One or two people on Doug Henwood's LBO-talk list have begun to notice that something happened last week. (The 'LBO' stands for 'Left Business Observer', a newsletter published by Henwood, so you might reasonably expect them to be aware of things like Opec and oil prices. Mostly, you would be disappointed.) Here is a comment from LBO-talk on my own remarks about alternatives, which was crossposted to LBO. Subject: Alternative Fuels From: Michael Ferro ([EMAIL PROTECTED]) Date: Sun Sep 17 2000 - 17:02:59 EDT sorted by: [ date ] [ thread ] [ subject ] [ author ] Next message: Tom Lehman: "Re: Fwd: Look for the Union Label" Previous message: Doug Henwood: "Lazare responds" ---------------------------------------------------------------------------- ---- Carrol Cox wrote: >Date: Sun, 17 Sep 2000 11:27:24 -0500 >From: Carrol Cox <[EMAIL PROTECTED]> >Subject: [Fwd: [CrashList] Why 'alternatives' are no alternative] >Mark's extended study of and commentary on the energy >problem are of immense importance. I think the following post on >alternative energy sources is worth careful consideration. >Carrol >- -------- Original Message -------- >Subject: [CrashList] Why 'alternatives' are no alternative >Date: Sun, 17 Sep 2000 10:38:47 +0100 >From: Mark Jones <[EMAIL PROTECTED]> >Reply-To: [EMAIL PROTECTED] >To: crl <[EMAIL PROTECTED]>,"Marxism-Thaxis@Lists. >wpublish. Com" <[EMAIL PROTECTED]> >>>>>>beginquote >It is said frequently and often nowadays that the future economy will be >'hydrogen-driven'. Most of what is written on the subject shows signs >of >being untouched by the human mind. For one thing, hydrogen is an >energy-carrier, not an energy-source. You have to *manufacture* >hydrogen, >and it is an energy-intensive process, requiring huge amounts of >electricity. Where will the electricity come from? Unmentioned in this discussion is the potential for using energy much more efficiently than at present. There are countless examples of this potential, but for illustrative purposes consider the single-occupant of the Ford Expedition SUV traveling the usual two-mile trip in a vehicle other than the 5000 lb. 300 hp. Expedition: to wit, something more like a covered wheelchair powered by an efficient weed-eater motor. On the West Coast there was over twenty years ago at least one outstanding example of this increased-efficiency thinking. Utilities were forced to buy insulating covers for their customers rather than build new power plants. Some partly-built nuclear plants were abandoned as a result of this thinking. I was involved several years ago in a similar effort regarding transportation in the four-county region abutting Puget Sound (near Seattle). Our econometrician was the same guy who did the model for the utility-oriented effort mentioned above. Our least-cost/full-cost model suggested that the best use of a billion transportation dollars was in building bike paths in every town in four counties. An "energy-efficient" public transit system was way behind. <<endquote Now, I didn't discuss efficiency because we were talking about the alleged 'alternatives' to fossil (PV's and the like) and 'efficiency' is not strictly speaking an alternative. In fact, this is actually a much bigger topic than 'alternatives' if only because the so-called 'alternatives' are mostly pie-in-the-sky, whereas looking for more efficiency and better conservation are actually basic to what capitalism has *always* been doing. Today, Amory Lovins and the Rocky Mountain Institute are continuing the process and thera are many appraoched to taking the energy and raw material content out of production. [for more see www.natcap.org ] Efficiency gains are not tangential to what capitalism does, they are the heart of accumulation whose main motor is increased factory productivity. So the idea that there is something 'new' to discuss here, misses the point. And equally, the idea that 'efficiency gains' and conservation could save capitalism from the effects of energy shortages, is also wrong. The question of whether there will be *energy deficits* is also a separate one. According to Doug Henwood and other economists such as Morris Adelman, there is no shortage of oil and there never will be a shortage of oil; LBO-talk's own former oil economist, Greg Nowell, even assured me that 'depletion theories' (such as the Hubbert Peak theory) are 'junk'. (Shortly afterwards, Greg changed his career-path and is no longer answering questions about oil). Like I say, increased efficiency is an old game. Energy inputs per unit of GDP have fallen continuously since the Industrial Revolution began in England in the 1750s. But overall growth of population, energy-consumption and the world-economy have continuously outstripped increased efficiency. Today's attempts at 'dematerialising' production and 'virtualising' the system, substituting networks for much of traditional economic activity, are only twists in an old saga. Today's economies are orders of magnitude more energy efficient than even 30 years ago. But the net result is that today's American uses more energy per capita than ever before. There is great scope for improvement; the US is energy profligate and could easily reduce consumption by half without noticing too many lifestyle changes. But even if the US did cut energy use by half that won't solve the energy crisis. The world's original endowment of oil is smaller than people suppose. To get an idea just how small, try to visualise it as follows. If all the recoverable oil could be formed into a cube, its edges would be a little over four miles long. The cube will contain somewhere between 230 and 350 trillion tonnes . It took more than 100 million years to create, and we shall have used it up in two centuries. Oil is important not just because the size of its contribution (it provides 38 percent of marketed energy), but also because of its convenient form and high caloric value. Much is made of how economies become more energy efficient, the supposition being that economic growth has somehow become 'delinked' from energy use. Thus in 1961 it took the US economy 180kg of oil-equivalent to produce $100 of GNP. By 1991 the energy requirement for $100 GNP had fallen to only 36kg oil-equivalent. In Japan the figues are 145 kg (1961) and 13 kg (1991). In the core EU the energy-input per $100/GNP fell from 165 to 19 in the same period. But in 1991 Poland still required 155kg of oil-equivalent to produce $100 of GNP. This was partly because of inefficienct communist economic management, but mostly because Poland used low-grade brwon coal. It is true that in general we have learned to use energy better, but the idea that this means that 'technology will always provide an answer', that what the econiomists call 'substitutability' will apply, and that we shall easily escape from looming energy deficits, is wholly false. Increases in energy efficiency have mostly come about because we have had access to better kinds of energy. The improvement in energy/GDP ratios is mostly due to the transition from coal to oil. The fallacy which had led to public over-optimism about the energy future was pointed out at the time of the first oil shock by the economist, Nicholas Georgescu-Roegen. Writing in 1975, Georgescu-Roegen said that: "economic history confirms a rather elementary fact -- the fact that the great strides in technological progress have generally been touched off by a discovery of how to use a new kind of accessible energy. On the other hand, a great stride in technological progress cannot materialize unless the corresponding innovation is followed by a great mineralogical expansion. Even a substantial increase in the efficiency of the use of gasoline as fuel would pale in comparison with a manifold increase of the known, rich oil fields. "This sort of expansion is what has happened during the last one hundred years. We have struck oil and discovered new coal and gas deposits in a far greater proportion than we could use during the same period. Still more important, all mineralogical discoveries have included a substantial proportion of easily accessible resources. This exceptional bonanza by itself has sufficed to lower the real cost of bringing mineral resources in situ to the surface. Energy of mineral source thus becoming cheaper, substitution innovations have caused the ratio of labor to net output to decline. Capital also must have evolved toward forms which cost less but use more energy to achieve the same result. What has happened during this period is a modification of the cost structure, the flow factors being increased and the fund factors decreased. By examining, therefore, only the relative variations of the fund factors during a period of exceptional mineral bonanza, we cannot prove either that the unitary total cost will always follow a declining trend or that the continuous progress of technology renders accessible resources almost inexhaustible." But economics has indeed restricted itself to the 'fund factors' and assumed that the flows will be inexhaustible. They will not. "Little doubt is thus left about the fact that the theses examined in this section are anchored in a deep-lying belief in mankind's immortality," Georgescu-Roegen continued. The act of faith which we are required to have in science and technology displays irrational anxiety and religious escapism in the face of looming disaster. I should put it into some kind of context by referring to the more commonly understood "pathetic fallacy." This is a literary technique which invests in non-living objects human behavior or feelings. For example: O hear my prayers, harvest moon Return to me my girl-friend June Or else at you I will throw my deadly harpoon Blind faith in humankind's ability to escape the inviolable circumstances of life and death is a form of the pathetic fallacy, in which we arrogate to ourselves the superhuman attributes we perceive in natural forces. Unfortunately we cannot escape the laws of physics so easily. Our ability to make use of the resource-bonanza of the past two centuries has created an economy which is adapted to doing to doing more of the same, and particularly ill-adapted to coping with the reverse situation, when the resources run out. Today the oil industry has entered a heroic, final, stage of exploration. Financial reorganisation and market deregulation has gone hand in hand with high technology. Expro teams now mount nuclear magnetic resonance imagers on the drillbits, which snake around under the ground like serpents sniffing out every last dreg of oil. And they are able to do this in extreme conditions such as force 10 storms off the Shetland Isles in the North Atlantic oil frontier, or in the Russian Arctic's ferocious storms. But this technological heroism is financed in energy-terms by a cross-subsidy of oil costing a few cents a barrle and coming from the vast but declining Persian Gulf fields. In turn, this expensive energy from inaccessible and difficult offshore fields, is used to glut markets and force Persian Guld prices to new historica lows. In turn, this expensive energy from inaccessible and difficult offshore fields, is used to glut markets and force Persian Gulf prices to new historica lows. The last horizon of oil is an Alice-in-Wonderland mirror, where the accelerating race towards final depletion takes the surreal form of price-collapse and glutted markets alternating with sudden price spikes. The financial press reports bullishly that oil is plentiful, but the truth is different and the oil corps know it is. Temporary low prices should fool no-one. They always go with economic crisis. The $10/bbl of 1997 went with the Asian meltdown. Future lows will happen because of much wrose recessions - not because oil has suddenly become 'plentiful'. The modern oil industry is a far cry from its early origins among the wildcatters of Texas and Baku. The days are long gone when a couple of roustabouts could fall out of a Houston bar and find oil with little more than a shovel. Meanwhile, the market continues to grow, and oilmen must find seventy five million barrels a day to fill it. Mark Jones _______________________________________________ Crashlist resources: http://website.lineone.net/~resource_base To change your options or unsubscribe go to: http://lists.wwpublish.com/mailman/listinfo/crashlist
