by MonteQuest » Wed 26 Oct 2005, 23:57:38
Solving Oil Depletion; Solutions in Isolation
Solutions in isolation. What do I mean by this? A classic example is nuclear power development without an answer to the waste problem. Another is increased coal use without considering the cost of carbon sequestration or the impact on global warming without it. Basically, it is offering solutions isolated from the true costs or consequences of implementing those solutions; i.e., failing to look at the Big Picture.
Probably the most cited solution for solving our energy crisis is instilling a conservation ethic into society and the economic engine. Conservation, by its very nature, is a self-induced recession on the economy. Increasing conservation always results in reduced economic activity. Each of the previous three oil shocks in the United States was followed by recession. In every oil shock, the US economy was at or near its “stall speed” when the oil shock occurred. From the cringes of the financial analysts as of late, nothing has changed.
Conservation means economic restraint, and that means fewer jobs which translates into less money in the hands of consumers. This results in poor sales that dominoes into business failures, more job losses and increased poverty that leads to conflict and human desperation.
Some will counter that new jobs can be created in the renewable energy field. Does this translate into a net reduction in energy consumption, or does it just transfer the consumption to another end use? I maintain it is the latter. The only way you can achieve the desired effect is to cut the standard of living. To re-employ those displaced by conservation measures, we must cut all wages so that there is less purchasing power distributed amongst more people. How else can you achieve a net reduction in energy consumption while keeping everyone employed? Somebody, somewhere, has to absorb the loss in consumption.
Can we afford cost-saving energy efficiency?
This is the question posed by the ecological economists Mathias Wackernagel and William Rees. They write (1997):
$this->bbcode_second_pass_quote('', 'T')he answer is 'yes' only if efficiency gains are taxed away or otherwise removed from further economic circulation. Preferably they should be captured for reinvestment in natural capital rehabilitation.
Many economists of all persuasions seem to agree that improving energy efficiency through technological means will, by lowering the implicit price, result in increased, not decreased, energy use. Energy efficiency gains can increase energy consumption by two means: by making energy appear effectively cheaper than other inputs; and by increasing economic growth, which increases energy use. This certitude is the result of almost 150 years - since Jevons in the 1860s - of theoretical discussion on resource use, and empirical evidence from historic analysis of energy use in economies.
And, as we all know, efforts to improve efficiency are subject to diminishing returns. Eventually you reach a point where reduced energy availability will translate to reduced economic activity. Given the fact that our economy is based on the assumption that economic activity must grow perpetually, the result is likely to be a recession with no bottom and no end.
Hydrocarbon depletion poses some huge obstacles, and few realistic ways around them. We need to think these so-called solutions through. The perpetual myopic thinking of modern man will no longer suffice. This is a crossroads of a once-in-a-earthtime event; peak oil will only happen once. Its consequences will be here forever.
A Saudi saying, "My father rode a camel. I drive a car. My son flies a jet-plane. His son will ride a camel."