Ecology, Economy and Energy
(Note: Graph from the February 2006 ASPO newsletter]
The fundamental relationship between current income and savings seems obvious. If you have a lot of savings, then you don’t need to worry as much about current income, because you can draw down your savings at a comfortable pace. In many ways, you could say that your family’s ‘status’ or ‘class’ is a direct function of your current income (earnings) plus your ability to draw down savings multiplied by the amount of time you can continue to draw down on savings. In other words, if you’re using up your savings in order to maintain your lifestyle because your current income doesn’t support it, your status is in jeopardy.
Of course the words ‘status’ and ‘class’ refer to your well-being relative to others – you’re upper class only in so much as there are those lower down than you. It’s also the case that current income plus ability to draw on savings determines your well-being in a more absolute sense. It determines, you could say, the ‘degrees of freedom’ you have to experience the full range of what life has to offer in a condition of comfort and safety, as well as your ability to provide this same experience to others.
For nearly all of human history, economy was really a product of ecology. Your economic reality was determined by your control of land and the natural ’services’ of the land. The word ‘land’ is actually not quite correct, actually, because access or control of the services and products of marine and other aquatic ecosystems was at least as important.
This relationship between economy and ecology was determinative, mainly because ‘ecology’ is a product of the planetary ability to make productive use of current solar income. The energy from the sun is ‘organized’, you could say, through the primary productive capacity of photosynthesis, into the full variety of carbon life forms, but also into the basic physics that drives water, through evaporation and weather patterns, through the system. People experience the results of this current solar income as it manifests in ‘crops’ of all kinds, and also as ‘game’, which concentrates and stores plant energy as meat.
Other forms of short-term energy storage can also be understood as part of ‘current income’ from the sun. On a human time-scale, firewood is ‘current’ stored solar energy, and when you put your hand out to be warmed in front of a campfire, you are experiencing, quite literally, the same heat that the sun radiated onto the tree within your lifetime.
Because people are in fact mammals on a planet surface, despite all of the complex cultural forms we’ve created to disguise the similarity between ourselves and the mere ‘animals’, we will maximize survival and reproductive success as we understand them. Physical control of land and water, and access to its productivity were essential, and nearly all early wars were wars of conquest over land.
The world economy grew as human ability to make use of current solar income improved. Innovations such as the water wheel and the sail boat harnessed the forces of water and weather and increased the amount of work a person could do in a day, as did early metallurgy powered by firewood. Early gross domestic product (GDP) can be seen as a direct measure of the relative ability of a group of people to innovate using current solar income.
The Savings Account… Coal, Natural Gas, and Oil
When we figured out how to use fossil fuels, however, it slowly dawned on us that we had discovered the savings account. Fossil fuels, specifically coal, natural gas and oil, are stored solar income. Just like the firewood contains the energy of the sun radiating onto the tree over its lifetime, these underground deposits contain the energy from the sun… but over a period of millions of years.
The Carboniferous Period occurred from about 354 to 290 million years ago during the late Paleozoic Era. The term “Carboniferous” comes from England, in reference to the rich deposits of coal that occur there, but coal from this period is found across North America, Europe and Asia. It seems that during this stage of evolution, trees began to produce lignin (the resinous material that causes newsprint to yellow, and which is separated from cellulose during the production of high quality printing and writing papers), and bacteria had not yet evolved a way to digest this new material. As a result, woody material that ended up in the lowland swamps never decomposed… and instead slowly compressed and hardened into what we now know as coal.
Because this process occurred over such a long time period, there is an enormous amount of coal in the earth. The World Energy Council estimate is that there is currently a reserve of approximately 910 billion tons of coal – of which the
About 75% of all coal mined is used for electricity production, and is the fastest growing energy source in the world. There are endless estimates about how long world coal reserves will last, but just as one example, the 2005 British Petroleum annual report estimated that proven reserves would last 164 years. Remembering that the dawn of the coal era was around 1700, in
Oil and natural gas were created a little differently than coal was, but the basic idea is the same. Organic material, in this case, organisms that lived in the water and were buried under ocean or river sediments, were compressed and essentially ‘cooked’ by heat, pressure and bacteria under layers of silt. Oil formed first, but as the cooking process continued, natural gas was formed, and this material has been held under rock formations at various depths beneath the earth’s crust since then.
Like coal, oil and natural gas were formed over a long time: during both the Jurassic (180 million to 140 million years ago) and the Cretaceous (140 million to 65 million years ago) periods, or a total era of 115 million years. The world’s first oil well was drilled in
While natural gas has been used since antiquity (like oil) when it naturally seeped out of the ground, the first use of the stuff in lighting was in
Keeping track of the exact accounting can drive you a little crazy, with all of the competing statistics and political objectives behind them. If the measures used to describe energy supplies and energy use were intended to be incomprehensible, they couldn’t have done a much better job… but it’s possible to simplify some of the terms used in order to get a better general understanding of what’s going on. First of all, the standard measure, which is a ‘barrel’ of oil.
Back when oil was first drilled in earnest, in the
The amount of energy in both natural gas and coal can be measured in their ‘equivalent’ barrels of oil… one barrel being equal to 6,000 cubic feet of natural gas, and 410 pounds of coal (about half that amount of lignite, which is low value, high moisture coal, but let’s not get totally lost in the details).
So: based on an average of the numbers from sources like the US Energy Information Administration, the Oil and Gas Journal, and World Oil, here’s a description of our inheritance:
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[Note: Reserve and Current Use figures for each type of fossil fuel are listed here in gallons of gasoline equivilent. Each barrel of oil produces about 19.5 gallons of gas, or roughly one tankfull.]
If you investigate these figures, you’ll find that there is tremendous, and quite vitriolic, controversy over a number of factors here. Will we find more reserves? (Probably, but quite limited amounts.) Will we burn at a faster rate than we are now? (Almost certainly.) Will we begin to convert coal to liquid fuels when the price of oil gets high enough? (Almost certainly.) Will new technologies and investment enable solar, wind and biofuels to take off faster than we can project now? (This certainly seems likely.) The upshot, though, however you slice it, is that we are definitely heading for increased energy demand and decreased energy supply, leading to higher prices and more intense conflict. No one knows the exact year in the future that each event will take place, but these trends are inexorable. And then, of course, there’s the fact that burning the remaining inheritance of fossil fuels will change the weather.
Peak Oil and Climate Change: This Isn’t Funny
The level of CO2 in the atmosphere has fluctuated over time (from about 180 to 280 parts per million for at least the past 400,000 years – some science now indicates this is true over 20 million years) as Al Gore showed us in what is arguably the best Power Point presentation of all time, but pre-industrial levels circa 1800 were 270 parts per million (ppm). Now that we’ve set fire to about half of the total inheritance of stored solar income, which is also, of course, stored Carbon, the CO2 levels have increased 30%, to about 370 ppm. There is not a single thoughtful person I know who believes we’ll actually stop CO2 concentrations at their current levels; even if we were to take serious policy measures here in the U.S. now, the global rate of increase in fossil fuel use would take decades to reduce. Like the debate over the moment of ‘peak oil’, no one can say exactly when the ice on Greenland will melt, or when what year massive hurricanes will sweep the Eastern Seaboard, but the underlying trends are now inexorable.
The irony is upon us. During a period of history when we’re going to see, finally, a recognition of the incredible value of fossil fuels and greatly increased competition to control them, we’ll also begin to see significant damage from the climate change they are causing.
Setting fire to stored carbon based fuels increases CO2 concentrations in the atmosphere. This is a big ‘Duh’ for anyone who is willing to think about it for even a minute. Greenhouse Gas (GHG) emissions were 18.3 billion tons in 1980, and today are about 27 billion tons per year, again according to the Energy Information Administration. Mid-range projections suggest that GHG emissions will increase by another 50 percent by 2025 compared to present levels – some models predict a 75% increase – with emissions in developing countries growing the fastest. For example, from the NY Times: “Already,
Total world energy use has just about doubled since 1980, and fossil fuel use is growing faster than non-fossil fuel use, despite the rapid increase in growth of wind and solar. Even if you assume exponential grown in wind and solar, they will contribute less than ½ of 1% of total world energy use by 2020.
The reality is that increasing scarcity of fossil fuels and rising demand for them will lead to severe conflict over control of the remaining inheritance and sharply increased prices. At the same time, CO2 concentrations will continue to rise past 400 ppm in the near future, and on up to 500 ppm. This convergence, of increasing scarcity of oil with increasing climate instability, is going to have implications for every sector of the economy and every region of the globe.
Just keep your eyes open when you read the news from now on: Record heat and record electricity use for air conditioning, record draught and record expenditure to get water to our fields and cities, record floods and hurricanes along with record migration. Pretty soon the financial implications for investment, retirement savings, insurance costs and portfolio allocation will become clearer as well. Historic weather patterns which have governed everything from crop production to settlement patterns to engineering standards are becoming irrelevent. The idea of a ‘100 year flood’ only makes sense if the next 100 years are something like the last 100, and that is no longer the case.
So: we’ve blown half of our inheritance, our consumption of this stored solar income is increasing rapidly, and we’re spending in a way that damages the basic climate system we rely on. There will be opportunities, for sure, in alternative and renewable energy of all kinds, and perhaps for the nuclear power industry, but the implications for other sectors of the economy here in the