Peak oil is no
crackpot conspiracy theory. Visit the links below and decide for
yourself. Read the following short essays by the
distinguished petroleum geologist Dr Colin Campbell, and journalist
George Monbiot.
The Dawn of the Second Half
of the Age of Oil Dr Colin Campbell
...basic facts of material existence George Monbiot
The Industrial Revolution opened in the mid 18th Century with the exploitation of coal, initially in Britain, providing a new fuel for industry, transport and trade, which grew rapidly. The Oil Age dawned 100 years later, initially to provide lamp-oil for illumination, but later to fuel transport, following the development of the Internal Combustion Engine. Electricity generation expanded widely, fuelled first by coal, but later mainly from oil, gas and nuclear energy. This epoch has been widely seen as one of amazing technological progress, which has conditioned many people to think that there must always be a technological solution.
The Industrial Revolution was accompanied by an equally important, but less visible, Financial Revolution. In short, commercial banks lent money in excess of what they had on deposit, effectively creating money out of thin air, but the system worked because tomorrow’s expansion provided collateral for today’s debt. It was effectively a system of confidence, an intrinsic element of all debt. So, it might be better termed the Financial-Industrial Revolution.
The Stock Markets evolved
from being simply an exchange of dividend-yielding instruments to
become largely speculative institutions, being in turn stimulated by
the tax regime that gave preferential treatment to speculative gains.
In addition, World trading currencies, previously the pound sterling
and now the US dollar, delivered massive hidden returns to the issuing
countries, becoming in effect the prime benefit of Empire.
The
World’s population expanded six-fold exactly in parallel with
oil,
which provided much of the fuel with which to plough the field, and
bring food and manufactured goods to market, thus indirectly supporting
the Financial System. The international transport of food
reduced
the risk of local famines when harvests failed for climatic and other
reasons.
The Second Half of the Oil Age now dawns and will be characterised by the decline of oil, followed by gas, and all that depends upon these prime energy sources. The actual decline of oil will be gradual at less than three percent a year: such that the production of all liquid hydrocarbons in 2020 will have fallen to approximately what it was in 1990. In those terms, it does not appear to be a particularly serious situation. But in reality, it is a devastating development because it implies that the oil-based economy is in permanent terminal decline, removing the confidence in perpetual growth on which the Financial System depends. Without the assumption of ever-onward growth, borrowing and lending dry up: there being little viable left to invest in. It follows that there will be a need to remove vast amounts of so-called Capital, which in fact was not Capital in the sense of being the saved proceeds of labour, but merely an expression of speculative confidence in ever onward economic growth. This in turn leads to the conclusion that the World faces another Great Depression, triggered more by the perception of long term decline of the general economy rather than the actual decline of oil supply itself which is gradual not cataclysmic. The World is definitely not about to run out of oil, but it does face the onset of decline having consumed about half of what is readily available on the Planet.
This is not welcome news, and those with mindsets conditioned on past experience find it very difficult to accept, some becoming viputerative in their reaction. In terms of pragmatic politics, it is virtually impossible for Governments to plan and prepare with logical strategies to face the new world that opens. Accordingly, the transition will likely be a time of international tension and resource wars of which the first salvoes have already been fired. But some of the more philosophically inclined wonder if in fact the post-oil world might not turn out to be a more harmonious one for the survivors. There are indeed hopes, Deus volens, that they may number somewhat more than the Planet was able to support prior to what by then will be seen to have been the brief Age of Oil, during which the World consumed its inheritance of fossil sunshine.
Let me mention some of the founding myths of industrial society. These myths are dominant in both capitalist and communist thought.
The first one
is that there is no limit to human potential. We can be
anything we want to be, we can do anything we want to do. Our potential
awaits only further economic and technological development. One day
everyone will be able to run a four-miniute mile. One day everyone will
live to be 200. One day, if we choose, we could all abandon the planet
we live on and move to another one. As economies and technologies
develop, we can expect to see the welfare of everyone on earth improve:
what the neoliberal economists call the rising tide which lifts all
boats.
This leads to the second
myth: the confusion of progress with
progressivity. In other words, the assumption that industrial and
post-industrial development will automatically distribute wealth,
rather than concentrating it.
Both these myths are entirely dependent on a third one: that the resources required to bring this utopia about are infinite. The world can keep providing for its people, however many there are, and however much they want to consume. In the capitalist mythology, the market will magically cause new resources to materialise when the old ones run out. In the communist mythology, the free development of each leading to free development of all will mystically discharge the same function. They are both variants of a far older belief: we might have messed up our chances of survival, but the Lord, or the gods, or the spirits will nevertheless provide. Today we say: technology will provide, the market will provide. We place our faith in them just as we once placed our faith in God.
The industrial worldview, in either of its dominant forms, is entirely incapable of engaging with the problem of finity. All these beliefs are plainly irrational, and bear no relation to what is actually happening on earth. They overlook some basic facts of material existence. Let me list a few.
At any rate of use, non-renewable resoures are, by definition,
depleted. They will not come back. As soon as you begin to use one, the
clock starts ticking towards the day on which it becomes exhausted.
This applies even to the non-renewable resource on which the entire
modern economy is built: namely petroleum. Global oil production will
soon reach its peak and then decline, at which point the Age of Growth
will give way to the Age of Entropy.
Not immediately, of course, but unless another source of energy, just
as cheap, with just as high a ratio of “energy return on
energy invested” is discovered or developed, there will be a
gradual decline in our ability to generate the growth required to keep
the debt-based financial system from collapsing.
Those of us who are alive today have been lucky enough to have been
brought up in an age of energy surplus. This is a remarkable historical
and biological anomaly. A supply of oil that exceeds demand has
permitted us to do what all species strive to do – expand the
ecological space we occupy – but without encountering direct
competition for the limiting resource. The surplus has led us to
believe in the possibility of universal peace and universal comfort,
for a global population of 6 billion, or 9 or 10. If kindness and
comfort are, as I suspect, the results of an energy surplus, then, as
the supply contracts, we could be expected to start fighting once again
like cats in a sack. In the presence of entropy, virtue might be
impossible.
Beyond a certain rate of use, renewable resources are depleted. There
is no clearer example of the limits of human action than the
paradoxical fact that the global resources which are running out first
are not the non-renewable ones, but the renewable ones. Fisheries,
forests, fresh water, soil. Their decline is our momento mori, our
reminder of the limits of finity, of the fact that we and the resources
on which we depend are mortal: a fact which all of us would prefer to
ignore.
Beyond a certain rate of exploitation, renewable resources become
non-renewable resources. If you hit them too hard, you destroy the
ecosystem which permits them to regenerate. This we have seen already
in certain fisheries and forests and hydrological systems.
The earth’s capacity to absorb pollution is limited. This
applies to the atmosphere as much as it does to our rivers. Beyond a
certain level of carbon dioxide emissions, human life becomes
impossible. The upper limit for temperature rises this century
predicted by the Intergovernmental Panel on Climate Change is six
degrees centigrade. The last time there was a global temperature rise
of six degrees was at the end of the Permian period, 250 million years
ago. The result was an almost complete collapse of biological
productivity: the total mass of biological matter. Around 90% of the
earth’s species were wiped out. No animal bigger than a
medium-sized pig survived.
But already several eminent climatologists are challenging the
Intergovernmental Panel’s figures: on the grounds that they
are too low. Some are predicting an upper range of 7 or 10 or 12
degrees of climate change this century.
The system which governs our economic lives, which we call capitalism,
is itself is a limited resource. Capitalism is a pyramid scheme. Let me
try to explain this.
It is a built on a system called fractional reserve banking. Almost the
entire money supply – generally, depending on where you live,
between 90 and 95% of it – is issued not by the state, but
the commercial banks. It is issued not in the form of notes and coins,
but in the form of loans. Between 90 and 95% of the money supply, in
other words, is debt.
To pay off the debt that is issued today, the banks must issue more
debt tomorrow, and so on and so forth. In a world which is not based on
material realities, the world which might exist, for an example, in a
computer model, it could expand for ever. But in the real world, the
supply of money is linked to material realities called collateral: the
real wealth which gives the loans meaning, and without which the whole
scheme would be exposed as a fraud. Eventually the amount of lending
must inevitably exceed the availability of meaningful collateral, for
the simple reason that the material world is finite while the possible
issue of credit is not. That is the point at which the whole structure
comes tumbling down.
The people who get hit first and hit hardest by any one of these
realities are not the rich but the poor. The depletion of resources is
inherently regressive: it might enrich the wealthy, but it makes the
lives of those who are already poor still harder.
These are the realities, but the three great myths of the industrial
era still prevail. Almost everyone on earth, to one degree or another,
accepts them. Despite everything I know to be true, sometimes I catch
myself believing them.
And this, I believe, is the result of an even deeper problem, an
inherent human characteristic which long pre-dates the industrial era.
It is as follows. We do not live in a world of reason. We live in a
dreamworld. With a small, rational part of the brain, we recognise that
our existence is governed by material realities. We recognise that as
those realities change, so will our lives. But underlying this
awareness is a deep semi-consciousness. This absorbs the moment in
which we live, then generalises it, projecting our future lives as
repeated instances of the present. This, not the superficial world of
our reason, is our true reality.