If you can get it

It’s a beautiful early April afternoon. In Tompkins Square Park there’s a chill in the air, but if you sit or stroll in the sun you’re warm enough in a light jacket. People walk dogs; groups of friends sit on the lawn, picnicking on takeout; a drummer and jazz flutist play on the east side of the park, an amplified guitarist with microphone on the west. All over, children run, bicycle, chase balls, and squeal from happiness.

We have inherited a pretty good setup, those of us lucky enough to be here in this park on this Sunday afternoon, or in the parks like it in cities across the country, or in suburban backyards, or shopping malls, or beaches, or wherever we gather without much care for our safety, without much worry for our food or our shelter. Yes, maybe we work too much, or have too much “stress,” or we are underemployed and tired of the drudgery of our job. Life is not easy. But on an afternoon like this, it’s at least easy to forget our troubles for a few hours. Freedom to forget: this is the shape of our current prosperity.

We have inherited a pretty good setup — good for us at least. It’s hardly original but often necessary to observe that most people in the world, including a good many here in America, do not enjoy the freedom from want and freedom from fear that we educated, middle-class Americans do. A good setup for us, then, but not for most. But there are storm clouds on the horizon that call for another restrictive modifier: good for us now, though we don’t know for how long.

For about the past year I’ve been having to ask myself an uncomfortable question: Am I falling into the grip of a mass delusion? The belief I’m afraid is delusional is far from being commonly held, but it has thousands of adherents. And although I’m approaching the belief suspiciously because of its strong psychological resemblance to all the apocalyptic delusions of past centuries that make up one of the most obvious of history’s recurring patterns, I also can’t think my way out of it. It creeps in and darkens even an afternoon as lovely and carefree as this one.

The idea goes something like this: Since human beings first started using petroleum for energy, prospectors have been out looking for more oil, and oil companies have been pumping more oil. The entire world supply of oil has risen steadily, ignoring a few hiccups. That rise has been driven by the demand for more oil from a growing world economy — even when, for example, cars became more energy efficient and thus used less petroleum per mile, more and more cars were produced and purchased, leading to more overall demand for petroleum. In turn, the growing world economy has come to depend on the ever-increasing supply of oil to fuel increased production and faster transportation.

But does it make sense to believe that the ever-increasing demand for oil will be met by an ever-increasing supply? Of course not; oil is a finite resource. And putting the question this way highlights the problem in fairly precise terms: The world is not due to “run out” of oil any time soon by most measures. But nasty things will start to happen well before we run out of oil. Macroeconomic shit can be expected to hit the fan when world oil production can no longer increase but world demand keeps rising.

This point is known among the believers as “peak oil,” or “Hubbert’s peak.” It’s named after King Hubbert, an oil scientist who charted what happened in countries or regions that had been producing oil for some time. In each case the pattern was the same. Discoveries of new and larger oil fields followed the initial discovery of oil, as companies and individuals flocked to the area to make their fortunes. Production rose in a curve that roughly followed the rising discovery curve, just offset by a few years or decades. Then, at some point, the discovery curve peaked and began to decline; the biggest and easiest-to-find fields had been found, but it was still worthwhile to seek out the smaller and more difficult pockets of oil. And following the peak of the discovery curve, after a period of a few years or a few decades, the production curve peaked as well — after all, how could it continue to rise in the face of declining discoveries? (In this rough graph I drew, the green line represents oil discovery, the black oil production.) Interestingly, peak comes at the time about half the total oil has been extracted; unfortunately, the half of the oil that is still in the ground at peak tends to be the most expensive to extract.

Peak oil graph

Hubbert and others found this pattern to hold for countries with “mature” oil industries. In 1956 he predicted that U.S. oil production would peak in about 1970; he was ridiculed, but he was off by just a year. So the idea behind “peak oil” as it’s currently discussed — as it haunts me on lovely Sunday afternoons — is that what is true for individual countries is true for the world, and that, since we seem to have already passed the peak of oil discovery, we can be expecting the peak of production sometime soon.

How soon, I don’t know. Some experts say we’re there already, resting on a plateau before the decline begins. (For various reasons, we probably won’t recognize the actual peak until we’ve passed it.) Others give us five more years, or twenty-five. Most of the estimates are sometime within the next ten years.

There are objections to the argument. Alternative energy might save us (though when you really look at the technologies, they are nowhere near being ready to replace oil in uses such as automobiles, let alone jet planes). An economist might argue that declining supply would raise prices, thus lowering demand — and voilà, no more problem of demand exceeding supply. Far from solving the problem, though, this line of analysis highlights one of the most terrible consequences of reaching peak oil. As demand exceeds supply, prices rise and reduce demand. But reduced demand for oil is a sure sign of economic recession; drastically higher oil prices would inevitably cause cutbacks in production (not to mention increased inefficiencies as a result of higher transportation costs) and, thus, a shrinking world economy, perhaps even a global depression.

Another set of consequences are already being felt. It appears that people at the top, including oil men like Dick Cheney, are convinced enough by peak oil theory to launch reckless foreign adventures to keep the oil flowing to the United States for as long as possible. From a foreign-policy “realist” perspective that holds that states should be driven solely by their national interests this makes a certain kind of sense. The national interest of the United States is the maximal continued growth of its GDP (just as the interest of a modern, publicly held corporation is maximal growth of shareholder value), and this national interest requires as much reasonably priced oil as a growing economy demands, regardless of whether other countries are getting as much as they would like. Theoretically, the United States could avoid the consequences of peak oil for a decade or more if it had special access to the dwindling supplies of crude produced by world sources. (Paradoxically, most realists who have entered the debate about Iraq oppose the invasion; these realists are using a different set of assumptions about the national interest and the consequences of the war.)

It is time to face squarely the possibility that the United States has entered a period of near-continuous and escalating armed conflict with the purpose of preserving access to oil. Despite the manifest disaster that is the Iraq war (a disaster, that is, measured against conventional standards), the Administration shows no signs of disengaging, and the leadership of the nominal opposition party, in hock to its own array of corporate interests, refrains from calling for a pullout it knows it is not willing to effect.

Meanwhile, according to reports from reliable and well-connected journalists such as Seymour Hersh, Bush has turned his eye to Iran. Battle plans are being drawn up for a massive air campaign against Iran’s suspected nuclear-arms-manufacturing infrastructure. The White House has resisted requests from military planners to take the offensive use of tactical nuclear weapons off the table. Most importantly, it appears that at least a sizable faction within the Administration is not merely posturing to win concessions from Teheran but really believes military action must be undertaken before the end of the Bush presidency.

It’s frightening to think about the consequences of a strike against Iran; the likely reaction of Muslims around the world would probably mean less security for the U.S. as a result of such an action rather than more. It’s also frightening to think of the consequences here at home of this kind of perpetual war. Since war against any Muslim country is now, in the minds of most Americans, part of the war on “terror,” an attack on Iran (preceded by the kind of scary WMD talk that the Administration used to build support for the Iraq venture, and that we’re hearing now about Iran’s nuclear program) would paradoxically leave most Americans feeling less secure, more in need of protection from the frightening Muslim terrorists, and more willing to give up liberties and constitutional restraints in favor of security and a strong commander-in-chief.

And Iran is not the last oil war the United States will need to fight if it wants to maintain anything like its current rate of petroleum consumption after peak oil is reached. We could easily find ourselves in a last-days-of-Rome situation, committed to ever-more-difficult foreign wars to keep some semblance of a domestic economy viable. What will that mean for our politics here at home? Will we become even more militaristic, more easily corralled? Could Rome have remained a democracy, or did the whole enterprise require an emperor? And what happens when it occurs to most Americans that the oil is running out? We love our SUVs and our cheap textiles; our suburbs, our cities, our manufacturing and our agriculture all depend on cheap oil. Wouldn’t most Americans, given the information and the choice, take Cheney’s alternative: blood for oil, if you can get it?

I’ll stop now. Did I mention that before I went to Tompkins Square Park I bout my first-ever pair of black jeans? I’m kind of nervous about it, but I think they could work out. The thing is, see, I thought they were really dark blue in the store. But now I’m pretty much convinced they’re black. What goes with black jeans? More black, right? This is New York, after all. I need another black shirt or two, I guess.

See? Freedom to forget.

10 responses to “If you can get it”

  1. ssw says:

    Dave, as always, your posts are inspiring, and thought-provoking. You’re spot on about shaky alternate energy solutions…but, it may be a way out. We need some green-friendly folks to talk to the bigwigs with power (in and out of govt) to reach the people, before we have some big Crisis. We start out right at least with the youth–we inform them early about our situation (anna loves to recycle and feels that it’s her duty as a citizen) but then adults just fade into being unconcerned, or somewhat helpless to enact Big Change. The only way to shake things up is to get people to act though. Right now, we know that a Small Crisis (rising gas prices) at least gets the public talking. But, we need to come up with something better before people feel the Major Crisis (what the fuck is that going to be, though–ironic that War isn’t enough….What’s it going to take? A Major Depression? World War III? More US Bombings? mmm…). Unfortunately, crisis is the key ingredient of policy change in this country.
    All that said you can still be conscientious and think about jeans. Jeans are important. They show off your hot ass. smooch xoxo

  2. Bragan says:

    Dave, congrats as usual on your vivid and lively writing. I’m sure the black jeans are very cute…A couple things on the “Peak Oil” phenomenon for your consideration:

    1. There have been NO new discoveries of any oil fields AT ALL in the past 5 years;
    2. Saudi Arabia’s rate of production remains flat. Since the price of oil started to skyrocket about 3 years ago, the Saudis have repeatedly promised to increase production to offset the demand, yet they have failed to live up to their promises. The largest Saudi oil field, Gahwahr, is being injected with tons of seawater every day to force the oil to the surface – this is the sign of an oil field in decline. If Saudi fields are in decline, so is the rest of the world.
    3. In recent months, the UK has actually proposed strict petrol rationing and a 3-day workweek in a desperate attempt to cope with the British energy crisis – the North Sea fields are tapped out and the UK now has to import nearly all of its fuel from elsewhere;
    4. The real question about Peak Oil is – as you observe – not related to the notion of “running out” of oil. There is still a great deal of oil left in the ground. Peak Oil theory is concerned with the fact that – once peak is recognized – the remaining oil in the ground is all of a consistently low quality – contaminated with sulfur, impurities, etc. This “sour” crude is much more expensive to acquire, refine and ship to the marketplace than sweet crude. Once peak is reached, oil of any kind will become more and more expensive.
    5. Do NOT put much faith in so-called “alternative energies.” The fact of the matter is that – as unpleasant as this is to contemplate – James Kunstler is quite right in his assertion that NO combination of “alternative energies” is going to allow late-industrial civilization to continue in its present form. All the alternative energies (and right now, hydrogen based power is just a dream) cost more to produce than they return in energy and profit…Wind, solar and water power simply cannot be used to run our army of trucks and autos & Ethanol – corn-based “gas” takes up valuable land needed for food production.
    6. What if the mass delusion to which you refer is the cheery American notion that our present way of life – which in fact is only about 50 years old – can continue into the indefinite future, and not the notion of Peak Oil at all?

    Some general remarks: Hubbert was roundly dismissed and ignored by his colleagues…Only after the great shock of 1970 did people in the oil business pay attention to him. US oil production peaked in exactly 1970 – it just wasn’t noticed until 1971…Hubbert’s prediction was right on target…Hubbert predicted that world peak would be reached in about 1995. He was wrong about this because he did not foresee the demand destruction caused by the OPEC embargo of 1973 or the Iranian Revolution of 1979. Also, Hubbert did not know about the North Sea oil fields – now depleted – which were discovered after his death in the 1970s, but which only came online in the 1980s.

    Also, it might be worth reflecting in this type of article a bit more about agriculture – oil and food are intimately linked. The Olduvai Theory posits that humanity’s present numbers are in fact possible only because of mass, oil-based industrialized agriculture…when that system collapses, an awful lot of people are going to go hungry very quickly.

    Yes, Peak Oil sounds pretty apocalyptic, if one makes the mistake of confusing late-industrial civilization with humanity itself. I believe that our generation is the first generation that is going to have to figure out a way to live in the post-industrial world.

    Even if the USA were able to take control of the Middle East in toto, all the Middle Eastern nations will hit their own individual peaks by 2025 at the absolute latest.

    I have been studying this subject since 9/11 and will happily discuss it with you on the off-chance that you want to learn something from me…

  3. bacon says:

    Dave,
    Let me start by agreeing with much of what you say, especially about geopolitics. And then move on by saying, I am here to assure you that the Peak Oil theory is bullshit. We heard all the doomsday stories in the 70’s. That’s when the entire science and economics faculty of MIT felt compelled to write an open letter to the NYT arguing that peak oil was a deeply flawed theory.

    Let me tell you what will happen. First let’s recognize that the cost of petrol in Europe is several times that of the US. Have they collapsed? No, because they just drive smaller cars and invest in public transportation. So what will happen? Oil supplies will decline, prices will rise, we will drive smaller cars, we will stop building sprawling suburban developments, alternative energy sources will suddenly become commercially viable with hundreds of companies jumping in to exploit and develop the opportunities, and hopefully, we will all live happy lives. It happened with coal.

    As an economist, I have to say that. But let me be clear–we will not, as Kunstler predicts, revert to an agrarian society. The prophetic claim sells books, but I’ve met the man, and he is crazy. With luck, we will slowly and steadily exit the auto-era and enter into a world where energy is more expensive but we behave ourselves and continue to live happy lives. The parks and the Spring blossoms will still be there (I’m talking about our grandchildren).

    One more thing. What the US needs now, desperately, and has needed for years, is a scaling up of the gasoline tax. That is obvious to any serious thinker, but it is two steps lower on the political agenda than legalizing narcotics.

  4. Adriana says:

    Ok, I like that. But what about shipping? I kind of like this way of life in which food from around the world is relatively cheap and I can mail my mother a chocolate pig for Easter and it only costs me $5. Won’t that change? I’m all for supporting local agriculture, but if I can’t afford to make guacamole when I’m 80 does that mean I’ll have to move to San Diego? I’m just trying to plan ahead. Lane and I had already decided whose Hudson Valley country house to comandeer before we read your post. So now that we won’t have to do that after all we still want to make sure our retirement years are still cushy. Please advise.

  5. Bacon says:

    No worries honey. Global warming will solve your problems. New York will find itself moving from horticultural zone 6 to zone 9, and soon the Coop will be stocking not just locally grown avocados, but mangos and papayas as well. Since Park Slope is a slope, you’ll be protected from rising sea levels. Indeed, with the swelling of the East River, the added property value of owning a river-front condo on Lincoln Place will allow you to purchase all the expensive, newly exotic cold-weather root vegetables you want, including potatoes, delivered via shipping channels recently openned through the vanishing arctic ice ledge.

  6. nicole says:

    dave,
    this is so incredibly thoughtful and insightful; thank you for writing it, and i’m glad i had the opportunity to read it. we do take things for granted a lot of the time – which is in itself a sort of freedom, i suppose. it’s perpetually raining here in sf, but i hope nyc is sunny and spring-like these days. hope you’re doing well-
    nicole

  7. Dave says:

    Bacon —

    I totally agree on the gas tax; let’s make it a general, global carbon tax (while we’re dreaming) and deal with global warming a bit, too — to save my apartment, which is considerably down the hill from Adriana’s. (Oh what do I care, I just rent.)

    I am comforted by the idea that our economy and our society will adjust to declining oil supplies and the higher energy costs they bring. I guess that’s the point of disagreement between the people who think peak oil will be a disaster and those who don’t think it will be too big a deal. How gradual will the transition be? How sharp the price spikes? How robust is the economy in its ability to handle the shocks it will be put through? The oil shocks of the ’70s had fairly nasty results, and they were temporary.

    I don’t know. I would like to see some different modeling approaches to these scenarios, I guess. But then I also wonder whether models could take into account enough relevant factors, and whether all the relevant factors are quantifiable — I don’t know enough about economics. But I do recall a line about it being a “science of single instances” — i.e., not a proper science at all, or at least much more limited in its predictive power than physics or chemistry. So I guess we should take both sides with a grain of salt. Does that make sense?

  8. Bacon says:

    Dave,

    Economics is not a science—it’s a way of understanding the world. Models are of limited use.

    But you are exactly right that it’s the speed of adjustment that matters. The very same debate is taking place (not that the public is interested) about whether our country’s unprecedented, ballooning borrowing abroad—led by our federal government’s dogmatic policy of cutting taxes, raising spending, and massively borrowing—will gradually work itself out or collapse suddenly when the ground disappears from under us and the global economy spirals into recession.

    If we’re talking about oil shocks, that’s one thing (but remember, the dual oil shocks of the 70’s produced gas lines, but we did not shift to an agrarian society). But Peak Oil is not about shocks, it’s about the observation that oil will run out someday. What I am arguing is that over a span of 20 or 30 years, we have the capacity to adjust without the foundations of our society collapsing, and that economics will force us to whether we like it or not. We’re not just going to wake up one sunny day and realize the world is out of fuel.

  9. […] According to Phillips, the U.S. economy’s dependence on oil places it in the position of the coal-dependent British economy at the beginning of the twentieth century. Committed to petroleum, our system may not be flexible enough to survive the end of the oil era. Phillips takes the standard peak oil analysis at face value: Soon worldwide oil production will peak, meaning diminishing amounts of oil will be available to feed increasing global demands. […]

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