Sunday, August 22, 2010

Points of departure

Figure. Optical illusion of simultaneous expansion and contraction.

The Swedish blogger Ylven recently wrote a text [in Swedish] about how clueless people are when she tries to explain what peak oil is, even though she leaves plenty of (grim) hints about what it will mean. Either people do not understand the problem at all, or they understand the problem but believe that "everything will be fine". Maybe they have eaten too many Chinese fortune cookies, because, as you may know, such cookies contain only positive messages. When I had some guests over earlier this spring, I told my guests that on my fortune cookie the surprising message was "Oil will peak and you will starve" (everyone in this particular company understood the joke). Looking at my joke in a different light, you may find the seeds of both a public educational campaign as well as a business idea which I gladly share with you - "Peak Fortune Cookies" - with messages such as "Oil will peak and your car will run out of gas", "Oil will peak and you will eat turnip and bark bread", "Oil will peak and you will lose your job", or why not "Oil will peak and you will be drafted to fight a resource war"?

I’m a university teacher and by now I have been able to sneak in some peak oil information as background to other things I talk about a couple of times. The reaction I get from the audience is usually the same as Ylven gets even though I have a "captive audience" who can not immediately stand up and leave the room. Based on a couple of these experiences, I have had to think long and hard about some of the starting points I have personally come to take for granted, and I now emphasize these in my talks in order to increase the likelihood of my point to be understood by the audience. These starting points are assumptions that I have incorporated into my own world view and also arguments that might persuade others. These assumptions are interrelated and they form a logical chain that is easy to follow but hard(er) to refute:

1 Peak oil is now. And if not exactly now, then at least very soon. But already today’s "normal" oil price is many times higher than the price a decade ago, and no one believes that the long-term trend will be broken and that the price will go down in the future. It is difficult today to imagine how we could increase oil production significantly over a longer period of time. Instead, we need to run faster and faster and chase harder- and-harder-to-find oil just to manage to remain in the same place (see the red queen). This claim can be backed up by tables and graphs.

2 Peak Oil is a predicament, not a problem. A problem can be solved, but a predicament has to be handled or countered by adopting better or worse strategies. A predicament can not once and for all be "solved" or "overcome". The fact that we will all die one day is an example of a predicament. You may extend or shorten your life (for example by eating healthy food and exercising or by smoking and taking risks in traffic), but in the end it makes no difference, for you will in any case die. You can not cheat the Reaper; he is standing somewhere, waiting to take you into his arms for the final embrace.

3 Peak oil = peak energy. Oil accounts for around 37% of global energy use and up to 95% of all transport depends on oil. When oil becomes (more) expensive it will become expensive to transport goods (globalization stops) and to transport people (travelling will become prohibitively expensive). No single type of energy and no combination of energy sources may cover up for the steady shortfall in oil production by a few percent per year. In addition, we have already picked "the lowest hanging fruit" also with regards to coal and gas, which together with oil constitute 85% of the global energy production. Furthermore and as the icing on the cake, it is said that there are some problems nowadays having to do with the climate as a result of us burning up all those non-renewable fossil fuels...

4 Peak Oil = Peak Economy. There is a strong correlation between energy consumption and economic growth. We can for sure hope for "decoupling" - to be able to have continued economic growth while maintaining or even reducing energy use - but no country has ever managed this Indian rope trick and that does not bode well. Maybe we are high on energy, listening a little to closely to the voice of intoxication, but it will unfortunately all too soon be replaced by a massive hangover.

The second point (above) is by the way an argument with unmatched know-it-all qualities. If you first explain what a predicament is by using death as an example, you may then easily move on and explain why Peak Gold (which occurred a decade ago) is a good example of a finite-resource predicament. As for the mining of gold, for each year you get less gold for the money (the investments) - from 12 grams of gold per metric ton of ore in 1950 to 3 grams of gold today. Gold is a good example of why the production of all non-renewable resources will always ultimately reach a peak and then begin to fall and/or why we have to run faster for each year to remain on the same spot (mine more ore to get the same amount of gold).

With this groundwork in place, any further objections to any of the arguments above may be rejected with a claim that the person objecting is suffering from denial and is trying to convert a Peak Oil predicament into a problem that may be fairly easily solved (with new technologies - electric vehicles, new energy sources - wind or nuclear power, redressing economic inequalities in the world or in a specific country, by mobilizing unparallelled political will, global agreements or some other miracle cure).

In any case, at around this point I usually stop bringing forward relatively cocksure claims (which if necessary may be backed up), and instead take a more humble stance. This is also where it starts to get really interesting when I further claim that:

5 The future will bring "disruptive" changes. (From Peak Fortune Cookies: "Oil will peak and you will face disruptive changes"). We will face many and big changes in the coming decades, but when haven't we in the previous decades? But the big point here is that the "direction" of these changes will be changed: Peak oil implies Big Changes. But not changes within the framework of the current system, but changes of the framework itself. Obama trump card was "change" ("Change We Can Believe In"). In the election campaign, “change” was a call full of promises, something to hope for and believe in. Unfortunately, the changes that await us will hardly be welcomed by anyone.

I imagine that somewhere during the coming decade (2010-2020), or at the latest in the decade thereafter, we will experience a shift from an expanding system (increasing amount of energy, more natural resources being exploited, increasing global population, more wealth, better welfare, people's expectations about the future being bright and so on) to a system in a state of contraction and shrinking.

We have lived with an expanding system for a few hundred years and all our economic and political structures (as well as our expectations for the future) are therefore adapted to a world of More, Better, Bigger, Faster, More Advanced, Newer, Cheaper and Two-For-The-Price-Of-One. The political challenges of distributing the material surplus of a growing cake is of course a breeze compared to the political challenges of distributing the cutbacks and austerity measures of a shrinking cake. This spring's riots in Greece has given us a foretaste of the problems we are facing. The change from the former (an expanding system) to the latter (a contracting system) will thus be "difficult". As you understand, this is a gross understatement, since (all) our current structures are ill-suited to manage this new reality.

If I allow myself to be a little bit pessimistic, I can not exclude the possibility that all of our current political structures (including a democratic government and perhaps the nation-state itself) will appear to be dysfunctional and break down as they are shown to be unable to cope with the problems we will face in the coming decades. Think of "failed states" such as Somalia, Sudan, Zimbabwe, Congo, Afghanistan etc. These are places where the state has withdrawn from many of its commitments (healthcare, education, police and judiciary, infrastructure, etc.) and where small groups/clans /regions must cope as best they can and not seldom in competition with other groups/clans/regions.

This is by all means a speculative worst-case scenario, but I in any case feel very certain about my claim that we will experience disruptive changes where the direction of the changes and societal "development" (or rather, degradation) will break off from what we and our parents have become accustomed to regard as normal (expansion and better times just around the corner).

To specify exactly what this will mean - what will happen, in what order and on what timescale - is of course an infinitely harder task. Despite the difficulties, it is these issues that interest me the most, rather than issues about production volumes and the exact time and date of peak oil, i.e. issues that Kjell Aleklett’s research group in Uppsala is mainly dealing with. What captures my interest is not "When will peak oil happen?" but rather "What happens next?". And although specific predictions are difficult or impossible to make, broad development lines are at least possible to comment or speculate on.

Some of my earlier texts have dealt with such questions about what might happen when energy becomes more expensive, for example "Energy free of charge", "Transportation free of charge" and “Death of Rationalization”.

I have some semi-developed ideas related to the text above, and I might concretize them in a follow-up to this post.