Three major aspects of life in the United States (and the world), all beginning with the letter, E, are inextricably linked. The Economy runs on Energy and draws resources from and returns waste to the Environment. Energy is provided largely by fossil fuels (petroleum, natural gas, coal), which are obtained from the Environment, with the extraction causing extensive destruction of land, water resources, wildlife, and atmosphere. Burning fossil fuels releases poisons into the atmosphere and produces CO2, which is a significant factor in climate change. Judging from recent and current weather, melting ice sheets, and steadily increasing average global temperature, climate change is upon us. The Economy draws raw materials for manufacturing from the environment, raw materials that exist in limited supply. Economic activities generate pollution of land, water, and air, and produce goods that are eventually discarded as waste, piling up in landfills.
The Economy
The mantra of seemingly every politician in office or up for election is "Grow the economy, create more jobs." Indeed, in order to survive, a capitalist economy such as that of the US must grow at 3-7% per year in order to pay the interest on money loaned into existence. A capitalist economy that does not grow cannot survive. Annual growth equal to a certain percentage of the current value of the economy is exponential growth, meaning that the value of the economy (gross domestic product) will inexorably increase on a rising curve. An economy that grows at 5% will double in value in 14 years, and will quadruple in value in 28 years. OUR NATIONAL EXPECTATION IS THAT OUR ECONOMY WILL GROW 5% PER YEAR--FOREVER!
Other countries--Japan, China, India, the European Union, Australia--have similar expectations. Indeed, China is growing at a double-digit percentage. The expectation of the world is that the global economy will grow at least 5% per year--FOREVER.
It might occur to us to ask whether this expectation is rational. In attempting to answer this we can look at two underlying aspects of economy. First, resources upon which manufacturing is based must be drawn from the environment. Perpetual exponential growth requires an infinite supply of resources. Second, the economy is driven by fossil-fuel derived energy. An exponentially growing economy requires an exponentially increasing production of fossil fuels. Can we expect the production of fossil fuels (which are resources) to increase exponentially forever?
The Energy Supply
The phenomenon of Peak Oil is relevant to the discussion. "Peak oil" is the point in time at which the production of oil has reached a maximum, after which the production must inevitably decrease. This peak in production corresponds to the situation in which half of the total supply of oil has been extracted, and half remains in the ground. Naturally, the most readily and easily obtained oil is extracted first, so the half that remains in the ground is considerably more difficult and expensive to extract than the first half was. In 1956, M. King Hubbert, a geologist with Shell, predicted that the production of oil in the United States would "peak" in the early 1970s and would thereafter decline. At the time that he made this prediction, he was met with skepticism (to put it mildly). Nonetheless, production of oil in the US peaked in 1970, and has been declining since. Using the same mathematical methods, Hubbert predicted in the 1980s that global oil production would peak in the early 2000s. Hubbert died in the late 1980s, but other geologists and oil industry specialists (Jeffrey Deffeyes, Colin Campbell, Jeremy Leggett) have carried out their own calculations and have made similar predictions. All are in agreement that we are very probably experiencing peak oil NOW. In other words, the most accessible half of the world's supply of oil has been extracted and burned, and the half that remains in the ground will be increasingly difficult and expensive to extract. From this point on, the production of petroleum globally will decrease.
The peak oil phenomenon is presented graphically below. The blue curve represents the worldwide production of oil. It is seen to reach a maximum in 2010. The red curve represents our expectations for economic growth: that it will increase on a rising curve virtually forever. Assuming oil is peaking now, there will henceforth be an increasing gap between our fantasies of economic growth and the reality of world oil production. The economies of the world cannot grow if the energy supply is not available to support the growth.
When the energy supply cannot support the expected economic growth, what can we expect to happen? It seems there are several possibilities (or dreams):
1) We can replace oil with "something else" and keep going. What could we conceivably replace it with?
a) Hydrogen? OR
b) Natural gas? OR
c) Nuclear power? OR
d) Some as yet undiscovered, unconceived "technological solution"?
2) Could we invade the middle east to secure the remaining supplies of oil for ourselves. Perhaps we have already done this.
3) Could we downsize the economy in tandem with the steadily decreasing production of oil?
The short response to option 1) is, NO. Option 2) is at best a short term solution, but in my view represents the most likely response of the US. The fallacy in option 2) may be that if we have all the oil, economies other than ours will crash, and it seems doubtful that our economy can continue to grow as other economies crash. (Maybe it's just me.) Option 3) sounds reasonable, but we have already said that a capitalist economy must grow to survive. So we cannot downsize our economy in its current form and expect the economy to survive. A particularly important aspect of downsizing an economy is the downsizing of food production. How can we support our (and much of the world's) excessive population if we downsize food production? In addition, if we think we have unemployment problems now, what will they be like as we continuously downsize the economy?
Clearly we face some major problems. We need, as a nation, to begin to address some of these problems NOW! Is it likely, given a populace that is addicted to automobiles, suburban lifestyle, and 2500-mile Caesar salads and a government whose members are much more concerned with getting re-elected than with real issues of import to the country, that we will begin to address these problems in the near future? My answer is, no, it is not likely.
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