The Existentialist Cowboy: peak oil

Showing posts with label peak oil. Show all posts

Friday, June 13, 2008

Limits to Growth and the Inevitable End of Capitalism

by Len Hart, The Existentialist Cowboy

It's been over 35 years since the "Club of Rome" shook up the world with a computer model that predicted the collapse of life on Earth. A startling book, "The Limits to Growth" was not the work of cultists or fanatics. It was the work of known, respected scientists and computer experts.

Our conclusions are
If the present growth trends in world population, industrialization, pollution, food production, and resource depletion continue unchanged, the limits to growth on this planet will be reached sometime within the next one hundred years. The most probable result will be a rather sudden and uncontrollable decline in both population and industrial capacity.
It is possible to alter these growth trends and to establish a condition of ecological and economic stability that is sustainable far into the future. The state of global equilibrium could be designed so that the basic material needs of each person on earth are satisfied and each person has an equal opportunity to realize his individual human potential

--The Limits to Growth, Abstract established by Eduard Pestel. A Report to The Club of Rome (1972), Donella H. Meadows, Dennis l. Meadows, Jorgen Randers, William W. Behrens III

The issues raised are more relevant now than ever. 'Capitalism' is premised upon unlimited growth. It follows, therefore, that if we have come to the limits of growth we have come to the limits of capitalism. The absolute end of growth is the absolute end of capitalism. Reality mandates NON-IDEOLOGICAL thinking. Ideologues will never grasp that! They cannot 'handle the truth'.

All historical eras are shaped by the material and environmental realities of their time. Our own reflects the adjustments society and nature have made to accommodate the unprecedented 6.7 billion human beings now alive. And those changes are dramatic. The planet is warming dangerously as a result of the heat-trapping byproducts of our daily lives. Half of the primeval forests that existed at the end of the last ice age are gone. A mist of mercury and other toxic metals from coal combustion falls continuously on land and ocean, and to eat fish is to absorb these metals yourself. Half of us are now urban, rarely if ever meeting up with creatures wilder than crows, cockroaches, and, in some cities, packs of feral dogs....
What dominates our experience in the first decade of the third millennium are the technologies and institutions we have invented, disseminated, tinkered with, and improved over thousands of years to make human life on such scales possible. We've done well. Not only are more people alive than ever, but most of us live longer than our ancestors did. Quite a few of us spend our entire lives in comfort and with tools and toys that those ancestors never could have imagined.
--Population: What to Do When There Are Too Many of Us

It's impossible to imagine unfettered growth continuing forever on a planet of finite resources. Unless the human race escapes the earthly sphere, it may not mine the resources of the Solar System. It may not be simply assumed that such 'exploitation' will ever be practical or feasible economically. Exploration for the sake of exploration is costly. It will have to be shown that going 'where no man has gone before' is profitble before it becomes reality. Thus it is not only the 'limits to growth' that are at issue but the 'limits' to the very practicality of limiting human horizons to that which is profitable.

"In 1990 the nonrenewable resources remaining in the ground would have lasted 110 years at the 1990 consumption rates. No serious resource limits were in evidence. But by 2020 the remaining resources constituted only a 30-year supply. Why did this shortage arise so fast? Because exponential growth increases consumption and lowers resources. Between 1990 and 2020 population increases by 50% and industrial output grows by 85%. The nonrenewable resource use rate doubles. During the first two decades of the simulated twenty-first century, the rising population and industrial plant in Scenario 1 use as many nonrenewable resources as the global economy used in the entire century before. So many resources are used that much more capital and energy are required to find, extract, and refine what remains.
"As both food and nonrenewable resources become harder to obtain in this simulated world, capital is diverted to producing more of them. That leaves less output to be invested in basic capital growth.
"Finally investment cannot keep up with depreciation (this is physical investment and depreciation, not monetary). The economy cannot stop putting its capital into the agriculture and resource sectors; if it did the scarcity of food, materials, and fuels would restrict production still more. So the industrial capital plant begins to decline, taking with it the service and agricultural sectors, which have become dependent upon industrial inputs. For a short time the situation is especially serious, because the population keeps rising, due to the lags inherent in the age structure and in the process of social adjustment. Finally population too begins to decrease, as the death rate is driven upward by lack of food and health services."
ENVIRONMENTAL AND NATURAL RESOURCE ECONOMICS, Tom Tietenberg; Harper Collins [p.p.132-134]

It was not so long ago that the European exploration of the 'new world' was motivated by greed and empire. At the 'limits of growth', 'greed and empire', indeed 'capitalism' of any sort may be obsolete. Thus 'global warming' is denied in the face of overwhelming evidence that it is real. Any fact will likewise be denied if it should challenge unquestioned dogma, especially the dogma of capitalism or any economic system premised upon the infinite exploitation of finite resources.

The 'Club of Rome' addressed five basic elements of life on earth --population, food production, and our consumption of nonrenewable natural resources. All are increasing at exponential rates. It should be clear that not only are there limits to exponential growth, assumptions that such growth is infinitely sustainable are not supported by fact, theory or observation. I don't have an animated demonstration of exponential growth as it relates to 'population' growth specifically, but I do have the late physicist Phillip Morrison narrating a dramatic visual representation of the 'powers of ten', the effect of adding one to an exponent.

Tuesday, October 23, 2007

New Study: Peak Oil is Here, Experts Predict "extreme shortages, wars, and social breakdown"

The peak of world oil production, long predicted by Houston geo-physicist M. King Hubbert, is here. A recent study for the German-based Energy Watch Group states that oil production has peaked and predicts production continuing to fall by 50% by the year 2030. It's a graphic picture of 'extreme shortages" leading to wars and social breakdown.

The difficulties of expanding oil production can also be demonstrated by looking at the performance of the big international oil companies. In aggregate, they were not able to increase their production in the last ten years, despite an unprecedented rise in oil prices.
--Crude Oil: The Supply Outlock, Report to the Energy Watch Group, October 2007

In 1956, geophysicist, M. King Hubbert, working at the Shell research lab in Houston, TX predicted a peak in US oil production which he thought might happen in the 1970's. He might have been correct had not "secondary recovery" breathed new but temporary life in the old, often abandoned oil fields that I grew up with in West Texas.

The use of technology, as discussed, will not change the overall picture. The decline of the oil production in the USA since 1970 could not be avoided. And, just to give a recent example, also not the production decline in the North Sea since 2000. The use of “aggressive” production methods aimed at producing fields at a maximum rate possibly poses a problem regarding the future global oil supply. Once the inevitable decline sets in, decline rates probably will be much higher than without the prior use of these methods. The decline rates in offshore regions past peak set an ominous example.
--Crude Oil: The Supply Outlock, Report to the Energy Watch Group, October 2007

New discoveries are another matter. The age of discovery peaked some time ago --in the sixties. For his efforts, Hubbert was pilloried by oil experts and economists. Nevertheless, the 70's are remembered for an Arab Oil Embargo that, while it might not have been the end, made the point that the US had become an oil junkie nation. The US partnership with Arab oil producers was always a strange marriage of fundamentalist Christians from Texas and equally fundamentalist Muslims from the far flung deserts of the Middle East, primarily Saudi Arabia. It was and remains a recipe for terrorism.

Only oil already found is produced. It is just a matter of time that production from existing fields will peak and decline.

That time has come. The global availability of oil will decline hereafter, year after year, accompanied by declines in economic growth in every oil-based economy.

Since oil replaced whale blubber, "coal oil", camphene and other lubricants and fuels, economic growth has been accompanied, made possible in fact, by growing oil consumption. In recent years, the growth of oil supplies has slowed and, thus, production has now plateaued. It is no surprise that oil prices have reached historic highs. It's a matter of supply balanced against industrial demands for oil, consumer demands for transportation.

The German-based Energy Watch Group puts a date on global oil production peak: the year 2006, earlier than most experts had expected, perhaps, as well, the oil barons propping up the Bush administration. Based on the report, you can now expect oil production to fall at a rate of 7% a year. Concurrently, oil prices will set new records. Just recently, oil hit more than $90 a barrel.

What this means for individuals all over the world is a matter of bleak conjecture amid the need for "radically different" approaches. The report quotes British energy economist David Fleming:

Anticipated supply shortages could lead easily to disturbing scenes of mass unrest as witnessed in Burma this month. For government, industry and the wider public, just muddling through is not an option any more as this situation could spin out of control and turn into a complete meltdown of society.
--British Economist David Fleming in Crude Oil: The Supply Outlook, Report to the Energy Watch Group, October 2007

Americans are just barely aware that for a long time they paid about one-third the price Europeans paid for gasoline! But you have to credit the GOP with resourcefulness. The Bush administration delivered a message to the faithful: the war in Iraq would result in lower prices at the pump even as Bush cited every other reason for waging war on Iraq. To assert that oil was behind Bush's war of aggression was tantamount to treason. It was unpatriotic. It was enough to get you pilloried and ostracized.

For a while, America bought Bush's line. Dixie Chick CD's were banned, there was a flag on every SUV, the nation was out to kick Iraqi ass. Americans felt macho. It is not a period of time which Americans can look back on with pride. I am sure millions would prefer to forget having bought that SUV. Millions may have forgiven the Dixie Chicks for daring to speak the truth. I am surprised that Bill Maher didn't promise to kick their asses! Millions must admit now that they were dead wrong and will pay the price for greed and imperialist ambitions. After peak oil, there is no place to run. No place to hide. See also: Life After the Oil Crash

There is a bright side to oil's demise. Oil wars will have outlived their utility. Those wars that are waged may not be motorized, certainly not powered by fossil fuels. The long bow may make its biggest come back since Agincourt.

The "oil industry" may no longer dictate to governments. The industry may no longer demand and get an "oil depletion allowance", the sacred cow that most surely cost JFK his life and Jimmy Carter his legacy. It's easy to find in the 1970's the growing antipathy between big oil and the Democratic party. Carter had been advised to lift price caps but others in his administration nixed the idea. Clearly, American consumers were fed up with higher prices but absurdly long lines were the only alternative. In the wake of this report, consumers will never, ever again have it both ways!