There’s an interesting divergence between the extreme
complexity of the predicament that besets contemporary industrial civilization,
on the one hand, and the remarkable simplicity of the failures of reasoning
that have sent us hurtling face first into that predicament, on the other.
Nearly all of those failures share a common root, which is the inability—or at
least the unwillingness—of most people in the modern world to pay attention to
the natural cussedness of whole systems.
The example I have in mind just at the moment runs all
through one of the most lively nondebates in today’s media, which is about peak
oil. I call it a nondebate because those
who are trying to debate the issue—that is to say, those people who have
noticed the absurdity of trying to extract infinite amounts of petroleum from a
finite planet—are by and large shut out of the discussion. Those who hold the other view, for their
part, aren’t debating. With
embarrassingly few exceptions, instead, they’re merely
insisting at the top of their lungs that peak oil has been disproved
by some glossy combination of short term factors, speculative bubbles, and
overblown hype about the future, and can we please just get back to our
lifestyles of mindless consumption and waste?
Behind the cornucopian handwaving, though, is a real debate,
one that those of us who are aware of peak oil need to address. The issue at
the heart of the debate is the shape of the curve that will define future
petroleum production worldwide, and the reason that it needs to be addressed is
that so far, at least, that curve is not doing what most peak oil theories say
it should do.
The original version of the peak oil curve, of course, is
the one sketched out by M. King Hubbert in his famous 1956 paper. Here it is:
That’s the model that underlies most of today’s peak oil
analyses. It’s a good first
approximation of the way that oil production normally rises and falls over time
on any scale—a well, a field, an oil province, a country—provided that external
factors don’t interfere. The problem
here, of course, is that oil production doesn’t happen in a vacuum, and so
external factors always interfere. It
helps to rephrase that last point in systems terms: the production of oil takes
place within a whole system and is always influenced by the state of the
system. That’s why at best, the history of oil production from any given well,
field, oil province, or country only roughly approximates the ideal shape of
the Hubbert curve, and many real-world examples stray all over the map in their
wanderings from the zero point at the beginning to the one at the end.
It’s the failure to appreciate this point that has left a
good many peak oil analysts flailing when global petroleum production failed to
decline according to some predicted schedule. Anyone who’s been following the
peak oil blogosphere for more than a few years has gotten used to the annual
predictions—they tend to pop up like mushrooms every December—that the year
about to begin would finally see rates of petroleum production begin dropping
like the proverbial rock. Tolerably often, in fact, the same predictions get
recycled from one year to the next, with no more attention to the lessons of
past failure than you’ll find in one of Harold Camping’s Rapture prophecies. Even among those who don’t go that far out on
a limb, the notion that global production of petroleum ought to start dropping
steeply sometime soon is all but hardwired into the peak oil scene.
The peak of global conventional petroleum production arrived,
as I hope most of my readers are aware by now, in 2005. The seven years since
then have given us a first glimpse at the far end of Hubbert’s curve, and so
far, it’s not following the model. Conventional petroleum production has
declined, and the price of oil has wobbled unsteadily up to levels that
mainstream analysts considered impossible a decade ago; that much of the peak
oil prophecy has been confirmed by events.
Overall production of liquid fuels, though, has remained steady and even
risen slightly, as high prices have made it profitable for unconventional
petroleum and a range of petroleum substitutes—tar sand extractives, natural
gas liquids, biodiesel, ethanol, and the like—to be poured into the world’s
fuel tanks.
It’s only fair to note that this was among the predictions
made by critics of peak oil theory back when that was still a subject of
debate. The standard argument economists used to dismiss the threat of peak oil
was precisely that rising prices would make other energy sources economical,
following the normal workings of supply and demand. For all its flaws—and I plan on dissecting a
few of those shortly—that prediction was rooted in the behavior of whole
systems.
The law of supply and demand, in fact, is one manifestation
of a basic principle of systems theory, a principle pervasive and inescapable
enough that it’s not unreasonable to call it a law. The law of equilibrium, as we might as well
call it, states that any attempt to change the state of a whole system will set
in motion coutervailing processes that tend to restore the system to its
original state. Those processes will not
necessarily succeed; they may fail, and they may also trigger changes of their
own that push the system in unpredictable directions; still, such processes
always emerge, and if you ignore them, it’s a fairly safe bet that they’re
going to blindside you.
The law of equilibrium is what’s behind so many of the
failures of technological progress in recent years. Decide that you can just go ahead and annihilate
pathogenic microbes en masse with antibiotics, for example, and the
countervailing processes of the planet’s microbial ecology are going to shift
into high gear, churning out genes for antibiotic resistance that spread from
one bacterial species to another and render antibiotics less effective with
every year that passes. The same is true
of genetically engineered plants—one of the ugly little secrets of the GMO
industry is that one insect species after another is doing exactly what
Darwinian theory says it should, evolving right around the biotoxins released
by Monsanto’s supposedly pestproof Frankencrops, and chowing down on the
otherwise unprotected buffet spread for them by unsuspecting farmers—and of any
number of equally clueless tinkerings with natural processes that are blowing
up in humanity’s collective face just now.
The global industrial economy is also a whole system, and
though it’s countless orders of magnitude less complex and sophisticated than
the biosphere, it still responds to changing conditions with its own
countervailing processes. That’s what’s
been happening with global liquid fuels production. As the rate of conventional petroleum
production peaked and began its decline, the countervailing processes took the
form of rising prices, which made more expensive sources of liquid fuels
profitable, and kept total production of liquid fuels not far from where it was
when conventional oil peaked in 2005. The wild swings in price since then have
provided the thermostat for this homeostatic process, balancing the ragged
decline of conventional petroleum and the equally ragged expansion of
substitute fuels by influencing the profitability of any given fuel over time.
In its own way, it’s an elegant mechanism, however much turmoil and suffering
it happens to generate in the real world.
Does this mean that peak oil is no longer an issue? Not by a long shot, because the economic
shifts necessary to bring substitute fuels into the fuel supply don’t exist in
a vacuum, either. They also put pressure on the global industrial economy, and
generate countervailing processes of their own. That’s the detail that both
sides of the peak oil nondebate have by and large been missing, even as those
countervailing processes have been whipsawing the global economy and driving
changes that seemed implausible even to most peak oil analysts just a short
time ago.
The point that has to be grasped in order to understand
these broader effects is that the higher price of substitute fuels isn’t
arbitrary. Tar sand extractives, for
example, cost more to produce than light sweet crude because pressure-washing
tar out of tar sands and converting it to a rough equivalent of crude oil takes
much more in the way of energy, resources, and labor than it takes to drill for
the same amount of conventional oil. Each year, therefore, as more of the
liquid fuels supply is made up by tar sand extractives and other substitute
fuels, larger fractions of the annual supply of energy, raw materials, and
labor have to be devoted to the process of bringing liquid fuels to market,
leaving a smaller portion of each of these things to be divided up among all
other economic sectors.
Some of the effects of this process are obvious enough—for
example, the spikes in food prices we’ve been having since 2005, as the
increasing use of ethanol and biodiesel as liquid fuels means that grains and
vegetable oils are being diverted from the food supply for use as feedstocks
for fuel. Many others are less obvious—for
example, as energy prices have risen and energy companies have become Wall
Street favorites, many billions of dollars that might otherwise have become
capital for other industries have flowed into the energy sector instead. Each of these effects, however, represents a
drain on other sectors of the economy, and thus a force for change that sets
countervailing processes into motion.
Those processes are a good deal more complex than the ones
we’ve traced so far, since they involve competition for capital and other
resources among different sectors of the economy, a struggle in which political
and cultural factors play at least as large a role as economics. Still, one result can be traced in the
unexpected decline in petroleum consumption that has taken place in the United
States since 2008, and that precisely parallels the similar decline that
happened between 1975 and 1985 in response to a similar rise in oil
prices. To describe this process as
demand destruction is an oversimplification; a dizzyingly complex array of
factors, ranging from the TSA’s officially sanctioned habit of sexually
molesting airline passengers, on the one hand, to shifts in teen fashion that
are making driving uncool for the first time in a century on the other, have
fed into the decline in oil consumption; still, the thing is happening, and
it’s probably fair to say that the increasing impoverishment of most Americans
is playing a very large role in it.
Thus the simple model of peak oil that dates from Hubbert’s
time badly needs updating. Ironically, The Limits to
Growth—the most accurate and thus, inevitably, the most maligned of
the various guides to our unwelcome future offered up so far—provided the
necessary insight decades ago. By the simple expedient of lumping resources,
industrial production, and other primary factors into a single variable each,
the Limits to Growth team avoided the fixation on detail
that so often blinds people to systems behavior on the broad scale. Within the
simplified model that resulted, it became obvious that limitless growth on a
finite planet engenders countervailing processes that tend to restore the
original state of the system. It became just as obvious that the most important
of those processes was the simple fact that in any environment with finite
resources and a finite capacity to absorb pollution, the costs of growth would
eventually rise faster than the benefits, and force the global economy to its
knees.
That’s what’s happening now.
What makes that hard to see at first glance is that the costs of growth
are popping up in unexpected places; put too much stress on a chain and it’ll
break, but the link that breaks isn’t necessarily the one closest to the source
of stress. The economies of the world’s
industrial nations are utterly dependent on a steady supply of liquid fuels,
and so a steady supply of liquid fuels they will have, even if every other
sector of the economy has to be dumped into the hopper in order to keep the
fuel flowing. As every other sector of the economy is dumped into that hopper,
in turn, the demand for liquid fuels goes down, because when people who used to
be employed by the rest of the economy can no longer afford to spend spring
break in Mazatlan, or buy goods that have to be shipped halfway around the
planet, or put gas in their cars, their share of petroleum consumption goes
unclaimed.
This process is, among other things, one of the main forces
behind the disappearance of "bankable projects" discussed in last
week’s post. The reallocation of ever
larger fractions of capital, resources, and labor to the production of liquid
fuels represents a subtle drain on most other fields of economic endeavor,
driving costs up and profits down across the board. The one exception is the
financial sector, since increasing the amount of paper value produced by purely
financial transactions involves no additional capital, resources, and labor—a
derivative worth ten million dollars costs no more to produce, in terms of real
inputs, than one worth ten thousand, or for that matter ten cents. Thus financial
transactions increasingly become the only reliable source of profit in an
otherwise faltering economy, and the explosive expansion of abstract paper
wealth masks the contraction of real wealth.
When systems theorists explain that the behavior of whole
systems can be counterintuitive, this is the sort of thing they have in mind.
It’s quite possible that as we move further past the peak of conventional
petroleum production, the consumption of petroleum products will continue to
decline, so that when the ability to produce substitute fuels declines as
well—as of course it will—the impact of the latter decline will be hard to
trace. Ever more elaborate towers of hallucinatory wealth, ably assisted by
reams of doctored government statistics, will project the illusion of a
thriving economy onto a society in freefall; the stock market will wobble
around its current level for a long time to come, booming and crashing on
occasion as bubbles come and go; meanwhile a growing fraction of the population
will be forced to drop out of the official economy altogether, and be left to
scrape together whatever sort of living they can in some updated equivalent of
the Hoovervilles and tarpaper shacks of the 1930s.
No doubt the glossy magazines that make their money by marketing
a rose-colored image of the future to today’s privileged classes will hail
declines in petroleum demand as a sign that some golden age of green technology
is at hand, and trot out a flurry of anecdotes to prove it; all they’ll have to
do is ignore the hard figures showing that demand for renewable-energy systems
is dropping too, as people who have no money find solar panels as unaffordable
as barrels of oil. For that matter, the people who are insisting in today’s
media that the United States will achieve energy independence by 2050 may just
turn out to be right; it’s just that this will happen because the US will have
devolved into a bankrupt Third World nation in which the vast majority of the
population lives in abject poverty and petroleum consumption has dropped to a
sixth or less of its current level.
That’s not the future that comes out of a simplistic reading
of Hubbert’s curve—though it’s only fair to mention that it’s the future that
some of us who used to be on the fringes of the peak oil scene have been
discussing all along. Still, it looks increasingly likely that this is the sort
of future we’re going to get, and it’s certainly the one that current trends
appear to be creating around us right now. No doubt cornucopians in 2050 will
be insisting that everything is actually just fine, the drastic impoverishment
of most of the American people is just the sort of healthy readjustment a
capitalist economy needs from time to time, and we’ll be going back to the Moon
any day now, just as soon as we finish reopening the Erie Canal to mule-drawn
barge traffic so that grain can get from the Midwest to the slowly drowning
cities of the east coast. With any luck, though, the peak oil blogosphere—it’ll
have morphed into printed newsletters by then, granted—will have long since
noticed that whole system processes do in fact shape the way that the twilight
of the petroleum age is unfolding. How
that is likely to affect the twilight of American empire will be central to the
posts of the next several months.
****************
End of the World of the Week #28
It’s a repeated source of embarrassment for scientists of
all kinds that the culture in which they live is so much less comfortable with
hypothetical statements and tentative suggestions than the internal subculture
of science tends to be. Witness the
embarrassment of the solar astronomers and atmospheric physicists who
suggested, back in the late 1990s, that the upcoming solar cycle 23 might see
some disruption of Earth-based electronics by the electromagnetic effects of
solar flares.
It was a reasonable supposition, since strong solar flares
have a solid track record of frying sensitive electronic systems and disabling
satellites. Still, it didn’t take long before their tentative suggestion was
inflated into apocalyptic prophecy. Web
pages screamed that before cycle 23 was over, an immense solar flare would
inevitably bring down the electrical grid worldwide, turning computers and
other electronic devices into useless silicon fritters, and plunging the world
into an instant dark age complete with roving hordes of starving
survivors. The popular online sport of
apocalypse machismo—"I can imagine a cataclysm more horrifying than you
can!"—went into overdrive on this one, spawning no end of highly colored
accounts of just how everybody else was going to die.
As it happened, cycle 23 did see a couple of spectacular
solar flares, including two of the largest ever measured, but none of the big
ones happened to be pointed anywhere near Earth. (If the Earth’s orbit was as
big around as a football stadium, remember, the Sun would be a beach ball
sitting on the 50 yard line and the Earth would be a marble perched somewhere
on the last row of bleachers.) When solar cycle 23 came to an end in December
2008, as a result, the Sun shone down on a world not noticeably more devastated
than it had been when the cycle began.
