Book review of Heinberg’s “Afterburn: society beyond fossil fuels”

Preface. This book has 15 essays Heinberg wrote from 2011 to 2014, many of them available for free online.  These are some of my Kindle notes of parts that interested me, so to you it will be disjointed and perhaps not what you would have chosen as important — but it gives you an idea of what a great writer Heinberg is and hopefully inspires you to buy his book.

Alice Friedemann   www.energyskeptic.com  author of “When Trucks Stop Running: Energy and the Future of Transportation”, 2015, Springer and “Crunch! Whole Grain Artisan Chips and Crackers”. Podcasts: Practical Prepping, KunstlerCast 253, KunstlerCast278, Peak Prosperity , XX2 report

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Heinberg, R. 2015. Afterburn: Society Beyond Fossil Fuels. New Society Publishers.

The most obvious criticism that could be leveled at the book “The Party’s Over”, which came out in 2005, is the simple observation that, as of 2014, world oil production is increasing, not declining. However, the following passage points to just how accurate the leading peakists were in forecasting trends: “Colin Campbell estimates that extraction of conventional oil will peak before 2010; however, because more unconventional oil—including oil sands, heavy oil, and oil shale—will be produced during the coming decade, the total production of fossil-fuel liquids (conventional plus unconventional) will peak several years later. According to Jean Laherrère, that may happen as late as 2015.”

In the “Party’s Over”, I also summarized Colin Campbell’s view that “the next decade will be a ‘plateau’ period, in which recurring economic recessions will result in lowered energy demand, which will in turn temporarily mask the underlying depletion trend.

Economics 101 tells us that supply of and demand for a commodity like oil (which happens to be our primary energy source) must converge at the current market price, but no economist can guarantee that the price will be affordable to society. High oil prices are sand in the gears of the economy. As the oil industry is forced to spend ever more money to access ever-lower-quality resources, the result is a general trend toward economic stagnation. None of the peak oil deniers warned us about this.

Peakists within the oil industry are usually technical staff (usually geologists, seldom economists, and never PR professionals) and are only free to speak out on the subject once they’ve retired. The industry has two big reasons to hate peak oil. First, company stock prices are tied to the value of booked oil reserves; if the public (and government regulators) were to become convinced that those reserves were problematic, the companies’ ability to raise money would be seriously compromised—and oil companies need to raise lots of money these days to find and produce ever-lower-quality resources. It’s thus in the interest of companies to maintain an impression of (at least potential) abundance.

The problem is hidden from view by gross oil and natural gas production numbers that look and feel just fine—good enough to crow about. President Obama did plenty of crowing in his 2014 State of the Union address, where he touted “More oil produced at home than we buy from the rest of the world—the first time that’s happened in nearly 20 years.” It’s true: US crude oil production increased from about 5 million barrels per day (mb/d) to nearly 7.75 mb/d from 2009 through 2013, with imports still over 7.5 mb/d. And American natural gas production has been at an all-time high. Energy problem? What energy problem?

We’ll never run out of any fossil fuel, in the sense of extracting every last molecule of coal, oil, or gas. Long before we get to that point, we will confront the dreaded double line in the diagram, labeled “energy in equals energy out.” At that stage, it will cost as much energy to find, pump, transport, and process a barrel of oil as the oil’s refined products will yield when burned in even the most perfectly efficient engine (I use oil merely as the most apt example; the same principle applies for coal, natural gas, or any other fossil fuel). As we approach the energy break-even point, we can expect the requirement for ever-higher levels of investment in exploration and production on the part of the petroleum industry; we can therefore anticipate higher prices for finished fuels. Incidentally, we can also expect more environmental risk and damage from the process of fuel “production” (i.e., extraction and processing), because we will be drilling deeper and going to the ends of the Earth to find the last remaining deposits, and we will be burning ever-dirtier fuels. Right now that’s exactly what is happening.

Unless oil prices remain at current stratospheric levels, significant expansion of tar sands operations may be uneconomic.

Lower energy profits from unconventional oil inevitably show up in the financials of oil companies. Between 1998 and 2005, the industry invested $1.5 trillion in exploration and production, and this investment yielded 8.6 million barrels per day in additional world oil production. Between 2005 and 2013, the industry spent $4 trillion on E&P, yet this more-than-doubled investment produced only 4 mb/d in added production.

 

It gets worse: all net new production during the 2005–13 period was from unconventional sources (primarily tight oil from the United States and tar sands from Canada); of the $4 trillion spent since 2005, it took $350 billion to achieve a bump in their production. Subtracting unconventionals from the total, world oil production actually fell by about a million barrels a day during these years. That means the oil industry spent more than $3.5 trillion to achieve a decline in overall conventional production.

Daniel L. Davis described the situation in a recent article in the Financial Times: The 2013 [World Energy Outlook, published by the International Energy Agency] has the oil industry’s upstream [capital expenditure] rising by nearly 180% since 2000, but the global oil supply (adjusted for energy content) by only 14%. The most straightforward interpretation of this data is that the economics of oil have become completely dislocated from historic norms since 2000 (and especially since 2005), with the industry investing at exponentially higher rates for increasingly small incremental yields of energy.

The costs of oil exploration and production are currently rising at about 10.9% per year, according to Steve Kopits of the energy analytics firm Douglas-Westwood.  This is squeezing the industry’s profit margins, since it’s getting ever harder to pass these costs on to consumers. In 2010, The Economist magazine discussed rising costs of energy production, musing that “the direction of change seems clear. If the world were a giant company, its return on capital would be falling.”

The critical relationship between energy production and the energy cost of extraction is now deteriorating so rapidly that the economy as we have known it for more than two centuries is beginning to unravel.

The average energy profit ratio (a.k.a. Energy Returned on Invested) for US oil production has fallen from 100:1 to 10:1, and the downward trend is accelerating as more and more oil comes from tight deposits (shale) and deepwater. Canada’s prospects are perhaps even more dismal than those of the United States: the tar sands of Alberta have an EROEI that ranges from 3.2 : 1 to 5 : 1.  A 5-to-1 profit ratio might be spectacular in the financial world, but in energy terms this is alarming. Everything we do in industrial societies—education, health care, research, manufacturing, transportation—uses energy. Unless our investment of energy in producing more energy yields an averaged profit ratio of roughly 10 : 1 or more, it may not be possible to maintain an industrial (as opposed to an agrarian) mode of societal organization over the long run.

Our economy runs on energy, and our energy prospects are gloomy, how is it that the economy is recovering? The simplest answer is, it’s not—except as measured by a few misleading gross statistics.

Unemployment statistics don’t include people who’ve given up looking for work. Labor force participation rates are at the lowest level in 35 years.

Claims of economic recovery fixate primarily on one number: gross domestic product, or GDP. Is any society able to expand its debt endlessly? If there were indeed limits to a country’s ability to perpetually grow GDP by increasing its total debt (government plus private), a warning sign would likely come in the form of a trend toward diminishing GDP returns on each new unit of credit created. Bingo: that’s exactly what we’ve been seeing in the United States in recent years. Back in the 1960s, each dollar of increase in total US debt was reflected in nearly a dollar of rise in GDP. By 2000, each new dollar of debt corresponded with only 20 cents of GDP growth. The trend line looked set to reach zero by about 2015.

We won’t quickly and easily switch to electric cars. For that to happen, the economy would have to keep growing, so that more and more people could afford to buy new (and more costly) automobiles. A more likely scenario: as fuel gets increasingly expensive the economy will falter, rendering the transition to electric cars too little, too late.

Most nations have concluded that nuclear power is too costly and risky, and supplies of uranium, the predominant fuel for nuclear power, are limited anyway. Thorium, breeder, fusion, and other nuclear alternatives may hold theoretical promise, but there is virtually no hope that we can resolve the remaining myriad practical challenges, commercialize the technologies, and deploy tens of thousands of new power plants within just a few decades.

 

Many economists and politicians don’t buy the assertion that energy is at the core of our species-wide survival challenge. They think the game of human success-or-failure revolves around money, military power, or technological advancement. If we toggle prices, taxes, and interest rates; maintain proper trade rules; invest in technology research and development (R&D); and discourage military challenges to the current international order, then growth can continue indefinitely and everything will be fine. Climate change and resource depletion are peripheral problems that can be dealt with through pricing mechanisms or regulations.

Some policy wonks buy “it’s all about energy” but are jittery about “renewables are the future” and won’t go anywhere near “growth is over.” A few of these folks like to think of themselves as environmentalists (sometimes calling themselves “bright green”)—including the Breakthrough Institute and writers like Stewart Brand and Mark Lynas. A majority of government officials are effectively in the same camp, viewing nuclear power, natural gas, carbon capture and storage (“clean coal”), and further technological innovation as pathways to solving the climate crisis without any need to curtail economic growth.

Other environment-friendly folks buy “it’s all about energy” and “renewables are the future” but still remain allergic to the notion that “growth is over.” They say we can transition to 100% renewable power with no sacrifice in terms of economic growth, comfort, or convenience. Stanford professor Mark Jacobson3 and Amory Lovins of Rocky Mountain Institute are leaders of this chorus. Theirs is a reassuring message, but if it doesn’t happen to be factually true (and there are many energy experts who argue persuasively that it isn’t), then it’s of limited helpfulness because it fails to recommend the kinds or degrees of change in energy usage that are essential to a successful transition.

The general public tends to listen to one or another of these groups, all of which agree that the climate and energy challenge of the 21st century can be met without sacrificing economic growth. This widespread aversion to the “growth is over” conclusion is entirely understandable: during the last century, the economies of industrial nations were engineered to require continual growth in order to produce jobs, returns on investments, and increasing tax revenues to fund government services.

 

Anyone who questions whether growth can continue is deeply subversive. Nearly everyone has an incentive to ignore or avoid it. It’s not only objectionable to economic conservatives; it is also abhorrent to many progressives who believe economies must continue to grow so that the working class can get a larger piece of the proverbial pie, and the “underdeveloped” world can improve standards of living. But ignoring uncomfortable facts seldom makes them go away. Often it just makes matters worse. Back in the 1970s, when environmental limits were first becoming apparent, catastrophe could have been averted with only a relatively small course correction—a gradual tapering of growth and a slow decline in fossil fuel reliance. Now, only a “cold turkey” approach will suffice. If a critical majority of people couldn’t be persuaded then of the need for a gentle course correction, can they now be talked into undertaking deliberate change on a scale and at a speed that might be nearly as traumatic as the climate collision we’re trying to avoid? To be sure, there are those who do accept the message that “growth is over”: most are hard-core environmentalists or energy experts. But this is a tiny and poorly organized demographic. If public relations consists of the management of information flowing from an organization to the public, then it surely helps to start with an organization wealthy enough to be able to afford to mount a serious public relations campaign.

All animals and plants deal with temporary energy subsidies in basically the same way: the pattern is easy to see in the behavior of songbirds visiting the feeder outside my office window. They eat all the seed I’ve put out for them until the feeder is empty. They don’t save some for later or discuss the possible impacts of their current rate of consumption. Yes, we humans have language and therefore the theoretical ability to comprehend the likely results of our current collective behavior and alter it accordingly. We exercise this ability in small ways, where the costs of behavior change are relatively trivial—enacting safety standards for new automobiles, for example. But where changing our behavior might entail a significant loss of competitive advantage or an end to economic growth, we tend to act like finches.

 

Some business-friendly folks with political connections soon became alarmed at both the policy implications of—and the likely short-term economic fallout from—the way climate science was developing, and decided to do everything they could to question, denigrate, and deny the climate change hypothesis. Their effort succeeded: Especially in the United States, belief in climate change now aligns fairly closely with political affiliation. Most elected Democrats agree that the issue is real and important, and most of their Republican counterparts are skeptical. Lacking bipartisan support, legislative climate policy has languished. From a policy standpoint, climate change is effectively an energy issue, since reducing carbon emissions will require a nearly complete revamping of our energy systems. Energy is, by definition, humanity’s most basic source of power, and since politics is a contest over power (albeit social power), it should not be surprising that energy is politically contested. A politician’s most basic tools are power and persuasion, and the ability to frame issues. And the tactics of political argument inevitably range well beyond logic and critical thinking. Therefore politicians can and often do make it harder for people to understand energy issues than would be the case if accurate, unbiased information were freely available. So here is the reason for the paradox stated in the first paragraph: As energy issues become more critically important to society’s economic and ecological survival, they become more politically contested; and as a result, they tend to become obscured by a fog of exaggeration, half-truth, omission, and outright prevarication.

Who is right? Well, this should be easy to determine. Just ignore the foaming rhetoric and focus on research findings. But in reality that’s not easy at all, because research is itself often politicized. Studies can be designed from the outset to give results that are friendly to the preconceptions and prejudices of one partisan group or another. For example, there are studies that appear to show that the oil and natural gas production technique known as hydraulic fracturing (or “fracking”) is safe for the environment. With research in hand, industry representatives calmly inform us that there have been no confirmed instances of fracking fluids contaminating water tables. The implication: environmentalists who complain about the dangers of fracking simply don’t know what they’re talking about.

 

Renewable energy is just as contentious. Mark Jacobson, professor of environmental engineering at Stanford University, has coauthored a series of reports and scientific papers arguing that solar, wind, and hydropower could provide 100% of world energy by 2030. Clearly, Jacobson’s work supports Politician B’s political narrative by showing that the climate problem can be solved with little or no economic sacrifice.

If Jacobson is right, then it is only the fossil fuel companies and their supporters that stand in the way of a solution to our environmental (and economic) problems. The Sierra Club and prominent Hollywood stars have latched onto Jacobson’s work and promote it enthusiastically. However, Jacobson’s publications have provoked thoughtful criticism, some of it from supporters of renewable energy, who argue that his “100 percent renewables by 2030” scenario ignores hidden costs, land use and environmental problems, and grid limits. Jacobson has replied to his critics, well, energetically.

Here’s a corollary to my thesis: Political prejudices tend to blind us to facts that fail to fit any conventional political agendas. All political narratives need a villain and a (potential) happy ending. While Politicians A and B might point to different villains (government bureaucrats and regulators on one hand, oil companies on the other), they both envision the same happy ending: economic growth, though it is to be achieved by contrasting means. If a fact doesn’t fit one of these two narratives, the offended politician tends to ignore it (or attempt to deny it). If it doesn’t fit either narrative, nearly everyone ignores it. Here’s a fact that apparently fails to comfortably fit into either political narrative: The energy and financial returns on fossil fuel extraction are declining—fast.

The top five oil majors (ExxonMobil, BP, Shell, Chevron, Total) have seen their aggregate production fall by more than 25% over the past 12 years—but it’s not for lack of effort. Drilling rates have doubled. Rates of capital investment in exploration and production have likewise doubled. Oil prices have quadrupled. Yet actual global rates of production for regular crude oil have flattened, and all new production has come from expensive unconventional sources such as tar sands, tight oil, and deepwater oil. The fossil fuel industry hates to admit to facts like this that investors find scary—especially now, as the industry needs investors to pony up ever-larger bets to pay for ever-more-extreme production projects.

 

The past few years, high oil prices have provided the incentive for small, highly leveraged, and risk-friendly companies to go after some of the last, worst oil and gas production prospects in North America—formations known to geologists as “source rocks,” which require operators to use horizontal drilling and fracking technology to free up trapped hydrocarbons. The ratio of energy returned to energy invested in producing shale gas and tight oil from these formations is minimal. While US oil and gas production rates have temporarily spiked, all signs indicate that this will be a brief boom.

During the 1930s, the US-based National Association of Manufacturers enlisted a team of advertisers, marketers, and psychologists to formulate a strategy to counter government efforts to plan and manage the economy in the wake of the Depression. They proposed a massive, ongoing ad campaign to equate consumerism with “The American Way.” Progress would henceforth be framed entirely in economic terms, as the fruit of manufacturers’ ingenuity. Americans were to be referred to in public discourse (newspapers, magazines, radio) as consumers, and were to be reminded at every opportunity of their duty to contribute to the economy by purchasing factory-made products, as directed by increasingly sophisticated and ubiquitous advertising cues.

Veblen asserted in his widely cited book The Theory of the Leisure Class that there exists a fundamental split in society between those who work and those who exploit the work of others; as societies evolve, the latter come to constitute a “leisure class” that engages in “conspicuous consumption.” Veblen saw mass production as a way to universalize the trappings of leisure so the owning class could engage workers in an endless pursuit of status symbols, thus deflecting workers’ attention from society’s increasingly unequal distribution of wealth and their own political impotence.

The critics have insisted all along, consumerism as a system cannot continue indefinitely; it contains the seeds of its own demise. And the natural constraints to consumerism—fossil fuel limits, environmental sink limits (leading to climate change, ocean acidification, and other pollution dilemmas), and debt limits—appear to be well within sight. While there may be short-term ways of pushing back against these limits (unconventional oil and gas, geoengineering, quantitative easing), there is no way around them.

 

Consumerism is inherently doomed. But since consumerism now effectively is the economy (70% of US GDP comes from consumer spending), when it goes down the economy goes too. A train wreck is foreseeable. No one knows exactly when the impact will occur or precisely how bad it will be. But it is possible to say with some confidence that this wreck will manifest itself as an economic depression accompanied by a series of worsening environmental disasters and possibly wars and revolutions. This should be news to nobody by now, as recent government and UN reports spin out the scenarios in ever grimmer detail: rising sea levels, waves of environmental refugees, droughts, floods, famines, and collapsing economies. Indeed, looking at what’s happened since the start of the global economic crisis in 2007, it’s likely the impact has already commenced—though it is happening in agonizingly slow motion as the system fights to maintain itself.

World conventional crude oil production has been flat-to-declining since about 2005. Declines of output from the world’s supergiant oilfields will steepen in the years ahead. Petroleum is essential to the world economy and there is no ready and sufficient substitute. The potential consequences of peak oil include prolonged economic crisis and resource wars.

Other unconventionals, like extra-heavy oil in Venezuela and kerogen (also known as “oil shale,” and not to be confused with shale oil) in the American West, will be even slower and more expensive to produce.

Why no collapse yet? Governments and central banks have inserted fingers in financial levees. Most notably, the Federal Reserve rushed to keep crisis at bay by purchasing tens of billions of dollars in US Treasury bonds each month, year after year, using money created out of thin air at the moment of purchase.

Virtually all of the Fed’s money has stayed within financial circles; that’s a big reason why the richest Americans have gotten much richer in the past few years, while most regular folks are treading water at best.

What has the too-big-to-fail, too-greedy-not-to financial system done with the Fed’s trillions in free money? Blown another stock market bubble and piled up more leveraged bets. No one knows when the latest bubble will pop, but when it does the ensuing crisis may be much worse than that of 2008. Will central banks then be able to jam more fingers into the leaky levee? Will they have enough fingers?

ExxonMobil is inviting you to take your place in a fossil-fueled 21st century. But I would argue that Exxon’s vision of the future is actually just a forward projection from our collective rearview mirror. Despite its hi-tech gadgetry, the oil industry is a relic of the days of the Beverly Hillbillies. This fossil-fueled sitcom of a world that we all find ourselves trapped within may on the surface appear to be characterized by smiley-faced happy motoring, but at its core it is monstrous and grotesque. It is a zombie energy economy.

 

Oil and gas are finite resources, so it was clear from the start that, as we extracted and burned them, we were in effect stealing from the future. In the early days, the quantities of these fuels available seemed so enormous that depletion posed only a theoretical limit to consumption. We knew we would eventually empty the tanks of Earth’s hydrocarbon reserves, but that was a problem for our great-great-grandkids to worry about.

In a few years we will look back on late 20th-century America as a time and place of advertising-stoked consumption that was completely out of proportion to what Nature can sustainably provide. I suspect we will think of those times—with a combination of longing and regret—as a lost golden age of abundance, but also an era of foolishness and greed that put the entire world at risk.

Making the best of our new circumstances will mean finding happiness in designing higher-quality products that can be reused, repaired, and recycled almost endlessly and finding fulfillment in human relationships and cultural activities rather than mindless shopping. Fortunately, we know from recent cross-cultural psychological studies that there is little correlation between levels of consumption and levels of happiness. That tells us that life can in fact be better without fossil fuels. So whether we view these as hard times or as times of

Nations could, in principle, forestall social collapse by providing the bare essentials of existence (food, water, housing, medical care, family planning, education, employment for those able to work, and public safety) universally and in a way that could be sustained for some time, while paying for this by deliberately shrinking other features of society—starting with military and financial sectors—and by taxing the wealthy. The cost of covering the basics for everyone is still within the means of most nations. Providing human necessities would not remove all the fundamental problems now converging (climate change, resource depletion, and the need for fundamental economic reforms), but it would provide a platform of social stability and equity to give the world time to grapple with deeper, existential challenges. Unfortunately, many governments are averse to this course of action. And if they did provide universal safety nets, ongoing economic contraction might still result in conflict, though in this instance it might arise from groups opposed to the perceived failures of “big government.” Further, even in the best instance, safety nets can only buy time. The capacity of governments to maintain flows of money and goods will erode. Thus it will increasingly be up to households and communities to provide the basics for themselves while reducing their dependence upon, and vulnerability to, centralized systems of financial and governmental power. This will set up a fundamental contradiction. When the government tries to provide people the basics, power is centralized—but as the capacity of the government wanes, it can feel threatened by people trying to provide the basics for themselves and act to discourage or even criminalize them.

Theorists on both the far left and far right of the political spectrum have advocated for the decentralization of food, finance, education, and other basic societal support systems for decades. Some efforts toward decentralization (such as the local food movement) have led to the development of niche markets.

The decentralized provision of basic necessities is not likely to flow from a utopian vision of a perfect or even improved society (as have some social movements of the past). It will emerge instead from iterative human responses to a daunting and worsening set of environmental and economic problems, and it will in many instances be impeded and opposed by politicians, bankers, and industrialists. It is this contest between traditional power elites and growing masses of disenfranchised poor and formerly middle-class people attempting to provide the necessities of life for themselves in the context of a shrinking economy that is shaping up to be the fight of the century.

When Civilizations Decline

In his benchmark 1988 book The Collapse of Complex Societies, archaeologist Joseph Tainter explained the rise and demise of civilizations in terms of complexity. He used the word complexity to refer to “the size of a society, the number and distinctiveness of its parts, the variety of specialized social roles that it incorporates, the number of distinct social personalities present, and the variety of mechanisms for organizing these into a coherent, functioning whole.”

 

Civilizations are complex societies organized around cities; they obtain their food from agriculture (field crops), use writing and mathematics, and maintain full-time division of labor. They are centralized, with people and resources constantly flowing from the hinterlands toward urban hubs.

Thousands of cultures have flourished throughout the human past, but there have only been about 24 civilizations. And all—except our current global industrial civilization (so far)—have ultimately collapsed.

Tainter describes the growth of civilization as a process of investing societal resources in the development of ever-greater complexity in order to solve problems. For example, in village-based tribal societies an arms race between tribes can erupt, requiring each village to become more centralized and complexly organized in order to fend off attacks. But complexity costs energy. As Tainter puts it, “More complex societies are costlier to maintain than simpler ones and require higher support levels per capita.” Since available energy and resources are limited, a point therefore comes when increasing investments become too costly and yield declining marginal returns. Even the maintenance of existing levels of complexity costs too much (citizens may experience this as onerous levels of taxation), and a general simplification and decentralization of society ensues—a process colloquially referred to as collapse.

During such times societies typically see sharply declining population levels, and the survivors experience severe hardship. Elites lose their grip on power. Domestic revolutions and foreign wars erupt. People flee cities and establish new, smaller communities in the hinterlands. Governments fall and new sets of power relations emerge. It is frightening to think about what collapse would mean for our current global civilization.

 

Nevertheless, as we are about to see, there are good reasons for concluding that our civilization is reaching the limits of centralization and complexity, that marginal returns on investments in complexity are declining, and that simplification and decentralization are inevitable. Thinking in terms of simplification, contraction, and decentralization is more accurate and helpful, and probably less scary, than contemplating collapse. It also opens avenues for foreseeing, reshaping, and even harnessing inevitable social processes so as to minimize hardship and maximize possible benefits.

Some of the effects of declining energy will be nonlinear and unpredictable, and could lead to a general collapse of civilization. Economic contraction will not be as gradual and orderly as economic expansion has been. Such effects may include an uncontrollable and catastrophic unwinding of the global system of credit, finance, and trade, or the dramatic expansion of warfare as a result of heightened competition for energy resources or the protection of trade privileges.

Further stimulus spending would require another massive round of government borrowing, and that would face strong domestic political headwinds as well as resistance from the financial community (in the form of credit downgrades, which would make further borrowing more expensive).

Without increasing and affordable energy flows a genuine economic recovery (meaning a return to growth in manufacturing and trade) may not be possible.

The evidence for the efficacy of austerity as a path to increased economic health is spotty at best in “normal” economic times. Under current circumstances, there is overwhelming evidence that it leads to declining economic performance as well as social unraveling. In nations where the austerity prescription has been most vigorously applied (Ireland, Greece, Spain, Italy, and Portugal), contraction has continued or even accelerated, and popular protest is on the rise.

Austerity is having similar effects in states, counties, and cities in the United States. State and local governments cut roughly half a million jobs during 2009–10; had they kept hiring at their previous pace to keep up with population growth, they would instead have added a half-million jobs. Meanwhile, due to low tax revenues, local governments are allowing paved roads to turn to gravel, closing libraries and parks, and laying off public employees. It’s not hard to recognize a self-reinforcing feedback loop at work here. A shrinking economy means declining tax revenues, which make it harder for governments to repay debt. In order to avoid a credit downgrade, governments must cut spending. This shrinks the economy further, eventually resulting in credit downgrades anyway. That in turn raises the cost of borrowing. So government must cut spending even further to remain credit-worthy. The need for social spending explodes as unemployment, homelessness, and malnutrition increase, while the availability of social services declines. The only apparent way out of this death spiral is a revival of rapid economic growth. But if the premise above is correct, that is a mere pipedream.

Centralized provision of the basics. In this scenario, nations directly provide jobs and basic necessities to the general public while deliberately simplifying, downsizing, or eliminating expendable features of society such as the financial sector and the military, and taxing those who can afford it—wealthy individuals, banks, and larger businesses—at higher rates. This is the path outlined at the start of the essay; at this point it is appropriate to add a bit more detail. In many cases, centralized provision of basic necessities is relatively cheap and efficient. For example, since the beginning of the current financial crisis the US government has mainly gone about creating jobs by channeling tax breaks and stimulus spending to the private sector. But this has turned out to be an extremely costly and inefficient way of providing jobs, far more of which could be called into existence (per dollar spent) by direct government hiring. Similarly, the new US federal policy of increasing the public’s access to health care by requiring individuals to purchase private medical insurance is more costly than simply providing a universal government-run health insurance program, as every other industrial nation does. If Britain’s experience during and immediately after World War II is any guide, then better access to higher-quality food could be ensured with a government-run rationing program than through a fully privatized food system. And government banks could arguably provide a more reliable public service than private banks, which funnel enormous streams of unearned income to bankers and investors. If all this sounds like an argument for utopian socialism, read on—it’s not. But there are indeed real benefits to be reaped from government provision of necessities, and it would be foolish to ignore them. A parallel line of reasoning goes like this.

 

Immediately after natural disasters or huge industrial accidents, the people impacted typically turn to the state for aid. As the global climate chaotically changes, and as the hunt for ever-lower-grade fossil energy sources forces companies to drill deeper and in more sensitive areas, we will undoubtedly see worsening weather crises, environmental degradation and pollution, and industrial accidents such as oil spills. Inevitably, more and more families and communities will be relying upon state-provided aid for disaster relief. Many people would be tempted to view an expansion of state support services with alarm as the ballooning of the powers of an already bloated central government. There may well be substance to this fear, depending on how the strategy is pursued. But it is important to remember that the economy as a whole, in this scenario, would be contracting—and would continue to contract—due to resource limits.

In any case, it’s hard to say how long this strategy could be maintained in the face of declining energy supplies. Eventually, central authorities’ ability to operate and repair the infrastructure necessary to continue supporting

As central governments seek to maintain complexity at the expense of more dispersed governmental nodes (city, county, and state governments), then conflict between communities and sputtering national or global power hubs is likely. Communities may begin to withdraw streams of support from central authorities—and not only governmental authorities, but financial and corporate ones as well.

Communities that have to contend with declining tax revenues, competition from larger governments, and predatory mega-corporations and banks, then nonprofit organizations—which support tens of thousands of local charity efforts—face perhaps even greater challenges. The current philanthropic model rests entirely upon assumed economic growth: foundation grants come from returns on the foundation’s investments (in the stock market and elsewhere). As economic growth slows and reverses, the world of nonprofit organizations will shake and crumble, and the casualties will include tens of thousands of social services agencies, educational programs, and environmental protection organizations . . . as well as countless symphony orchestras, dance ensembles, museums, and on and on. If national government loses its grip, if local governments are pinched simultaneously from above and below, and if nonprofit organizations are starved for funding, from where will come the means to support local communities with the social and cultural services they need?

Local movements to support localization—however benign their motives—may be perceived by national authorities as a threat.

Complications

Scenarios are not forecasts; they are planning tools. As prophecies, they’re not much more reliable than dreams. What really happens in the years ahead will be shaped as much by “black swan” events as by trends in resource depletion or credit markets. We know that environmental impacts from climate change will intensify, but we don’t know exactly where, when, or how severely those impacts will manifest; meanwhile, there is always the possibility of a massive environmental disaster not caused by human activity (such as an earthquake or volcanic eruption) occurring in such a location or on such a scale as to substantially alter the course of world events. Wars are also impossible to predict in terms of intensity and outcome, yet we know that geopolitical tensions are building.

The success of governments in navigating the transitions ahead may depend on measurable qualities and characteristics of governance itself. In this regard, there could be useful clues to be gleaned from the World Governance Index, which assesses governments according to criteria of peace and security, rule of law, human rights and participation, sustainable development, and human development. For 2011, the United States ranked number 32 (and falling: it was number 28 in 2008)—behind Uruguay, Estonia, and Portugal but ahead of China (number 140) and Russia (number 148).

One wonders how many big-government centralists of the left, right, or center—who often see the stability of the state, the status of their own careers, and the ultimate good of the people as being virtually identical—are likely to embrace such a prescription.

History teaches us at least as much as scenario exercises can. The convergence of debt bubbles, economic contraction, and extreme inequality is hardly unique to our historical moment. A particularly instructive and fateful previous instance occurred in France in the late 18th century. The result then was the French Revolution, which rid the common people of the burden of supporting an arrogant, entrenched aristocracy, while giving birth to ideals of liberty, equality, and universal brotherhood. However, the revolution also brought with it war, despotism, mass executions—and an utter failure to address underlying economic problems. So often, as happened then, nations suffering under economic contraction double down on militarism rather than downsizing their armies so as to free up resources. They go to war, hoping thereby both to win spoils and to give mobs of angry young men a target for their frustrations other than their own government. The gambit seldom succeeds; Napoleon made it work for a while, but not long. France and (most of) its people did survive the tumult. But then, at the dawn of the 19th century, Europe was on the cusp of another revolution—the fossil-fueled Industrial Revolution—and decades of economic growth shimmered on the horizon. Today we are just starting our long slide down the decline side of the fossil fuel supply curve.

The world supply of uranium is limited, and shortages are likely by mid-century even with no major expansion of power plants. And, atomic power plants are tied to nuclear weapons proliferation.

None of this daunts Techno-Anthropocene proponents, who say new nuclear technology has the potential to fulfill the promises originally made for the current fleet of atomic power plants. The centerpiece of this new technology is the integral fast reactor (IFR). Unlike light water reactors (which comprise the vast majority of nuclear power plants in service today), IFRs would use sodium as a coolant. The IFR nuclear reaction features fast neutrons, and it more thoroughly consumes radioactive fuel, leaving less waste. Indeed, IFRs could use current radioactive waste as fuel. Also, they are alleged to offer greater operational safety and less risk of weapons proliferation.

Fast-reactor technology is highly problematic. Earlier versions of the fast breeder reactor (of which IFR is a version) were commercial failures and safety disasters. Proponents of the integral fast reactor, say the critics, overlook its exorbitant development and deployment costs and continued proliferation risks. IFR theoretically only “transmutes,” rather than eliminates, radioactive waste. Yet the technology is decades away from widespread implementation, and its use of liquid sodium as a coolant can lead to fires and explosions.

David Biello, writing in Scientific American, concludes that, “To date, fast neutron reactors have consumed six decades and $100 billion of global effort but remain ‘wishful thinking.’”

But we don’t have the luxury of limitless investment capital, and we don’t have decades in which to work out the bugs and build out this complex, unproven technology.

Degrading topsoil in order to produce enough grain to feed ten billion people? Just build millions of hydroponic greenhouses (that need lots of energy for their construction and operation). As we mine deeper deposits of metals and minerals and refine lower-grade ores, we’ll require more energy.

Governments are probably incapable of leading a strategic retreat in our war on nature, as they are systemically hooked on economic growth. But there may be another path forward. Perhaps citizens and communities can initiate a change of direction.

Wes Jackson of the Land Institute in Salina, Kansas, has spent the past four decades breeding perennial grain crops (he points out that our current annual grains are responsible for the vast bulk of soil erosion, to the tune of 25 billion tons per year).

Population Media Center is working to ensure we don’t get to ten billion humans by enlisting creative artists in countries with high population growth rates (which are usually also among the world’s poorest nations) to produce radio and television soap operas featuring strong female characters who successfully confront issues related to family planning. This strategy has been shown to be the most cost-effective and humane means of reducing high birth rates in these nations.

It’s hard to convince people to voluntarily reduce consumption and curb reproduction. That’s not because humans are unusually pushy, greedy creatures; all living organisms tend to maximize their population size and rate of collective energy use. Inject a colony of bacteria into a suitable growth medium in a petri dish and watch what happens. Hummingbirds, mice, leopards, oarfish, redwood trees, or giraffes: in each instance the principle remains inviolate—every species maximizes population and energy consumption within nature’s limits. Systems ecologist Howard T. Odum called this rule the Maximum Power Principle: throughout nature, “system designs develop and prevail that maximize power intake, energy transformation, and those uses that reinforce production and efficiency.”

In many countries, including the US, government efforts to forestall or head off uprisings appear to be taking the forms of criminalization of dissent, the militarization of police, and a massive expansion of surveillance using an array of new electronic spy technologies. At the same time, intelligence agencies are now able to employ up-to-date sociological and psychological research to infiltrate, co-opt, misdirect, and manipulate popular movements aimed at achieving economic redistribution. However, these military, police, public relations, and intelligence efforts require massive funding as well as functioning grid, fuel, and transport infrastructures. Further, their effectiveness is limited if and when the nation’s level of economic pain becomes too intense, widespread, or prolonged. A second source of conflict consists of increasing competition over access to depleting resources, including oil, water, and minerals. Among the wealthiest nations, oil is likely to be the object of the most intensive struggle, since oil is essential for nearly all transport and trade. The race for oil began in the early 20th century and has shaped the politics and geopolitics of the Middle East and Central Asia; now that race is expanding to include the Arctic and deep oceans, such as the South China Sea. Resource conflicts occur not just between nations but also within societies: witness the ongoing insurgencies in the Niger Delta, where oil revenue fuels rampant political corruption while drilling leads to environmental ravages felt primarily by the Ogoni ethnic group; see also the political infighting in fracking country here in the United States, where ecological impacts put ever-greater strains on the social fabric.

Lastly, climate change, water scarcity, high oil prices, vanishing credit, and the leveling off of per-hectare productivity and the amount of arable land are all combining to create the conditions for a historic food crisis, which will impact the poor first and most forcibly. High food prices breed social instability—whether in 18th-century France or 21st-century Egypt. As today’s high prices rise further, social instability could spread, leading to demonstrations, riots, insurgencies, and revolutions.

In the current context, a continuing source of concern must be the large number of nuclear weapons now scattered among nine nations. While these weapons primarily exist as a deterrent to military aggression, and while the end of the Cold War has arguably reduced the likelihood of a massive release of them in an apocalyptic fury, it is still possible to imagine several scenarios in which a nuclear detonation could occur as a result of accident, aggression, preemption, or retaliation. We are in a race—but it’s not just an arms race; indeed, it may end up being an arms race in reverse.

We can only hope that historical momentum can maintain the Great Peace until industrial nations are sufficiently bankrupt that they cannot afford to mount foreign wars on any substantial scale.

 

In his recent and important book Carbon Democracy: Political Power in the Age of Oil, Timothy Mitchell argues that modern democracy owes a lot to coal. Not only did coal fuel the railroads, which knitted large regions together, but striking coal miners were able to bring nations to a standstill, so their demands for unions, pensions, and better working conditions played a significant role in the creation of the modern welfare state. It was no mere whim that led Margaret Thatcher to crush the coal industry in Britain; she saw its demise as the indispensable precondition to neoliberalism’s triumph. Coal was replaced, as a primary energy source, by oil. Mitchell suggests that oil offered industrial countries a path to reducing internal political pressures. Its production relied less on working-class miners and more upon university-trained geologists and engineers. Also, oil is traded globally, so that its production is influenced more by geopolitics and less by local labor strikes. “Politicians saw the control of oil overseas as a means of weakening democratic forces at home,” according to Mitchell, and so it is no accident that by the late 20th century the welfare state was in retreat and oil wars in the Middle East had become almost routine. The problem of “excess democracy,” which reliance upon coal inevitably brought with it, has been successfully resolved, not surprisingly by still more teams of university-trained experts—economists, public relations professionals, war planners, political consultants, marketers, and pollsters. We have organized our political life around a new organism—“the economy”—which is expected to grow in perpetuity, or, more practically, as long as the supply of oil continues to increase.

Andrew Nikiforuk also explores the suppression of democratic urges under an energy regime dominated by oil in his brilliant book The Energy of Slaves: Oil and the New Servitude. The energy in oil effectively replaces human labor; as a result, each North American enjoys the services of roughly 150 “energy slaves.” But, according to Nikiforuk, that means that burning oil makes us slave masters—and slave masters all tend to mimic the same attitudes and behaviors, including contempt, arrogance, and impunity.

As power addicts, we become both less sociable and easier to manipulate. In the early 21st century, carbon democracy is still ebbing, but so is the global oil regime hatched in the late 20th century. Domestic US oil production based on hydraulic fracturing (“fracking”) reduces the relative dominance of the Middle East petro-states, but to the advantage of Wall Street—which supplies the creative financing for speculative and marginally profitable domestic drilling. America’s oil wars have largely failed to establish and maintain the kind of order in the Middle East and Central Asia that was sought. High oil prices send dollars cascading toward energy producers but starve the economy as a whole, and this eventually reduces petroleum demand.

Governance systems appear to be incapable of solving or even seriously addressing looming financial, environmental, and resource issues, and “democracy” persists primarily in a highly diluted solution whose primary constituents are money, hype, and expert-driven opinion management. In short, the 20th-century governance system is itself fracturing. So what comes next?

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