So folks don't let anyone kid you. This is not the age of information, though there is a bit of that around. Not the age of networking, though there's a good deal of that happening too. Nor is it the space age, nor the atomic age. No, as boring and as twentieth-century-sounding as it is to say, we're still very much living in the age of oil, because let's face it without the black goop, material civilization as we know it with all its computers and satellites and UPS trucks and economists and farmers and marine ecologists would cough a few times, turn over, and expire. I say all this not to praise or even to damn but to point out the obvious.
A few more observations, mostly by way of emphasis:
1. Oil may not be your favorite thing. You may not even notice it much, and you may even wish it would just go away. Nevertheless you depend on it, as much as any apple depends on its tree.
2. If civilization depends on oil, as it does, then if oil becomes more expensive, so does civilization.
3. It's foolish to complain about oil and the environmental costs and downsides of its extraction unless you are ready and willing to do without many of its benefits. We will come back to this point many times in the course of our explorations as nine-volt citizens of the earth.
There has been a great deal of talk (i.e. blather) in the past couple of years about the "promise" of shale oil. We're being told by all sorts of people that we in America still have a great deal of the good black stuff to burn--a hundred year's supply according to some, and some say much more. Never mind whether burning the stuff for another hundred years would be a good idea or not, and never mind the technical, geological, and economic facts, these prophets of plenty gush on and on, insisting that our supplies are so vast (vast is a favorite word of theirs) that even after we satisfy our own appetite we will have plenty left to export. Yes sir profits aplenty await Americans into perpetuity. Soda water fountains. Lemonade springs. Big Rock Candy mountains.
A few relevant facts:
Classical economics tells us that when the price of something rises, then supply (after a lag) tends to rise in response. Sensing the opportunity for profits, producers and manufacturers invest their capital, build the requisite infrastructure for an increase, and hire the necessary hands. Production ramps up until supply of the product matches demand and maybe even overshoots it. Eventually prices steady or come back down.
So far so good. Now, over the past decade the price of oil has steadily risen; a barrel of oil that, in 2003, cost thirty dollars, now costs one hundred and five. How have the producers responded? Well in fact over the past decade, right in line with economic theory, the number of drilling rigs has doubled, as has the investment that oil companies have made in exploration. But then here's the question: has the actual production of oil, in consonance with the laws of supply and demand, risen as well?
No it has not. The total production of crude worldwide since 2005 has remained more or less steady; it has plateaued, the shale oil "revolution" notwithstanding. Why? Why has the world not been flooded with oil, and why haven't prices declined as a result? Furthermore what, as time goes on, can we expect in terms of price and supply? Speak to us, Indubitable Oracle.
Ahem.
First of all, it's important to know that the exploration and the new wells cited here have in large part focused on shale oil, the fracked stuff. And yes, naturally with all that effort and money put into fracking, the supply of fracked oil has increased. But! Even as the supply of shale oil has risen, supplies of conventional oil (the kind that needs pretty much only the drill and no rock splitting or injection of fluid in order to extract it) are steadily, inexorably falling. The rise in the first category is only barely offsetting the fall in the second. This decline in conventional sources is one circumstance that militates against a rise in total supply as well as any possible decrease in price.
But there is a second reason, and one probably just as powerful: shale oil, though plentiful in supply, is expensive to produce. Far more capital per well goes into fracking than under the conventional routine. Plus what you get for all your work--in comparison again to conventional drilling--is relative peanuts. A good conventional well can produce thousands of barrels a day for decades. Out of a fracked well, you're lucky to get a hundred barrels a day for a few years. And that, folks, makes all the difference. It's enough to ensure that the cost of oil is going to stay high and go higher as the years march on. Of course monetary speculation, hurricanes, rig and refinery explosions, as well as world political and economic circumstances all play their part in the price of oil, and as these change, so will the price of oil. But again, given the decline of conventional drilling and the need to offset it with a much more expensive process of production--the basic direction of the price is up. The era of cheap oil is over. Finis. Kaput.
Q. What will be the limit? How long will it take before oil becomes expensive enough, so as to require us to really change our lives?
A. Nobody knows for sure. But given that right now we're barely managing to keep overall production flat, and given the overall decline in the cheaper conventional production amounts to something like 3 to 5 percent a year, it's probably not going to be all that long. A decade at the most will probably elapse before real shifts have to take place.
Q. What will we do?
A. Mostly make do. Live with the reality. Muddle through.
Q. How?
A. By slowly, painfully coming up with a different model for civilization, which is to say, by returning to an old idea of civilization. Which is to say, a civilization that demands less power, less motion, less novelty, and fewer consumer goods.
Q. Won't that feel like poverty?
A. To many people yes, all this will feel like the universal onset of poverty. To others who are already poor, it will actually feel pretty normal.
Q. Given cheap oil's place in our civilization, can the downshift be made easier?
A. Changes that will make the most difference will be inner mental and spiritual ones: moderation of material expectations, joy in the present moment, an enthusiastic return to the household arts, and a re-estimation of the value of physical labor. In general a shift toward a nine volt perspective on life: one low in mechanically-gauged power, but high in imagination and community life. Just as electrical cells can be linked to provide brighter and more resilient illumination, so with the application of a little imagination and wisdom might we find a beautiful sufficiency in community life. Of course there is no reason why we cannot be seeking this now. Communal moderation and mutual fun is an infinitely more powerful means toward finding happiness, than this desperate grasping of ours to maintain our present lifestyle. This second way is vanity. A chasing after the wind.
Q. What about renewables?
A. Community life and the life of the human imagination are both infinitely renewable.
Q. I was speaking of substitutes for oil.
A. Oh, renewable energy will help, but it cannot really substitute for oil. The necessary infrastructural transformations (at whatever level we undertake them) will be enormously costly, and the technologies themselves--wind solar hydro etc.--just don't carry the necessary oomph and variation of application. And let's add as well, that they all come with environmental impacts of their own, downsides that are often overlooked and downplayed, soft-pedaled and denied.
Q. So, probably no flying cars for me?
A. A donkey or mule may be more likely. Don't forget your own two legs. Bicycles work too.
Q. What do mules eat?
A. Try oats, various grains.
Q. Speaking of asses and mules, what mythical king received the ears of an ass?
A. King Midas. Yes the same king whose touch had the power to transmute any and every object to gold, including (unfortunately) his very own food. A regrettable oversight on his part. A case of superpowers getting in the way of real living. Every time he tried to eat, the food would turn to gold. One version of the story even has him accidentally changing his daughter (oops) into gold.
It strikes me that we in the developed world have become the Midases of oil. To paraphrase the poet Hopkins, everything we touch "wears [oil's] smudge and bears [oil's] smell," so that what began as a gift (a little something to light a lantern) is now killing us by surfeit and overuse and over-consumption. Carbon emissions rise, and the climate shifts almost tectonically beneath us. The oceans acidify with absorption of carbon, and the reefs dissolve. Oil's miracle derivatives betray us with cancers. Wars are fought over access to oil and real people die in them. None of which of course even begins to account for the impact oil has had on the rest of the living planet: For a glimpse of which, if you dare, see here.
Realizing that his gift was no gift at all, but a deadly burden and a curse, Midas prayed to be free of his powers. Oh to be fully human again. To be able to touch and not kill. And as it turned out the gods proved merciful. Midas was told to wash in a river, along with all the objects he had transformed to gold. He did, and the curse was lifted, and the objects returned to their original state (let's hope his daughter, blinking, forgave him). Then with a long grateful sigh of relief, this wiser king took a vow of poverty and began a second career as a music critic (well sort of). In this second capacity he had a second misadventure, and it was this one that got him pegged with the ears of an ass. But that's another story. For now I wonder why--surrounded as we are by the oil-charged emblems of our self-destruction--we have not, like Midas, ever really thought to pray for freedom from these billions and billions of barrels of oil. From this tide of toxins. From this slavery to goo.
How long will it be?
HB
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