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SPEAKING
FREELY
Oil's not
well
By Chris Shaw
Speaking Freely is an Asia Times
Online feature that allows guest writers to have
their say. Please click here
if you are interested in
contributing.
When I was a boy, I
loved Australia's new Chadstone Shopping Center.
It was the very first modern shopping center in
the southern hemisphere. And better than
pretty-well everything else was the Downyflake
Donut Shop. The donut machine stood in the window.
Embryonic donuts danced and grew in the hot oil as
they meandered through the stainless-steel maze.
That little food processor amused me for hours. It
promised a future of limitless possibilities ... a
future that I couldn't wait to grow up in, and be
a part of.
On the wall near the machine a
laconic jester stood with donut in hand and these
prophetic words: As you ramble on through life,
brother,
Whatever be your goal,
Keep your
eye upon the donut,
And not upon the hole.
... and there the jester stood for years,
until time rubbed him out.
Two thousand
years ago, another jester had stated the bleeding
obvious. He had some wise things to say about
greed, love and anger management. He also seemed
to be saying something about the danger of
exchanging life's necessities for tokens, then
becoming bedazzled by the tokens themselves. Well
he was rubbed out, of course!
Fast forward
to 1974, when respected geologist M K Hubbert
predicted that the world's oil supplies would peak
around 2000 and thereafter decline. By this time
the world was swimming in tokens, so no one paid
much attention to him. There was no shortage of
tokens to go around, so why the fuss? Hubbert was
regarded as a Jester by the people who played
tiddly-winks all day long with the tokens.
No mystery here. Hubbert was simply
keeping his eye upon the donut.
You see,
to find and exploit an oil deposit, we need to
expend quite a lot of oil energy. Oil is the
supreme example of compact energy, so we have all
enjoyed the abundance of "spare" energy left over.
As the easy stuff is used up, we arrive at the
point where we must finally expend a whole barrel
of oil to produce a barrel of oil. Approaching
this point, rising oil prices simply express the
diminishing proportion of "spare" energy left over
for distribution.
Once the net energy
return is zero, it's over ... no matter how much
oil is tantalizingly "still down there". For the
same reasons, less accessible or poor quality oil
deposits can be very short-lived. At the finish,
the price of oil is immaterial. 1c or $1 million
per barrel ... it's over.
Yet in
these twilight days of easy oil we have economists
who are saying to themselves, "If we use one $40
barrel of oil today to produce half a $160 barrel
tomorrow, we will have doubled our money ... gee,
that's good business!"
That simple example
shows the gulf that can exist between economic
dogma and physical reality. It is not only
ridiculous, but adds a dangerous twist to the
simple notion that rising oil prices will regulate
consumption. Add the holy commandments of
corporate profit and we have globalized
self-delusion. Figure it out; the fingerprints of
Texan oilmen are all over the corpse of Iraq.
Easy oil delivers such a wealth of net
(excess) energy and goods, that we are free to
indulge in all sorts of charades in order to
satisfy our personal ambitions. Cheap transport
has permitted us to bury local food production
under a sea of suburbs. Our agricultural system is
totally dependent on oil and natural gas, not only
for mechanization but also for fertilizer and the
pesticides so necessary for large-scale
monoculture.
Want a liter of milk? No
problem. Just jump in the old jalopy and potter on
down to the local for a carton of nature's finest.
How far away is the shop? Does it matter? How did
the milk get there? Who cares! That's what we pay
the captains of industry for. It's their problem,
not ours.
Suppose, just suppose that the
(global) depletion of oil and gas is with us here
and now. Let's say it's no longer a poisoned apple
to be left for the grandkids, but something we
must face right now. For example, we know that UK
North Sea oil and gas production peaked in 1999.
We know that thanks to Margaret Thatcher's
free-market policies, the deposit was plundered
hastily and sold cheaply. Didn't they know there
is not enough energy in a $100 note to boil a pot
of tea? The UK will soon have to go cap-in-hand to
other countries in the hope of sourcing natural
gas.
We know that US natural gas is
critically depleted and that they depend on it for
electricity, fertilizer and a host of other
processes. We know that they are drawing down the
Canadian reserves using the free trade agreement.
We know that the US administration is meddling in
the affairs of Venezuela and other neighbors
because the fear is that the gas and oil (and
profits) there might be wasted on the indigenous
populations.
We know that the Australian
prime minister has offered the warm cloak of Timor
gas to the shoulders of governor Arnold
Schwarzenegger in California. For money, of
course. But then, anything is better than having
it taken at the point of a gun; ask the Iraqis. In
the meantime, US troops will be hanging around the
Darwin terminal just to make sure everything runs
smoothly.
Sniff, sniff ... er, does anyone
smell gas?
Geologist Colin Campbell
(Texaco, BP, Amoco ... retired) cautioned,
"Throughout history, people have had difficulty in
distinguishing reality from illusion. Reality is
what happens, whereas illusion is what we would
like to happen. Wishful thinking is a well-worn
expression. Momentum is still another element: we
tend to assume that things keep moving in the same
direction. The world now faces a discontinuity of
historic proportions, as nature shows her hand by
imposing a new energy reality. There are vested
interests on all sides hoping somehow to evade the
iron grip of oil depletion, or at least to put it
off until after the next election or until they
can develop some strategy for their personal or
corporate survival. As the moment of truth
approaches, so does the heat, the deceptions, the
half-truth and the flat lies."
Prophetic,
if not apocalyptic words from Campbell,
dovetailing very nicely into the crappy script
that our leaders are presently reading from. It is
hard to credit the torrent of oil energy that has
been flowing silently throughout our entire lives.
I am reminded of the great London sewerage system,
the operation of which goes largely unnoticed by
the industrious yet ignorant ant-nest above.
In the (alas, too few) years to come, we
will see great argument over the proper allocation
of dwindling oil reserves. It will be realized
that other sources of energy cannot deliver
sufficient surpluses to replace the potent
portable energy we know as gasoline and diesel. It
is not generally understood that poorer quality
energy sources can be critically dependant on oil
for their extraction, processing and distribution.
In other words, oil is the precursor for other
sources of energy; gas, coal, nuclear, solar,
hydro, because these require oil fuel to create
and maintain infrastructure. It also gives them
the illusion of being "profitable".
Corporate profit, the "free market" and
monetary wealth have become our fundamental
religion over the past three decades. It is not
only "good" but "right" that market forces will
somehow deliver the best outcomes in an
energy-depleted world. Our governments' energy
policies will probably prioritize the development
of alternative energy sources in order of
profitability. What a mistake that might be. The
mind that understands the abstract chicanery of
money is a poor tool for chiseling out a daily
existence in some sort of cooperative way. This is
well understood in the mining industry, which
somehow still manages to provide us with
necessities despite the efforts of many company
accountants.
Would you think me a jester
if I said that the one true currency is energy? It
always was and always will be. Economics is the
game of tiddly-winks that we can afford to play
only in the midst of easy, abundant energy. Energy
is the donut, economics is the hole.
Have
no doubt that the race for the last of the easy
energy has begun. First out of the stalls was the
US military-industrial complex, which in year 2000
installed the loser in a presidential election.
Thus began operation "war on terror", launched
under a smokescreen - a fusillade of explosions
provided by men of Middle-Eastern appearance.
While it is up to the Islamists to provide some
semblance of a threat, it is up to us Westerners
to imagine the terror. The coalition of the
willing leaders have offered their services as
cheerleaders of the terrified and I understand
that the American incumbent has some prior
experience in this regard.
In the rush to be
fashionably terrified, it is hoped that we will
not notice how the last reserves of "sweet" oil
are being encircled and plundered. Of course it
can be argued that the US military-industrial
complex has the greatest need of the greatest
share of oil. Their warfare would be utterly
impossible without it ... imagine that! Sometimes
in my wildest waking dreams I imagine those
Pentagon brass-hats having to pedal a 65-ton
Abrams tank to work. Oh yes ...!
... but
then, I am only a bit of a jester.
Chris Shaw is an extractive
metallurgist by trade.
(Copyright
Chris Shaw, 2005)
Speaking Freely is
an Asia Times Online feature that allows guest
writers to have their say. Please click here
if you are interested in
contributing. |
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