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Exponentially on purpose: a century-and-a-half of ignored warnings

The peak oil debate is a case of history repeating itself: people have been ignoring warnings about exponential use of finite resources for a century and a half.

The concept of peak oil, based on the pioneering work of geologist M. King Hubbert (right), states that world oil production will one day reach a natural limit due to geological factors. As he observed, “although production rates tend initially to increase exponentially, physical limits prevent their continuing to do so.” In other words, oil is a finite resource, and regardless of technology and investment, output cannot go on increasing year after year. Geology trumps economics, although the latter explains what will happen to oil prices once output begins to decline.

But no-one wants to hear the argument. Even International Energy Agency forecasts of record world oil demand, and warnings that the “era of cheap oil is over” made barely a ripple in the media. (In fairness, they are not talking about peak oil so much as the lack of investment in the oil industry causing spare capacity to slump – but it still means economy-busting oil prices are just around the corner.)

It would seem to be wholly sensible, conservative even, to suggest that exponential growth cannot go on forever. But whenever anyone does say this out loud, they find themselves routinely disparaged and outright misrepresented in the media. But then, the naysayers are well practiced. The arguments go back to the Victorian era.

I was trying to put together a peak oil theory timeline, and found that kept coming up against some core ideas. Similar arguments about resource depletion, and rebuttals, keep coming around.

In 1865, economist William Stanley Jevons posed The Coal Question; an Inquiry Concerning the Progress of the Nation, and the Probable Exhaustion of Our Coal Mines. At the time, the United Kingdom administered the world’s largest empire, some 9.5 million square miles; its industries led the world, and the nation set the standard for the international monetary system. Jevons made the then startling revelation that despite all the patriotic fervor, one factor was behind the UK’s global dominance: cheap coal. Take that away, he conjectured, and the nation’s factories and navy would lose their competitive advantage. Coal, after all, is a finite reserve. Jevons noted (left) that as demand for coal was growing every year, a point would soon come when faltering output would push prices up. He calculated that with annual coal output at 100 million tons in 1865, and increasing at the rate of 3.5 per cent per year, the nation would have to produce more than 2.6 billion tons a year by 1965. It’s simply not possible.

He also linked the nation’s growing population, rising at 10 per cent each decade, to increasing coal production, rising at 40 per cent each decade, and suggested that a slump in coal output would lead to a slump in prosperity. He was promptly accused of being Malthusian. (The Reverend Thomas Malthus published six editions of An Essay on the Principle of Population between 1798 and 1826, observing “the increase of population is necessarily limited by the means of subsistence.” He saw population as prone to grow faster than the means of producing food, which he saw as somewhat static. Clearly, food production has changed out of all recognition since his day.)

Although Jevons considered other energy sources, he clearly missed the coming rise of oil, for which he has subsequently been ridiculed. (UK coal output actually peaked in 1913, earlier than he conjectured, and its oil in 1999.) But what is often missed is that Jevons opened the energy debate, transformed the field of political economy and, while he was at it, made a striking observation for which he will likely always be remembered: efficiency measures drive up consumption. Jevons noted that innovations in steam technology actually enabled greater use, particularly in industrial applications like smelting iron. Improvements enable bigger engines, which in turn require more fuel. This, known as Jevons paradox, can be seen today, in every SUV and oversized luxury sedan on the road. His observations that cheap energy put the UK ahead, rather than day’s officially sanctioned notions of racial superiority, can be traced through to recent publications such as Jared Diamond’s Pulitzer-prize-winning masterpiece Guns, Germs, and Steel.

In turn, geologist M. King Hubbert made his name by using similar methodology to look at his era’s dominant sources of energy.

Hubbert’s 1949 paper Energy from Fossil Fuels (pdf of original here) considered oil, natural gas and coal, “an essentially fixed storehouse of energy, which we are drawing upon at a phenomenal rate.” It states that plotting production against time produces a curve: "Thus we may announce with certainty that the production curve of any given species of fossil fuel will rise, pass through one or several maxims, and then decline asymptotically to zero. Hence, while there is an infinity of different shapes that such a curve may have, they all have this in common: that the area under each must be equal to or less than the amount initially present."

Reading this 60-year-old paper today, it’s hard not to be struck by how modern it sounds, with references to the Athabasca Tar Sands and shale oil, the role of fossil fuels in enabling an unsustainable population, the future decline of fossil fuel and mineral resources, and a hope that the world can one day harness solar power. Or that while our use of fossil fuel energy seems normal to us, it actually constitutes “but a moment in the total of human history”:

The release of this [fossil fuel] energy is a unidirectional and irreversible process. It can only happen once, and the historical events associated with this release are necessarily without precedent, and are intrinsically incapable of repetition.

. . . [T]he events which we are witnessing and experiencing, far from being “normal,” are among the most abnormal and anomalous in the history of the world. Yet we cannot turn back; neither can we consolidate our gains and remain where we are. In fact, we have no choice but to proceed into a future which we may be assured will differ markedly from anything we have experienced thus far.

Among the inevitable characteristics of this future will be the progressive exhaustion of the mineral fuels, and the accompanying transfer of the material elements of the earth from naturally occurring deposits of high concentration to states of low concentration dissemination. Yet despite this, it will still be physically possible to stabilize the human population at some reasonable figure, and by means of the energy from sunshine alone to utilize low-grade concentrations of materials and still maintain a high-energy industrial civilization indefinitely.

Of course, in 1949, the world’s energy resources appeared limitless and he was ignored. By 1956 Hubbert had the mathematical formula to back it all up, published as Nuclear Energy and the Fossil Fuels (available in an easier-to-read format here) This is immediately striking for the “approximations of the future production curves for the various fossil fuels,” the bell charts dismissively referred to at the time as Hubbert’s pimple. (It’s also worth noting that this report avoids mention of global population growth, presents mathematical formula to back up the claims, and ends on an upbeat note, praising the future prospects of nuclear power – it needn’t have languished for the best part of two decades before people took note.)

Nuclear Energy and the Fossil Fuels begins with a lesson on the nature of exponential growth: “Goal production in the United States from 1850 to 1910 increased at a rate of 6.6 percent per year, with the production doubling every 10.5 years. Crude-oil production from l880 until 1930 increased at the rate of 7.9 percent per year, with the output doubling every 8.7 years.” Meanwhile, world coal and oil demand ran a little slower, doubling ever 16 and 10 years, respectively. Hubbert continues:

These facts alone force one to ask how long such rates of growth can be kept up. How many periods of doubling can be sustained before the production rate would reach astronomical magnitudes? That the number must be small can be inferred from the fact that after n doubling periods the production rate will be increased by a factor of 2n. Thus in ten doubling periods the production rate would increase by a thousandfold; in twenty by a millionfold. For example, if at a certain time the production rate were 100 million barrels of oil per year - the U.S. production in 1903 - then in ten doubling periods this would have increased to 100 billion barrels per year. No finite resource can sustain for longer than a brief period such a rate of growth of production; therefore, although production rates tend initially to increase exponentially, physical limits prevent their continuing to do so.

This rapid rate of growth shown by the production curves makes them particularly deceptive with regard to the future length of time for which such production may be sustained. For example, coal has been mined continuously for about 800 years, and by the end of 1955 the cumulative production for all of this time was 95 billion metric tons.

It is somewhat surprising, however, to discover that the entire period of coal mining up until 1925 was required to produce the first half, while only the last 30 years has been required for the second half.

Similarly, petroleum has been produced in the United States since l859, and by the end of 1955 the cumulative production amounted to about 53 billion barrels. The first half of this required from 1859 to 1939, or 80 years, to be produced; whereas, the second half has been produced during the last 16 years Based on estimates of coal, natural gas and oil reserves, Hubbert suggested dates for “the ultimate peak of production” for each.

With regard to global crude oil production, Hubbert postulated that “the ultimate potential production is taken to be the 1250 billion barrels,” and that “the maximum rate of production will be about two and one-half times the present rate, which places the date of the peak at about the year 2000. As in the case of coal, variations of this assumed maximum rate will advance or retard the date of the culmination.” Hubbert suggested domestic US oil production would peak in either 1965 or 1970, depending on estimates of the amount of reserves (150 billion barrels versus 200 billion, respectively.)

Clearly, despite what the critics claim, Hubbert was not dogmatic about global peak coming in 2000, because he stated it depended on the rate of production. Also, despite what I’ve read elsewhere, the paper considers “Oil Shales and Tar Sands,” and that coming technological advances may mess around with the symmetry of his charts. “Improved methods of secondary recovery will probably make the rate of decline of the oil production curve less steep than is shown here, but are not likely seriously to postpone the date of the culmination.”

Hubbert’s message seem to have been deliberately marginalized in subsequent media accounts. I'd suggest his key points are:
1. Demand for oil is growing exponentially, and output cannot go on at this rate forever;
2. Based on current estimates of reserves and demand, you can plot the likely peak of production (but this is a model based on moving variables, and so liable to change);
3. Because of exponential production, even finding an extra 50 billion barrels of oil in the US (“an amount equal to eight East Texas oil fields”) only postpones “the date of culmination” five years.

This misrepresentation is nothing as to what has befallen the 1972 publication of The Limits to Growth, a best-selling paperback that grew out of meetings of an obscure global think tank, the Club of Rome. Limits to Growth is based upon computer modeling of global population, industrialization, pollution, food production and resource depletion, which, once again, shows that finite natural resources cannot endure indefinite exploitation. It sold 12 million copies in more than 30 translations, making it the best-selling environmental book in world history. And the most unfairly reviled.

It was the late, great Matthew Simmons who connects peak oil theory and the equally controversial Limits to Growth. His essential 2000 ‘energy paper' Revisiting The Limits to Growth: Could The Club of Rome Have Been Correct, After All? contains stark observations about the ongoing vitriolic media misrepresentation of Limits to Growth that can subsequently be applied to peak oil theory. The same process of vilification is at work. As he states:

Over the past few years, I have heard various energy economists lambast this "erroneous" work done. Often the book has been portrayed as the literal "poster child" of misinformed "Malthusian" type thinking that misled so many people into believing the world faced a short mania 30 years ago. Obviously, there were no "The Limits To Growth". The worry that shortages would rule the day as we neared the end of the 20th Century became a bad joke. Instead of shortages, the last two decades of the 20th Century were marked by glut. The world ended up enjoying significant declines in almost all commodity prices. Technology and efficiency won. The Club of Rome and its "nay-saying" disciples clearly lost!

The critics of this flawed work still relish in pointing out how wrong this theory turned out to be. A Foreign Affairs story published this past January, entitled Cheap Oil, forecast two decades of a pending oil glut. In this article, the Club of Rome's work was scorned as being the source document which led an entire generation of wrong-thinking people to believe that energy supplies would run short. In this Foreign Affairs report, the authors stated, "....the "sky-is-falling school of oil forecasters has been systematically wrong for more than a generation. In its dramatic 1972 The Limits to Growth report, the group of prominent experts known as The Club of Rome wrote that only 550 billion barrels of oil remained and that they would run out by 1990."

Simmons came to read it after producing papers suggesting a coming oil shock due to logistical supply problems, and the Insatiable Energy Needs of China. He naturally began wondering what would happen if the poorer people of the world improved their standard of living, as his research showed “energy growth always goes hand in hand with countries switching from being poor to becoming even slightly affluent.”

But actually seeing Limits to Growth for himself was something of a shock:

Nowhere in the book was there any mention about running out of anything by 2000. Instead, the book's concern was entirely focused on what the world might look like 100 years later. There was not one sentence or even a single word written about an oil shortage, or limit to any specific resource, by the year 2000.

The members of the "Club or Rome" were also not a mysterious, sinister, anonymous group of doomsayers. Rather, they were a group of 30 thoughtful, public spirited-intellects from ten different countries. The group included scientists, economists, educators, and industrialists. They met at the instigation of Dr. Aurelia Peccei, an Italian industrialist affiliated with Fiat and Olivetti.

Simmons's report Revisiting The Limits to Growth is so important because it brought things up to date – as of its 2000 publication anyway. He noted that the world was “almost one-third of the way around The Club of Rome's 100 -year track” and the global population was rising, and energy demand was still expanding at an exponential rate.

He found that it’s then 30-year-old conclusions remained as valid as ever: “if present growth trends continued unchanged, a limit to the growth that our planet has enjoyed would be reached sometime within the next 100 years. This would then result in a sudden and uncontrollable decline in both population and industrial capacity."

Simmons also identifies the trend, which he returned to later through his career, of increasing oil demand from within Opec exporting nations:

Saudi Arabia had only 6 million people in 1970. By 2000, their population grew to 22 million. 43% of Saudi Arabia's 22 million people are 14 years old or less. The country's fertility rate is 6.3 children per female. If these trends continue, Saudi will have 45 to 50 million people by the year 2030.

Saudi's demographics are not an exception to the rest of the OPEC countries. A careful analysis of the OPEC countries' population, their current electricity use (as a proxy for total energy use) and the age and "fertility" rate for each country portrays the possible energy squeeze the world could experience if the population of these countries continues to grow and eventually narrow the gap between the rich and the poor.

Throughout this paper, Simmons is drawn repeatedly to the imagery used in Limits to Growth, The French Riddle of the Lily Pond. This considers a virulent lily that can double in size each day, and will choke out all other aquatic life if left to grow. But if you wait to take action until it’s taken over half of the pond, it’s too late. The next day it will have taken over the pond. He applies this to both increasing demand for oil and pollution, referring to the role of fossil fuel emisions in man-made climate change.

That’s the thing about exponential growth. As Simmons puts it: “the closer we got to the material limits to the planet, the more difficult this problem would be to tackle.”

But instead of taking action, politicians and economists responded to the publication of The Limits to Growth by devoting “their precious hours attacking the few voices of energy sanity.” Simmons observes:

Over the years, the energy economists' incorrect dismissal of this important work was not only a mistake but their criticism also turned somewhat mean-spirited and at times even shrill! What a sad conclusion for such a well-intended work to finally produce.

Lurking in the backdrop of this silly, misinformed chirping was a body of statistics, all in the public domain, that were proving that many of the key issues raised by The Limits to Growth were not only serious, but the magnitude of the problem was growing as the gap between the rich and the poor widened and the poor population expanded at a much faster pace than the rich.

Perhaps the ultimate irony capping all the other mistakes which too many energy planners made as the 20th Century came to an end is that the work they lambasted so viciously turned out to be true.

As an aside, the recent ASPO international tribute to Matthew Simmons makes it clear how pivotal his role was in getting the peak oil message out. Along with Colin Campbell, Simmons turned the first international workshop on the subject, held May 2002, into an international event that apparently introduced the term peak oil to the world: “We had managed to interest Bruce Stanley of AP, Associated Press of London, in attending. He came to Uppsala and wrote about our workshop. When Matt awoke on Saturday morning in Houston he could read on the first page of his local newspaper that he had been and spoken in Uppsala. It was in that article that the expression “Peak Oil” was used for the first time in the international press.”

According to his National Academy of Sciences obituary, Hubert was dismissed by the media until “February 1975, when America was laboring under an oil shortage that took most of the country by surprise, a National Academy of Sciences report confirmed the Academy's acceptance of King Hubbert's calculations on the rate and extent of oil and natural gas depletion and its rejection of more optimistic estimates.”

Bringing things up to date, Limits to Growth is still ignored, overlooked and misrepresented. Outside of a few business reports, the peak oil debate still has not been given serious consideration. Jevons is a joke for calling doom over declining coal reserves when an oil boom was around the corner. . .

No-one, it seems, want to hear the message. Talk about peak oil in general terms, and you are a Chicken Little. Use science to suggest an actual date for peak, and you will be presented as the next in line of a group of aluminum foil hat people that make predictions that consistently fail to come true. Aspo has itself revised dates for the suggested peaking of oil – which has been presented as failed predictions rather than an attempt to make calculations on changing data relating to reserves and demand. Meanwhile, the basis of their work, that oil will one day peak, is not discussed.

Ultimately it all goes back to Jevons: we didn’t get to where we are because we are racially superior, smarter, or work harder than other nations; it’s just that we got access to cheap sources of energy first. Energy equates to economic development. As Hubbert observed, our hydrocarbon-enabled riches and grand schemes are “but a moment in the total of human history.” But no-one wants to hear this.

Instead, most people would snicker that Jevons couldn’t see the coming switch from coal to oil – but that doesn’t make his message less important. We have switched from exponential use of one finite resource to another, merely postponing the eventual problems. The world will still face the issues Jevons envisioned, albeit later than he would have thought, and involving a wider range of declining resources. Hubbert said the same thing, as did the Club of Rome, Matthew Simmons and other peak oil writers.

Exponential growth is highly dangerous. Something has to give. But if no-one wants to hear the message, no-one will begin the transition process to a recessionary world of higher energy prices.

What do you think? Leave a comment below.

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