The Next Energy Transition

Quite early in the exploitation of fossil resources the debate began about what happens after their exhaustion, but it has remained mostly academic. The post WWII period of sustained growth, affluence and freedom from the adverse effects of war had the effect of entrenching the faith2 in human power and the inexorable arrow of progress that would lead to more of whatever we desired. Consideration of external limits or cultural constraints on individualistic affluence remained at the fringe. Throughout most of the 20th century, a range of energy sources (from nuclear to solar) have been proposed as providing the next “free” energy source that will replace fossil fuels3.

In so called developing countries, the power of the dominant globalist culture both as a model to emulate and a mode of exploitation to resist, preoccupied most thinkers, leaders and activists. The key issue was how to get a share of the cake, not the limits to the size of the cake.

But the super accelerated growth in energy per person of the post WWII era came to an end with the energy crisis of 1973, when OPEC countries moved to exert their power through oil supply and price. The publication of the seminal Limits To Growth report in 1972 had defined the problem and the consequences by modelling how a range of limits would constrain industrial society in the early 21st century. After the second oil shock in 1979 the debate about the next energy transition intensified, but by 1983 a series of factors pushed energy supply off the agenda. Economic contraction not seen since the Depression of the 1930’s had reduced demand and consequently prices for energy and natural resources. In affluent countries conversion from oil to gas and nuclear for electricity generation reduced demand for oil. Energy efficiency gains in vehicles and industry further reduced demand. Most importantly, the new super giant oil fields in the North Sea and Alaska reduced Western dependence on OPEC and depressed the price of oil. All other primary commodity prices followed the downward trend set by oil because cheap energy could be used to substitute for other needed commodities.4

The economies of the affluent countries were further boosted by two important changes. The shift from Keynesian to Friedmanite free market economic policies reduced regulatory impediments to business and enlisted public wealth for new private profits. At the same time, the Third World debt crisis in developing countries triggered by collapsing commodity prices didn’t slow the flow of interest repayments into the coffers of western banks. In line with the new free market ideology, Structural Adjustment Packages from the IMF and World Bank provided more loans (and debt) on the condition that developing countries slash education, health and other public services, to conserve funds for repayments.

The scientific consensus about Global Warming in the late 80’s and early 90’s renewed the focus on reducing fossil fuel use. Not to conserve resources, which were widely thought to be abundant, but to reduce carbon dioxide additions to the atmosphere. But with energy prices low due to a glut of oil, the main action was an acceleration in the shift to gas as a cheap and relatively “clean” fuel.

Half a century earlier in 1956, the startling predictions by eminent petroleum geologist M. King Hubbert that oil production in the USA, the world’s largest producer, would peak in 1970, had almost destroyed Hubbert’s career and reputation.  Ironically the controversy within the oil industry over Hubbert’s methodology and predictions was not known the authors of the Limits To Growth Report and was not part of the 1970’s public debate over limits of resources.  It was nearly a decade, at the depth of the greatest economic recession since the 1930’s, before the industry would acknowledge that the 48 lower states of the US had in fact peaked and declined despite the greatest drilling program in history.  Hubbert has also made a more approximate estimate of a global peak early in the 21st century.

In the mid 1990’s the work of independent and retire petroleum geologists who were colleagues of Hubbert reviewed his original predictions using new information and evidence, triggering the debate about peak oil that grew and spread along with the internet in the last years of the millennium.  But with the cost of oil as low as $10/barrel, the gurus of economics and oil supply quoted in the mainstream media thought that oil was on the way to becoming worthless and redundant through glut and technological advances. The delusions of cheap energy were widespread.  Ironically, many environmentalists concerned about the mounting evidence of, and inaction of governments about climate change, put their faith in the “hydrogen economy” powered by clean renewable technologies to save us from polluting the planet to death.
 

california freeway
Freeway in Raileigh, North Carolina at peak hour, 2005. The classic symbol of automobile dependence in the USA where personal mobility in private automotives consumes about 60% of total oil production and imports.

 

While energy and consequently food costs in affluent countries remained the lowest in human history, the evidence for energy descent rather than ascent made little impact, outside the counterculture.  Since 2004 the rising cost of energy, and now food, is focusing the attention of leaders and the masses to the questions of sustainability not seen since the energy crises of the 1970's.

The research, activism and awareness of energy and climate issues provide a context for the growing debate about the ecological, economic and social sustainability of everything from agriculture to human settlement patterns and even fundamental human values and beliefs. There is a huge body of evidence that the next energy transition will not follow the pattern of recent centuries to more concentrated and powerful sources.

But the likelihood that this transition will be to one of less energy is such an anathema to the psycho-social foundations and power elites of modern societies that it is constantly misinterpreted, ignored, covered up or derided. Instead we see geopolitical maneuvering around energy resources, including proxy and real wars to control dwindling reserves and policy gymnastics to somehow make reducing carbon emissions, the new engine of economic growth.

Next page: 2. Energy Futures   

Last Updated ( Tuesday, 12 August 2008 )