businesses is clear. Act now."
Even the solidly cornucopian U.S. Energy Information Administration (EIA), the statistical arm of the U.S. Department of Energy, saw a crack develop in its otherwise optimistic veneer. A presentation by an EIA employee unearthed by a French newspaper cast doubt on whether oil supplies could meet demand in this decade. The author was suddenly transferred away from his post--previously planned, the agency said--and the media was shut out from further contact with him.
Leading executives from the oil industry are also weighing in on peak oil. According to Thierry Desmarest, chairman of the French oil giant Total, "The problem of peak oil remains. In our opinion, it will be very difficult to raise oil production worldwide above 95 million barrels a day, which is 10 percent more than today." He added that oil could peak in about 10 years.
Chevron executives haven't been quite as explicit. At least since 2005, however, they've been saying that the era of cheap oil is over, and even translated that idea into an ongoing public relations campaign on television and elsewhere with the slogan "Will you join us?"
Former Talisman Energy CEO Jim Buckee has also been sounding the peak oil alarm for some time. A former Shell chairman, Lord Oxburgh, said in 2007 that he believes oil supplies will be tight in the long term and that a peak within 20 years would not surprise him.
I saw a presentation at the 2008 ASPO-USA peak oil conference by the consultant who models future oil supplies for Toyota. One would expect auto manufacturers to be perennially bullish on oil supplies. His conclusion: Peak between 2017 and 2023 (slide 46).
And, finally there has been for some time a peak oil caucus in the U.S. House of Representatives led by Roscoe Barlett (R-Maryland) that has been a bipartisan voice for concerns about peak oil.
No longer do peak oil activists stand alone on a stage when they deliver presentations about our unfolding energy difficulties. With all of these prominent voices and institutions behind them, activists can now confidently say, "You don't have to take my word for it." That simple phrase can be quite effective in helping to persuade the broad public when it is followed by the growing list of government and industry voices now talking about peak oil.
It's wise not to rely on just one source of information. Humans are fallible creatures. Knowing that, we feel much more comfortable when we can confirm something someone tells us either directly through observation or indirectly by going to a well-vetted source. We can, for instance, easily verify whether the Empire State Building has 103 stories, either by going there and counting the stories or referring to some reputable source of information. Furthermore, whether the Empire State Building has 103 stories is not really a matter of opinion. It's either true or it isn't.
When it comes to murkier matters such as peak oil, we must admit that our perceptions and conclusions are always based on incomplete information. In such instances, humans, being social creatures, seek confirmation from others when they receive information that is new and not easily verified. They wonder, quite rightly, whether other people accept such information as correct.
Now, as we know, the mere fact that large numbers of people accept a certain conclusion is not necessarily proof of its veracity. Still, with little to go on and little time to do independent research, many people essentially resort to polling. Does my reference group, the people I hang out with most, accept a particular conclusion? Does the broader public, reflected through the media, accept it?
This confirmation strategy has worked against the peak oil movement for many years as very few highly placed people dared to utter the words "peak oil" in public--even if they believed the issue was important. That has changed rather radically in the last 12 months, and it hands peak oil activists another important rhetorical tool, namely, the phrase: "You don't have to take my word for it."
In rhetorical terms this phrase is, of course, an appeal to authority. Those who argue the peak oil case most often rely on appeals to reason. That works with some people. But others can find such argumentation tedious and difficult to follow. A shortcut for them is to check out what experts and officials are saying. Increasingly, those experts and officials are saying that peak oil is near, that it is a serious danger, and that we are unprepared for it.
Perhaps the most important announcement in this respect is the turnabout at the International Energy Agency (IEA) late last year in its 2010 World Energy Outlook. The Paris-based IEA is an intergovernmental energy research and policy organization serving its 28 member states including Australia, Canada, France, Germany, Japan, the United States, and the United Kingdom. It was formed in the wake of the 1973 Arab Oil Embargo to advise member states, most of which are oil importers, on energy policy.
Consistently optimistic in the past about future energy supplies, the IEA undertook its own field-by-field survey of oil reserves in 2008 and has become increasingly concerned about oil supplies. This year the agency explicitly discussed peak oil for the first time and proclaimed that conventional crude most likely peaked in 2006. It continues to believe unconventional oil from the tar sands, the Arctic and deepwater fields along with natural gas liquids can make up for declining conventional oil and lead to increases in world oil production for two more decades. But it warns that this is no longer a foregone conclusion without the necessary and rather large investment required.
There were earlier indications that the IEA was about to change its official views. In 2008 the chief economist of the IEA, Fatih Birol, wrote in a guest editorial in the British newspaper The Independent that "we should leave oil before it leaves us."
This turnabout is significant because the public listens much more closely to officials who change their minds than it does to those who've advocated a position consistently. The public feels that an insider who changes his or her mind about an important policy topic must have special inside knowledge that confirms the change. More important is that IEA officials are changing their minds not because it is merely fashionable to do so, but because mounting evidence has convinced them that our energy future, particularly our oil future, will not be smooth sailing.
That has been the case again and again in official circles recently. In 2005 the so-called Hirsch Report, a report about peak oil commissioned by the U.S. Department of Energy, stood practically alone as an official pronouncement about the dangers and proximity of peak oil.
But last year the U.S. military released a report raising warnings about a nearby oil supply crunch that would seriously affect military operations. "A severe energy crunch is inevitable without a massive expansion of production and refining capacity," the report said. But even in the measured language of the report there can be no mistaking that there is concern about oil production peaking worldwide. "The world would need to add roughly the equivalent of Saudi Arabia’s current production every seven years" to meet expected oil demand in 2030. I sat next to the author of that report at a meeting last summer--a peak oil meeting.
The American military was not the only defense establishment that got interested in peak oil in 2010. The German military commissioned a report, leaked to the media, assessing the dangers of world peak oil production. Parts of the British government including the Ministry of Defense huddled in meetings last year about peak oil. The content of the meetings remains secret. But their existence sent a minor shock wave through the British public who had been consistently told by high government officials not to worry about peak oil.
A private report put together by some major industry players in Britain was also released last year. The group called itself the Industry Taskforce on Peak Oil and Energy Security. The message couldn't have been more blunt: "Our message to government and businesses is clear. Act now."
Even the solidly cornucopian U.S. Energy Information Administration (EIA), the statistical arm of the U.S. Department of Energy, saw a crack develop in its otherwise optimistic veneer. A presentation by an EIA employee unearthed by a French newspaper cast doubt on whether oil supplies could meet demand in this decade. The author was suddenly transferred away from his post--previously planned, the agency said--and the media was shut out from further contact with him.
Leading executives from the oil industry are also weighing in on peak oil. According to Thierry Desmarest, chairman of the French oil giant Total, "The problem of peak oil remains. In our opinion, it will be very difficult to raise oil production worldwide above 95 million barrels a day, which is 10 percent more than today." He added that oil could peak in about 10 years.
Chevron executives haven't been quite as explicit. At least since 2005, however, they've been saying that the era of cheap oil is over, and even translated that idea into an ongoing public relations campaign on television and elsewhere with the slogan "Will you join us?"
Former Talisman Energy CEO Jim Buckee has also been sounding the peak oil alarm for some time. A former Shell chairman, Lord Oxburgh, said in 2007 that he believes oil supplies will be tight in the long term and that a peak within 20 years would not surprise him.
I saw a presentation at the 2008 ASPO-USA peak oil conference by the consultant who models future oil supplies for Toyota. One would expect auto manufacturers to be perennially bullish on oil supplies. His conclusion: Peak between 2017 and 2023 (slide 46).
And, finally there has been for some time a peak oil caucus in the U.S. House of Representatives led by Roscoe Barlett (R-Maryland) that has been a bipartisan voice for concerns about peak oil.
No longer do peak oil activists stand alone on a stage when they deliver presentations about our unfolding energy difficulties. With all of these prominent voices and institutions behind them, activists can now confidently say, "You don't have to take my word for it." That simple phrase can be quite effective in helping to persuade the broad public when it is followed by the growing list of government and industry voices now talking about peak oil.
Sunday, January 09, 2011
The extremely leisurely pace of American democracy and the urgency of our predicament
Winston Churchill once remarked that "[t]he United States invariably does the right thing, after having exhausted every other alternative." The assumption behind that remark is that there will be time to do the right thing after all alternatives have been exhausted. This assumption is especially troubling when it comes to addressing such issues as peak oil and climate change.
It is worthwhile to look back a bit and see why Churchill came to his famous conclusion. One issue that threatened the stability of the United States from its founding was slavery. The first attempt to smooth over differences was in the U.S. Constitution. Slaves would be counted as three-fifths of a person for the purposes of determining the number of representatives from each state. Also, the importation of slaves could be prohibited after 1808. That arrangement worked until 1820 when the balance between slave states and free states became a point of fierce contention as the union expanded. Slaveholders did not want to see the federal legislature controlled by representatives from free states. The Missouri Compromise maintained that balance for the time. There was the Compromise of 1850 and then in 1854 the Kansas-Nebraska Act, both attempts to calm sectional tensions. And, of course, finally the American Civil War (1861-65) ended a 70-year experiment with compromise over slavery.
I recite this history because it is emblematic of how slowly American democracy moves on critical, even existential matters. Many women had worked hard for the abolition of slavery and in the aftermath of the Civil War expected to attain the right to vote along with former slaves. But the 15th Amendment failed to mention women. And, it took another 50 years for women to receive the right to vote.
It took another 95 years from the passing of the 15th Amendment guaranteeing the right to vote to all citizens regardless of "race, color or condition of previous servitude" until African-Americans received in fact what they had been given in law by that amendment. The Voting Rights Act of 1965 finally made it possible for African-Americans in the South to exercise their franchise.
It is true that the American federal system was designed specifically to encourage slow, deliberate action. It is far easier to stop something in the U.S. Congress than it is to get anything approved. While the long wait for voting rights for women and African-Americans was a blot on the American historical record and exceedingly damaging and painful to those it affected, neither issue ultimately destroyed the country.
While the Civil War still holds the record for the number of American deaths in a war, that number might end up looking small even as a percentage of the population (2 percent) compared to the number of Americans who will suffer and die in one way or another because of peak oil, climate change, and myriad other environmental threats that now beset us. The problem is that these Americans don't die from immediately discernible causes such as gunshot wounds. Rather their suffering will often only be indirectly and circuitously related to environmental threats and resource depletion. Therefore, it will be difficult for those hit hardest to coalesce into an effective voting block, especially since the fossil fuel and other lobbies have worked hard to confuse them about the resource and environmental issues of our age.
I recently watched the film The American President again. I was struck that this movie released in 1995 took climate change as a given, something the audience would readily accept as an important issue that needed to be addressed promptly. Here we are 16 years later, and only now is the U.S. Environmental Protection Agency (EPA) taking the first baby steps toward regulating greenhouse gas emissions pursuant to a Supreme Court ruling that affirmed its power to do so. Even so a new hoard of climate change deniers in Congress propose to stop the EPA from exercising that authority. (I doubt that they will be able to do so for now.)
In addition, Americans seem to have somehow accepted that oil at $90 a barrel means nothing in particular. This is true even though a decade ago oil at $30 or $40 a barrel was thought to be potent enough to crush the economy. Perhaps we have adapted to these higher prices. But there seems to be no urgency to move the economy away from oil dependence even though the warnings of peak oil activists have been largely borne out.
When will the American democratic machinery actually begin to react to the twin crises of oil depletion and climate change? When there is a calamity directly attributable to one or the other or both, that's when. There are two problems with this approach.
First, it may not be clear that some future crisis is peak oil- and/or climate change-induced. How much of the Hurricane Katrina disaster can be attributed to climate change? No one knows. The damage done to New Orleans is certainly very much what had been foretold by climate modelers as hurricanes intensify and sea levels rise. But even the destruction of a large American city failed to catalyze any action on climate change.
Record high oil prices certainly had something to do with the economic meltdown of 2008. After all, nearly every recession since 1970 has been preceded by a spike in oil prices. But the focus so far has all been on finance. And, little has been done to address the world's oil dependency since 2008.
Second, the damage inflicted on the country and the world by waiting for a discernible crisis clearly linked to peak oil and/or climate change will far exceed the costs of prevention. Imagine what the 2008 financial crisis might have looked like if the country had already largely electrified its transportation system using renewable energy sources. The crisis would certainly still have been bad, but not nearly so ominous and devastating as tight oil supplies made it. And those tight supplies continue to hamper recovery, threatening a second downturn.
Finally, it's worth noting that national emergencies tend to elicit temporary emergency measures that are rarely revoked, some of which may fly in the face of democratic processes. The attacks of September 11, 2001 have spawned a whole raft of such measures, many obviously illegal and unconstitutional, but which the public sustains because it does not understand the true nature of our predicament.
How many more ill-conceived and heavy-handed measures can we expect when the death toll is not 3,000, but 300,000 or 3,000,000--all because we and other nations failed to address adequately peak oil- and climate change-related problems before they became too big to ignore.
Those who block progress on these critical issues in Congress believe--just as those who held slaves and those who opposed women's suffrage--that what they are doing will not bring down the whole system around them. And, they tacitly believe that if they are in the wrong, there will be plenty of time to address peak oil and climate change through compromise in the future.
But, while slaves and women may be made to wait by the hand of oppression, nature recognizes no such limit. Our social divisions may be held at bay for long periods while we work out our differences. When it comes to energy depletion and climate change, it is nature that will prevail in enforcing its will on us without regard to legislative or lobbyist timetables.
It is worthwhile to look back a bit and see why Churchill came to his famous conclusion. One issue that threatened the stability of the United States from its founding was slavery. The first attempt to smooth over differences was in the U.S. Constitution. Slaves would be counted as three-fifths of a person for the purposes of determining the number of representatives from each state. Also, the importation of slaves could be prohibited after 1808. That arrangement worked until 1820 when the balance between slave states and free states became a point of fierce contention as the union expanded. Slaveholders did not want to see the federal legislature controlled by representatives from free states. The Missouri Compromise maintained that balance for the time. There was the Compromise of 1850 and then in 1854 the Kansas-Nebraska Act, both attempts to calm sectional tensions. And, of course, finally the American Civil War (1861-65) ended a 70-year experiment with compromise over slavery.
I recite this history because it is emblematic of how slowly American democracy moves on critical, even existential matters. Many women had worked hard for the abolition of slavery and in the aftermath of the Civil War expected to attain the right to vote along with former slaves. But the 15th Amendment failed to mention women. And, it took another 50 years for women to receive the right to vote.
It took another 95 years from the passing of the 15th Amendment guaranteeing the right to vote to all citizens regardless of "race, color or condition of previous servitude" until African-Americans received in fact what they had been given in law by that amendment. The Voting Rights Act of 1965 finally made it possible for African-Americans in the South to exercise their franchise.
It is true that the American federal system was designed specifically to encourage slow, deliberate action. It is far easier to stop something in the U.S. Congress than it is to get anything approved. While the long wait for voting rights for women and African-Americans was a blot on the American historical record and exceedingly damaging and painful to those it affected, neither issue ultimately destroyed the country.
While the Civil War still holds the record for the number of American deaths in a war, that number might end up looking small even as a percentage of the population (2 percent) compared to the number of Americans who will suffer and die in one way or another because of peak oil, climate change, and myriad other environmental threats that now beset us. The problem is that these Americans don't die from immediately discernible causes such as gunshot wounds. Rather their suffering will often only be indirectly and circuitously related to environmental threats and resource depletion. Therefore, it will be difficult for those hit hardest to coalesce into an effective voting block, especially since the fossil fuel and other lobbies have worked hard to confuse them about the resource and environmental issues of our age.
I recently watched the film The American President again. I was struck that this movie released in 1995 took climate change as a given, something the audience would readily accept as an important issue that needed to be addressed promptly. Here we are 16 years later, and only now is the U.S. Environmental Protection Agency (EPA) taking the first baby steps toward regulating greenhouse gas emissions pursuant to a Supreme Court ruling that affirmed its power to do so. Even so a new hoard of climate change deniers in Congress propose to stop the EPA from exercising that authority. (I doubt that they will be able to do so for now.)
In addition, Americans seem to have somehow accepted that oil at $90 a barrel means nothing in particular. This is true even though a decade ago oil at $30 or $40 a barrel was thought to be potent enough to crush the economy. Perhaps we have adapted to these higher prices. But there seems to be no urgency to move the economy away from oil dependence even though the warnings of peak oil activists have been largely borne out.
When will the American democratic machinery actually begin to react to the twin crises of oil depletion and climate change? When there is a calamity directly attributable to one or the other or both, that's when. There are two problems with this approach.
First, it may not be clear that some future crisis is peak oil- and/or climate change-induced. How much of the Hurricane Katrina disaster can be attributed to climate change? No one knows. The damage done to New Orleans is certainly very much what had been foretold by climate modelers as hurricanes intensify and sea levels rise. But even the destruction of a large American city failed to catalyze any action on climate change.
Record high oil prices certainly had something to do with the economic meltdown of 2008. After all, nearly every recession since 1970 has been preceded by a spike in oil prices. But the focus so far has all been on finance. And, little has been done to address the world's oil dependency since 2008.
Second, the damage inflicted on the country and the world by waiting for a discernible crisis clearly linked to peak oil and/or climate change will far exceed the costs of prevention. Imagine what the 2008 financial crisis might have looked like if the country had already largely electrified its transportation system using renewable energy sources. The crisis would certainly still have been bad, but not nearly so ominous and devastating as tight oil supplies made it. And those tight supplies continue to hamper recovery, threatening a second downturn.
Finally, it's worth noting that national emergencies tend to elicit temporary emergency measures that are rarely revoked, some of which may fly in the face of democratic processes. The attacks of September 11, 2001 have spawned a whole raft of such measures, many obviously illegal and unconstitutional, but which the public sustains because it does not understand the true nature of our predicament.
How many more ill-conceived and heavy-handed measures can we expect when the death toll is not 3,000, but 300,000 or 3,000,000--all because we and other nations failed to address adequately peak oil- and climate change-related problems before they became too big to ignore.
Those who block progress on these critical issues in Congress believe--just as those who held slaves and those who opposed women's suffrage--that what they are doing will not bring down the whole system around them. And, they tacitly believe that if they are in the wrong, there will be plenty of time to address peak oil and climate change through compromise in the future.
But, while slaves and women may be made to wait by the hand of oppression, nature recognizes no such limit. Our social divisions may be held at bay for long periods while we work out our differences. When it comes to energy depletion and climate change, it is nature that will prevail in enforcing its will on us without regard to legislative or lobbyist timetables.
Sunday, January 02, 2011
The electric car fetish
In lieu of my regular weekly post, I'm referring readers to my latest column on Scitizen entitled "The Electric Car Fetish." Here is the teaser:
Many automobile enthusiasts believe that the electric car is the wave of the future that will help save the environment while expanding the availability of private transport to the world's growing middle class. They are likely wrong on both counts....Read more.
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