These days I try to tune out what is going on in the Republican primary race because, to be blunt, every candidate is a joke and everything I've heard any of them say to date has been ludicrous. Especially about energy and the economy. More than that, I am heartbroken that so many citizens in this country can actually buy into any of this dribble. To be fair, however, the Democrats and the current administration haven't got it much better. They seem to be a little more realistic when it comes to understanding the oil/gasoline price problems, but they still don't seem to get the underlying dynamic that is driving us all off the cliff. Right now they are working hard to put the best spin on the recent economic data that seems to show the economy in recovery, even if slowly. But spin is all it is. As long as oil hovers north of $100 per barrel, we are all going to be adapting downward for a long time to come.
For example there is a lot of hot air circulating in the left political arena and in the MSM about jobs starting to show improvement. And it appears to be true that the raw numbers of jobs, even across many sectors, is either increasing or the loss is slowing. What they don't tell you is that the average wage rates for these new jobs is much less than what the old jobs (in the same sector) had paid. People aren't complaining. They are just happy to have a job. What the newly hired, as well as most Americans in the low and middle classes, are doing is cutting back on non-essentials. The recent run up in gas prices on the coasts is aggravating this. GDP growth remains sluggish even while the stock markets seem to be soaring. The left wants everyone to believe that the economy is recovering as we plunge into the political season. But, in fact, it is only adjusting. People are lowering expectations and adapting to a lower overall cash flow.
Meanwhile the underlying true cause of this contraction dynamic goes without recognition. As the world shifts from traditional crude oil liquids to the kind of gunk we get out of Alberta's tar sands, the net energy per capita continues its downward spiral. Peak conventional oil is being compensated in volume by bringing on more non-conventional and energy expensive volumes just to keep up appearances. Usable energy, that is the kind that does useful economic work, is the basis for the economy. Purchasing power relies on having enough energy to produce real goods and useful services and the amount of useful energy derived from non-conventional (like deep water) oil cannot replace what we had from conventional. No feasible amount of biofuels will make up the difference either.
But what about natural gas? The word on the street is that we have enough NG for 100 years at present use rates. The President said so. The NG companies say so. The investment bankers say so. The MSM says so. All we have to do is convert everything to NG and away we go!
There is a little known fact about NG, especially the kind you can only get out of the ground by horizontal drilling and hydro-fracturing the shale rocks. First the difference between technical recovery and financially-feasible recovery is significant. The MSM (and everybody else) likes to quote the reserve estimates based on the former. They choose to use this much higher number because they believe the technology to make it economic is just around the corner. Ask any of these advocates about the latter and they will look at you cross eyed. To them technically recoverable is the number that counts. Also what they do not know is the production dynamics of the non-conventional wells. It is true that these wells, when they produce (which isn't even close to 100% of drills), they produce at a much greater initial level than conventional wells. A fair amount of the hype about NG comes from this observation. But they never follow with the fact that these same wells have a much faster decline rate. In fact it looks like the decline rates of such wells is so fast that the total volume of actual NG recovered is much less than the initial burst would have predicted based on conventional wells. In other words, there is a big fanfare of production followed by wimpy results. I would bet the NG companies will not be publishing that to their investors.
The net energy per capita of all forms of fossil fuels is in decline. Even coal is costing more to get to the power plants. And if emission requirements gain any teeth (not really likely) then the costs of producing electricity with coal will climb and it will NEVER go down again.
The economy can grow as long as net energy is growing. There are only two ways that will happen. If the total volume of raw energy (fossil fuels) is growing rapidly then the total net will also grow. Or, if someone were to figure out how to reverse the decline in energy return on energy invested (EROI) then that would boost the net return from any amount of raw energy extracted. As that might entail finding a loophole in the Second Law of Thermodynamics, and as no one who knows anything about the physics expects that to happen, that avenue is probably not going to work out. There is a third way we might experience growth of net energy on an individual level, and that is if the population would stop growing, and in fact, decline. Well peak oil (and the same phenomenon covering NG and coal) pretty much puts the cabash on the first way. The second would require an act of God. And the fourth is biologically impossible — we are still animals. So, since the net energy is destined to decline so is the economy. Simple physics.
Of course there are a lot of people who hold out for the salvation to be brought from alternative energy sources, the renewable kind like solar and wind. When I started writing this blog I warned against thinking these sources could ever replace or supercede the fossil sources because of their efficiency and scalability limitations. Well, we are finally getting some empirical results that confirm my concerns. There are now many large-scale photovoltaic, thermal conversion, and wind farm systems built and operated so that we can actually look at real performance compared with projected performance. We can also see more clearly all of the little gottchas that no one thought about when the systems were still on the drawing boards. So the reality is finally getting a purchase and there are several news sources that have been willing to carry this fact.
So why is the general public still clinging to Newt Gingrich's promise for $2.50 per gallon gasoline? Why do people think the President of the US can do anything about prices or the economy?
They believe in magic.
I've come to realize that the Enlightenment, at least in the US, is dead and buried. That a candidate like Rick Santorum would even be a serious consideration for president tells us a lot about the beliefs of a fair segment of the population. If he got the nomination and then won the election I would say that was conclusive evidence that we, as a people, are back in the Dark Ages for sure. Is that even a serious possibility? I don't know anymore. A few years ago I would have laughed at the idea, thinking it a joke. But then I laughed at the idea of George W. Bush even running for president let alone ending up with the title before the 2000 election season. I had given up on the Republican party as having been colonized by the fundamentalist religious right. But I never would have guessed that a sufficient number of people in the US would be just as wacky.
Lest it sound like I am picking on the Republicans, I hasten to point out that the Democrats suffer their own form magical thinking. It is more subtle. They do a better job of rationalizing their beliefs. They sound like they believe in science (at least on global warming). But underneath they are just as susceptible to belief in magic as everyone else. They believe that economic growth is possible and desirable precisely because it lifts all boats. President John F. Kennedy said as much. Just read Paul Krugman or Robert Reich to see what I mean (had an interesting tet-a-tet with Reich a few weeks ago, he was upset that I had suggested that in overlooking the energy dynamics and calling for more stimulus he seemed to be avoiding learning the “truth” - he objected to me suggesting he wasn't interested in the truth, but he never addressed the core issue. Funny). So lefties (especially progressives) get no pass from me. They are the ones believing in a “green” economy that will look just like the current one only without the carbon. So where the Republicans simply deny science the Democrats use science to appear to be rational, while still believing in magic.
I have, for many years, wondered about the popularity of books like “Harry Potter” and the whole fantasy genre. A good fantasy now and then I can understand. But the barrage of fantasy novels for kids (mine soaked them all up), the fascination with vampires and zombies in teens and young adults, and other indicators that even older adults are able to enjoy fantasies — all you need to do is re-label them as “reality TV” — indicate a propensity to believe in magic.
Those are, however, just the obvious trappings of such beliefs. It goes far beyond the obvious folklore kinds of fantasies. The Grand Wizard of Innovation & Entrepreneurial Magic, Thomas Friedman teaches us that the Mystical Magic of the Market will fix everything if we only believe. All we need do is provide the right incentives (tax breaks maybe, but we may need to go to human sacrifice — oh wait, we already do that to the poor and middle classes). Then the magic will take place. Entrepreneurial magicians will, indeed, conquer the Second Law and devise Energy Technology to rival the magic of Information Technology! Our problems will be solved.
Then there are the Mysterious Economic Alchemists who have repeatedly shown that infinite substitution of one resource for another, when the price of the first gets too high, will always take care of depletions. They have proven it with mathematics no less. And there is the magic of economic growth. It has been demonstrated time and again that this magic is powerful enough to lift all boats. Well you have to ignore the 2 billion boats that live on less than $2.00 a day, are malnourished and have to walk miles for a drink of water. Those aren't really boats, you know.
These are the purveyors of magic. They claim that their wands will produce endless and fabulous wealth for all. If we just believe...
And then there are the believers. You won't have to walk very far down a crowded street to bump into the true believers. Politics doesn't matter. That is just a question of which house in Hogwarts you belong to. It just depends on which wizard or witch (remember Bachman, Palin, and even Hilary?) you think has the most juju.
I guess I first began to wonder if we were back in the Dark Ages when the debates about evolution vs. creationism were resurfacing. It wasn't surprising to see them emerge in the deep south. But Kansas? Then I watched the unfolding of the global warming debate. DEBATE? How do you debate science? Sure you can be skeptical that an experimental protocol supplied sufficient data to support a hypothesis. But debate science — between scientists on the one side and corporate foils on the other?
Over the years it has become increasingly clear where this is going. We haven't really gotten past our prehistoric voodoo minds. We've just substituted the medium in which magic plays out. Modern, technologically savvy man really knows no more than Late Pleistocene man about causes and effects. Arthur Clarke, the science fiction author said, &;dquo;Any sufficiently advanced technology is indistinguishable from magic.” And as far as most people know the workings of an iPad might just as well be magic. For them the point is they don't have to know how something works to get a benefit from it. On the surface that seems like a perfectly reasonable argument. But the problem is that the world is so much more complicated. Short-term pragmatics hides the longer-term causal relations that really will matter to all of humanity. Enjoy your iPads while you can, I suppose. Just by purchasing them, and using them, you are relegating us all to a poorer future.