Apr 2010

Peak oil revisited (part 3)

[Part 1] | [Part 2]

As we’ve already seen, we are approaching a singular discontinuity in human affairs. We’ve built an advanced technological civilisation that relies heavily upon a resource that will soon decline in availability. At the same time we developed an economic system predicated upon growth.

Economic growth is more or less synonymous with an increase in the total amount of work being carried out*. Energy is defined as “the ability to do work”. This physical definition is vital to our understanding of what happens in a world with progressively less net energy available for use… put simply; less work can be done. Feed a person 2,000 calories per day but force them to expend 2,100. Eventually they will die.

Similarly, if you have an economic system that depends upon growth for survival, a consistent and ongoing reduction in available energy will eventually kill it. The trick, therefore, is to develop a system that does not require constant growth. We need a radical shift in how we perceive economic data. Here, as we sit in the midst of a recession, we are bombarded by constant assurances from our politicians that they are working towards a “return to growth”. This is — almost universally — seen as a good thing. We should, however, be greeting these pronouncements with horror and anger. As unemployment rises we need to begin looking at ways to take advantage of a reduction in work rather than ways to reverse the trend. Put simply, with less energy available, there will be less work. This is not predicated upon an ideology or desired policy, but on the basic laws of physics. And we need to get used to it.

Instead of seeing a mental picture of an upward-trending graph when we hear the word “growth”, we should be seeing a mental picture of a malignant tumour.

The Problem of The Market

Like many of us, in my youth I tried on a number of different belief systems to see which one made most sense to me. I didn’t realise that’s what I was doing of course, so when I was a Roman Catholic… I was Catholic forever. Later on I found The One True Path and it was Marxism. A little while after that, libertarianism became the Obviously Right Way of viewing the world. And so it went. I have much sympathy for those who never went through this process, and who still find themselves stuck in the first rut they fell into, whether through indoctrination, laziness or a lack of imagination.

My free market capitalism days didn’t last very long though because they came along when I was already beginning to view the world in ecological terms. This isn’t so much a belief system as it is a mode of perception. These days I call it my “ecological filter” and it was very much in its infancy for me then. Even now, two decades later, I still find myself surprised at how it mutates and evolves, changing me and my beliefs as it does so. In fact, it’s probably only in the past six or seven years that I’ve even begun to understand this way of viewing things. It always felt right to me of course, but it wasn’t until I encountered the work of Gregory Bateson that I actually understood it.

Even back in the early days, however, even as I was professing a belief in it, I found myself recoiling from free market economics. It didn’t sit right with me. Part of that was as simple as aesthetics. A world with material profit at its heart seemed ugly and cold to me. I recall attending a lecture by a fairly renowned economist who responded to a question from the audience by suggesting that the way to protect endangered species was to ensure “they were more profitable alive than dead”. This complete willingness to bypass ethics and base life or death decisions on profit margins appalled me. Just like the Marxists I’d once flocked with, the free marketeers seemed content to apply economic models in situations which — to me at least — were completely inappropriate.

Economic value is but one way of measuring value. What’s more, it’s not even the most valuable.

The Essential Disconnect

Our modern economic system, however, has successfully employed a variety of strategies to ensure that all other measures of value become subservient to the economic model. The most effective of these strategies is what I call ‘The Essential Disconnect’. And nowhere is this more apparent than the palm-oil plantations of Indonesia.

Rising crude oil prices (i.e. market signals) coupled with perfectly legitimate concerns about Climate Change** led many governments to mandate the use of biofuels as a percentage of our total liquid fuels consumption. Despite the generally low percentages involved, this created a huge demand for vegetable-based oils (a low percentage of a massive number can often be quite large). In response to this demand, the major palm-oil exporters of which Indonesia is the largest began to ramp up production. This resulted in the kind of deforestation programme not seen since the height of the Brazillian slash-and-burn years. It is estimated, for instance, that the island of Sumatra — the largest in the Indonesian archipelago — will be entirely deforested within the next couple of years.

The Essential Disconnect is a twofold mechanism which both hides the consequences of palm oil production from those who consume it, and downplays the importance of those consequences for those who do hear about them. Few of us ever actually see the destruction of the Sumatran forests, and those who do are trapped by a worldview that fails to recognise the significance of that destruction. Our economic system effectively insulates the consumer from the consequences of their consumption.

Which is why a peak in global crude oil production coupled with a global free market in natural resources poses such a great threat to us. Rather than forcing us to re-evaluate our economic system, the first response provoked by peak oil in a free market will be to try to meet demand despite a drop in supply. So we don’t see a drop in private car use, we see the rapid deforestation of areas far away from the car owners. We don’t see huge investment in energy reduction measures, we see plans for a bunch of new nuclear power stations. “Consume less” becomes the last resort rather than the first.

Which wouldn’t be such a big deal if those first attempts to plug the supply gap weren’t so destructive. If they didn’t involve the suicidal destruction of the very environment of which we are an integral part. When the markets start to feel the pinch of peak oil they will react by demanding more palm oil, more coal burning, more uranium mining… As Bateson never tires of pointing out: “the organism that destroys its environment, destroys itself”.


This essay ended up being a good deal longer than I’d intended. Sorry about that. It started out as a response to a comment on a previous post and grew almost without me realising. I hope, however, that at least one person learns something they didn’t know about peak oil and resource depletion while reading it. Even if they don’t come to the same conclusions as I’ve reached, I can’t help but feel that the more people thinking about this issue, the better.

[Part 1] | [Part 2]

* of course, you can still have a certain level of growth without an increase in work by increasing the efficiency of existing work, but that eventually reaches a ceiling beyond which higher efficiencies are not possible.

** there is a sad irony in the fact that — for a variety of reasons — the biofuel life-cycle does not appear to significantly reduce ‘greenhouse gas’ emissions. Indeed, there are instances where biofuel production actually produces greater emissions than petroleum. So we find ourselves destroying our native ecology for no good reason.

Posted in: Opinion