By James Howard Kunstler:
Wishful thinking now runs so thick and deep across the USA
that our hopes for a credible future are being drowned in a tidal wave
of yellow smiley-face stories recklessly issued by institutions that
ought to know better. A case in point is the Charles C. Mann’s
tragically dumb cover story in the current Atlantic magazine — “We Will Never Run Out of Oil” *
— setting out in great detail the entire panoply of techno-narcissistic
“solutions” to our energy predicament. Another case in point was senior
financial writer Joe Nocera’s moronic op-ed in last week’s New York Times beating the drum for American “energy independence.”
You could call these two examples mendacious if it weren’t
so predictable that a desperate society would do everything possible to
defend its sunk costs, including the making up of fairy tales to justify
its wishes. Instead, they’re merely tragic because the zeitgeist now
requires once-honorable forums of a free press to indulge in self-esteem
building rather than truth-telling. It also represents a culmination of
the political correctness disease that has terminally disabled the
professional thinking class for the last three decades, since this
feel-good propaganda comes from the supposedly progressive organs of the
media — and, of course, the cornucopian view has been a staple of the
idiot right wing media forever. We have become a nation incapable of
thinking, or at least of constructing a consensus that jibes with
reality.
In not a very few years, the American public will be so disappointed and demoralized by broken promises like these that they will turn the nation upside down and inside out, probably with violence and bloodshed.
In not a very few years, the American public will be so disappointed and demoralized by broken promises like these that they will turn the nation upside down and inside out, probably with violence and bloodshed.
Charles Mann’s Atlantic article begins by cheerleading for
the mining of methane hydrates from the ocean floor. These are natural
gas molecules trapped in ice formations in the muck around the
continental shelves. Mann spotlights the efforts of a Japanese research
ship conducting tests. Guess what: the Japanese are engaging in this
because they have absolutely no fossil fuels of their own, and a failing
consensus about nuclear power, and they are on a course to become the
first advanced industrial nation to be forced to return to a medieval
economy. That is, they are the most desperate among the desperate. You
could say they’ve got nothing to lose (but a few billion of their
rapidly depreciating Yen).
Methane hydrates are stable only at extreme pressures or very low
temperatures. They also exist in the arctic permafrost, for instance,
Siberia, where conventional natural gas drilling operations have been
carried out for decades, with no contributions from methane hydrates.
Undersea methane hydrate exploration projects have gone on for decades
in the US, Canada, India, Russia, China, and Japan. The hope is that
this so-called “hot ice” would turn out to be the gas equivalent of tar
sands, which would mean at best a very expensive way to get more fossil
fuels as the conventional sources dry up. That hope has dimmed in
nations other than extremely desperate Japan. Like a lot of
techno-wonders, the recovery of methane hydrates can be demonstrated on
the “science project” scale. For now, no viable technique exists for
getting commercially-scaled streams of natural gas out of methane
hydrates. The Japanese themselves state that it would take at least ten
years, if ever, to commercially mine methane hydrates. Japan doesn’t
have ten years. It’s banking system is imploding, and without capital
even the science projects will come to an end.
Charles Mann is equally rapturous about shale oil and gas. He writes:
“Today, though, fracking is unleashing torrents of oil in North Dakota and Texas–it may create a second boom in the San Joaquin Valley–and floods of natural gas in Pennsylvania, West Virginia, and Ohio. So bright are the fracking prospects that the U.S. may become, if only briefly, the world’s top petroleum producer. (“Saudi America,” crowed The Wall Street Journal. But the parallel is inexact, because the U.S. is likely to consume most of its bonanza at home, rather than exporting it.)”
This is very misleading. The US consumes roughly 19 million
barrels a day. The Bakken and Eagle Ford shale formations produce about a
million barrels a day combined now, and guaranteed to get a whole lot
lower within the next five years. Today’s near-peak production is based
on furious drilling and fracking of extremely expensive wells — known as
“the Red Queen syndrome” because they are running as fast as they can
to keep production up. Meanwhile, the depletion curve on shale oil is a
reverse “hockey stick.”
The situation is similar for shale gas, the difference being
that the temporary glut of 2005 – 2012 happened because we didn’t have
the means to export surplus gas from the initial burst of development
and it briefly flooded the domestic market. The price of shale gas is
still below the level that makes it economic to produce and when it
eventually rises to that level, and beyond, it will be too expensive for
its customers to buy. Shale gas is also subject to the Red Queen
Syndrome.
These arguments have been well-rehearsed many times in this
blog and elsewhere. But the key to understanding our energy predicament
is ignored in cornucopian cases like Charles Mann’s Atlantic
piece, which is the role of capital. Non-cheap oil has already worked
its hoodoo on advanced industrial economies: it has already destroyed
the process of capital formation. These economies were not designed to
run on non-cheap oil and they can’t, and the capital is no longer there
for even the research-and-development to change out the infrastructure,
let alone carry out any as-yet-undesigned changes. Furthermore, there is
no prospect that we can rescue the process of capital formation at the
scale required to continue financing things like shale oil. The absence
of real growth in the USA, Europe, and Japan has already destroyed the
operations of interest and repayment of debt, and any new debt issued
will never be repaid, meaning it is functionally worthless (we just
don’t know it yet). These impairments of capital formation have left the
major commercial banks insolvent and central banks have worked
tirelessly to rescue them by issuing more “money” in the form of credit
that can never be paid back.
What all this means is that the capital does not exist to
run non-cheap oil economies, or to continue indefinitely the production
of non-cheap oil and gas, not to mention methane hydrates and other
fantasy fuels.
Joe Nocera’s op-ed in last week’s New York Times was shorter and even dumber (and lazier) than Charles Mann’s foolish Atlantic
article. It was based on remarks made by Canada’s Energy Minister, Joe
Oliver, who said (among other patently false and idiotic things) that
Canada “has the resources to meet all of America’s future needs for
oil.” Oliver was pimping for the Keystone pipeline project to transport
tar sands byproducts from Alberta down to the US. Nocera swallowed
everything Oliver said whole, such as “oil mined from the sands is
simply not as environmentally disastrous as opponents like to claim.”
Is that so, Joe? And what’s your source for that assertion? Canada’s
Energy Minister? The slug at the bottom of Nocera’s column said he was
invited onto the op-ed page because regular columnists Gail Collins and
Nicholas Kristoff were off (or on book leave). Nocera’s column was
disgracefully ignorant. The editors should send him back to the Times business section where unreality is the order-of-the-day.
Now, many people may draw the conclusion that some conspiracy
is underway when the major mainstream media report the news so
disingenuously, but that is just not so. The reason we, in effect, lie
to ourselves incessantly is because of the master wish behind all
the subsidiary wishes: we want to keep driving to WalMart forever and
we can’t imagine any other way of life, let alone the way of life that
the contraction of industrial economies is tending toward — which is to
say a way, way downscaled and re-localized economic life centered on
farming and artisanal manufacture. Yes, we are going medieval too,
eventually, just like the Japanese, who will get there a little sooner
than we will. It’s hard to swallow, I’m sure. That’s why we prefer the
more digestible propaganda gummi bear treats like Charles Mann’s Atlantic article and Joe Nocera’s stupid op ed.
* This was the title on The Atlantic’s cover. Charle’s C. Mann’s article inside was titled “Why We Will Never Run Out of Oil.” Shame on the editors of The Atlantic.
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