[R-G] [BillTottenWeblog] The Paradox of Production

[Bill Totten]

by John Michael Greer

The Archdruid Report (March 26 2008)

Druid perspectives on nature, culture, and the future of industrial society


One of the things that makes the challenge of peak oil so insidious, and
so resistant to quick fixes, is the way in which many things that seem
like ingredients of a solution are actually part of the problem.
Petroleum provides so much of the energy and so many of the raw
materials we take for granted today that the impacts of declining oil
production extend much further than a first glance would suggest.

Read through discussions of the energy future of industrial society from
a few years back, for example, and you’ll find that many of them treat
the price of coal and the price of oil as independent variables, linked
only by the market forces that turn price increases in one into an
excuse for bidding up the price of the other. What these analyses
missed, of course, is that the machinery used to mine coal and the
trains used to transport it are powered by diesel oil. When the price of
diesel goes up, the cost of coal mining goes up; when supplies of diesel
run short in coal-producing countries – as they have in China in recent
months – the supply of coal runs into unexpected hiccups as well.

I’ve pointed out in previous posts here that every other energy source
currently used in modern societies gets a substantial “energy subsidy”
from oil. Thus, to continue the example, oil contains about three times
as much useful energy per unit weight as coal does, and oil also takes a
lot less energy to extract from the ground, process, and transport to
the end user than coal does. Modern coal production benefits from these
efficiencies. If coal had to be mined, processed, and shipped using
coal-burning equipment, those efficiencies would be lost, and a sizeable
fraction of total coal production would have to go to meet the energy
costs of the coal industry.

The same thing, of course, is true of every other alternative energy
source to a greater or lesser degree: the energy used in uranium mining
and reactor construction, for example, comes from diesel rather than
nuclear power, just as sunlight doesn’t make solar panels. What rarely
seems to have been noticed, however, is the way these “energy subsidies”
intersect with the challenges of declining petroleum production to
boobytrap the future of energy production in industrial societies. The
boobytrap in question is an effect I’ve named the paradox of production.

It’s crucial to understand that the problem with our society’s reliance
on petroleum is not simply that petroleum will become scarce in the
future, and will have to be replaced by less concentrated or less
abundant fuels. It’s that a huge proportion of industrial society’s
capital plant – the collection of tools, artifacts, trained personnel,
social structures, information resources, and human geography that
provide the productive basis for society – was designed and built to use
petroleum-derived fuels, and only petroleum-derived fuels. Converting
that capital plant to anything else involves much more than just
providing another energy source.

Consider the difficulties that would be involved in building the sort of
hydrogen economy so often touted as the solution to our approaching
energy crisis. We’ll grant for the moment that the massive amounts of
electricity needed to turn seawater into hydrogen gas in sufficient
volume to matter turn out to be available somehow, despite the severe
challenges facing every option proposed so far. Getting the electricity
to make the hydrogen, though, is only the first of a series of tasks
with huge price tags in money, energy, raw materials, labor, and time.

Hydrogen, after all, can’t be poured into the gas tank of a
gasoline-powered car. For that matter, it can’t be dispensed from
today’s gas pumps, or stored in the tanks at today’s filling stations,
or shipped there by the pipelines and tanker trucks currently used to
get gasoline and diesel fuel to the point of sale. Every motor vehicle
on the roads, along with the vast infrastructure built up over a century
to fuel them with petroleum products, would have to be replaced in order
to use hydrogen as a transport fuel.

The same challenge, in one form or another, faces nearly every other
energy source proposed as a replacement for petroleum. It’s not enough
to come up with a new source of energy. Unless that new source can be
used just like petroleum, the petroleum-powered machines we use today
will have to be replaced by machines using the new energy source.
Furthermore, unless the new energy source can be distributed through
existing channels – whether that amounts to the pipelines and tanker
trucks used to transport petroleum fuels today, or some other
established infrastructure, such as the electric power grid – a new
distribution infrastructure will have to be built. Either task would add
massive costs to the price tag for a new energy source; put both of them
together – as in the case of hydrogen – and the costs of the new
infrastructure could easily dwarf the cost of bringing the new energy
source online in the first place.

Factor the impact of declining oil production into this equation and the
true scale of the challenge before us becomes a little clearer. Building
a hydrogen infrastructure – from power plants and hydrogen generation
facilities, through pipelines and distribution systems, to hydrogen
filling stations and hundreds of millions of hydrogen-powered cars and
trucks – will, among many other things, take a very large amount of oil.
Some of the oil will be used directly, by construction equipment, trucks
hauling parts to the new plants, and the like; much more will be used
indirectly, since nearly every commodity and service for sale in the
industrial world today relies on petroleum in one way or another. Until
a substantial portion of the hydrogen system is in place, it won’t be
possible to use hydrogen to supplement dwindling petroleum production,
which is already coming under worldwide strain as demand pushes up
against the limits of supply. Instead, the fuel costs of building the
hydrogen economy add an additional source of demand, pushing fuel prices
higher and making scarce fuel even less available for other uses.

The same thing is true of any other alternative energy system that
attempts to replace petroleum in its current uses. The costs differ,
depending on how much of the existing infrastructure has to be replaced,
but there’s always a price tag – and a large portion of the energy
needed will have to come from petroleum, because that’s the energy
source our society uses for a great many of its crucial needs. If the
new energy source can be produced and used by existing infrastructure
with minimal modification, this effect may well be small enough to
discount, but it is always there.

The advantage of energy sources that can use existing infrastructure is
one of the reasons why ethanol and biodiesel have entered the energy
stream in amounts large enough to affect total liquid fuel numbers, and
have helped drive grain prices to stratospheric levels into the bargain,
while so many other alternative fuels languish on the drawing boards and
the imaginations of peak oil optimists. Both of these can be distributed
and used as though they were petroleum products. Neither one is a viable
response to the broader problem, of course; stark limits get in the way
of fueling an industrial economy by pouring our food supply into our
fuel tanks. All the arable land on the planet is not enough to produce
more than a small fraction of the liquid fuels we get from petroleum
today, and long before even that inadequate point was reached, mass
starvation or violent revolution would cut the process short.

All other proposed replacements for petroleum, however, require much
larger investments of money, energy, and raw materials for new
infrastructure. The production of energy and raw materials depends on
petroleum nowadays; so does the global economy which gives money its
value – and conventional petroleum production worldwide is almost three
years into what is most likely an irreversible decline.

At this point the paradox of production can be easily defined. If energy
prices are high because supplies are limited, the obvious solution is to
increase the supply by producing more energy. If this requires replacing
one energy resource with another that cannot be produced, distributed or
consumed using the identical infrastructure, though, the immediate
impact of such a replacement will be to raise energy prices, not lower
them. The direct and indirect energy costs of building the new energy
system become a source of additional demand that, intersecting with
limited supply, drive prices up even further than they otherwise would rise.

If the new energy source turns out to be more abundant, more
concentrated, and more easily extracted than the source that it’s
replacing, this effect is temporary; if the new source can be
distributed and used, at least at first, via old technology, the effect
is minimized; if the new source is introduced a little at a time, in an
economy reliant on many other sources of energy, the effect can easily
be lost in the static of ordinary price fluctuations. All three of these
were true of petroleum in its early days. It started as a replacement
for whale oil in lamps, and was distributed and consumed in existing
technology; decades later, it found a niche as a transportation fuel,
and relied on the old lamp-oil distribution system until a new one could
be constructed on the basis of existing revenues; its other uses evolved
gradually from there over more than half a century, until by 1950 it was
the world’s dominant energy source

None of the proposed replacements for petroleum, though, have those
advantages. None of them yield as much net energy as crude oil under
natural pressure, and none combine petroleum’s unique mix of abundance,
concentration, ease of production and distribution, and fitness for a
world of machinery designed and built for petroleum-based fuels. The
fuel they need to replace remains by far the most important energy
source in the world today. Nor do we have half a century to ramp up a
new energy system for the industrial economy; conventional petroleum
production is already declining steadily, and the most reasonable
projections of future production show it dropping off a cliff within the
next decade or so.

At the very least, then, trying to solve the energy crisis on the
downside of Hubbert’s peak by bringing new energy sources online will
drive up the cost of petroleum further than it would rise on its own,
since the direct and indirect energy costs of the new source and its
infrastructure have to be met from existing sources. That poses the same
political test faced, and failed, by the nations of the industrial world
in the late 1970s, when promising steps toward sustainability went into
the dumpster because their immediate costs hadf more political impact
than their long-term benefits.

It also risks potentially fatal damage to the industrial economy itself,
which will face severe strains already as the age of cheap abundant
energy comes to an end. Pursued with enough misplaced enthusiasm, a
crash program to bring some new energy source online in a hurry could
drain enough energy, raw materials, labor, and money out of an already
fragile system to drive it over the edge into economic and political
collapse.

Fortunately, this is not the whole story. There is at least one proven
way to counter the paradox of production, exert downward pressure on
energy prices, and free up resources and time that can be used to
respond constructively to our predicament. I’ll discuss it in next
week’s post.
_____

The Grand Archdruid of the Ancient Order of Druids in America (AODA),
John Michael Greer has been active in the alternative spirituality
movement for more than 25 years, and is the author of a dozen books,
including The Druidry Handbook (Weiser, 2006). He lives in Ashland, Oregon.

http://thearchdruidreport.blogspot.com/2008/03/paradox-of-production.html

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