Well, we definitely seem to have passed a threshold of sorts. For most of the sixteen years since I started blogging, one of the things I had to point out constantly to my readers was the slow pace of historical change. Whenever I posted an essay on the twilight of industrial society, I could count on fielding at least one comment from a reader who expected the entire modern world to crash and burn in the next few months. I’d have to patiently remind them that Rome wasn’t sacked in a day—that it takes years of breathtakingly moronic decisions motivated by mindless greed, vicious partisan hatred, blind ideological dogmatism, and a total unwillingness to think about the long-term consequences of short-term decisions, to bring a civilization down.
Now of course all through the years while I was telling people this, decisions of the kind I’ve just described, guided by motives of the sort I’ve just characterized, were standard operating procedure throughout the industrial world. Those proceeded to have their usual effect. I still don’t expect modern civilization to crash to ruin in the next few months, but it’s reached the point that I no longer have to tell people that the Long Descent won’t show up as soon as they think. No, at this point it’s my ironic duty to suggest that they make whatever preparations they have in mind sooner rather than later, because the world shows no signs of waiting for them.
As I write this, the most obvious set of problems has to do with the economies of the United States and its client states. Those of my readers who follow financial media already know that signs of economic trouble are elbowing one another out of the way to get to the front pages. The cryptocurrency market has racked up gargantuan losses; the stocks listed on NASDAQ have shed something like $7 trillion in value so far this year; the massively overinflated US real estate market has sprung a leak and is showing signs of deflation, and layoffs are spreading through the economy as corporations shed jobs at a rapid pace. It’s shaping up to be a real mess.
Part of this is the ordinary rhythm of idiotic excess followed by equally idiotic panic—up with the rocket and down with the stick—that sets the beat of economic life in a neoliberal economy. That said, I think there may be more going on here than that. I don’t know how many of my readers are aware that the simmering hostility between the US government and the oil-producing nations of OPEC is coming to a brisk boil just now. The steady rise in oil prices over the last year or so has caused stark panic in the White House, since increased gas prices correlate rather nicely with the fading of Joe Biden’s last dim hopes of reelection. Repeated attempts to pressure the OPEC nations to increase oil production and drive prices down have gotten no response, not least because the Biden administration isn’t offering anything in return, and has been noticeably hostile to the interests of several leading OPEC nations.
Cue the gibbering inmates of the US Congress to draft a bill that would make it possible for plaintiffs to sue OPEC nations for price fixing in American courts. Normally there’s a thing called sovereign immunity—in plain English, the governments of other nations can’t be held accountable to US laws—but this bill, the cutely named NOPEC Act, would strip OPEC nations of sovereign immunity in US courts for any decision that some US lawyer could label price-fixing. The target of this project, of course, is the gargantuan amount of money that OPEC nations have invested in assets in the United States and its client states, which could be seized to pay off judgments under the new law. Since governments in the US and Europe have engaged in exactly that sort of piracy toward Russian assets this year, this isn’t an empty threat.
So, dear reader, if you were a high-ranking official in a petroleum-producing country, and you picked up the newspaper and read about the NOPEC Act, what would you do?
That’s right. You would start quietly cashing out of your investments in the United States and its client states, so those investments wouldn’t be available for US courts to seize. Those asset sales would of course result in a general softening of market conditions, and might well trigger a crash in asset prices, but at least you’d get some of your money back, you know. Meanwhile there are countries outside the US sphere of influence that would be happy to provide a home for your investment money—Russia, China, and India come to mind, just for starters—and if the US and its client states get obstreperous, why, you can always do what your grandfather did in 1973, refuse to sell petroleum to the American market, and watch the price of oil soar in response.
I don’t know for a fact that this is what’s happening to asset markets in the US and Europe. Nor do I know for a fact that this is part of what’s behind the remarkable robustness of the Russian economy in the face of US sanctions: that would make perfect sense if there was a covert flow of OPEC wealth into Russian banks and securities, but doubtless there are other factors involved. If the OPEC nations have the brains the gods gave geese, they’re using plenty of financial shenanigans to camouflage their reallocation of assets as long as possible, and so it’ll be very difficult to tell what’s happening until a lot of money is gone. It could just be that the markets are insanely overinflated and what went up is now on its way back down. It could be that China is doing the same sort of asset shuffle to free up funds to deal with its imploding real estate sector and the long term costs of its Covid policies. It could be that something completely different is going on.
Still, it’s pretty clear that it has never occurred to anybody in the US Congress that OPEC nations might, you know, have their own interests in mind, and might respond to a hamfisted attempt at bullying by doing something other than groveling at Uncle Sam’s feet. I’ve noted before that the elite classes in the US and Europe today seem incapable of understanding that the rest of the human race doesn’t consist of little automatons that will always and only do as they’re told. That failure of basic reasoning is fairly common in senile aristocracies, and it very often plays a large and colorful role in the collapse of empires. It may well play such a role in the collapse of ours.
One way or another, of course, sky-high energy prices are an important element in the fix we’re in, and that brings me circling back around to one of the themes I sketched out last week—the complex twilight of fossil fuel resources summed up in the phrase “peak oil.”
Let’s start with the basics. Petroleum is a nonrenewable resource. Yes, I’m aware that there’s a cornucopian fringe out there insisting, under the label “abiotic oil,” that the Earth is full of oil and any oil field drained of oil will promptly be replenished from further underground. Do you recall the 2008 oil spike, when old oil fields in Pennsylvania, California, and a hundred other places that had been capped decades ago were opened up again, since crude oil was worth upwards of $100 a barrel? Not one of those fields had refilled, as the abiotic oil theory predicted. There’s a good simple word for a theory that makes predictions that don’t pan out. That word is “wrong.”
Petroleum is a nonrenewable resource. It provides around 40% of all energy used by human beings on this planet, including nearly all the energy for transportation. (Electric cars and trains have a negligible share worldwide.) It’s fairly rare in the Earth’s crust, all things considered, and it’s been extracted at a breakneck pace for more than a century. The rate of new discoveries has been far behind the rate of annual extraction for decades. Do you see the problem there?
The obvious solution, if you happen to want to sustain an industrial society of the current sort, is to find some other energy source to replace petroleum. The other fossil fuels won’t cut it—they’re also being used at breakneck rates, and facing the same depletion problems as oil. More coal is being mined and burnt today, for example, than at the peak of the coal age a century and a quarter ago, and most of the coal that’s being burnt now is low-quality brown coal because all the good stuff got shoveled up and burnt decades ago.
That means that some new energy resource has to be discovered and deployed in a hurry. That’s why scientists have been hard at work on that project for well over fifty years now, and the one minor difficulty is that they haven’t found one yet. More to the point, they’ve found any number of supposed replacements for petroleum, which have soaked up a great many investment dollars and then failed to perform as advertised. There are two primary reasons why all attempts at a substitute for petroleum have failed: scale and net energy.
Let’s start with issues of scale. To cite one example that took up a great deal of attention and investment money back in the day, you can grow corn, ferment it into ethanol—that’s spelled “corn likker” in the flyover states, and it’s great stuff if you don’t mind the hangover—and burn that in an engine along with, or instead of, gasoline. Back when I was first blogging, there were ethanol trolls all over the peak oil end of the internet, loudly proclaiming that all us peak oil bloggers were as wrong as wrong could be, because corn-based ethanol would make up the shortfall. The one small problem with this analysis is a matter of scale. If you planted every acre of farmland in the United States with corn, leaving no room for food or anything else, and turn it into fuel ethanol, you’d replace only a small fraction of the gasoline we use every single year. (And that doesn’t even begin to deal with the need for diesel fuel, jet fuel, or any of the other fuels made from petroleum.)
Similar difficulties show up with many other proposed replacements for any of the fossil fuels, because fossil fuels are far more concentrated than any other energy resource on this planet. You get petroleum when huge accumulations of dead sea life in anoxic conditions get squeezed and roasted deep inside the earth for millions of years, a process that soaks up vast amounts of energy that no human being has to pay for. That’s why to match the energy in a single gallon of gasoline, for example, you need around one ton of fully charged auto batteries. That’s one of the problems with renewables, by the way: they depend on the diffuse and intermittent flows of energy we get from the sun right now, instead of the highly concentrated resources the earth has stashed away in her sediments over the last half billion years or so.
Issues of scale, though, are only one set of challenges that have to be faced to replace petroleum. The second is net energy. It takes energy to extract, process, and transport energy, and to build the devices that use energy. Take the total energy in a resource and subtract the energy that has to be used for all these purposes, and what’s left is net energy. It’s exactly the same, conceptually, as net income: take your gross income and subtract your expenses, and you’ve got your net, which is the amount of money you can actually do something with.
You can have a huge gross income and still go broke. All that’s necessary is that your expenses have to be just a little bit larger than your income. (Watch the tech industry over the next few years if you want to see that assertion proved in a very colorful manner.) In exactly the same way, your gross energy doesn’t matter two farts in a Cat-5 hurricane if the energy inputs you need are too high. The poster child here is algal biodiesel, another supposed substitute for petroleum that boomed and went bust a decade ago. On paper, it looks great: you farm vast amounts of oil-rich pond scum, process it into diesel, and away you go. In practice, the net energy ranges well into negative numbers—in other words, it makes exactly as much sense as trying to get a profit by buying dollar bills for $1.50 each.
Net energy is very difficult to calculate. Fortunately there’s a convenient proxy, which is price. The more expensive an energy resource turns out to be in practice, the worse the net energy turns out to be. Nuclear power is a great example here. Yes, I know there’s always some exciting new nuclear technology that’s sure to change that, and provide abundant, cheap electrity into the far future. There’s always one of those on the drawing boards, or more than one, and it’s funny how reliably it turns out that every nuclear technology is affordable until it gets built. Then it turns out to be another gargantuan white elephant that can only keep going with huge and ongoing government subsidies.
The secret is that the net energy of nuclear power is very, very low. You have to process vast amounts of raw material to produce the fuel rods, and that takes energy; you have to build and maintain a huge and complex power plant, and that takes energy; you have to deal with the wastes, and that takes energy, and so on through a very long list of energy sinks. That’s another problem with renewables, by the way. Most renewable technologies yield very modest net energy, because so much energy has to go into gathering and concentrating the diffuse energy flows that power renewables. That’s why they require the same sort of constant subsidies as nuclear plants.
Keep track of the economic dimension, in fact, and you can filter out most of the nonsolutions to the accelerating depletion of conventional petroleum. Keeping track of the economic dimension, in turn, is something that cheerleaders for purported replacements for petroleum inevitably will not do. They love to talk about technical feasibility, and of course it’s quite true that you can come up with any number of technically feasible gimmicks to replace petroleum. The problem is that none of them can pay for themselves.
It’s usually about this point in a discussion of peak oil that somebody gets angry and starts yelling, “Look, there has to be some replacement for petroleum!” That’s an understandable belief. Unfortunately, it also happens to be dead wrong. No law of nature requires another cheap, abundant, highly concentrated energy source to pop up in time to save us from the consequences of wasting the one we had. Most people figure out fairly early in life that if you spend your entire paycheck on booze, no good fairy is going to come up with the rent money in time to keep your rump from landing on the street. The same rule applies to energy, but for complex reasons rooted in our collective psychology, this isn’t something that most people want to hear.
That brings us around to our current situation. Despite the crumbling economy, petroleum is running well above $100 a barrel these days, because—ahem—we’re running out: not all at once, but slowly, one dry oil well at a time. The fracking frenzy that briefly boosted US oil production over the last decade is sputtering, because oil is a nonrenewable resource, and even if you don’t have to worry about the bottom line because the Fed is printing money hand over fist and funneling it to you, eventually you run out of shale deposits that can be fracked.
Again, this doesn’t mean that we’re going to run out suddenly. It means that oil production firms have to run faster and faster, invest more and more money and resources, and struggle harder and harder against geological reality to keep the market supplied with oil—and this means that an ever-growing share of economic output has to be funneled into the energy industry, leaving an ever-shrinking share for everything else.
That’s the future we’ve backed ourselves into. We’re running on empty, and the last gas station is somewhere back there in the blue distance.
I mentioned two weeks ago when I announced this sequence of posts that I was going to talk about what individuals, families, and community groups could do about all this. Fortunately, what to do about an energy crisis was explored in great detail half a century ago, during the oil crises of the 1970s, and before then in the severe shortages during the two world wars. The difficulty we face is very simple. Energy—all forms of it—will become much more expensive than you expect, and everything made with energy—in other words, most goods and services, across the board—will also become much more expensive than you expect. Meanwhile jobs will become scarcer and economies will contract as energy costs bite deeper into every form of economic activity. That’s called stagflation: stagnation plus inflation. It’s what happens when the price of energy spikes, and it’s happening now.
So you have two straightforward tasks ahead of you, dear reader. The first is to use much less energy than you do right now. The second is to cut your expenditures on everything you can, to free up the money you’ll need to deal with soaring energy costs and price inflation generally.
Using less energy is easy if you’re American. It’s easy because we waste energy so profligately. Go here and you can download a set of basic energy conservation papers that were drawn up during the oil crisis of the 1970s. (They’re the lessons I studied when I was getting my Master Conservers certificate in the very early 1980s. Yes, they had Master Conserver programs back then.) If you rent, you can use weatherstripping and cheap window insulation; if you own your own home, there’s much more that you can do. You can change your habits to cut energy costs, and you can also pick up the grand old 1970s habit of doing more for yourself instead of buying things, since here again energy goes into most goods and services, and prices will rise accordingly.
If you have the chance to pick up some do-it-yourself books from back in the day, you’ll be better off still. The self-sufficiency books listed for sale in old issues of The Whole Earth Catalog, and other resources of the same era? Worth their weight in gold. It also helps to know people who can teach you how to do things for yourself, and to put plenty of time and effort as soon as possible into applying that fine old country saying, “Use it up, wear it out, make it do, or do without.” People thought they could afford to neglect that during the heyday of the fossil fuel era. Now we get to learn better.
Oh, and make sure to have backups for anything that depends on energy you don’t produce yourself. With its usual monumental stupidity, the US Congress is already talking about price controls, and those are among the best ways known to our species to turn price hikes into actual shortages. (The US isn’t self-sufficient in energy resources, not by a long shot, and nobody will be in a hurry to sell oil to us at artificially low prices, you know.) If price controls go through, expect gas stations to run out of fuel, diesel shortages to play merry hob with product delivery to stores, and rolling blackouts if the price controls get applied to natural gas. Fun times!
One more detail. This isn’t going to last forever; energy crises never do. My working guess at this point is that the US and Europe are facing a decade or so of economic crisis and soaring energy costs before demand destruction, sharp increases in energy efficiency, and a modest helping of new technologies bring renewed stability in energy markets. Mind you, by then we’ll have other things to worry about. I’ll discuss those in the posts ahead.