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Sneak Peak: Oil Age Presentation Script

Below is the script written by Senior Fellow Richard Heinberg for the presentation Post Carbon Institute would like to create for all the hundreds of concerned citizens out there who have asked us over the years for help in educating their neighbors, family, and friends about the end of the oil age. I've adapted the script a bit to include mention of my family, just as presenters will be able to adapt the content and images to reflect personal and community histories.

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Nearly everyone would agree that we live in uncertain, challenging times. It seems that so much is happening so fast that it’s almost impossible to make sense of it all. We’re clearly on some kind of trajectory, but a trajectory toward what?

Even if we set aside religious beliefs and political ideologies, we all still tend to have several fundamentally different ways of evaluating and interpreting the simple facts about our recent past and where we’re headed.

It’s evident, for example, that over the past century the economy has grown, and many of us pay particular attention to that.

Per capita incomes have increased. We’ve seen the introduction of all kinds of new technologies, from telephones and typewriters to lasers, cell phones, and iPads. Our mobility has dramatically expanded with automobiles and airplanes. Modern medicine has discovered cures or treatments for a host of ailments. And all of this has helped support population growth— we now enjoy the company of 7 billion other humans.

Let’s represent the trajectory of all these developments related one way or another to the growth of the economy with this single blue line.

Others of us, however, when looking back at the last century, would emphasize our social achievements. Today more nations are democracies than was the case a century ago. The average person has vastly greater access to information and higher levels of education.

A century ago, women didn’t have the right to vote, and in large areas of the United States, African Americans were forced to attend different schools and were prohibited from using the same washrooms or sitting at the same lunch counters as European Americans.

All of that has changed. These are substantial achievements that have come about as a result of considerable effort and struggle.

It would be hard to objectively measure these accomplishments the way we measure, say, GDP, but we definitely see a kind of momentum here, so let’s represent that trajectory with this green line.

Still others of us think of the modern era in terms of what the environment has suffered.

It’s estimated that species are going extinct at more than a thousand times the normal rate. Oceans are acidifying. Topsoil is disappearing. Many nations are seeing water scarcity. Chemicals in the air and water are altering reproductive patterns in many animals as well as sperm counts in humans.

The global climate is changing, and extreme weather events including droughts and floods are threatening our food supply. Our oceans now feature huge “dead zones” and great “gyres” of plastic fragments that are inevitably ingested by marine organisms and make their way up the food chain.

Again, it’s hard to compress all of those developments into a single metric, but we’re not assigning numbers to the x and y axes here—we’re just looking at basic directional trends. So we can represent the increase in environmental damage in the last century with this red line.

These are three great trends of our time, and people who pay attention primarily to one or another of them are—well, they’re right; they’re all right. All of this has been going on concurrently. It’s the best of times and the worst of times. But these three trends are at least partly explained by a fourth—energy use.

It takes energy to do things, and throughout the human past, the amount of energy available to us was limited.

Until very recent times, we got most of our energy directly or indirectly from food crops and trees, and exerted energy by way of muscle power.

When we began using fossil fuels, at the start of the Industrial Revolution, we found that we had at our disposal history’s biggest energy prize. Cheap, abundant fossil energy enabled us to grow the size of our economy many times over. Having all this energy also led to rising social aspirations, and fuel-fed machines gave us the free time to pursue those aspirations.

Oil was arguably the most important of these fuels, as it was perfect for use in transportation. We developed trains, automobiles, airplanes, and oil-burning ships, and these in turn enabled global trade to grow exponentially. We became more mobile, which gave us a tangible, geographic freedom that called forth a yearning for other kinds of freedoms.

But at the same time, the burning of fossil fuels, our dramatically increased consumption of resources, and massive population growth led to unprecedented environmental destruction.

In this case, it is easy to be quantitative. We could show our expanding energy use with graphs of BTUs or megajoules expended by humanity annually, or barrels of oil or tons of coal consumed. But for our purposes here, once again, all that’s really needed is the general trend of energy production and consumption. This black line will do the trick.

If energy is a key to understanding the past, it is also, as we will see, a key to interpreting the future course of economic, social, and environmental trends.

Okay, let’s shift gears a bit. Drawing graphs is an abstract way of portraying what’s been happening in our lives. Abstraction can be helpful, but it can also distance us emotionally from what we’re talking about.

So let’s make this personal. I’d like to share with you a little about my family, and how these developments shaped the lives of some of the people closest to me.

My great grandmother Della was born in San Jose, California about six months after the great earthquake leveled her family’s home in San Francisco. She was two years old in 1908, the year when Henry Ford introduced the Model T—the first affordable, mass-produced automobile.

The entire United States federal budget amounted to just a little over 9 billion dollars. The U.S. had a population of 89 million, and most of those people were farmers. About half of the horsepower in the economy was still being supplied by, well, horses —by muscles, that is, as opposed to engines. Firewood was still an important fuel, but coal and oil were coming along fast.

The world’s biggest corporation at that time was Standard Oil, and American petroleum from Pennsylvania, Ohio, and California was fueling the beginnings of the auto and aircraft industries.

My grandfather Clarence was born in 1923 and grew up through the roaring 20s in the Fillmore District of San Francisco, which at the time was a bustling center of Jewish American life. He was seven years old in 1930, when America was still in the early stages of the Great Depression. The U.S. federal budget amounted to about 46 billion dollars, and America’s population stood at 123 million.

By this time, automobiles were commonplace, and oil had become the most important source of energy in the national economy. At this time, the United States was the center of the global oil industry, producing half or more of the world total and exporting large amounts to other countries. But something happened that year that nobody would recognize until much later: the annual amounts of oil discovered in the U.S. peaked.

Every year since 1930, we’ve found less oil within our borders than we did then, and the downward trend is undeniable when you look at data from the last eight decades.

My father was eleven years old in 1956, the year that Bill Russell led the San Francisco Dons to the national championship in college basketball. The U.S. population was close to 169 million and the federal budget topped 559 billion dollars.

By this time, industrial agriculture at a lower per-unit cost; had made it possible to dramatically increase food production in the process, millions of small farms could no longer compete, and so by 1956 only 5% percent of Americans were still farming. The Cold War was full swing, and the military budget had grown to 60 percent of all government spending.

In this year, a respected geophysicist named Marion King Hubbert noted that U.S. petroleum discoveries had been declining for a quarter of a century, and he forecast that the nation’s oil production would peak soon, probably around 1970. He was ridiculed.

I was born in 1972. The following year, in 1973, hourly wages for American workers were at their highest point ever, if you adjust for inflation. The first Earth Day had occurred a couple of years earlier, and the environmental movement was starting to take off. The Vietnam War was still raging, The U.S. population stood at 212 million. U.S. oil production had indeed peaked in 1970, just as M. King Hubbert had forecast, though very few people were as yet aware of this fact.

However, in 1973 everybody forcibly came to understand that America had become economically vulnerable as a result of its increasing dependency on oil imports. In that year, the Arab members of OPEC—the Organization of Petroleum Exporting Countries—embargoed exports to the West, forcing oil prices to the stratosphere.

The American economy took a major hit, and after the 1970s, economic growth in the wealthy industrial nations would never be quite the same.

In 1986, I was fourteen and living in Portland, Oregon. That year, America’s federal budget amounted to 1.6 trillion. By this time, America’s population had just topped 240 million, and, though few people realized it at the time, the Soviet empire was on the verge of collapse.

The Soviets were major oil producers, and depended on income from petroleum export revenues. When oil prices plummeted in the late 1980s—partly as a result of new discoveries in the North Sea and Alaska—that put enormous pressure on the Soviet economy.

The fall of the Berlin Wall also occurred in this decade, which just about everyone today agrees was a good thing. But low oil prices during this era dramatically slowed efforts to develop solar and wind energy, efforts that had started in the 1970s when oil prices were so high.

With oil now cheap again, Americans went back to easy motoring and started buying bigger cars. We also saw globalization really start to take off. The U.S. economy began to depend more on outsourcing, offshoring, and finance rather than manufacturing with the advent of computers, container ships, and satellite communication.

Okay, let’s talk about the present. My time and your time.

Farmers are just 2 percent of the population and the average age of our remaining farmers is pushing 60. The federal budget is over 3 trillion dollars and has accumulated $14 trillion of national debt, and counting. The U.S. population stands at more than 300 million.

Even though concerns have been raised for the past 40 years about our increasing dependence on foreign oil, the U.S. has done very little to reduce that dependency, and the nation now imports most of its petroleum. But world oil production has essentially flat-lined since 2005.

In 2008, the oil price spiked to $147 a barrel, and the global economy descended into turmoil. In 2011, political unrest in the Middle East and North Africa again drove oil prices upward. And an earthquake, tsunami, and nuclear nightmare in Japan left massive devastation in its wake and tore at the world economy, making us realize that still another of our main energy sources has big problems.

Given that energy has been so crucial to so many of our human achievements during the past century or two looming energy limits would seem to pose a serious problem for us. Yet most people don’t seem overly concerned.

This is partly because the information we’re getting from various authorities is unclear at best. Fossil fuel companies rightly point out that there are enormous amounts of lower-grade hydrocarbon resources waiting to be extracted.

What they often don’t mention is that both the dollar cost and the energy cost of producing them will be much higher than was the case historically with oil, coal, and gas. And the environmental risks will be far greater. The low-hanging fruit is gone.

Also, many people assume that society will easily and quickly transition to alternative energy sources as needed. We at Post Carbon Institute looked at this assumption very carefully in a study we did a couple of years ago. We examined 18 energy sources according to 10 criteria, including cost of development, energy returned on energy invested, size of the resource, environmental impacts, infrastructure needed, and so on.

We concluded that, if all of these important criteria are considered, there is no credible scenario in which world energy supplies are likely to continue growing once world fossil fuel production starts declining. And that moment could come quite soon.

The alternative energy sources just aren’t up to the challenge at this point, and the amount of investment capital that would be needed to get them up to capacity simply isn’t there. Many renewable energy sources (including wind and solar) are viable and should be prioritized and subsidized. The problem is that what they are replacing are energy sources that are concentrated and portable and were created by nature over tens of millions of years without any need for human effort.

We can have a renewable energy economy—in fact, it’s inevitable—but it simply won’t look like the economy we’re used to. It may be smaller, slower, and more localized.

Where do we go from here? What does this mean for our children, our grandchildren? In a sense, we’ve been borrowing from them—or stealing.

Our continued burning of non‐renewable resources like oil or coal means there will be less available to future generations. They might have thought of something more interesting to do with these amazing substances than just burn them up, but they won’t have the chance to do so.

Most of the high‐quality, easily accessed oil, coal, and gas is already gone. Meanwhile, by mid‐century, most nations will be suffering from water scarcity, and many thousands of animals and plants will have gone extinct.

The folks who mostly pay attention to that first blue curve—the economic curve—typically argue that a fast‐paced growing global economy is our most valuable legacy to future generations, since only innovation and investment can solve our environmental problems.

But that argument assumes that we will always find another energy source to keep the economy growing. Things don’t appear to be working out that way. And if growth stops, a lot of bills will come due at once.

Even some of the economy watchers are concerned that we’re stealing from our kids by way of unsustainable levels of debt. But isn’t that debt just a symbol for real resources?

We’re continuing to pile on vast sums in debt, securities, and derivatives. The numbers just keep getting bigger and bigger—billions, trillions, tens of trillions. But those numbers ultimately stand for the real things that money will buy—food, minerals, and energy. And many of those things aren’t growing, they are essentially finite; in fact we’re depleting nature’s storehouse of natural resources at an accelerating pace.

If you look at it that way, economic growth looks an awful lot like a ponzi scheme. And in pyramid schemes, a few people get rich early on, but most people lose out in the end.

It’s true that our economic progress has been associated with real social benefits. Most of us want it all—the cars, air conditioners, and smart phones as well as political freedoms and access to information. But all of it may be at risk if we can’t keep the economy growing with more cheap energy.

So here’s a crucial question: Can we disengage energy consumption from the benefits we want? Up to a point, yes—we can make our energy consumption more efficient. But if our population keeps growing, that cancels out much of the payoff from improved efficiency.

Another problem is that efforts aimed at increasing efficiency suffer from the law of diminishing returns: each new increment of energy efficiency tends to be more costly than the previous one. To be sure, energy efficiency is a very good thing. As energy becomes more scarce and expensive, efficiency will be one of the most important strategies we will need to adopt in order to get along. But it would be unwise to expect efficiency to drive the same level of economic growth that cheap, abundant energy yielded in decades past.

It may be easier to keep all of our social achievements than all of our economic benefits. But that may not be such a terrible trade‐off. It can be argued that, in the economic sphere, we’ve actually overdone it. Over the last few decades we have become so obsessed with growth and returns on investments, with consumption and convenience, that we in the wealthiest countries have created lifestyles that are wasteful and materialistic.

In the early 20th century, one of the greatest challenges to our economy was overproduction—factories could make more stuff than people were interested in buying. So we created the advertising industry—a $250 billion propaganda machine whose sole purpose is to talk us into buying things we may not need or even want.

We’ve come to think of overconsumption as normal, as a source of status and identity. We could scale back a bit on material consumption without much real distress, if everyone could count on some basic level of support, and if we replaced consumerism with other more enduring values.

I think we’d all agree that we don’t want to give up our political freedoms, our access to information, civil rights, and so on. And we shouldn’t have to—none of those things really requires enormous amounts of energy or other natural resources. However, overconsumption does, and if we don’t plan for scaling back, the energy transition might be messy and painful.

We’ve created financial structures that only function properly under conditions of constant economic growth. And we have few provisions in place to keep people from falling under the wheels of the bus if the financial system really goes out of control, as it started to do in 2008.

A lot of people have been working, some of them for decades, on strategies to disconnect energy consumption from social and essential economic benefits. Low‐input agriculture. Renewable energy. Alternative forms of transportation. None of these is a silver bullet, but all deserve support and attention.

Maybe we can still aspire to improve the human condition, and the lives of our children if we focus less on quantity and more on quality, less on whatever is bigger and faster, and more on what is sustainable and equitable.

As we make our way through the closing years and decades of the fossil fuel era, I believe we can enjoy benefits as we face these challenges. By focusing more on quality of life rather than consumption, we could regain more of a sense of community, and also of self‐reliance. Recent studies have shown that there is little correlation between levels of happiness in a society and the scale of energy consumption in that society.

We still face enormous challenges in moving beyond fossil fuels. We’re talking about a redesign of most of the basic systems that support modern civilization.

The details are going to take a lot of work.

What does finance look like in a post‐fossil fuel, post‐growth world? What about global trade? What political stresses and strains will emerge when rising material expectations have to be abandoned—like the expectation of a gas‐guzzling SUV in the driveway of every suburban McMansion?

What kinds of social messages will help people adapt? In order to make this ship, we will need to focus on a few central priorities...

Relocalize: Without cheap transport fuel, the trend toward globalization of production and distribution that we have seen in recent decades will reverse itself. Nations and communities that are dependent on long‐distance supply chains will face problems, while those that produce much of what is needed close by will gain the advantage.

Re‐Skill: As the trend toward mechanization slows and reverses due to rising costs of energy and materials, we will need to know how to do more for ourselves—including growing more of our own food and taking better care of our health through nutrition and exercise, depending less on expensive pharmaceuticals. We’ll need to know how to mend clothes, rather than just buying new ones shipped from China.

Conserve: Making the most of available energy and materials will become an art. Solar cookers, solar food dryers, solar water heaters, and clotheslines are examples of the kinds of simple and inexpensive technologies that will help us stretch our budgets and do more with less.

Share: Is it really necessary for each of us to have a complete set of tools, gadgets, and machines for every imaginable contingency? By pooling resources among neighbors and families, we can reduce consumption levels while enriching our social lives.

Build resilience: Even if we do everything right, we’re going to hit some economic and environmental bumps, or should I say, boulders along the way.

We need to make sure we can bounce back. Food and energy systems are more resilient if they have built‐in redundancies and are distributed rather than centralized.

As we do these things, we should aim for progress and growth in all the areas where it can be achieved—most of which are in the social sphere.

If we demand higher levels of consumption, we will reap only frustration while condemning our grandchildren to conditions we would never want for them. Yet if we strive to improve culture, human relations, and environmental integrity, we could realistically aspire to build a more content, more engaged society in the long run.

We at Post Carbon Institute certainly don’t pretend to have all the answers. But we think it’s important to frame the right questions. We’re inviting you to join the conversation. It’s going to take a lot of us approaching this problem from different angles to figure it out. A lot is at stake. And the solutions will come down to more than graphs and numbers. In the end, this is about people, the people we care most about. This is the challenge of our lifetime. Let’s embrace it and see what we can do together. Thank you.

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