Prediction is a difficult business at the best of times, but
the difficulties seem to change from one era to another. Just now, at least for
me, the biggest challenge is staying in front of the headlines. So far, the
crash of 2015 is running precisely to spec. Smaller
companies in the energy sector are being hammered by the plunging
price of oil, while the
banking industry insists that it’s not in trouble—those of my readers
who recall identical expressions of misplaced confidence on the part of bankers
in news stories just before the 2008 real estate crash will know just how
seriously to take such claims.
The shiny new distractions disguised as energy breakthroughs
I mentioned here two weeks ago have also started to show up. A glossy puff
piece touting oceanic
thermal energy conversion (OTEC), a white-elephant technology which
was tested back in the 1970s and shown to be hopelessly uneconomical, shared
space in the cornucopian end of the blogosphere over the last week with an
equally disingenuous puff piece touting yet another rehash of nuclear fission as the answer to
our energy woes. (Like every fission technology, of course, this one will be
safe, clean, and affordable until someone actually tries to build it.)
No doubt there will shortly be other promoters scrambling
for whatever government subsidies and private investment funds might be
available for whatever revolutionary new energy breakthrough (ahem) will take
the place of hydrofractured shales as America’s favorite reason to do nothing.
I admit to a certain feeling of disappointment, though, in the sheer lack of
imagination displayed so far in that competition. OTEC and molten-salt fission
reactors were already being lauded as America’s energy salvation back when I
was in high school: my junior year, I think it was, energy was the topic du
jour for the local high school debate league, and we discussed those
technologies at length. So did plenty of more qualified people, which is why
both of them—and quite a few other superficially plausible technologies—never
made it off the drawing board.
Something else came in for discussion that same year, and
it’s a story with more than a little relevance to the current situation. A team
from another school in the south Seattle suburbs had a brainstorm, did some
frantic research right before a big debate tournament, and showed up with data
claiming to prove that legions of squirrels running in squirrel cages, powering
little generators, could produce America’s electricity. Since no one else
happened to have thought of that gimmick, none of the other teams had evidence
to refute them, and they swept the tournament. By the next tournament, of
course, everyone else had crunched the numbers and proceeded to stomp the
squirrel promoters, but for years to come the phrase “squirrel case” saw use in
local debate circles as the standard term for a crackpot proposal backed with
seemingly plausible data.
The OTEC plants and molten-salt reactors currently being
hawked via the media are squirrel cases in exactly the same sense; they sound
plausible as long as you don’t actually crunch the numbers and see whether
they’re economically and thermodynamically viable. The same thing was true of
the fracking bubble that’s messily imploding around us right now, not to
mention the ethanol and biodiesel projects, the hydrogen economy, and the
various other glittery excuses that have occupied so much useless space in the
collective conversation of our time. So, it has to be said, do the more
enthusiastic claims being made for renewable energy just now.
Don’t get me wrong, I’m a great fan of renewable energy.
When extracting fossil carbon from the earth stops being economically viable—a
point that may arrive a good deal sooner than many people expect—renewables are
what we’ll have left, and the modest but real energy inputs that can be gotten
from renewable sources when they don’t receive energy subsidies from fossil
fuels could make things significantly better for our descendants. The fact
remains that in the absence of subsidies from fossil fuels, renewables won’t
support the absurdly extravagant energy consumption that props up what passes for
an ordinary middle class lifestyle in the industrial world these days.
That’s the pterodactyl in the ointment, the awkward detail
that most people even in the greenest of green circles don’t want to discuss.
Force the issue into a conversation, and one of the more common responses
you’ll get is the exasperated outburst “But there has to be something.”
Now of course this simply isn’t true; no law of nature, no special providence,
no parade of marching squirrels assures us that we can go ahead and use as much
energy as we want in the serene assurance that more will always be waiting for
us. It’s hard to think of a more absurd delusion, and the fact that a great
many people making such claims insist on their superior rationality and
pragmatism just adds icing to the cake.
Let’s go ahead and say it in so many words: there doesn’t
have to be a replacement for fossil fuels. In point of fact, there’s good
reason to think that no such replacement exists anywhere in the small corner of
the universe accessible to us, and once fossil fuels are gone, the rest of
human history will be spent in a world that doesn’t have the kind of lavish
energy resources we’re used to having. Concentrations of energy, like all other
natural resources, follow what’s known as the power law, the rule—applicable
across an astonishingly broad spectrum of phenomena—that whatever’s ten times
as concentrated is approximately ten times as rare. At the dawn of the
industrial age, the reserves of fossil fuel in the Earth’s crust were the richest
trove of stored energy on the planet, and of course fossil fuel extraction
focused on the richest and most easily accessible prizes first, just as quickly
as they could be found.
Those are gone now. Since 2005, when conventional petroleum
production peaked worldwide, the industrial world has been engaged in what
amounts to a frantic game of make-believe, pretending that scraping the bottom
of the oil barrel proves that the barrel is still full. Every half-baked scheme
for producing liquid fuels got flooded with as much cheap credit as its
promoters could squander. Some of those—biodiesel and cellulosic ethanol come
to mind—turned out to be money pits so abysmal that even a tide of freshly
printed money couldn’t do much more than gurgle on the way down; others—above
all, shale fracking and tar sand mining—were able to maintain a pretense of
profitability for a while, with government subsidies, junk bonds, loans from
clueless banks, and round after round of economic stimulus from central banks
over much of the world serving to prop up industries that, in the final
analysis, were never economically viable in the first place.
The collapse in the price of oil that began this June put
paid to that era of make-believe. The causes of the oil crash are complex, but
back of them all, I suggest, is a straightforward bit of economics that almost
everyone’s been trying to avoid for a decade now. To maintain economic production at any given
level, the global economy has to produce enough real wealth—not, please note,
enough money, but enough actual goods and services—to cover resource
extraction, the manufacture and replacement of the whole stock of nonfinancial
capital goods, and whatever level of economic waste is considered socially and
politically necessary. If the amount of real wealth needed to keep extracting
resources at a given rate goes up steeply, the rest of the economy won’t escape
the consequences: somewhere or other, something has to give.
The economic history of the last decade is precisely the
story of what gave in what order, or to put it another way, how the industrial
world threw everything in sight under the bus to keep liquid fuel production
around its 2005 peak. Infrastructure was abandoned to malign neglect, the last
of the industrial world’s factory jobs got offshored to Third World sweatshops,
standards of living for most people dropped steadily—well, you can fill in the
blanks as well as I can. Consumption remained relatively high only because
central banks flooded the global economy with limitless cheap credit, while the
US government filled the gap between soaring government expenditures and flat
or shrinking tax receipts by the simple equivalent of having the Fed print
enough money each month to cover the federal deficit. All these things were
justified by the presupposition that the global economy was just going through
a temporary rough patch, and normal growth would return any day now.
But normal growth has not returned. It’s not going to
return, either, because it was only “normal” in an era when cheap abundant
fossil fuels greased the wheels of every kind of economic activity. As I noted
in a
blog post here back in 2007, the inevitable consequence of soaring
oil prices is what economists call demand destruction: less formally, the
process by which people who can’t afford oil stop using it, bringing the price
back down. Since what’s driving the price of oil up isn’t merely market
factors, but the hard geological realities of depletion, not everyone who got
forced out of the market when the price was high can get back into it when the
price is low—gas at $2 a gallon doesn’t matter if your job scavenging abandoned
houses doesn’t pay enough for you to cover the costs of a car, and let’s not
even talk about how much longer the local government can afford to maintain
streets in driveable condition.
Demand destruction sounds very abstract. In practice,
though, it’s all too brutally concrete: a rising tide of job losses, business
failures, slumping standards of living, cutbacks to every kind of government
service at every level, and so on down the litany of decline that’s become part
of everyday life in the industrial world over the last decade—leaving aside,
that is, the privileged few who have been sheltered from those changes so far.
Unless I miss my guess, we’re going to see those same changes shift into
overdrive in the months and years ahead. The attempt to boost the world out of
its deepening slump by flooding the planet with cheap credit has failed; the
global economy is choking on a supersized meal of unpayable IOUs and failed
investments; stock markets and other venues for the exchange of paper wealth
are so thoroughly gimmicked that they’ve become completely detached from the
real economy of goods and services, and the real economy is headed south in a
hurry.
Those unwelcome realities are going to constrain any attempt
by the readers of this blog to follow up on the proposal I made in last week’s
post, and take constructive action in the face of the crisis that’s now upon
us. The energy situation here in the US could have been helped substantially if
conservation measures and homescale renewables had received any kind of
significant support from the oh-so-allegedly-green Democratic party, back when
it still had enough clout in Congress to matter; the economic situation would
be nowhere near as dire if governments and central banks had bitten the bullet
and dealt with the crisis of our time in 2008 or thereafter, rather than
papering things over with economic policies that assumed that enough money
could negate the laws of physics and geology. At this point, it’s much too late
for any sort of collective action on either of those fronts—and of course the
political will needed to do anything meaningful about either one went missing
in action at the end of the 1970s and hasn’t been seen since.
Thus all of us will have to cope with a world in which the
cost of energy suffers from drastic and economically devastating swings, and
the sort of localized infrastructure that could cushion the impact of those
swings wasn’t built in time. All of us will also have to cope with a global
economy in disarray, in which bank failures, currency crises, credit shortages,
and crisis measures imposed by government fiat will take the place of the
familiar workings of a market economy. Those are baked into the cake at this
point, and what individuals, families, and community groups will be able to do
in the years ahead will be constrained by the limits those transformations
impose.
Those of my readers who still have a steady income and a
home they expect to be able to keep would still be well advised to doublecheck
their insulation and weatherstripping, install solar water heating and other
homescale renewable energy technologies, and turn the back lawn into a
vegetable garden with room for a chicken coop, if by any chance they haven’t
taken these sensible steps already. A
great many of my readers don’t have such options, and at this point, it may be
a long time before such options are readily available again. This is crunch
time, folks; unless I’m very much mistaken, we’re on the brink of a historical
inflection point like the ones in 1789 and 1914, one of the watersheds of time
after which nothing will ever be the same again.
There’s still much that can be done in other spheres, and
I’ll be discussing some of those things in upcoming posts. In terms of energy
and the economy, though, I suspect that for a lot of us, the preparations we’re
going to be able to make are the ones we’ve already made, and a great many
people whose plans depend on having a stable income and its associated perks
and privileges may find themselves scrambling for options when the unraveling
of the economy leaves them without one. Those of my readers who have been
putting off the big changes that might make them more secure in hard times may
be facing the hard decision of making those changes now, in a hurry, or facing
the crisis of our age in the location and situation they’re in right now. Those
who’ve gone ahead and made the changes—well, you know as well as I do that it’s
time to review your plans, doublecheck the details, batten down the hatches and
get ready to weather the storm.
One of the entertainments to be expected as the year draws
on and the crisis bears down on us all, though, is a profusion of squirrel
cases of the sort discussed toward the beginning of this essay. It’s an
interesting regularity of history that the closer to disaster a society in
decline becomes, the more grandiose, triumphalist, and detached from the grubby
realities its fantasies generally get. I’m thinking here of the essay on
military affairs from the last years of the Roman world that’s crammed full of
hopelessly unworkable war machines, and of the final, gargantuan round of Mayan
pyramids built on the eve of the lowland classic collapse. The habit of
doubling down in the face of self-induced catastrophe seems to be deeply
engrained in the human psyche, and I don’t doubt for a moment that we’ll see
some world-class examples of the phenomenon in the years immediately ahead.
That said, the squirrel cases mentioned earlier—the OTEC and
molten-salt fission proposals—suffer from a disappointing lack of imagination.
If our society is going to indulge in delusional daydreams as it topples over
the edge of crisis, couldn’t we at least see some proposals that haven’t been
rehashed since I was in high school? I
can only think of one such daydream that has the hallucinatory quality our
current circumstances deserve; yes, that would be the proposal, being made
quite seriously in the future-oriented media just now, that we can solve all
our energy problems by mining helium-3 on the Moon and ship it to Earth to fuel
fusion power plants we have absolutely no idea how to build yet. As faith-based
cheerleading for vaporware, which is of course what those claims are, they set
a very high standard—but it’s a standard that will doubtless be reached and
exceeded in due time.
That said, I think the media may need some help launching
the march of the squirrels just mentioned, and the readers of this blog proved
a good long time ago that they have more than enough imagination to meet that
pressing need.
Therefore I’m delighted to announce a new contest here on
The Archdruid Report, the Great Squirrel Case Challenge of
2015. The goal is to come up with the most absurd new energy technology you can
think of, and write either the giddily dishonest corporate press release or the
absurdly sycophantic media article announcing it to the world. If you or a
friend can Photoshop an image or two of your proposed nonsolution to the
world’s energy needs, that’s all the better. Post your press release or media
article on your blog if you have one; if you don’t, you can get one for free
from Blogspot or
Wordpress. Post a link
to your piece in the comments section of this blog.
Entries must be posted here by February 28, 2012. Two winners—one picked by me, the other by
vote of the registered members of the Green Wizards forum—will
receive signed complimentary copies of my forthcoming book After
Progress. I can’t speak for the forum, which will doubtless have its
own criteria, but I’ll be looking for a winsome combination of sheer absurdity
with the sort of glossy corporate presentation that frames so many absurd
statements these days. (Hint: it’s not against the rules to imitate real press
releases and media articles.)
As for the wonderful new energy breakthrough you’ll be
lauding so uncritically, why, that’s up to you. Biodiesel plants using
investment bankers as their primary feedstock? A vast crank hooked to the Moon,
running a global system of belts and pulleys? An undertaking of great energy
profit, to misquite the famous ad from the South Sea Bubble, but no one to know
what it is? Let your imagination run wild; no matter how giddy you get, as the
failure of the fracking bubble becomes impossible to ignore, the mass media and
a great many of our fellow hominids are go much further along the track of the
marching squirrels than you will.
********************
