Monday, December 8, 2008

Now Don't Tell Anybody

There's nothing that plays so badly with the American public as bad news, especially if it means that we might be compelled to alter our daily habits or give up things that we've grown to view as entitlements, like ever bigger and more amenity-stuffed houses on 3-acre lots 50 miles out of the city that appreciate 20% a year and have ATM machines attached to them so that we can pull money out of them every time we get an itch for some recreational shopping, or the ability to wrack up a three-quarter million dollars' worth of debt on those houses while making payments against them barely equal to the rent on an average city apartment and while using them as piggy banks from which to pull money for vacations and boats and Hummers and shopping sprees at the mall.

Willful blindness on the part of the people we pay to lead us in policy matters, and coddling the public in its delusional state, have been the chosen political operating methods of both our political parties, which did a wonderful job of deluding themselves and the public as to the price that would exacted for the 10-year credit binge that has produced the current economic debacle. Anyone who pointed out the rather obvious facts- that the debt being incurred would sometime soon have to be repaid by somebody, and that debt both public and private had reached levels beyond what we jointly or severally could hope to pay back in our lifetimes- was labeled a killjoy and party-pooper, and booed off the stage.

However, there are a few public figures that have been stalwart in their determination to level with the public and deliver the information we badly need in order make the personal decisions and plans that either enable us to successfully resist the destructive hysteria of the moment and make the life and financial decisions that will enable us to negotiate some of the most wrenching shifts in our economy and life arrangements in over a century, and continue to lead reasonably comfortable lives- or end up being refugees in Tent Cities, bartering toilet paper for washing water and canned beans. Senator Roscoe Bartlett, a Maryland Republican, is one of these, along with former Fed Chairman Paul Volcker, oil geologists Colin Campbell and Kenneth Deffeyes, and SAIC Senior Energy Program Advisor Robert L. Hirsch, whose landmark report on the eminent peaking of world oil production, Peaking of World Oil Production: Impacts, Mitigation, and Risk Management, is an unsparing assessment of the bleak and choppy future on the downslope from the peak of production; and the difficult and wrenching shifts in our entire fix on life that we must make in order to ensure a shift to lower energy use, and still enjoy anything like the technological amenity that we have enjoyed since 1900.

Therefore, it's unsettling and not a little ironic, that at just the hour when we are being shown the gruesome cost of willful blindness regarding our finances public and private, that Hirsch himself would counsel us to soft-pedal the truth regarding world energy supplies, and enable the public in self-delusion regarding the harrowing energy sitution and our lack of viable alternatives to our current energy-guzzling life arrangements. Hirsch was quoted in the November 14 issue of The New York Times, and many other places, as follows:


The world is in the midst of the most severe financial crisis in most of our lifetimes. The economic damage that has already been wrought is considerable, and we have yet to see the bottom or the turnaround. Against this background, I suggest that the peak oil community minimize its efforts to awaken the world to the near-term dangers of world oil supply. The motivation is simple: By minimizing our efforts in the near term, we may not add fuel to the economic fires that are already burning so fiercely.

We are all aware of how disoriented governments and business are right now. Our leaders, leaders-to-be, and best minds are disoriented and seeking pathways out of the current morass. The public is in a quiet panic mode — those who were reasonably well off are less well of, and their options for action are limited. Those that have lost their jobs and/or homes are desperate. Businesses and the markets are in what might be called a free fall. If the realization of peak oil along with its disastrous financial implications was added to the existing mix of troubles, the added trauma could be unthinkable.

Like many of you, I’ve devoted my recent efforts to trying to wake the public and governments to the impending horrors of peak oil. As much as that awaking is urgently needed, continuing to press forward now is almost certainly not in the broader interest.

Many may be tempted to directly challenge the recent IEA World Energy Outlook. I am among those who were very disappointed. Pressing those concerns at this time might further the peak oil “cause,” but it could well do much more damage than any of us really intend.

Please keep up your studies and thinking, because helping the world realize the dangers of peak oil is an absolute must. In the near term, keeping relatively quiet is likely the better part of valor.

Certain phrases in Hirsch's plea speak to the problem with Willful Blindness. Would "our leaders, leaders-to-be, and best minds" be so "disoriented", had they sqaurely confronted the many signs out there, that were there as early as 2003, that the credit rampage was ratcheting out of control and that the overhang of public and private debt, the largest ever in the history of the world, was a massive threat to our financial system and economy? They did not confront the situation because doing so would have wrecked the "ownership society" party of "wealth creation, which was wholly dependent upon debt creation and asset inflation; and the underlying weakness of our unproductive and parasitical economy would have been laid bare, with unacceptable political repercussions.

Well, the confusion and disorientation of our leaders and "best minds" regarding the global financial unravelling is nothing compared to the panic, hysteria, and total inability to deal with non-negotiable realities, that will ensue once we are headed irrevocably down the slope of fossil fuel depletion,and which is starting right now- if we continue to delude ourselves regarding the gravity of the global fossil fuel drawdown and the weakening position of this import-dependent country in competing for dwindling global supplies. Once again, our leaders will be blindsided by circumstances that these wonderful minds will tell us they could not possibly have been expected to forsee, and we will have to deal with a constellation of suddenly dire circumstances, from a position of extreme ignorance, a bloated sense of entitlement, and the almost total lack of alternatives, coping skills, or willingness to adapt our behavior and world view to new and unwelcome circumstances.

As any floundering home debtor grappling with the reset of his $500,000 mortgage to payments that exceed his monthly income can ruefully attest, willful blindness regarding the core material facts of your life is not a sound operating policy for individuals. You wouldn't have taken that mortgage had you troubled yourself to actually read it and understand it, would you?And if the failure to see and understand is disastrous for individuals making major life decisions, how dangerous is it for a troubled country of 300 million people who are mostly totally dependent upon systems and arrangements that simply will not function once the fuel supplies that make them possible begin to dwindle sharply? The failure of our "best minds" to confront this bald truth is criminal.

We're not talking here about just having to give up our cars and being stranded in unheatable houses 5 miles from the nearest public transit. We are talking about the breakdown of all the systems and structures we depend upon for food production and delivery, for health care, for electrical power and home heating, for sanitation and potable water. We have not discussed how we will allocate fuel supplies in order to make sure that lifeline services such as the fire and police departments are adequately supplied, nor have we talked about the public health challenges that spot shortages and suddenly upward-ratcheting prices due to that, might entail, such as the sudden unavailability of essential vaccines, or the inabililty of many municipalities to deliver the clean water we take for granted, or provide for basic sanitation.

We cannot afford to be willfully blind regarding the global fuel drawdown, which is continuing apace even with the recent destruction of oil prices and the return to $40 a barrel oil due to the global financial unwinding. This is a temporary circumstance that in itself could lead to critical shortages, as many drilling and recovery projects have been cancelled due to the impossibility of realizing a profit at these price levels, meaning that we will have less oil in the near future. Failure to negotiate the downslope successfully will mean that we will not only never recover economically in our likely lifetimes, but will also experience systems failure, social disorder, and material hardship comparable to that experienced by Russia after the Soviet collapse, except that the Russians had a degree of social cohesion and experience in dealing with material adversity that we totally lack here in this land of total dedication to personal convenience at any cost in fuel and debt.

Our politicians will not tell us the truth because their careers depend upon making us feel good. And now even people who usually know better are afraid of panicking us sheoples out here and possibly causing a stampede. Therefore, may I suggest that we each of us begin, as individuals and local communities, to prepare ourselves? For individuals, that means getting out of debt to the extent possible in these jobless times, curtailing spending on non-essentials, and redesigning our lives for comfort and amenity, not to mention bare material survival, on a much smaller energy platform. What adjustments a person makes will depend on personal necessities and means. It might mean getting to know your community and neighbors better, and forming informal cooperative associations and mutual-aid pacts. It will probably mean relinquishing treasured material goals and adjusting to meaner circumstances than what we've been accustomed to. For communities, it means tabling planned public expenditures, especially on large infrastructure projects that will be increasingly obsolete under the new regime of energy scarcity, while committing to putting the systems and platforms in place that we will badly need down the road. It should certainly mean curtailing spending on monument-building and "vanity" projects that bring no long-term benefit to the community but occasion large net costs, like Chicago's planned 2016 Olympics. It should also mean rolling back the pay raises of public officials, in keeping with the reduced circumstances of the citizens underwriting their paychecks. It should absolutely mean a critical look at all our lifeline services and our critical water, utility, and sanitation infrastructure in order to make critical repairs and improvements while fuel is still relatively cheap, for the costs of improvements will ratchet beyond affordability as fuel prices start to hike again.

Most of all, we need to get the word out. Willful blindness is not "the better part of valor"; it is cowardice, and if ever there were a time that we cannot afford to walk through a minefield blindfolded, this is it.


Nudge said...

Great post again, NC. Well said. The relation of western society to oil right now is that of the sometimes-starving person who, on his way to the free 4H classes about how to grow his own food, has stumbled across a case of Twinkies that fell out of a passing truck. And now with “food” in hand, he's headed back home to postpone the farming project for another day.

Among many other projects, that Brazilian deepwater find was being counted on to help offset the depletion of other fields and their contributions toward the west .. particularly the depletion in Mexico's Cantarell field. The planned deepwater Arctic stuff would have probably been even harder to do, but with the right shortages & prices pushing it, we could have probably got at least some oil out of the ground.

Predictably, what will happen next is that by the time we run up against the next oil price peak, relatively little will have been accomplished to develop the new oil fields that were supposed to cushion the shock of the depletion of the current majors.

As a species, we don't learn very well.

The North Coast said...

Hi, Nudge.

Anybody who's counting on that Brazilian deep water find must not be able to count to 10. In all, it might contain 30 billion barrels, of which we can hope to extract 4 billion barrels at the most. Given that this country alone tears through over 7 billion barrels a year, anybody who has a grasp of 3rd grade arithmetic can figure out that these small finds- 20 billion here, 33 billion there, another 15 billion over there- all added together, hardly make a dent in the demand.

I find that even well-educated people in finance are staggeringly ignorant of not only how much liquid fuels it takes to keep us going, but also of how the math is totally against us when it comes to switching to other fossil fuels that seem more plentiful. For example, if we continue to ramp up our use of coal and uranium by just 2% a year, a "250 year supply" quickly becomes a 30 year supply, and 30 years passes very quickly.