The Archdruid Report - Archive

It bears repeating that the heart of the predicament industrial society faces in the first decades of the 21st century is not primarily a technical problem, but a social and intellectual challenge; one might even risk using an utterly unfashionable word and calling it a spiritual challenge as well. The technical issues of downshifting from an energy-wasting economy and society based on fossil fuels to an energy-conserving economy and society based on renewable energy resources are significant, granted, but they could have been solved easily enough if they had been tackled in earnest starting in the 1970s.

Even today, though the transition would be a good deal more wrenching and the human cost much greater, the thing could be done successfully given the social and political will to do so. Yet it’s precisely the social and political will to deal with the crisis of our time that are nowhere to be found. We need to talk more about why this happens, and one place to start is precisely with what happened at the end of the Seventies, when the industrial world turned its back on the signs of crisis, and a great many promising steps toward sustainability went into the dumpster.

Part of that sea change in industrial society was political, of course. “Conservative” parties in most of the industrial world – the word belongs in quotation marks, since today’s conservatives have forgotten how to conserve just as thoroughly as their liberal counterparts have forgotten how to liberate – realized that they could cut their opponents off at the knees by proclaiming that limits to growth didn’t exist, and papering over the energy crises of the previous decade with short-term political and economic gimmicks. Part of it, though, was a reflection of the sheer success of the sustainability movement of the Seventies. In the aftermath of that movement, defying nearly all predictions, petroleum consumption and energy use per capita throughout the developed world went down and stayed down for much of a decade.

This, as much as anything else, made it possible for politicians in the US and Britain to force down the price of oil to levels that, in constant dollars, were lower than ever before in history. When oil hit $10 a barrel, alternative energy and conservation technologies that had been profitable at higher energy prices became a quick ticket to bankruptcy. To the extent that the push for energy efficiency in the ‘70s helped drive down the demand for oil, the sustainability movement of that decade dropped dead from the consequences of its own success.

It’s a useful experience to read through publications on energy issues from the 1970s and compare their confident predictions that permanent limits to growth had arrived with the very different realities of the decades that followed. One of the bits of Seventies nostalgia on my shelves is a thoughtful little book titled The Rise of the Welsh Republic by Derrick Hearne, an attempt to portray the first decade of the history of an independent Wales in the imminent Age of Scarcity. Hearne did not invent the Age of Scarcity; it was expected by many other thinkers of the same period, and Hearne’s proposals mirrored those being discussed in now-forgotten periodicals such as Rain and Seriatim, where appropriate technology and organic agriculture rubbed elbows with social criticism amid the last hurrah of the idealism of the Sixties.

Fast forward from these perspectives to today’s peak oil debates and you might be forgiven a strong sense of déjà vu. Part of the received wisdom in the peak oil community these days is that once worldwide petroleum production peaks and begins its permanent decline, the mismatch between production and demand will cause exactly the same sort of Age of Scarcity that Hearne and so many other thinkers imagined in the Seventies. Now as then, the major issue under debate is whether the changeover to sustainability can be done quickly and completely enough to prevent a crash.

There are good reasons to think that the energy put into this debate will turn out to be just as misplaced as it was in the Seventies, and for much the same reasons. Prophecy is risky business, but it’s a risk worth taking on occasion, so I would like to offer the following seemingly unlikely prediction: fifteen years after the definite arrival of a peak in oil production, the price of crude oil in Euros will be no higher than it is today, and may actually be quite a bit lower.

The time frame is more important here than it may seem at first glance. The most likely immediate aftermath of a significant decline in world oil production, of course, is skyrocketing prices for oil and everything made or transported with it, and the possibility that oil could hit E200 a barrel or higher, even corrected for inflation, is a real one. Price surges on that scale can hardly mean anything less than a body blow to the economies of most nations in the developed world. It also means that any method of conserving energy or using alternative energy resources in place of oil will be worth much more than its weight in light sweet crude.

So far, this fits the conventional wisdom in the peak oil community, but it’s worth looking a step further into the future. If economies across the industrial world contract, the demand for petroleum will soften as people are forced to abandon the lifestyle choices that account for much of today’s extravagant energy usage. Especially in the US, where 5% of the world’s people use 25% of its petroleum production and arguably waste most of it, a severe economic contraction could readily cause what economists call “demand destruction,” which can be simply defined as the process by which people who can’t afford a product stop using it. Meanwhile, in a global market awash with effectively limitless amounts of paper capital, the chance for huge profits in the conservation and alternative energy sectors guarantees that entrepreneurs in these fields will have more money to hand than they know what to do with. The most likely result, as these trends start to bite, is that the price of oil will level off and then begin to decline.

Does this mean that peak oil can be ignored, because it poses no threat to industrial society? Hardly. As oil production worldwide continues to contract, and conservation and alternative energy reach the point of diminishing returns, oil prices will spike upward in turn, rising even higher than before and unleashing another wave of economic and social disruption. Just as the economic contractions of the 1970s and 1980s spawned intractable unemployment in most industrial societies and launched a process of downward mobility from which many families never recovered, each wave of economic contraction will likely force more and more of the population into a permanent underclass for whom the abstract phrase “demand destruction” plays out in a downward spiral of impoverishment and misery.

In such a future, the periods of apparent recovery that will likely follow each round of energy shortages and demand destruction will provide little room to rebuild what has been lost. Those periods will, however, make it exceptionally difficult for any response to fossil fuel depletion to stay on course, so long as that response depends on market forces or politics. Each time oil prices slump, the market forces that support investment in a sustainable future will slump as well, while governments facing many calls for limited resources will face real challenges in maintaining a commitment to sustainability which, for the moment, no longer seems necessary. Thus the collapse of public and private funding for the alternative energy sector in the aftermath of the 1970s will likely be repeated over and over again as we stumble down the long downhill side of Hubbert’s peak.

Those planning for a future of peak oil, in other words, need to beware of the perils of linear thinking. Much more often than not, the world moves in circles rather than straight lines, and planning for a future that is like the present, only more so, is a good way to come to grief in the real world. In next week’s post I want to focus on the way that this has played out in one of the most discussed and least pursued responses to peak oil – the establishment of lifeboat communities to preserve knowledge through the deindustrial Dark Age approaching us.