Tuesday , September 29 2020
Home / Uncategorized / When politicians call, ask only this

When politicians call, ask only this

Voiced by Amazon Polly

With the US presidential election campaigning in full flow, news and social media has descended into the depressing blue team versus red team idiocy that experience tells us leads nowhere.  The supporters of both teams blindly claim that voting for their side is the only way of bringing about positive change; or, at least, of warding off the evil posed by the other team.  But experience tells us that whichever team wins, the same dreary process of decline which began back in the 1970s is going to continue. (Cue howls of indignation from the blue/red team supporters who earnestly believe that their guy can deliver where nobody has delivered before).

It is not that politics doesn’t matter.  On the periphery it can have important impacts; although never as profound as promised. The point is that four years from now the supporters of the winning team in November are going to be left with a sense of betrayal (cue more howls of righteous indignation from teams blue and red) because past experience tells us that it always turns out that way.  And there is good reason for this.  Since the 1970s we have been plunged ever deeper into an “overshoot predicament” that neither red nor blue team even perceives; still less has a viable solution to.

For the most part, politics is driven by something similar to a curious ritual which took place in Cardiff in the early 2000s.  Cardiff’s Millennium Stadium – previously used for the rugby world cup final – was chosen as the best neutral alternative while London’s Wembley Stadium was being rebuilt.  It didn’t take long for “the curse of the south dressing room” to become newsworthy.  As the BBC reported at the time:

“The stadium is used for some of Britain’s biggest footie finals – but the last eight teams who’ve used the south dressing room have all lost. This includes Arsenal, Birmingham City and Spurs.”

The apparent solution was to use feng shui in an attempt to cleanse the evil spirits (I kid you not) from the afflicted dressing room:

“Feng shui is an ancient Chinese art used to create a positive feeling in a room. Specialist Paul Darby from Nottingham will try to change the ‘energy’ of the dressing room by redecorating it, scattering incense and sea salt and lighting candles and chanting.

“Stadium bosses said: ‘The unlucky south dressing room will be given the full feng shui treatment ahead of the Football League’s LDV Vans final between Blackpool and Cambridge on Sunday’.”

In sport as in politics, people are all too quick to believe nonsense and act accordingly.  For the most part, the mainstream economic prescriptions employed by politicians to remedy the supposed evil spirits afflicting countries and economies are different to feng shui only insofar as they cause far more harm when they go wrong.  Nevertheless, they employ similar spurious correlations – things that happen independently of each other, but appear to have a causal relationship.  For example, the upswing in economic fortunes in the USA and UK from the mid-1980s appears to have been the result of the neoliberal economic policies pursued by Ronald Reagan and Margaret Thatcher.  Both, however, were merely the beneficiaries of the opening up of new oil and gas deposits in the North Sea, North Alaskan Slope and the Gulf of Mexico.  In the same way, Trump’s pre-pandemic economy owes more to the unsustainable temporary benefits of hydraulic fracturing than to the various policies pursued in the past three years.  It goes without saying that irrespective of who wins in November, the collapse of the oil industry in general and the fracking industry in particular during the pandemic, suggests a prolonged period of decline which can only be reversed with a new, cheap and energy-dense energy source.

To understand this requires that we step back from the political/establishment media version of an economy.  In that world view, “the economy” is somewhere different to our daily lives; an abstract place populated by investors, speculators and stock brokers who make and lose fortunes on stock markets and international commodity exchanges.  That world, we are told, requires specialist knowledge only known to a select economist priesthood, whose pronouncements we dare not ignore. 

In reality “the economy” is the sum total of everything we do.  Even non-financial “transactions” as apparently trivial as making someone a cup of tea, lending tools or helping out with a (non-employment) job, are still important transactions that help bond the social fabric which we all depend upon.  Consider though, that the tea being offered in a suburb in South Wales was grown in India.  Someone transported it to an export agent at an Indian port.  That agent had to be supported by an internationally connected banking and finance infrastructure to provide the insurances and guarantees to allow trade to take place.  A transport company had to arrange for the tea to be loaded onto a ship – which had to be filled with oil from the Middle East – to transport it to a port somewhere in Europe.  Someone else had to unload the cargo of tea, and reload it onto trucks – also filled with oil – some of it from the North Sea and Russia – and distributed to various wholesalers dotted around Europe; including the one in the UK, from whence it was transported to a packaging company.  Once packaged, it was sent to a regional supermarket depot, and eventually on to the shop where it was purchased.  That’s just the tea.  Similarly complex supply chains were required to provide the kettle, the electricity, the water, the cup, the milk and the sugar.

In other words, all of our activities – even the apparently trivial – can involve millions or even billions of transactions; most of which are invisible to us.  But the sum total of all of them is what we call “the economy.”  And the driving force behind the economy, according to the economists, politicians and establishment media, is money.  Charles Eisenstein sets out this view:

“Looking down from Olympian heights, the financiers called themselves ‘masters of the universe,’ channelling the power of the god they served to bring fortune or ruin upon the masses, to literally move mountains, raze forests, change the course of rivers, cause the rise and fall of nations.

“What we call recession, an earlier culture might have called ‘God abandoning the world.’ Money is disappearing, and with it another property of spirit: the animating force of the human realm. At this writing, all over the world machines stand idle. Factories have ground to a halt; construction equipment sits derelict in the yard; parks and libraries are closing; and millions go homeless and hungry while housing units stand vacant and food rots in the warehouses. Yet all the human and material inputs to build the houses, distribute the food, and run the factories still exist. It is rather something immaterial, that animating spirit, which has fled. What has fled is money. That is the only thing missing, so insubstantial (in the form of electrons in computers) that it can hardly be said to exist at all, yet so powerful that without it, human productivity grinds to a halt.”

Money – or rather “currency” (since in the modern world it is not a store of value) – is though, no more than a claim on wealth.  Sure, we mortals struggle to survive without access to currency.  But it is not the currency itself that we need, but the goods and services that we can buy with it.  And the animating force which allows those goods and services to exist is not currency but energy.  As Steve Keen famously put it:

“Capital without energy is a statue; labour without energy is a corpse.”

In most economics textbooks, energy is not mentioned at all.  It is viewed as merely one of a myriad cheap and abundant “externalities” which is assumed to always be available in whatever quantities are required.  So cheap, indeed, to be hardly worth a mention in comparison to the huge outlays spent on capital and wages.  But without energy – the food eaten by workers and work animals and the fuels and electricity which drives the machinery – there can be no economy.  And crucially, not all energy is equal.

This should be obvious enough.  If you are a farmer or a haulier who requires diesel because it is the only energy-dense liquid fuel that can power your machinery, learning that wind turbines off the coast of Scotland have replaced the coal required by a power station in Wales is of no importance at all.  Neither coal nor wind is going to drive the heavy machinery and trucks that are essential to putting food on the tables of millions of people.  Indeed, as we discovered in the early stages of the pandemic, when those supply chains break down, lives are quickly threatened.

The apparent difference between the energy density of oil compared to coal seems trivial.  On average (different sub-categories of fossil fuels vary) a kilogram of coal contains some 6,000 Kcals, whereas a kilogram of oil contains around 10,000 Kcals.  That may not sound like much, but it is the difference between the technology and living standards of the western world in the nineteenth century and those same countries in the second half of the twentieth.  In a 2015 essay, physicist Tom Murphy uses a thought experiment to explain the difference:

“Let’s set the stage with a thought experiment about three equally-separated times, centered around 1950. Obviously we will consider the modern epoch—2015. The symmetric start would then be 1885, resulting in 65-year interval comparisons: roughly a human lifetime.

“So imagine magically transporting a person through time from 1885 into 1950—as if by a long sleep—and also popping a 1950 inhabitant into today’s world. What an excellent adventure! Which one has a more difficult time making sense of the updated world around them? Which one sees more ‘magic,’ and which one has more familiar points of reference? The answer is obvious, and is essentially my entire point.

“Take a moment to let that soak in, and listen for any cognitive dissonance popping inside your brain.

“Our 19th Century rube would fail to recognize cars/trucks, airplanes, helicopters, and rockets; radio, and television (the telephone was 1875, so just missed this one); toasters, blenders, and electric ranges. Also unknown to the world of 1885 are inventions like radar, nuclear fission, and atomic bombs. The list could go on. Daily life would have undergone so many changes that the old timer would be pretty bewildered, I imagine. It would appear as if the world had blossomed with magic: voices from afar; miniature people dancing in a little picture box; zooming along wide, hard, flat roads at unimaginable speeds—much faster than when uncle Billy’s horse got into the cayenne pepper. The list of ‘magic’ devices would seem to be innumerable.

“Now consider what’s unfamiliar to the 1950 sleeper. Look around your environment and imagine your life as seen through the eyes of a mid-century dweller. What’s new? Most things our eyes land on will be pretty well understood. The big differences are cell phones (which they will understand to be a sort of telephone, albeit with no cord and capable of sending telegram-like communications, but still figuring that it works via radio waves rather than magic), computers (which they will see as interactive televisions), and GPS navigation (okay: that one’s thought to be magic even by today’s folk). They will no doubt be impressed with miniaturization as an evolutionary spectacle, but will tend to have a context for the functional capabilities of our gizmos.

“Telling ourselves that the pace of technological transformation is ever-increasing is just a fun story we like to believe is true. For many of us, I suspect, our whole world order is built on this premise.”

There were coal limits to the coal technologies of the nineteenth century.  Only the additional power of oil allowed coal/steam technologies to be extended in the twentieth.  Deep coal mining, giant (1,000 MW+) out-of-town power stations and even 126mph steam trains were only possible because coal had been supplemented with oil.  Meanwhile, most of the 1950s technologies that we have since evolved and miniaturised were only possible in an economy driven by the additional power of oil.

Oil technologies though, have similar limitations.  There is an oil limit to oil technologies beyond which we can only go by making sacrifices elsewhere in the economy.  This is why, for example, the last human to set foot on the moon returned to Earth nearly half a century (48 years) ago.  It is why we no longer traverse the Atlantic on supersonic commercial airliners.  It is even – somewhat unexpectedly – why we are hard pressed to find an independent automatic car wash these days.  This is not because we are “running out,” but because the amount of energy we have to invest in order to obtain useable energy – the energy cost of energy – has been increasing since the supply shocks of the 1970s.

Since 2008 the entire global economy has been slipping ever closer to the edge of a net energy cliff:

The more energy we are required to invest in such things as recovering oil from miles beneath the seabed of the Gulf of Mexico, boiling bitumen sands or hydraulically fracturing the source rocks beneath North Dakota and Texas, the less we have available to grow the much bigger non-energy part of the economy where the overwhelming majority of us work.  As the cost of energy increases, so the wider economy is impoverished; causing a fall in demand which renders energy companies unable to secure the price increases needed for further investment.

The stock “solution” from the economists, politicians and establishment media is that we will substitute some combination of hydroelectric, nuclear and renewable energy to replace increasingly expensive coal, oil and gas.  Wind turbines, in particular, have been touted as the saviour of humanity because they – allegedly – provide an energy return (EROI) of 20:1.  There is, though, a dangerous sleight of hand in this.  Remember that the farmers and the hauliers that we need to keep eight billion humans alive do not need any old energy source; they need a liquid fuel that is at least as energy-dense as diesel.  Hydrogen (or methanol manufactured from hydrogen) are often touted as the best alternatives.  But when we add the energy investment required to convert wind into electricity with which to produce the hydrogen, the energy return on wind turbines falls off the net energy cliff; particularly if the intention is to produce hydrogen from water.

This is a common flaw with EROI calculations, which are concerned with energy at the point of production.  In the real world, the energy cost of oil as it is pumped out of an oil well or the energy cost of electricity as it comes out of a wind turbine is irrelevant.  What matters is the energy cost of the electricity when it reaches the wall socket in your house, or the energy cost of the diesel or petrol when you fill up your tank.  And the reality of that calculation is that energy cost per capita across the western states has been rising since the 1970s, causing per capita energy use in the western economies to decline.  Only the coal-fired Asian economies have kept global growth going since 2008; and even before the pandemic, even that growth had petered out.

There are three things that economies can do to address this “supply side” problem.  By far the simplest is to throw more fuel onto the economic fire.  This often happens in the decades immediately after a new fuel source is used.  But as time goes on and the energy cost of a fuel increases, “productivity” – using energy more efficiently – becomes the main means of driving further growth.  This involves deploying technology (in the broadest sense of that word) to convert more energy into useful work, allowing less to be lost as waste heat.  Unfortunately, this has given rise to the mistaken belief – challenged by Tom Murphy – that it is the technology rather than the energy which drives economic growth.  This obscures the thermodynamic and economic limits to productivity.

Like it or not, and irrespective of what technologies are proposed, the laws of thermodynamics dictate that some of the energy we use will always be lost as waste heat.  Nor is this trivial; in almost every case we generate more waste heat than we obtain useful work.  Long before this absolute limit is reached, however, we run into economic limits.  With any technology, early productivity gains tend to be cheap and simple.  As technologies mature, though, further improvements become complicated and expensive, so that the cost of further efficiency is greater than the returns.

At this point – a point that the western economies reached nearly 20 years ago – only one course of action remains on the table.  This is to do what we did in the early nineteenth century and again in the second half of the twentieth century: change to a new energy source.

Some politicians, economists and green campaigners will no doubt claim that the switch to non-renewable renewable energy-harvesting technologies is precisely this.  But remember that in the early nineteenth century we switched from charcoal (at 4,500 Kcals per Kg) to coal (at 6,000 Kcals per Kg) and that in the second half of the twentieth century we switched to oil (at 10,000 Kcals per Kg).  In short, each industrial revolution was based upon a more versatile and energy-dense fuel source than the previous one.  Renewable energy is simply too diffuse to ever be a replacement for oil in a growing economy.

In the same way, other politicians and economists who regard fracking as the technological miracle which will deliver us to the Promised Land will also be disappointed.  With an EROI of just 5:1, there is simply no way in which hydraulically fracturing the source rock – even in the most favourable US regions – is going to result in economic growth in an economy that needs an EROI of 20:1 just to avoid collapse.  In monetary terms, the fracking industry has been spending billions of other people’s (mainly your pension fund) dollars to produce millions of dollars of oil.  This was already coming to grief prior to the arrival of SARS-CoV-2; but it has accelerated since.

So when the various political campaigners ring you or knock on your door to pedal their version of Making Your Country Great Again, don’t be fooled by the smoke and mirrors of unrealisable promises – still less by the chimerical cheer leading of the establishment media.  When they call, ask only this: “What energy will provide the power to achieve the growth and prosperity your team is promising?”  Because if their answer is anything other than a cheaper and more energy-dense liquid fuel than diesel, their promises are worth less than dust in the wind.

As you made it to the end…

you might consider supporting The Consciousness of Sheep.  There are five ways in which you could help me continue my work.  First – and easiest by far – please share and like this article on social media.  Second follow my page on FacebookThird, sign up for my monthly e-mail digest to ensure you do not miss my posts, and to stay up to date with news about Energy, Environment and Economy more broadly.  Fourth, if you enjoy reading my work and feel able, please leave a tip. Fifth, buy one or more of my publications