In this 2016 presentation, Richard Heinberg talks about his new book (with David Fridley) Our Renewable Future. Both the book and talk focus mainly on the ease with which renewable energy can replace fossil fuels in our current industrial economy. He argues the transition is essential, not only to reduce the impact of catastrophic climate change and ocean acidification, but to address growing global economic and political instability (ie resource wars in the Middle East over dwindling oil and natural gas reserves).
Electric power generation – coal and gas-fired power plants are fairly easy to replace with wind and/or solar generation. However Heinberg also argues that homes need to be made more efficient (in terms of heating and cooling) to reduce peak load demand. Renewable technologies are not good at ramping up at short notice. We have had the technical know-how for decades to produce buildings requiring 1/20th of the energy we presently use to heat them. Up until now, we have lacked the political will to change local building codes accordingly.
Personal transportation – Heinberg argues that electric cars aren’t a panacea. Because they are so energy intensive to produce, only fairly wealthy people will be able to afford them. He feels there needs to be more focus on increasing public transport and adapting our communities to facilitate active transport, such as walking and cycling.
Mass transit – he strongly advocates increased use of rail, by far the most efficient form of transit for both people and freight. For transcontinental travel, high speed trains are much more energy efficient than air travel and are easily electrified.
Shipping – ocean freighters are already quite energy efficient compared to air transport. Using kite sails to propel them can reduce their energy consumption by 60%
Food production – at present we expend 12 fossil fuel calories for every calorie of food produce. In additions to our chemical fertilizers, pesticides and herbicides (all derived from fossil fuels), we also use fossil fuels in food processing and packaging, to run farm machinery and to transport food halfway around the world. The transition in food production has already begun, with strong organic and buy local movements worldwide. Heinberg also supports the growing movement to use sustainable agriculture to sequester carbon ((carbon farming, aka the 4 per 1,000 initiative – see The Soil Solution to Climate Change).
Construction – most of our commercial buildings are made of concrete and steel, which both require intensive fossil fuel input in production. Here he recommends a transition to recycled and more natural building materials and a conscious effort to design buildings to human scale. The splurge in high rise construction of the 20th century was only possible due to a glut of cheap fossil fuel.
Manufacturing – most manufacturing has already been electrified.
Consumer electronics – Heinberg argues we need to make Smartphones more easily upgradable – enabling each of us to purchase one per lifetime. The pressure to replace Smartphones every year is deliberate “planned obsolescence” to increase profits.
Plastics, paint, synthetics – natural ingredients (hemp can be used for all three) tends to be cheaper, more durable and less harmful to the environment.
Despite its length, this documentary should be compulsory viewing. Everyone with an IQ over 90 should see it at least once before they die. It was only in viewing this film that I fully grasped the insane, oil-inspired military aggression in the third world and the US fascination with despotic dictators.
The video below is actually an 8-part series shown over successive nights on Al Jazeera-English. I’ve summarized the highlights of each of the eight parts so you can fast forward to specific segments that interest you.
0.00 – 23.26
Part 1takes viewers from the founding of the secret Seven Sisters oil cartel in 1928 to the creation of the competing Organization of Petroleum Exporting Countries (OPEC) in 1960. The latter is made up of oil producing countries that have nationalized their oil industries.*
The film begins by describing the secret (illegal) cartel formed in 1928 by the Anglo-Persian Oil Company (which became British Petroleum), Standard Oil (which became Exxon) and Royal Dutch Shell. The goal was to end the cutthroat competition that was eating into profits. At a secret meeting in Scotland the three companies agreed to an orderly division of global production zones, as well as a process for fixing oil prices.
Later Mobil, Gulf, Texico and Chevron would join these three oil giants. The existence of the cartel remained secret until the 1950s, when it became known as the Seven Sisters.
This segment describes the totalitarian control BP exercised over Iran until 1951. A strike for higher wages led to a national uprising that overthrew the Shah and resulted in the democratic election of Mohammad Mosadegh as president. When the latter threatened to nationalize Iran’s oil industry, the British government requested CIA assistance to overthrow Mosadegh and restore the Shah to the throne. In return, the US government won the right for American oil companies to join BP in exploiting Iran’s oil resources.
In July 1956 after Egyptian president Nasser nationalized the Suez Canal (the main route for transporting Middle East oil to Europe), Britain, France and Israel declared war on Egypt. Nasser responded to an aerial bombing campaign by using concrete bunkers to blockade all Suez traffic. For once, the US and USSR collaborated to pressure the three aggressors to withdraw their forces and restore the transit of oil tankers through the canal.
23.26 – 46.00
Part 2 traces how the rise of OPEC worked to gradually erode the dominance of the Seven sisters – with violent repercussions.
In 1972 Saddam Hussein nationalized Iraq’s oil industry, with technical and military support from the Soviets and the French.
By October 1973, when Israel’s Arab neighbors launched the Yum Kippur War, OPEC members controlled 60% of the global oil supply. This enabled them to launch an oil embargo against the US in retaliation for their support of Israel in the 1973 conflict.
In 1978 Iran’s Ayatollah Khomeini, living in exile in Paris, called for a workers strike in the Iranian oil industry that caused a total shutdown of oil production. This, in turn, led the US to abandon their longtime support of the Shah and his secret police. The result was a national uprising, the forced exile of the Shah, the return of Ayatollah and the nationalization of Iran’s oil industry.
Determined to regain American corporate control of Iran’s oil industry, the US government backed Saddam Hussein’s invasion of Iraq in 1980. The sudden onset of peace in 1988 led to a period of “overproduction” and a dangerous drop in oil prices. In response, George Bush senior, whose Zapata oil company had made a fortune via offshore drilling in Kuwait, openly encouraged Saddam Hussein (through ambassador April Glaspie) to invade Kuwait. This would create a pretext for the first US invasion of Iraq in 1991.
In May 2001 (20 months before the US invasion), a secret energy task force headed by former oil executives Dick Cheney and Condoleezza Rice, drew up a plan whereby Exxon, Shell and BP would divide up US occupied Iraq into eight oil extraction zones.
48.00 – 61.00
Part 3describes the decision by the Seven Sisters to open up Africa to increasing oil exploitation due to their gradual loss of control over Middle East oil.
In 1970, Colonel Omar Gaddafi led a coup against a corrupt Libyan monarchy that was allowing the Seven Sisters to pay 12 cents a barrel in royalties to extract high quality Libyan oil. Gaddafi immediately nationalized the oil industry, raised oil prices 33% and used the funds to finance generous public services for the Libyan world and to fund freedom fighters all over the world (including the Palestinians).
This section also traces the history of the French oil companies ELF and Total in Nigeria. After Algeria won independence from France in 1971, they nationalized their oil industry, and ELF began exploiting oil resources in Nigeria, Chad, Congo, Cameroon, and Angola, where they financed guerrillas and despotic regimes and participated in bribery and embezzlement schemes that massively increased the international indebtedness of these countries. In 2003 the CEO of ELF was sentenced to prison and the company was bought out by Total.
61.00 – 95.00
Part 4 covers the role of the Seven Sisters in stoking Sudan’s civil war (most of Sudan’s oil comes from South Sudan) and the role of Shell Oil Company in Nigeria’s trial and execution of environmental activist Ken Saro-Wiwa.
95.00 – 118.00
Part 5 traces the longstanding battle between Russia and the US oil industry over control of the Baku oilfields on the Caspian Sea. It begins with Lenin’s capture of the oilfields in 1920. Hitler’s primary reason for attacking the USSR in 1941 was to gain control over Baku.
This section also details how a US-Saudi conspiracy to flood the market with oil in the late eighties (dropping the global oil price to $13) ultimately led to the Soviet collapse in 1989. At the time revenue from oil sales was the Soviet’s sole source of foreign currency.
118.00 – 142.00
Part 6 concerns the role of the color revolutions in Georgia, Armenia and Azerbaijan in keeping Caspian Sea oil out of Russian hands and under the control of US oil companies.
It briefly discusses the US role in Boris Yeltsin’s coup against the Russian parliament and his privatization of the Russian oil industry on behalf of the Seven sisters and a handful of Russian oligarchs (Putin has subsequently re-nationalized Russia’s oil industry).
142.00 -165.00
Part 7discusses the concept of Peak Oil and the current dispute between the Iraqi Kurds and the Iraqi government over the control of the Bakr oil terminal near Bazra. At present it’s illegal for the Kurds to export their own oil. Eighty-five percent of Iraqi oil is processed at the Bakr oil terminal and Iraqi Kurdistan on receives 17% of this revenue.
165.00 – 190.00
Part 8 is about the Seven Sisters exploitation of Mexican and Venezuelan oil prior to the election of Hugo Chavez as president. It also summarizes that status of the countries (Saudi Arabia, Russia, Iran, Venezuela, Brazil, and Malaysia) that have nationalized their oil industry. At present these countries control one-third of oil and gas production, and more than one-third of oil reserves. Despite their role in instigating western military aggression, the influence of the Seven Sisters continues to declines.
At present they control 10% of oil production and only 3% of oil reserves. Their monopoly on exploration, drilling and refining technology gives them disproportionate control over the industry.
*Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates, and Venezuela
Afterburn Society is about the economics of energy, specifically the energy produced by fossil fuels. The subject of economics is like bad-tasting medicine for a lot of people. However Post Carbon Institute Fellow Richard Heinberg’s jargonless, down-to-earth delivery makes the experience quite painless and even pleasurable.
Heinberg begins by tracing the history of agriculture and manufacturing. Prior to the late 19th century, there were only two sources of energy. People either relied on their own muscle power or they employed traction animals or slaves (ironic, isn’t it, how fossil fuels replaced slavery?).
In contrast, our modern-day food industry relies heavily on fossil fuels to run farm machinery, for plastic packaging (derived from oil), to transport food to market, for nitrogen fertilizer (derived from natural gas) and as a source of herbicides and pesticides (derived from oil).
It takes 350 gallons of oil a year to feed one American and seven Calories* of fossil fuel to produce one calorie of food.
The Law of Diminishing Returns
Heinberg goes on to explain the law of diminishing returns as it pertains to oil production. Over the last eight years investment in oil production has soared, while output per dollar invested has steeply declined. From 1997-2005, oil companies spent $1.5 trillion to produce 86 million barrels of oil a day. Between 2005-2013, they spent $4 trillion to produce 3 million barrels a day.
Industry data reveals conventional oil production peaked in 2005 and has been declining ever since. Most of the new oil production has come from more costly and risky technologies, such as fracking and deep sea oil drilling. The use of these new technologies has increased the cost of oil extraction. This, in turn, has led the price of oil to skyrocket from $27 a barrel in 2000 to $100 a barrel in 2014.
The higher price of oil means a higher return for oil companies. This, in turn, enabled more costly and controversial technologies, such as fracking and deep sea oil drilling have come onboard. They only became economically viable when the price of oil passed $70-80 a barrel.
EROEI
Oil production costs aren’t only increasing in dollar terms, but in terms of the energy required to extract new oil. Heinberg predicts that by mid-century, it will require as much energy to extract a unit of oil and natural gas as that unit will produce when it’s burned. At that point, fossil fuels will cease to be a viable energy source, though they may continue to be useful in producing plastics, synthetic fabrics and other petroleum byproducts.
Overall surplus energy will steeply decline when this happens, as renewable energy technologies have a much lower EROEI (Energy Return on Energy Invested) than fossil fuels. For example, solar energy has an EROEI of 2.5-5 to 1 (2.5-5 units returned for every unit invested), in contrast to oil’s EROEI of 30 to 1. Biofuels, with an EROEI of 1 to 1, are even worse. Their only purpose is to return a profit to government subsidized biofuel merchants like Archer Daniels Midland. They’re useless as an energy source.
The steep decline in surplus energy will translate into major social change, as nearly all of our energy use will be geared towards producing new energy (i.e. food production).
The Recent Drop in Oil Prices
In my view, the only shortcoming in this presentation was Heinberg’s failure to address the steep drop in oil prices that began in June 2014 (from $100 to $48 a barrel, recently leveling off around $60 a barrel). He does discuss it in a December 19, 2014 article The Oil Price Crash of 2014
In brief he attributes the temporary price drop to a decrease in demand (due to deepening recession in China, Japan and Europe), coupled with increasing supply (due to the frantic pace of fracking in the US). Normally when there’s a mismatch in supply and demand, it falls on Saudi Arabia (the world’s top oil exporter) to ramp down production. This time the Saudis have refused to cut back production.
Their motivation is a matter of speculation. According to Heinberg, the most likely reasons are a desire to destroy the US fracking industry (small fracking companies are going bankrupt in droves – they’re up to their eyeballs in debt and fracked oil is only profitable above $70-80 a barrel) – and to punish Russia and Iran (whose economies are totally dependent on oil and gas exports) for meddling in Syria and Iraq.
*A measure of energy, a Calorie is the amount of energy needed to raise 1 kilogram of water 1 degree Centigrade.
The End of Growth: Adapting to Our New Economic Reality
by Richard Heinberg
(New Society Publishers Aug 2011)
(This is the sixth of a series of posts about stripping private banks of the right to issue money. It stresses the link between our debt-based monetary system and the drive for perpetual economic growth.)
The basic premise of The End of Growth is that the world economy has flat-lined. Not only is it contracting, rather than expanding as most politicians claim, but there are important reasons why it will never return to pre-2007 growth levels. The reason? The last two centuries of continuous economic expansion were only possible due to the ready availability of cheap fossil fuels. Growing fossil fuel scarcity has caused energy costs to skyrocket. And this, according to Heinberg, is the main reason for declining economic growth.
As well as making an strong case that economic expansion has ended, Heinberg also writes about far-sighted governments (Japan, Sweden, Denmark, Norway and Finland) that are enacting policies to ensure the welfare of their citizenry as they confront new economic realities.
Heinberg and others in the Peak Oil/climate change movement have always argued that infinite economic expansion is mathematically impossible on a finite planet with finite natural resources. The End of Growth highlights the massive ecological devastation caused by this reckless obsession with economic growth, while warning that we are depriving our children and grandchildren of natural resources (fossil fuels, water, industrial fertilizers, fish stocks, top soil) that may be needed for basic survival.
In Heinberg’s previous work, he predicts it will take a decade or more before fossil fuel scarcity causes the capitalist economic system to hit the wall. In The End of Growth, he argues it already has: in October 2008. While a few countries can claim an occasional quarter of increased GDP, aggregate global economic growth is either stagnant or slowly contracting. Even China’s so-called economic “miracle” hasn’t been sufficient to generate a genuine increase in total global wealth.
The Ultimate Ponzi Scheme
Heinberg goes on to explain how private banks use the fractional reserve system to invent money out of thin air. In a global economic system where money can only be created by issuing bank loans, there’s never enough money in the system to repay all the debt. This means the global economy can only function via continual creation of new loans. And continuous economic growth is essential to make this happen.
Heinberg’s analysis of the 2008 meltdown starts with an introduction to classical economic theory, and a discussion of of the “financialization” of the US economy that occurred in the 1980s. There’s a detailed discussion of the risky financial derivatives that led to a decade of speculation and “debt” bubbles. The largest was the subprime/derivative boom, in which massive amount of borrowed money was speculated on derivatives and subprime mortgages that couldn’t be repaid. The debt bubble created was so large it plunged the entire world economy into depression when it burst.
The End of Growth in China
Heinberg also presents a painstaking analysis of why the China’s current phenomenal growth rate (7-8% per year) and somewhat slower growth rates in India, Thailand, Malaysia and Vietnam also represent “bubbles” that will eventually pop and trigger recession. China is pursuing the identical economy strategies that caused the Japanese economic miracle to collapse in the 1990s – resulting in a two decade long recession.
Life in a Steady State Economy
Obviously the end of economic growth, and continuing job, wage and benefit cuts mean that people in most industrialized countries will be forced to massively downsize their lifestyles. Outside the US, some far sighted governments are intervening in ways to make this transition less painful. Heinberg gives examples of countries (Japan, Sweden, Denmark, Japan, Norway) who openly acknowledge the reality of their steady state economies and pursue policies that make it easier for their citizens to adjust.
Sweden, for example, has transformed depressed industrial towns into “ecomunicpalities,” by “dematerializing” their economies. They have made them into fossil fuel-free towns with organic farming, public transportation and alternative energy projects – while simultaneously fostering social equity.
Population control is a taboo topic among in most sustainability circles. It shouldn’t be. According to a University of Oregon study, childbearing is the number one carbon intensive activity. Having just one has twenty times the impact of a lifetime of carbon frugality.
How Many People Can the Earth Support?
The human species lives on a finite planet with finite resources. Growing evidence suggests we have already exceeded the earth’s carrying capacity. WHO and World Hunger data reveal our current system of industrial agriculture only feeds 84% of the global population. At present nearly a billion people (out of 7 billion) die of starvation or malnutrition-related disease.
I used to believe that third world hunger stemmed purely from inequality and maldistribution of food resources. Now I’m not so sure. In the past five years, desertification, drought, extreme weather events, increasing fossil fuel prices*, water scarcity and topsoil depletion have caused global food production to level out and start to decline.
The Good News
The good news is that fertility rates are already dropping. According to the CIA (the official source of international fertility data), the current global fertility rate is 2.45 births per woman. This is down from 2.50 in 2011 and 2.90 in 2006.
Demographers attribute the drop in third world fertility rates to massive urbanization and the entry of women into the workforce. In the developed world, declining fertility rates seem more closely linked to worsening economic conditions. In Japan, which has in continuous recession for two decades, the fertility rate is 1.39In Greece it’s 1.40, in Italy 1.41.
At a global fertility rate of 2.45, the world will reach replacement rate (2.1 births per woman), between 2020 and 2030 and peak at 8.5 billion in 2030.
At present the planet only feeds 5.88 billion people. Could we feed 8.5 billion? Possibly. If they all give up meat and we dig up a few thousand parking lots and return them to food production.
Dropping Fertility Rates: A Capitalist’s Worst Nightmare
The bad news is the enormous pressure Wall Street exerts to keep birth rates high. Declining population growth threatens the robust economic growth our current economic system relies on.
Like a pyramid scheme, monopoly capitalism is based on the continual creation of new debt. Perpetual economic growth is essential to repay this ever increasing debt. Without it, the pyramid collapses.
The Pressure to Have Babies
At present the US and New Zealand are tied for the second highest fertility rate (at 2.06) in the industrialized word (France is highest at 2.08). The first two countries share two specific population drivers: a high rate of teen pregnancy and the bombardment of young women with constant pro-baby media messaging.
The US is number one in the developed world for teen pregnancy. New Zealand is number two. Although Kiwi teenagers have excellent access to reproductive services (including abortion) through our national health service, there’s no effort to provide effective sex education in our public schools.
Meanwhile, thanks to the capture of New Zealand popular culture by American mass media, Kiwi girls are bombarded with the same well-oiled messaging about the new feminine mystique: that without thin, perfect bodies, faces, hair, husbands and babies, they are utterly worthless as women.
In the US, teenage girls have abysmal access to both sex education and contraception. It’s tempting to blame this on the rise of the religious right. I think the issue deserves more scrutiny. A close look at the millionaires and billionaires who have facilitated the boom in right wing fundamentalism suggests they have cynical economic reasons for furthering policies that ensure robust US population growth.
We Need a Movement
Clearly activists who are genuine about curbing carbon emissions must give population control the same priority they give changing light bulbs, installing solar panels and reducing car trips. We’re not talking mandatory sterilization, abortion or eugenics – but voluntary steps people can take to curb their fertility.
So what does a population control movement look like? First it’s got lots of men in it. Access to affordable abortion and contraception is no longer a woman’s issue – it deeply affects all of us. Growthbusters guru Dave Gardner clearly does his part by handing out endangered species condoms in the street.
Secondly it works to actively counteract Wall Street messaging that pressurizes women to have more babies. The sustainability movement is successfully counteracting messages to consume more and incur more debt. There’s no reason we can’t do the same with pro-baby messaging. There are numerous advantages to remaining childless. We need to promote them.
Finally it actively campaigns to reduce teen pregnancy.There is absolutely no reason why the Christian right should have a monopoly on pregnancy counseling. Progressives and liberals need to start our own rape crisis and sex education clinics, comparable to the “birth right” counseling movement. If the schools won’t do it, we need to educate teenage girls about debt rape and where they can obtain free and low cost contraception and morning after pills.
During the sixties, activists concerned about oppression in the schools, medical system, and other pro-corporate entities started their own alternative schools, clinics, abortion centers and child care programs. It’s time we followed their example.
*Fossil fuels are essential for industrial agriculture. In addition to fueling farm machinery, the fertilizers, pesticides and herbicides used in factory farming also derive from fossil fuels.
How to Grow More Vegetables (and fruits, nuts, berries, grains, and other crops) than you ever thought possible on less land than you can imagine
By John Jeavons
2002 Edition
Ten Speed Press
Book Review
Originally published in 1974, How to Grow More Vegetables remains a vital resource for farmers, agricultural researchers and planners, sustainability activists and home gardeners, as the world confronts the challenge of feeding a global population of 7-9 billion without access to the cheap fossil fuels that have run “industrial” agriculture for the last century. Thanks to skyrocketing oil prices, Peak Oil is no longer just a theory. The failure of oil production to increase at the same rate as heavy demand from developing countries like China and India has driven the price of oil to record levels. Owing to the heavy use of fossil fuels in contemporary agriculture, food prices have tended to increase at a comparable rate. Scientists predict that food shortages related to the loss of mechanized agriculture will likely be compounded by droughts, floods and other extreme weather events related to climate change.
Growing Soil, Not Crops
Jeavon’s book is unique in that it combines theory and research (with a fifty-three page bibliography) with a cookbook-style manual for households preparing for a future in which they grow most or all of their own food. The GROW BIOINTENSIVE approach, developed by Jeavons and Ecology Action of the Midpenninsula (Palo Alto), is centered around preserving the microbial life (bacteria and fungi) that are abundant in healthy soil and which are essential to plant health and growth. Up to 6 billion microbial life-forms live in one 5-gram sample of cured compost (about the size of a quarter). This microbial life, so essential to plant development, is destroyed by specific aspects of industrial farming. This is the main reason for the relatively poor yields of factory farms (in contrast to traditional biointensive methods). It’s also responsible for the extensive destruction of our topsoil. Repeated plowing and chemical fertilizers disrupt the delicate ecology of topsoil organisms, and pesticides and herbicides are as deadly to soil bacteria and fungi as they are to insects and weeds. In his introduction, Jeavons reveals that industrial farming destroys approximately six pounds of topsoil for each pound of food it produces. China’s soils, for example, remained productive for more than 4,000 years, until the adoption of mechanized chemical agricultural techniques led to the destruction of 15-33% of their agricultural soil. Another example is North Africa, which was the granary for Rome until overfarming transformed it into a desert. According to Jeavons, the world only has enough topsoil left to last 42-84 years.
Quadrupling Crop Yields
Based on thirty-plus years of horticultural research, Ecology Action members have ascertained that the GROW BIOINTENSIVE method, in the hands of a skilled practitioner, can produce enough food to feed one person (on a vegan diet) with 4,000 square feet of land. This contrasts with the 7,000 square feet required to feed a vegan using fossil fuels, farm machinery and conventional chemical or organic techniques. Without fossil fuels and machines, the amount of land required (using conventional chemical or organic techniques) would be 21,000-28,000 square feet. At present it takes 31,000-63,000 square feet per person to produce an average US diet (including eggs, milk, cheese, and meat), using fossil fuels and mechanization and conventional chemical or organic techniques. In addition to increasing caloric production by 200-400% per unit of area, the GROW BIOINTENSIVE method also significantly reduces water consumption (by 67-88%) and increases soil fertility (by 100%).
A Manual for Novice, Intermediate and Advanced Gardeners
Most of How to Grow More Vegetables is a detailed instruction manual describing how an average family (1-4 people) can grow the right kind of crops to supply most, if not all, their food requirements. Nearly half the book consists of tables with basic information about the spacing, care and calorie and protein content of specific crops and master charts showing where, when and how much of each variety to plant.
A 2013 study from Fairleigh Dickinson University reveals that 29% of Americans believe an armed revolution may be necessary in the next few years to “protect liberties.” The voter survey differed from most corporate media polls in that it included a substantial number of low income, cellphone only households.
18% of Democratic respondents shared this view, 27% of Independents and 44% of Republicans.
A decade ago, the notion that anyone other than a few thousand fringe extremists would contemplate violent revolution was unthinkable. At the very least, these results suggest a significant minority of Americans are profoundly disillusioned with the government’s apparent indifference to their needs and expectations.
The End of Growth: An Inconvenient Reality
Despite government claims to the contrary, recovery from the deflationary spiral that started in 2008 (aka The Recession) has been elusive. Although stock prices continue to soar, productivity, employment and consumer spending have stubbornly refused to return to pre-2008 levels. Some latter day (non-Wall Street) economists believe the era of economic growth has ended – permanently – owing to the soaring cost of fossil fuels. In their view, the world has returned to a steady state economy.
Given the historic link between growth and “full” employment (jobless levels below 10%), they are also predicting a scenario in which roughly half the adult population is unemployed. The paid work that remains will be low paid, part time, temporary jobs, unprotected by unions, employment rights or health and safety regulations.
To appreciate that US economic growth is at a standstill, it’s essential to look at undoctored economic data. For example, when Obama and the corporate media trumpeted a 7% unemployment rate for November, they neglect to mention that this figure only reflects the number of workers newly unemployed in the last six months (i.e. the number still receiving basic unemployment benefits). Unlike other countries, the official US jobless figure doesn’t include workers whose benefits have run out, who have stopped looking for work, or who want to work full time but are stuck in part time jobs.
Data from the Federal Reserve Bank of St Louis reveals that the US economy is shedding full time jobs, rather than gaining them. The percentage of unemployed Americans of working age has increased from 35.5% in 1999 to 41.7% in 2013 – the highest since 1980. Most of that increase (5%) has occurred since Obama was first elected in 2008.
The 2008 Economic Crash Was Predictable
Prominent members of the Peak Oil movement, most notably Michael Ruppert and Richard Heinberg, predicted the 2008 economic crash. They based their predictions on declining oil reserves, the failure of oil production to keep up with increasing demand from developing countries and the steep rise in oil prices that began in 2005.* Based on their calculations, mankind had extracted half of the world’s available oil reserves by November 2005. This was officially known as Peak Oil. We reached Peak Natural Gas several years before that, though we won’t reach Peak Coal for another decade or so.
Although there still remains tons of oil, gas and coal left in the ground for us to extract and burn, we are now on a downward slope. Not only is production continuing to outstrip demand, but most of the remaining oil, natural gas and coal are difficult to get at, expensive to extract and rely on dangerous, expensive, environmentally destructive and controversial technologies, such as deep sea oil drilling, tar sands extraction fracking and mountain top removal.
Capitalism and Productivity
The steady economic expansion we call growth is a relatively new phenomenon in human history. Prior to the 19th century, the major nations of the world operated steady state economies. In fact the argument Heinberg and others make is the burst of productivity most of the world attributes to capitalism had nothing to do with the capitalist economic model itself. Rather it was based on the widespread abundance of cheap fossil fuels. British economists at the Fiesta Institute provide abundant data justifying this argument in Fleeing Vesuvius: Overcoming the Risks of Economic and Environmental Collapse. They point out that even at current oil prices, it costs far less to use a machine to perform work than to employ a human being or even a draft animal.
The birth of capitalism wasn’t just about the exploitation of fossil fuels. It was about the exploitation of all natural resources – clear cutting forests, large open pit mines to extract steal, copper, gold, bauxite (for aluminum), gold diamonds and rare earth minerals, draining swamps and eradicating wetlands. When oil started becoming more expensive (in the 1970s), it was also about moving western factories to third world countries to enable wholesale exploitation of human labor. Government encouraged this wholesale extraction and exploitation because it produced enormous prosperity for most of western society over many decades.
At the same time there were immense human and environmental costs. Western capitalism produced incalculable suffering in the third world as indigenous people were driven off the land that gave them a subsistence living, with the lucky ones obtaining jobs in brutal sweatshops that paid starvation wages. Suffering in the first world was less visible until last decade, when residents of the industrialized world began to realize they were being systematically poisoned with toxic industrial chemicals, increasing levels of both nuclear and microwave radiation and harmful organisms that had contaminated our air, water and food chain.
*Historically the oil price ranged between $2-4 a barrel prior to 1973 oil crisis. It remained between $10-20 a barrel until 1979. From 1979-1986 it fluctuated between $20-38 a barrel until 1986, when it dropped below $20 a barrel until 1989. It dropped below $20 a barrel very briefly in 1999. It hasn’t been below $40 a barrel since 2004.
The Most Revolutionary Act 