The Quiet Road

Just a quickie. In my recent post (The next great wave of Irish emigration) about the collapse of the Irish property market and the mountain of debt it has created for us all, I suggested that there’s “an estimated quarter of a million newly built houses and apartments standing empty”. I must apologise as my estimate was somewhere between 20% and 40% out. It turns out, according to the most recent data, that in fact the number is “believed to be between 352,414 and 301,682”.

That’s a whole lot of vacant houses for a nation of 4.4 million.

For about 12 years starting in the mid-90s a bunch of private business concerns decided to buy large tracts of land in Ireland (particularly around Dublin) and “develop” them by building luxury apartments and hotels. Competition was high because every property developer in the country had bought into the same delusion. Somehow they convinced themselves that this was a no-lose proposition. Property values shot up. Greenfield sites in the Dublin commuter belt increased in value by a couple of hundred percent within a few years. And brownfield sites in the city centre rose by even more. It was sheer lunacy.

Which, in itself, wouldn’t have been a problem. No, it became a problem when this small group of developers succeeded in convincing the banks and the government to join their party. And so together, the bankers, speculators and developers — breathlessly urged onwards by politicians tripping over themselves to rezone land and dismantle regulatory frameworks — dragged the nation relentlessly into a deep dark hole. Massive loans were granted based on absurd valuations and overnight a mountain of debt appeared in Dublin’s financial district.

The half-dozen or so sane people left in the country shook their heads ruefully and suggested that there was only one way for this to end… the same way all collective delusions end… with a bone-shaking return to reality and lots of wailing and gnashing of teeth. Of course nobody listened. We were labelled doom-mongers and pessimists. “Shut up and let me enjoy the party”, they’d say, and we’d wince as they shovelled another gramme of future debt up their nose. It’s gonna be one hell of a come-down, we’d mutter as they gave us dark scowls and dismissive gestures. “Come down?! Don’t be such an arsehole”, they’d yell, “I can keep snorting this stuff forever”.

Sadly, there the drug analogy ends. A hangover or comedown may be managed via the skillful application of hair-of-the-dog. Not the case with a property crash. Especially not one that happens just prior to an energy crisis. The Irish people find themselves slumped, sweating and groaning, on the bathroom floor. The economy flushed to get rid of the stench. All that remains of it is a foul stain on our shirt and a few nasty dried flecks stuck to our hair. Ugly reminders of our willingness to trade our future and that of our children for a few years of hedonism.

You see, as was entirely predictable… indeed inevitable… property prices crashed. And how! The Irish Glass Bottle site in Ringsend, which has become something of a symbol of the insanity that gripped the nation, has seen an 88% drop in valuation since the bubble burst. Purchased for €412 million in 2006, it has recently been repossessed by the bank that provided the loan and is for sale for €50 million. There are no interested buyers.

There are now an estimated quarter of a million newly built houses and apartments standing empty in “ghost developments” around Ireland. This, in a country with a population of four million. Safe to say the prospects for a recovery in the Irish residential property market aren’t good. In fact, probably the only remaining positive aspect of the property boom is the new nomenclature that has sprung up to describe the folly. Ghost developments sounds pretty cool, but even better is ‘Zombie hotels’, which is the phrase being used to describe the dozens of brand new hotels that are slowly choking the life out of established businesses. The massive over-capacity is forcing equally massive rate cuts. Good news, you might think, for the consumer but it’s crippling the entire sector and — as is so often the case — the good news of short-termism often doesn’t stay good for very long.

But hang on a second… rewind a bit to the Irish Glass Bottle site in Ringsend. Did I say “repossessed by the bank”? Let me rephrase that… it has been repossessed by the Irish government who have generously agreed to absorb pretty much all of the hundreds of billions of euro worth of debt injected into the Irish economy by a small number of greedy fools. The people responsible for creating our ghost developments and zombie hotels aren’t — it seems — the people responsible for dealing with the consequences. It’s been suggested that every person currently alive in Ireland will have to pay €2,000 per year for the next 70 years in order to clear the total liability that’s been shouldered by our Fianna Fáil / Green coalition government. And given that not all of us have another 70 years to live, we’ll be bequeathing a massive burden to the next couple of generations.

You’re welcome, kids.

As soon as this all sinks in — and for most, it really hasn’t yet — expect to see the next great wave of Irish emigration.

Last night the British parliament enacted a thoroughly regressive piece of legislation. Called The Digital Economy Bill (DEBill), it is ostensibly designed to — amongst other things — prevent internet file-sharing. In fact, what it actually does is allow large corporations to legally victimise individuals based on nothing more than suspicion. Once again the representatives of the people have sold them out to appease the power of private capital.

And people say the coming election actually matters? Fact is, who ever gets into government, it’s Big Business who stays in power.

According to DEBill, corporations are permitted to monitor the nation’s internet connections and demand that anyone suspected of filesharing be disconnected. Yes, warning letters must be sent out first, but the fact remains that there is no actual burden of proof involved. If your IP address is spoofed, or WiFi network hacked, or computer compromised by a custom trojan*, say goodbye to your net connection. If your 14 year old kid continues to download music without your knowledge, say goodbye to your net connection. If you share your own home movies or music with others and can’t prove that it’s your material (in this case there is a burden of proof… but it’s on you; you must take the issue to court at your own cost), say goodbye to your net connection.

And this has happened in a climate where the Minister for Digital Britain, Stephen Timms, claims that “[b]roadband is no longer considered a luxury — it has become an essential service delivering social, commercial and economic benefits”. A climate where Gordon Brown insists that “the internet is as vital as water and gas” (hyperbole certainly, but he said it, not the anti-DEBill camp).

So Britain now has a Labour-driven law designed to allow corporations to legally withdraw essential services from individuals on the basis of suspicion of wrongdoing.

But of course it wasn’t just Labour who passed the law. It pretty much had all-party support. The tories were firmly behind it. And while the Liberal Democrats claimed to oppose it, they couldn’t be bothered to show up for the vote, let alone the debate. This is supposed to be the liberal party, the one that in theory would be most opposed to this kind of corporate power grab, and yet less than a third of their MPs were present in parliament to speak or vote against it. While Nick Clegg and his liberal democrats jet around Britain talking like they’re an alternative to the two large parties, their actions tell a somewhat different story.

Politicians are constantly lamenting the perceived public apathy with politics. Young people, they say, are disconnected from the political process. But here we have a bill that’s arguably of particular interest to young people and yet anyone tuning in to watch the proceedings last night would have seen a handful of disinterested and ill-informed MPs in a half-empty room acquiescing to the wishes of big business. If even the professional politicians can’t be arsed to attend a vote on important legislation, is it any wonder nobody else is interested in the bloody process?

UPDATE: It appears that the office of Stephen Timms, Minister for Digital Britain, is under the impression that IP (as in IP address) stands for “Intellectual Property”. I just don’t know what to say about that. Am I the only one who believes that perhaps MPs should actually understand the laws they are passing? That part of their job should be to research things before they legislate on them? Rather than merely being rubber-stamps to the whims of capital? Perhaps that’s why so few MPs showed up to vote… they were too ignorant to grasp the importance of the bill and too damn lazy to do anything about that fact. (via antonvowl on twitter)

A few years ago in a longish piece about Nukes in Ireland, I discussed a report commissioned by the Irish Department of Enterprise, Trade and Employment. Compiled by the advisory body, Forfás, I described it as “the Buzz Aldrin of peak oil studies” as it was the second major government study (in English) of the peak oil situation. The first such study was The Hirsch Report carried out by the US Department of Energy. Both came to very similar conclusions.

In the intervening four years the recommendations of the Forfás report have been roundly ignored by the government that commissioned it. Of course, governments commission a lot of studies and reports and can’t be expected to follow every recommendation in every one. But when presented with strong evidence from your top advisors that the entire country will go down the tubes unless something is done quickly, it takes either a criminally negligent or deeply moronic set of politicians to sweep that evidence under the carpet in the hope that ignoring it will help matters.

The report suggested that the crisis would start to seriously impact Ireland within ten to fifteen years. It suggested that radical measures needed to be taken immediately as it would take at least that long to prepare for peak oil and that even a ten year lead time was cutting it very fine indeed. The Hirsch Report, remember, suggested that twenty years was the bare minimum to implement a mitigation strategy that had any chance of working.

Sadly, the reality is, credible warnings were sounded and it is now simply too late to deal effectively with peak oil without significant damage being done to the fabric of global civilisation.

Which isn’t to say that nothing can be done. But each day we delay we make that damage all the worse. Each day we live in denial and insist that our strategy must be to achieve a “return to growth” rather than a wholesale restructuring of our economy, our systems of production and distribution, is a day closer to complete systemic collapse.

We are here already

For all intents and purposes we have already passed the global peak in oil production. We’ve reached the tipping point. Which is presumably why that title, Tipping Point, was chosen for yet another Irish report into the peak oil problem. Subtitled Near-Term Systemic Implications of a Peak in Global Oil Production: An Outline Review, this time the study has been produced by Feasta (The Foundation for the Economics of Sustainability) and it makes very grim reading indeed. If you don’t fancy downloading the full report, a brief summary can be accessed on their website. As I say though, it’s grim stuff.

The Irish Times today reports the study under the headline: Ireland ‘among most vulnerable’ to peak oil. The point I’d like to make — briefly as it’s getting late — is that although there’s a certain truth in that; it doesn’t tell the whole story.

Ireland’s vulnerability to peak oil stems from the fact that modern Ireland is more dependent upon cheap oil than most places. We are the third highest per capita oil consumers in Europe, thanks largely to our heavy use of oil to generate electricity (Dublin’s primary power station is an oil burner). We have squandered billions in recent years on road-building programmes while our public transport systems remain an embarrassment. The “knowledge economy” our government is so proud of building may have funded a decade-long orgy of consumerism but will ultimately turn out to be a betrayal of the people of Ireland. We allowed our traditional agricultural base to decline while hurtling towards a world where the ability to produce real actual food will be infinitely more valuable than being Google’s European base of operations.

And yet, despite the inevitable upheavals that approach us, Ireland does have a few things going for it. We’ve got a couple of aces up our sleeves. Albeit no thanks to the people who actually run the country.

Firstly is the fact that we are one of the few countries in the developed world that has not exceeded its notional carrying capacity. In other words, should there be a collapse in global trade — as predicted by the Feasta study — Ireland could become self-sufficient in food production. Certainly it would take a huge effort to achieve this, and given the kind of people we’ve tended to put in charge of national policy there’s every chance we’ll screw it up completely. Nonetheless, this island has the ability to produce enough food to prevent widespread hunger. The same cannot be said for many of our neighbours.

Another advantage we possess is our broadly socialist culture. Yes, it’s taken a severe knock in the past twenty years as successive governments sought to emulate the neoliberal travesties that rose briefly to international prominence on the back of an over-abundance of cheap energy. Nonetheless, I genuinely feel that the basic vision of de Valera (the most influential political figure in the early years of the Irish state) is still there. Sure, it’s buried beneath a thick layer of dust. And yes, it was always uncomfortably bound up with the darkness of Irish Catholicism. But de Valera’s basic vision of a socialist-leaning nation built upon agricultural self-sufficiency and a firm rejection of the entrenched power of private capital hasn’t been dead so long that it can’t be revived.

Here on this small wet island we possess the raw materials to keep body and soul together. And terrible though it may be to point it out, this actually puts us in a minority of nations. Whether we actually do keep body and soul together though, remains very much in the balance. But our national culture — the collective psyche of Ireland — shouldn’t be as unreceptive to the steps required to achieve this as might be the case elsewhere.

See, a transition to sustainability will happen. There’s not actually a choice in this. We can no more choose another option than we can legislate gravity away. The only question is how much destruciton and suffering will be involved in that transition. And that will largely be predicated upon how quickly we wake up to the need to act. The more preparation we carry out before the oil supply starts to significantly dwindle, the less damage we’ll suffer as a nation — and as a global civilisation.

Meanwhile, as Gordon Brown represented his nation by prostrating himself before the throne of Her Majesty, David Cameron was on the other side of the Thames prostrating himself before the altar of public opinion. He rolled up his sleeves and ran his fingers through immaculately styled hair to symbolise his dynamism and vigour. Unencumbered by other members of his party (almost none of whom can be trusted in front of a microphone) he desperately sought to portray himself in a presidential manner.

He echoed John F. Kennedy’s “ask not what your country can do for you” speech (though his phrasing was far clumsier and ended up being about as inspiring as a wet Sunday afternoon in Basingstoke). His promise to champion “the Great Ignored” called to mind Nixon’s appeal to the Silent Majority. In fairness to Cameron he did have almost as much charisma as Nixon. His body language and “look at how at ease I am” mannerisms screamed Bill Clinton. Though in a supremely irritating, nails-across-a-blackboard kind of way. I’d only have been mildly surprised if he’d pulled out a saxophone and donned a pair of shades.

Most of all though, he was aiming for that Barack Obama vibe. He never actually said “Yes We Can!” but you could see how much he wanted to. It was all about Change. Vote for Cameron and he’d usher in an era of change. It’s a time for change. Indeed, it’s the Year Of Change. So everyone in Britain should Vote For Change. Change and Hope. Oh, and Optimism. Change, Hope and Optimism. That’s what President Cameron would represent.

Unfortunately though, a vote for President Cameron would actually result in the election of Prime Minister Cameron. And if you thought the shower of fools and villains flanking Gordon Brown on Downing Street were depressing, just wait ’til you see who Cameron will be taking into power with him. Tawdry backward-looking reactionaries who actually mean it when they sing God Save The Queen. Bankers, puppy-killers, nuclear weapons enthusiasts… and that’s just Oliver Letwin.

Still, at least the moats will be clean.

And as Daveybloke Cameron was filmed in front of a carefully selected crowd of young, ethnically diverse supporters on the South Bank he spoke passionately about the sort of people he would represent. The sort of people his government would really listen to. “The Great Ignored” he called them. They were black and white, he said. They were rich and poor, he said (though I found it difficult to swallow the idea that “the rich” are really part of The Great Ignored). They were hard-working taxpayers, he said.

In the background you could see a short scuffle as Conservative security guards wrestled a megaphone from shadow home secretary Chris Grayling who was shouting “not the queers though, Dave, not the fucking queers!”

Indeed, if anything illustrates just how shallow this tory ‘change’ really is, it’s the ugly homophobia that seeps from under the pretty plastic facade that Saatchi & Saatchi are fashioning around the party. The past couple of weeks have seen Cameron spectacularly implode during an interview with Gay Times. An interview in which he first claimed that homosexual equality was “a fundamental human right” and then suggested that he was unwilling to put pressure on other tories to support it. The next leader of Britain, it seems, is pretty damn equivocal on the subject of fundamental human rights.

Gay Rights campaigners predictably criticised Cameron for his less than forthright support of their fundamental human rights. At the same time, Conservative elder statesman Lord Norman Tebbit was also attacking Cameron for this wishy-washy attitude to gay rights. Except he was under the impression that Cameron’s lip-service to equality was actually going too far. All a bit limp-wristed and pink for Grand-Vizier Tebbit’s liking, it seems. Daveybloke shouldn’t be concerning himself with such “trivialities” as “political asylum for African homosexuals” says Vice-Emperor Tebbit. Protecting fundamental human rights shouldn’t be a high priority for the British Conservative Party. At least, not according to the British Conservative Party.

Then, to top it all off, out comes Chris Grayling — shadow Home Secretary let’s not forget — with his suggestion that people who run Bed & Breakfasts should have the right to refuse entry to guests on the grounds of their sexuality.

That the people of Britain look likely to elect these bigots as their next government is very sad indeed.

Queen Elizabeth II.
Kindly permitting democracy in Britain.

The sorry spectacle of an elected leader travelling to the palace of an hereditary monarch to request permission to hold an election played out in the UK this morning, as it has done prior to every British election in living memory. The people of the United Kingdom (the clue’s in the name) doffed their collective cap to Queen Elizabeth in recognition of the ruthless ability possessed by her ancestors to violently subjugate the masses. Well done Liz! And well done people of Britain, for permitting such a weird and demeaning custom to continue for the amusement of the rest of the world.

And yes, we all know the queen’s role is technically ceremonial but the symbolism of the prime minister’s visit to Buckingham Palace is surely distasteful — at the very least — to anyone with a commitment to social justice and equality. Brown’s announcement on Downing Street, flanked as he was by his profoundly unlikeable and discredited cabinet that “the queen has kindly agreed” to allow the democratic process to get underway merely underlined the cringeworthy absurdity of the charade.

The thing it called most to my own mind was the explicit promises by the current government (promises that have been echoing in their speeches and manifestos since 1997) to remove hereditary peers from the House of Lords. This assembly possesses plenty of real, non-ceremonial power and influence, yet there are still over 90 members of the legislature whose position is predicated on who their dad was.

And this is a nation that feels comfortable exporting democracy at the barrel of a gun?

[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”.

Epilogue

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]

[Part 1] | [Part 3]

In Part 1 of this article we learnt that a proven methodology (the Hubbert Curve) exists to predict the rate at which a given region will produce oil. We learnt that when applied to the “official” (BP published) figures for existing oil reserves, this methodology predicts a peak in global production in the middle of this century. However, we also learnt that these official figures are unreliable and that the application of the Hubbert Curve to a more accurate database suggests that a production peak is imminent.

The ‘meaning’ of Peak Oil

But what exactly does this mean? Well, firstly it’s important to realise that it doesn’t mean crude oil will run out in a few years. The Hubbert Curve illustrates that the dynamics of oil fields are such that peak production occurs when roughly half of the available oil has been pumped. So when global oil production peaks, it will mean we still have the same amount of oil available to us as has already been consumed.

However — and people unfamiliar with petroleum geology really need to understand this point — the rate at which oil can be extracted from a given well is fixed by the geology of the oil field. As more and more oil is pumped out, the internal pressure of the field drops. By the time you’ve extracted half the available oil, the flow begins to decrease and the rate of extraction falls by between 3% and 6% per annum, depending on the specific field.

There are Enhanced Oil Recovery (EOR) technologies available, but these tend not to extend the life of a field very much. They can increase the total amount of oil that gets extracted from a field, but they also usually recover the oil faster. This leads to a slightly higher peak production rate and a slight extension of that peak (making it more a plateau than a peak), but they also ensure a more precipitous fall in production after that plateau. Furthermore, pretty much every major field in the world suitable for EOR is already using it. For this reason, it’s likely that the post-peak per annum drop in global production rates will be closer to the 6% figure than the 3%.

Now, the reason this is so important is down to the fact that oil is the primary driver of the global economy. It accounts for 40% of the total energy used by humanity and more than 95% of the transport sector. Just as importantly, crude oil is the raw material from which we produce a mind-numbingly vast array of products. From pesticides to paints to plastics. It is the feedstock for so many of our industrial chemicals and lubricants that it’s difficult for someone like me who has worked in industry to imagine how a modern factory could possibly function without it. Right now we are living in the Age of Oil. And it’s drawing to a close.

An article produced by the RunningOnEmpty web group estimated that crude oil had more than half a million different by-products…

… including fertilizers (they are the most vital), medicines, lubricants, plastics (computers, phones, shower curtains, disposables, toys, etc.), asphalt (roading and roofs), insulation, glues/paints/ caulking, “rubber” tires and boots, carpets, synthetic fabrics/clothing, stockings, insect repellent…

Modern food production, preservation and distribution is highly reliant upon cheap and plentiful oil. Whether it’s fertilizers, pesticides, refrigeration, packaging, transportation or simply preparation; oil plays a huge part in keeping us all fed. Systems Theorist H.T. Odum once suggested that modern agriculture was effectively a system designed to convert fossil fuel into food. And it’s a system upon which billions of us now rely for sustenance.

I feel we should all remember this every time we climb into a car. It’s a finite resource with a multitude of alternative uses, so the petrol being burnt to move us from A to B is — in a sense — potential “future food” that will never be produced.

There are no effective substitutes for crude oil

This is another point that people unfamiliar with this issue don’t always appreciate. Certainly when I first started to research peak oil back in the late 1990s, I became convinced that biofuels offered a simple and effective solution. I became something of an evangelist for the idea. Unfortunately though, I was wrong.

The energy density of crude oil is such that available arable land simply can’t produce a fraction of the energy required to replace global oil production. I once did a rough, back-of-a-napkin calculation which revealed that Ireland (a small nation but one with a relatively low population density) could devote the entire arable surface of the country to growing high-yield fuel crops and still only produce approximately half of the fuel required to run our private automobile fleet. That’s just private cars.

All of our arable land, and we’d still need to import about 45% of the fuel needed for our cars.

And it’s this reason why allowing free market forces to deal with peak oil is so disastrous. But more about that a little later.

Prior to that, let me first address some of the other “oil replacements” that are often suggested. Like biofuels, many of these appear to be fine ideas until you try to scale them up. Yes, a barrel of oil can be replaced by a barrel of biofuel*. But replacing 85 million barrels of oil per day with vegetable-based oils? It’s just not an option. We can convert every remaining wilderness and forest into fuel plantations and still not make a serious dent in that number. We can all become vegans and grow biofuels on the land currently used to graze animals and grow their feed… yet still we’ll be relying on biofuel imports from Alpha Centauri.

Put simply, we need another couple of Earths if we are to replace crude oil with vegetable oil.

Others speak of the hydrogen economy. This too is a complete non-starter. Primarily because hydrogen is not an energy source. There are no hydrogen reservoirs; it needs to be manufactured. And the manufacture of hydrogen consumes more energy than is produced by burning the end product. It’s like a proposal to replace 85 million barrels of oil per day with batteries. Hydrogen may have a role to play in the storage of solar or wind power (and I stress “may” because hydrogen has problems of its own and there are probably better energy storage solutions available), but those who propose it as a substitute for oil don’t understand basic physics.

Coal is often suggested as a stop-gap solution until something better comes along. Unfortunately there are serious drawbacks with this (not least the huge increase in carbon emissions and other forms of pollution it would entail). The process of converting coal to liquid fuel, which would be required if it was to replace some or all of the 95% of transportation energy currently provided by oil, is costly (both economically and from an energy-efficiency standpoint), highly polluting and requires large quantities of fresh water (another global resource in increasingly short supply). If we view coal as a potential replacement for oil, then we are resigning ourselves to massive increases in carbon emissions, the acceleration of fresh water depletion and the destruction of large parts of our natural environment. Furthermore, the oft-quoted line that we have “hundreds of years worth of coal” still left in the ground is only true so long as we don’t radically increase its use (which would be the case if we tried to replace the energy we get from oil with it).

Probably the only energy source that is broadly comparable to crude oil is natural gas. It’s slightly less polluting, but is also slightly less convenient. Liquifying it for transportation by tanker (or for use in combustion engines) reduces the energy efficiency of the fuel. To store it efficiently requires compression and/or refrigeration. All in all, when compared with crude oil, it’s a pain in the arse to work with. None of which rules it out as a replacement for oil. The fact that it’s also being rapidly depleted, however, does rule it out. The Association for the Study of Peak Oil and gas (ASPO) estimates that we will reach a global peak in natural gas production sometime around 2020. And it’ll certainly be sooner should we ramp up our gas consumption to compensate for a reduction in oil availability. Even worse, the depletion profile of natural gas isn’t a smooth curve like that of crude oil. Dr. Colin Campbell uses the phrase “natural gas cliff” to describe it. So while our reliance upon crude oil will force us to deal with gradually decreasing availability at up to 6% per year, any reliance upon natural gas will soon be met with sudden and large drops in supply.

Nuclear power is a terrible idea for all manner of reasons. Firstly, there are the obvious issues like waste disposal, security and proliferation to worry about. Less well known is the fact that uranium isn’t exactly plentiful. The world’s largest producer — Australia — estimates that they have about 40 years worth of the stuff left at current consumption rates. This will clearly be significantly reduced should we ramp up nuclear power generation. Certainly there are theoretical solutions for this (fast breeder reactors that can use reprocessed waste as new fuel, and the idea of extracting uranium from sea water). However, the current plans for a new generation of nuclear power stations do not propose to use any of these technologies. Given that new nuclear can’t be expected to come on line for at least 15 years, at the earliest, we shouldn’t expect these advanced nuclear technologies to show up much before 2030 or 2040. This will, quite simply, be too late to meet the challenges of peak oil. Furthermore, it would be foolish to assume that a society in the grip of an oil crisis would be capable of the sort of massive industrial effort required to greatly expand nuclear power. It would consume much needed resources without bringing us any closer to genuine sustainability.

Renewable energy solutions like solar power, wind, wave and tidal will doubtlessly play an important role in keeping the lights on in those nations who invest heavily in them. They have their own drawbacks of course, but they are at least sustainable in the broadest sense.

Like the other proposals, however, what they cannot do is meet the energy gap left by oil depletion. Liquid fuel shortages can’t be mitigated by building wind turbines. Crude oil is an amazingly precious resource. Those who suggest it can easily be replaced by “something else” tend to be largely ignorant of just what makes it so precious. It is (thus far) fantastically plentiful, easily accessible, convenient to transport and versatile almost beyond belief. It also contains vast amounts of concentrated energy when compared to any potential replacement (with the exception of uranium which has its own set of problems).

On top of all this, we’ve only been considering substitutes for oil as an energy source. All the wind turbines in the world won’t generate pesticides or plastics. The byproducts of oil surround us all. I’m typing this on a keyboard made of the stuff. The infrastructure supporting modern life is sculpted from crude oil. It grows the food we eat, coats the roads the food travels on, fuels the trucks that carry it over those roads (and is the raw material for many of the components of those trucks), it’s the wrapping that keeps the food fresh and the refrigeration that keeps it cool.

Introducing ‘The Problem of The Market’

Some critics of Peak Oil theory dismiss it on the grounds that it simply won’t happen… that there won’t be supply constraints in our lifetimes. This is nonsense and unworthy of serious discussion. The evidence is there and even the most optimistic of those who understand the evidence acknowledge that it will happen by the middle of this century (which, as I hope I’ve demonstrated, is likely to be inaccurate by 30 or 40 years). Others, however, insist that while oil production capacity may peak soon, it isn’t all that big a deal. Some of them play down crude oil’s vital role in keeping our civilisation ticking over; others believe that with a bit of minor tweaking, something else can play that role; or they believe that free markets will somehow deal with the problem.

I hope I’ve shown why oil is indeed vital to our modern world, and why there is currently nothing else available to fill the gap it will leave. In Part 3 I’ll address the issue of free markets and why they pose a dangerous obstacle to peak oil mitigation rather than a potential solution.

[Part 1] | [Part 3]

[Part 2] | [Part 3]

In the comments thread to my previous post, Luis Enrique suggests he’s optimistic about the ability of market mechanisms to mitigate the worst effects of peak oil. He does preface this, however, by acknowledging that it isn’t a subject he’s studied extensively and accepts that this optimism may well be misplaced.

So for the benefit of Luis and anyone else who may have missed my previous witterings on the subject, I’d like to recap my own position on the peak oil problem, why I believe it is the most pressing problem we face as a society, why free market mechanisms can only exacerbate the problem, and what I believe we should do about it.

Now, before I get excitable environmentalists accusing me of hyperbole for describing peak oil as “the most pressing problem we face”, and insisting that Climate Change makes peak oil pale into insignificance, let me point out that I don’t claim peak oil is somehow a more important problem only that it is more immediate. Furthermore, a failure to deal effectively with peak oil will dramatically accelerate Climate Change. Indeed, we cannot begin to effectively address the Climate Change issue without first sorting out what we plan to do about oil production peaking.

As an aside, I’d also like to point out that I’m a little troubled by the current tendency of environmentalists to describe Climate Change as ‘the most important issue facing the world’. Don’t get me wrong, I do understand where they’re coming from with that, but I believe they’re failing to see the wood for the trees… focussing on a single facet of something far larger. The issue we need to be concerned with — above all — is sustainability. Our impact on the climate may well be one of the largest obstacles to our achieving sustainability, but any “solution” to Climate Change that is itself unsustainable should be automatically discounted. This is why I have such a problem with the likes of George Monbiot and Mark Lynas (two environmental writers for whom I have a great deal of respect) suggesting that nuclear power be part of our plan to deal with Climate Change. The kind of massive increase in industrial activity that would inevitably accompany any significant expansion of nuclear power will only serve to take us further from sustainability. But that’s a discussion that deserves a post of its own, so for now I’ll get back to the specifics of peak oil.

A brief history of Peak Oil

The idea of a peak in global oil production was first seriously mooted by M. King Hubbert in the 1950s. There had been others before him who’d predicted oil running out, but they may as well have been reading tea-leaves for all the evidence they had to back up their claims. Hubbert on the other hand was a quite brilliant man; a petroleum geologist working for Shell Oil who carried out a highly detailed systems analysis of the oil industry. He collated and correlated vast amounts of data regarding oil discovery and production, then presented the findings to his extremely sceptical colleagues. They dared not openly dismiss such an acknowledged expert in the field, but it’s safe to say that his analysis was largely ignored.

This all changed with Hubbert’s vindication in the late 1970s as it became clear that his claims were borne out by the facts. Back in the 50s he had generated a graph — which has since become known as ‘the Hubbert Curve’* — which he claimed illustrated the life-cycle of oil production in a given region. His curve indicated that oil production in the 48 states of the continental United States would rise until 1970 whereupon it would peak and drop off at a rate of roughly 3% per annum.

As it happens, he was one year out.

Oil production in ‘the lower 48’ peaked in 1971 and despite the massive incentives created by the oil embargo of the early-to-mid 1970s, it declined steadily at roughly the rate he predicted and has been declining ever since.

By definition a peak in oil production can’t be identified until several years after it happens. So it wasn’t until the late 70s that Hubbert’s work was revisited in a serious way. Once it became established that his model had been near perfect in predicting oil production on the continental United States, a number of people in the industry began to work at applying that model to global production.

This, however, took a great deal of time. As I’ve recently discussed, getting hold of accurate data for oil fields isn’t always easy. Many nations — Norway and the UK for instance — have fairly transparent oil field accounting allowing both production and discovery to be accurately assessed. Unfortunately, although their production levels are easily identified, the nations controlling the majority of the global supply (the OPEC nations and Russia) tend to be extremely secretive about their discoveries. And the Hubbert analysis requires both sets of data.

Ultimately it took about 10 years for the first global analysis based on Hubbert’s methodology to be published. It appeared in a 1991 book by Dr. Colin Campbell called The Golden Century of Oil. Dr. Campbell, like Hubbert before him, was a well-respected petroleum geologist who had worked for many of the major players in the industry. He’s still a well-respected petroleum geologist but is now the Chairman of ASPO (the Association for the Study of Peak Oil and gas).

Campbell soon realised, however, that his analysis was far too optimistic — predicting, as it did, a global peak in production sometime in the middle of this century. The reason for, what he later realised was a significant inaccuracy, was his reliance upon the “official” data. As you may recall, BP have recently insisted that peak oil will not manifest for another 40 years or so which tallies with Campbell’s original hypothesis. However, as you may also recall, BP’s data is seriously flawed and significantly over-estimates the oil reserves in the major producing countries. Soon after the publication of his book, Campbell was contacted by an American geologist called Harry Wassall.

Wassall had spent his life in the oil industry and had set up a company in Switzerland called Petroconsultants. A significant portion of the resources of this company was sunk into developing the world’s first accurate database of oil discoveries and reserves. This was done by bypassing the official pronouncements of oil companies and nations and going straight to the source. As Campbell points out, what they did amounted — more or less — to “industrial espionage“. They sent engineers out to every major oil field and asked the people working on-site for accurate data. After double and triple verifying their information, they were able to build up a comprehensive, field-by-field, database of oil reserves.

Having read his book, Wassall got in touch with Campbell and suggested he re-run the analysis using the Petroconsultants database. Enlisting the help of fellow geologist Jean Laherrere, Campbell carried out the — rather laborious — analysis a second time and arrived at a somewhat troubling conclusion… global oil production was due to peak several decades before his initial estimate.

In fact, a strict application of the Hubbert curve to the Petroconsultants data set appeared to predict a global peak sometime around the year 2000. However, what Hubbert’s methodology does not — and cannot — take into account are any political and economic restrictions to production. The oil embargo of the mid-1970s dramatically reduced oil production for political reasons. This in turn plunged the world into a recession which saw demand drop for economic reasons. Thanks to this interruption of expected production rises, the peak was pushed back by several years. Once this was factored into the data, Campbell and Laherrere — using the tool-set provided by Hubbert — concluded that global oil production would peak sometime around 2010. They suggested a 5-8 year margin of error because although the Petroconsultants data set was far more accurate than the official figures, they couldn’t guarantee it was quite as accurate as the U.S. data that Hubbert had access to. Campbell published their findings in a 1997 book (The Coming Oil Crisis). In March 1998 their results were summarised in Scientific American. The article was called The End of Cheap Oil and can be read here (PDF file).

Mr. Bliss joins the party

Which is how and when I became aware of Peak Oil. As it happens, I’d begun to think about the issue about a year earlier when a chance remark had set my mind reeling. I was in a small boat on a particularly wide stretch of the Amazon River, near the city of Manaus. We were caught unawares by the mother of all electrical storms and spent half an hour in abject terror as wind, rain and river tried to swamp us. Miraculously we survived, and several bottles of beer were consumed in quick succession to steady the nerves. I was therefore in a rather ‘heightened’ frame of mind when one of my companions said of the storm “someone should learn to harness all that energy for when the oil runs out”.

Although I’d thought about the concepts of resource depletion and sustainability prior to that, it was really that moment when they became a mild obsession of mine. For a year I mulled over the question of what happens “when the oil runs out”. I was working in the engineering industry at the time and my job took me to numerous places where they pumped oil. The more I discovered, the more horrified I became. Then I received a copy of Campbell’s article from a guy called Jay Hanson who had — it appeared — become even more obsessed with the issue than I had. A few years earlier I’d published an article he’d written (on Corporate practices) in a zine I ran. He invited me to join a fledgling email-list he was involved in, called ‘energyresources‘ (set up to discuss Campbell’s book and Scientific American article, along with their implications) which is still going strong today.

As is my interest in the subject.

[Part 2] | [Part 3]

John Band has a good analysis of the current British Airways strikes over at his place. It’s well worth a read.

He opens the piece by pointing out that BA’s “business model is unsustainable”. This is true in the sense that he describes it. But it’s also true in another sense; one that’s shared by the airline industry as a whole. Some within the industry have begun to belatedly wake up to this fact. A month or so ago, Richard Branson (of Virgin Airlines fame) had this to say…

Of course, anyone who has been aware of the peak oil problem for longer than ten minutes will find themselves shaking their head in dismay at Branson’s statement. His belief that five years represents enough time to prepare for “the oil crunch” is roundly contradicted by every serious analysis of the problem that’s been carried out to date. Most famously (and arguably most authoritatively) the Hirsch Report, carried out by the US Department of Energy, has this to say about the length of time required to prepare for, and mitigate, the effects of peak oil.

Mitigation Efforts Will Require Substantial Time

Mitigation will require an intense effort over decades. This inescapable conclusion is based on the time required to replace vast numbers of liquid fuel consuming vehicles and the time required to build a substantial number of substitute fuel production facilities. Our scenarios analysis shows:

• Waiting until world oil production peaks before taking crash program action would leave the world with a significant liquid fuel deficit for more than two decades.
• Initiating a mitigation crash program 10 years before world oil peaking helps considerably but still leaves a liquid fuels shortfall roughly a decade after the time that oil would have peaked.
• Initiating a mitigation crash program 20 years before peaking appears to offer the possibility of avoiding a world liquid fuels shortfall for the forecast period.

Peaking of World Oil Production: Impacts, Mitigation and Risk Management (PDF, Page 65)

Even taking this into account, there’s a very real possibility that — with regards to the modern airline industry — the problems presented by peak oil simply cannot be mitigated. Even if we had two decades, which appears not to be the case, there’s just no alternative fuel for modern commercial aircraft.

Let me stress that nobody sane is suggesting that oil or jet fuel will disappear overnight. Peak oil will result in a gradual reduction in crude oil production capacity of between 3% and 6% per annum. This will, however, be more than enough to cause massive economic upheaval of the kind that will certainly overshadow our current credit crisis*. More specifically, it’ll be enough to put an end to mass air travel in anything like the form we presently enjoy.

Put bluntly, British Airways is part of a dying industry. Flying millions of people around the world in jet aircraft is unsustainable in the short to medium term and while some form of commercial air travel will surely remain available to the extremely wealthy, the industry will soon be a tiny fraction of its current size.

I like to imagine a future — say a hundred years from now — where we have successfully weathered the twin storms of resource depletion and Climate Change. Where we have achieved, almost certainly through terrible suffering and struggle, some kind of balance with our environment. Where we have adopted an ethos and a lifestyle that allow us to look towards a sustainable future. And in this future, I imagine our great grandchildren flying across oceans in magnificent solar-powered airships.

But that’s science-fiction. A speculative future that becomes less and less likely every day we persist in ignoring the need for it.