Why It's Going to Get Worse

[peristaltor.livejournal.com]

Yes, that's a pretty goading subject line. It's supposed to be. Here's my backing evidence.


George Stephenson's Rocket, the first
commercially practical steam locomotive.

This is the beast that started it all, The Rocket. In 1829, this coal powered locomotive won the prize offered for practical mechanical means of conveyance. Coal had been fueling industrial production for a century prior to the Rocket; wind, captured by sails, had been bringing raw materials to and delivering finished goods from those coal-powered factories.

It is metaphorically satisfying to talk about threads being woven together when talking about cotton, but the thread that mattered to the Liverpool & Manchester Railway was made of iron: thirty miles of it, smelted, forged, and wrought in ironworks . . ., and laid down as rails between the two cities that were now producing, in their mundane way, more wealth in a year than the entire Roman Empire could in a century.

(William Rosen, The Most Powerful Idea in the World: A Story of Steam, Industry, and Invention, Random House, 2010, p. 303.)

By the 1820s the choke point was overland transport. The distance between Liverpool's docks and Manchester's factories still had to suffer track cart deliveries at a horse team's pace.

The Rocket, clocked at 35 mph during the competition, would break the horse pace by an order of magnitude. It was the first time fossil fuel powered transport significantly. This event closely corresponds to another interesting factoid, one that until recently, bettered the lives of all of us:

From 1820 to 1970, over every decade, average real wages rose, enabling a rising standard of consumption. These 150 years rooted workers' belief that the US was a "chosen" place where every generation would live better than its parents. (Richard D. Wolff, Capitalism Hits the Fan, Olive Branch Press, 2010, p. 51.)

This increase was due to a large part to the growing reliance society placed on replacing human and animal labor with mechanical. As mechanical labor grew, the time it took to accomplish traditional tasks fell, and made new accomplishments possible. As these tasks reduced our needed minimum of daily labor, hours were freed to pursue different labors, increasing the productivity of people everywhere.

This increased productivity led to increased wealth. An expanding economy, made possible by the shift from strict specie of gold and silver to wealth that recognized only a fraction of the held specie in fractional reserve lending, led to assumptions. Going over the recent history of economies, it seemed that growth could be infinite, since history had since 1820 allowed growth. There was, therefore, no real need to create a stable economy, since downturns were historically short-lived.

This is changing. Evidence of the peak extraction levels for both coal and oil are abundant; I will therefore not bore you with repetition. Knowledge of how this affects our economy, however, is not widespread. First, understand that (for the most part) governments do not print money. Banks do. Commercial banks issue new money whenever they lend, accepting assets as collateral and delivering in exchange credit and a contract to repay that credit. Since only the principal is created at the time of the loan, other loans taken by other people must continue to grow the money supply. If that doesn't happen and the economy stalls, previously good loans turn bad, leading to defaults that continue the process. Our economies are driven by a positive feedback mechanism: when times are good, the money supply grows quickly; when times are bad, it contracts quickly through cascading defaults.

Without access to the cheap energy that literally fuels our economies, though, we hit a stall that promises a fall.

What we need right now is not the next new source of motive fuel (though that would be nice). What we need is to systemically restructure our economies to allow for periods of graceful degradation, where the money supply can be supplemented by entities other than traditional lending institutions, and added in ways that do not exacerbate debt loads. Sadly, this needed overhaul appears daunting not just in scope, but well nigh impossible given the current schisms and struggles in which traditional political institutions find themselves embroiled.

Still, until these needed changes happen, don't expect anything but continuing recessions, as our heads bang again and again on the Gas Ceiling.

Comments

[badlydrawnjeff.livejournal.com]

Evidence of the peak extraction levels for both coal and oil are abundant; I will therefore not bore you with repetition.

I'm curious as to why you believe it's abundant. We're finding new oil and better ways to extract known, previous unattainable reserves daily. We won't see peak coal in our lifetimes.

Still, until these needed changes happen, don't expect anything but continuing recessions, as our heads bang again and again on the Gas Ceiling.

First, fuels aren't causing recessions. The easily-manipulated cost of gas certainly isn't helping, but it's not causing anything.

The issue is simpler than that - it's not the finite fossil fuels that are at fault, but the continued banging of our heads against nonviable alternative fuels and energy sources. The more we continue to push push push for "green" alternatives, sink billions into wind and solar options that have zero chance of becoming primary options for fuel, the less chance we have of moving to a truly viable alternative.

After all, if the government is going to give you billions to explore politically favorable alternatives, where's the incentive to branch out?

[darksumomo.livejournal.com]

I'm curious as to why you believe it's abundant.

What sources are you reading? Do they include energybulletin.net and theoildrum.com? Also, belief is the wrong concept to use; accepting the idea based on the evidence is the right one.

We're finding new oil and better ways to extract known, previous unattainable reserves daily.

Yes, but are we discovering enough to replace depleted reserves and maintain, if not expand production? Are we even producing enough to meet expanding demand?

We won't see peak coal in our lifetimes.

*snort* I'm 22 years older than you, so while I may not see peak coal in my lifetime, I wish I were around long enough to make you a bet that you'd see it in yours.

First, fuels aren't causing recessions. The easily-manipulated cost of gas certainly isn't helping, but it's not causing anything.

Argue that with David Hamilton at Econobrowser. His most recent post on the subject is Economic consequences of recent oil price changes (http://www.econbrowser.com/archives/2011/08/economic_conseq_2.html).

After all, if the government is going to give you billions to explore politically favorable alternatives, where's the incentive to branch out?

Like billions of dollars in loan guarantees for nuclear power plants? I actually think that was a good idea, mind you.

[gunslnger.livejournal.com]

Current estimate is the known coal reserves will last 150 years (http://en.wikipedia.org/wiki/Coal#World_coal_reserves), so how long do you expect we're going to live?

From the same paragraph you're quoting

[mrsilence.livejournal.com]

Collective projections generally predict that global peak coal production may occur sometime around 2025 at 30 percent above current production in the best case scenario, depending on future coal production rates

Unless my calendar is horribly wrong, that means Peak Coal supply is expected less than 15 years from now.

Re: From the same paragraph you're quoting

[gunslnger.livejournal.com]

If peak production is what's meant by Peak Coal, then it's a nearly useless metric.

[peristaltor.livejournal.com]

Known estimates always assume flat consumption rates; for an economy to grow, consumption must also grow. See my response to Jeff for an example.

[gunslnger.livejournal.com]

Known estimates always assume flat consumption rates

I don't see any reason to believe that.

[meus-ovatio.livejournal.com]

Only 150 years?

*surveys the scale of historical time*

IS THIS SUPPOSED TO BE COMFORTING?!

[peristaltor.livejournal.com]

Exactly.

[badlydrawnjeff.livejournal.com]

What sources are you reading? Do they include energybulletin.net and theoildrum.com?

Of course not. We're talking mainstream assessments here.

Also, belief is the wrong concept to use; accepting the idea based on the evidence is the right one.

Right. That's specifically why I used the term "belief" to question the OP's position on peak oil.

Yes, but are we discovering enough to replace depleted reserves and maintain, if not expand production? Are we even producing enough to meet expanding demand?

Yes and yes. Much of our production is slowed down artificially due to international cartel-like activity such as OPEC or shortsighted energy policy like keeping ANWR off limits or dragging of feet in the gulf.

*snort* I'm 22 years older than you, so while I may not see peak coal in my lifetime, I wish I were around long enough to make you a bet that you'd see it in yours.

Throw it in a trust for my kids, then. d:-)

Argue that with David Hamilton at Econobrowser. His most recent post on the subject is Economic consequences of recent oil price changes.

Seems that we agree that it's a contributing factor, but not necessarily a cause.

Like billions of dollars in loan guarantees for nuclear power plants? I actually think that was a good idea, mind you.

The government offers loan guarantees for nuclear plants in one hand and so many restrictions on them that it makes no sense to pursue in the other? Not great incentive-making right there.

With that said, the focus has been on generally unreliable alternatives. That's where my criticism sits.

Cite your mainstream assessments then.

[squidb0i.livejournal.com]

Then, using them, explain how the economy crashed in late 2007-early 2008 without peak oil to push us off the cliff.

[soliloquy76.livejournal.com]

So pushing for alternative energy (wind, solar) is causing and/or continuing recessions? Am I reading that right? If so... *Picard facepalm*

Also, regarding solar viability:
http://www.physorg.com/news/2011-09-artificial-light-harvesting-method-energy-efficiency.html

Advances are being made every year. At some point, likely in the near future, solar will be the most viable form of energy on the planet. That doesn't mean counting out coal, oil, nuclear, etc. They all have their pro's and con's and having a diverse mix of sources is necessary.

[badlydrawnjeff.livejournal.com]

So pushing for alternative energy (wind, solar) is causing and/or continuing recessions? Am I reading that right? If so... *Picard facepalm*

...no? How the hell did you get there from where I started?

What I'm saying is that pushing for alternatives like wind and solar is keeping us from getting actually viable alternatives, since researchers are likely to go to what is guaranteed money before exploring anything else.

Advances are being made every year. At some point, likely in the near future, solar will be the most viable form of energy on the planet.

I feel like I've been hearing this for decades.

[peristaltor.livejournal.com]

I'm curious: What would you regard as a "viable alternative?"

I would agree that wind and solar are not viable for replacing fossil fuels. As John Michael Greer noted, put a burning lump of coal in one hand, and hold your other hand open to the sun, and tell him which has more energy.

Still, coal and oil exist today. What are your thoughts for a truly viable replacement?

"pushing for alternatives like wind and solar is keeping us from getting actually viable alternative

[squidb0i.livejournal.com]

Such as?

[harry-beast.livejournal.com]

I don't know whether "sustainable energy" programs cause recessions, but they certainly burn through billions of dollars, raise the price of energy for consumers and add to government debts while delivery very little benefit. The massive subsidies they receive are proof that at this time and for the foreseeable future, alternative energy schemes are not viable. For a recent example of a large unsuccessful attempt by government to defy the laws of energy and economics, see Ontario's Green Energy Act.

So very many unsubstantiated statements.

[squidb0i.livejournal.com]

Call us when you have some numbers and backup for your claims.

[peristaltor.livejournal.com]

We won't see peak coal in our lifetimes.

Mainstream media have started recently to note oil's peak in 2005, which frankly surprised me. Anyone who ponders too long the implications of peak would rightfully panic, and the mainstream media don't make money if they cause a real panic. As for coal, read Richard Heinberg's "The End of Cheap Coal" for another perspective. From the article:

Coal consumption is accelerating fast, notably in China . . . This renders meaningless reserves-lifetime figures calculated on the basis of flat demand. A 2009 report from China's Energy Research Institute forecast that coal demand rise by 700 million to 1 billion tonnes by 2020, reducing reserves lifetimes to about 33 years. If coal demand grows in step with projected Chinese economic growth, the reserves lifetimes would drop to just 19 years.

That last sentence encapsulates the predicament. The faster our economies grow, the faster energy demand grows. The opposite proves true; the less we can increase our energy consumption, the less our economies can grow.

Your note about the "push push push" misses the point. We pursue the wind and solar because they are present, they are available. At the present time, there is no "truly viable alternative."

[badlydrawnjeff.livejournal.com]

Mainstream media have started recently to note oil's peak in 2005, which frankly surprised me.

That they've noticed something does not necessarily mean it exists. You trust it exists, yet provide little to support it.

Your note about the "push push push" misses the point. We pursue the wind and solar because they are present, they are available. At the present time, there is no "truly viable alternative."

We pursue wind and solar at the expense of exploring actual viable options. That's the problem.

[peristaltor.livejournal.com]

Ah, but now you're getting circular. Above, responding to Dark, you dismissed his news sources as not "mainstream." Now, you dismiss the mainstream media mentions of peak as evidence peak does not necessarily exist. I'm curious now to know what sources you would find acceptable. Or is the fact that they concur on peak oil evidence that they are no longer acceptable?

I could blast you with references that you could explore at your leisure, but you seem curiously reluctant to accept even the notion of peak, so perhaps I shouldn't bother.

And again, I would love to know what you consider a "viable option." Please, provide one for us to consider.

[kylinrouge.livejournal.com]

the less chance we have of moving to a truly viable alternative.

What's the 'truly viable alternative'? Where does they money need to be going?

[allhatnocattle.livejournal.com]

As I understand it, what makes the world go round is resources. A lack of resource makes it stop. I'm talking economically.

A lack of man/horse power will kill an economy, or at least stifle it. As an energy, the advent of steam and later combustion engines boosted the global economy everywhere that had access to it.

As we deplete coal/oil reserves the economy will stifle and eventually recede. No matter how good we are at finding new oil reserves, or re-extracting oil from previously depleted ones, these reserves are indeed finite on planet earth.

Newer sources of energy (wind, solar, geothermal, algae, etc) seem to have limited potential. Antiquated sources of energy (wood, oxen, donkey) are also limited. But no matter if we're talking about burning wood or utilizing the sun or having oxen... these resources are practically infinite. Trees grow, sun shines and oxen breed. Unlike fossil fuels, will never use up these resources. They will replenish up to a point. Unfortunately our need for energy is greater then their replenishing. Back to fossils.

The growth of a community (city) is limited by other resources. Land is a physical barrier to unlimited growth. Run out of land and growth stifles. The solution is to link land masses by bridges, or be more creative with the land available. Cities grow out first, then they grow up. Skyscrapers utilize the limited resource of land.

But resources are often abstract... like logistics. In the 19th Century many cities growth were stifled by a lack of potable water and safe removal of waste products. This is probably the most immediate threat to sustainability. Many populations truck waste far away for safe disposal and are finding clean water and food sources more expensive to utilize.

There's no lack of water. There's a lack of clean water and access to it. Some populations are desalinizing sea waters at great expense. Some are having to build new waterways to replace older ones.

But I would say the #1 resource that drives economies is population. Too small of a population and potential to grow is hampered. Too large of a population and growth is stressed. Sustainable populations could be better managed.

Some worthwhile sauce.

[squidb0i.livejournal.com]

http://www.theoildrum.com/node/7831

Re: Some worthwhile sauce.

[peristaltor.livejournal.com]

Interesting (at a quick glance). I gather tar sand extraction has made up quite a bit of the crude shortfall. Last I heard, Canada had become the US's biggest crude supplier.

Of course, if someone other than Harper takes office, I imagine that darned Kyoto Protocol might be dusted off. All that nat gas burning, just to make fuel. . . .

Re: Some worthwhile sauce.

[squidb0i.livejournal.com]

Exactly. Five times the greenhouse emissions over regular oil. And the energy inputs to turn TS into useable fuel are just absurd, worse than corn eth.