If you are sitting around the kitchen table contemplating the escalating cost of your grocery bills (and just about everything else), then welcome to what U.S. writer James Kunstler calls “the long emergency.”
In 2005 Kunstler, famous for his critique of suburbia, noted that civilization’s energy appetites were unsustainable given the declining quality of fossil fuels left in the world.
“We can be certain that the price and supplies of fossil fuels will suffer disruptions in the period ahead that I am calling the Long Emergency,” advised Kunstler. “No combination of alternative energies will permit us to continue living the way we do, or even close to it.”
The inflation we are facing today is a manifestation of that long emergency intensifying. The elephant in the room is the rising cost of all fossil fuels.
That’s not of course what we are hearing from those either trying to calm our nerves or inflame populist emotions.
The experts mostly blame the pandemic, unsettled supply chains and great surges in demand. Don’t worry, the authorities tell us, all of this is temporary and transient.
At the same time political insurrectionists, who now proliferate like rodents in our whack-a-mole culture, have blamed everything from government deficits to carbon taxes for inflation. They do so even though inflation has appeared in jurisdictions with no deficits and no carbon taxes.
Pierre Poilievre, for instance, has famously accused the Bank of Canada for Canada’s 30-year high inflation rate. On Twitter the demagogue and wannabe prime minister claims that “money printing deficits” have “bid up the price of goods.”
These political explanations steadfastly ignore that our inflationary hell is due to the rising cost of oil, gas and coal all at once.
These fossil fuels still perform the majority of work in an ailing civilization struggling with the weight of its unsustainable numbers and unpredictable complexity. Houston geologist Art Berman, a reliable guide to the vagaries of our fossil fuel culture, recently put it this way:
“What is going on is a system collapse.”
Other critics have their own terms for what we are experiencing. The U.S. analyst Nate Hagens calls it “the great simplification.” Geographer Peter Zeihan calls it “deglobalization.”
The ecologist Bill Rees calls it “overshoot.” And the late Donella Meadows called it “limits to growth.”
‘Energy is the economy’
The crisis, now decades in the making, picked up steam early last year as oil prices started to climb into double-digit territory after their spectacular drop at the beginning of the pandemic.
Since April 2020 the cost of oil has climbed five-fold. The price of coal, the cheapest of fossil fuels, has hit new highs by nearly 150 per cent. Methane, which powers much electrical generation, has also hit new global highs. Diesel, the fuel which moves transport trucks, tractors and heavy machinery, has gone through the roof.
Putin’s war of annihilation in Ukraine, of course, has pushed those prices higher. Despite effusive rhetoric about an “energy transition,” fossil fuels still account for 79 per cent of all energy spending in the global economy.
Whenever the price of those fuels rises, so too does the cost of food, housing, clothing and transportation, renewables and electric cars.
Art Berman has repeatedly underscored the basics:
“Energy is the economy. Money is a call on energy. Debt is a lien on future energy.”
For decades now economists have mostly preached a different gospel. Their models pretend that money, labour or technology make the world go around. But this profession largely has been ignorant of the central role that energy plays in the rise and fall of civilizations. Whatever the economists might say, physical reality still rules. Growth doesn’t happen unless the per capita energy spending of fossil fuels increases. Period.
As the oil shocks of the 1970s ably demonstrated, higher oil prices primarily drive inflation. In April, for example, the U.S. inflation rate fell from 8.5 per cent to 8.3 per cent when the world price of oil dropped a bit from US$108 to US$101.
The rising costs of fossil fuels illustrates both the fragility and interdependence of a high energy spending civilization. When China started using more methane for power generation last year, the price of liquified natural gas started to climb. As methane prices escalated, many countries returned to coal because it’s a cheaper energy source.
When Europe thought it could retire nuclear energy with renewables and become dependent on Russian oil and gas with no problems, reality intervened. When the winds didn’t blow on the continent, there were widespread natural gas shortages as countries scrambled to make up for wind energy shortages. The U.S. then exported more fracked gas to Europe, but that caused prices to rise in North America. Then the price of diesel started to climb because refineries use methane to produce hydrogen in order to remove sulfur from diesel. Fossil fuels are the house that Jack built.
Let’s now add to this crazy picture years of underinvestment in oil and gas exploration primarily due to excessive multibillion-dollar losses from fracking (industry flooded the market and drove down the price below the cost of extraction) along with dubious claims about the energy transition. Scarcity is now an issue.
Meanwhile rising oil prices affect the cost of dinner, directly and indirectly. Whenever the price of diesel goes wild so too does the cost of our food, much of which travels far to our pantries. As the energy ecologist Vaclav Smil has calculated it takes the energy equivalents of five cups of diesel fuel (from fertilizers to herbicides to transportation) to put one kilogram of imported tomatoes on the table.
In fact we live in a wasteful civilization that thinks it is entirely acceptable to burn 10 calories of mostly fossil fuels to make one calorie of food, and all by employing fewer than one per cent of the population. Prior to the colonization of farming by fossil fuels, agriculture was local, small, low energy (employing human or animal muscle), inefficient and nutritious. Now it is global, big, high energy, efficient and tasteless.
The inflationary problem doesn’t stop with food. Most people, for example, still don’t understand that one barrel of oil does the equivalent work of 4.5 years of human labour.
As a consequence current oil consumption equals the employment of 500 billion fossil fuel “energy slaves” in our economy. This vast disruptive army has enabled the level of global consumption responsible for the relentless poisoning of oceans, the degradation of forests, the depletion of fisheries, the erosion of soils, the disruption of nutrient cycles and the destabilization of the climate.
So the truth is this: Civilization largely has used fossil fuels to destroy robust natural ecosystems and to replace them with artificial and fragile ones.
Our era of ‘extreme’ resources
Rising energy prices, of course, also affect the material conditions of civilization.
When oil prices rise that makes it more difficult and expensive to extract and refine metals needed to make more stuff. The cost of producing plastic increases, too. And during this long emergency, in case you haven’t noticed, we have become deeply dependent on metals and plastics.
Crap made by high energy spending drives globalization. The average North American will consume 1.37 million kilograms of minerals, metals and fossil fuels over their lifetime. The list includes 23.4 tonnes of cement, 8.7 tonnes of iron ore, 60 grams of gold, 2.7 billion litres of petroleum; and seven tonnes of phosphate rock. None of this bounty could be harnessed without the expenditure of fossil fuels.
Which is why the metals price index pretty much follows the crude oil price index like a dog following its owner. So, too, does the food price index.
Here is where the long emergency has delivered us today. Extracting fossil fuels is increasingly difficult. So oil producers need high prices to extract harder-to-get deposits like bitumen, fracked gas and deep-sea oil — what experts call “extreme” resources. But consumers need cheap oil prices to buy goods and services. They yearn for bygone days when oil was cheap and plentiful. Welcome to today’s volatile oil economics. Oil producers and petrostates cheer prices of US$100 per barrel or more — but the same trend poses a threat to the family finances of ordinary consumers. The system is cannibalizing itself.
This dynamic may seem fresh, but ever since the global crash of 2008, the existing economy and industrial system has struggled to grow as fossil fuels become more onerous and costly to mine.
The new reality of dirtier and often lower quality fossil fuels has been pretty much masked by financial manipulation to spark growth. Easy credit and extremely low interest rates made it seem nothing had changed. It’s as though a fine-tuned steam engine has been forced to operate on lower grades of fuel that produce heat of erratic quality. Now the globalization train is running out of track.
The actuary Gail Tverberg believes this predicament explains a wave of jarring events.
“The economy is a self-organizing system that behaves strangely when there is not enough inexpensive energy of the right types available to the system. Wars tend to start. Layers of government may disappear. Strange lockdowns may occur, such as the current restrictions in China.”
What’s ahead and how to respond
By any measure cheap oil paved the road for massive globalization. Not surprisingly, expensive oil will either put the whole show in reverse or invite variations on chaos. If we are to finally take heed of our long emergency, we must break free of today’s dominant narratives about not only inflation but economic growth and what we really need to live saner lives.
It’s the kind of tough but real conversation you might expect to be led by experts who call themselves “green.” Unfortunately many supposed eco-savants are propping up the long emergency with magical thinking that panders to the unsustainable status quo. This I will next explain in the second of my two-part essay.
Tomorrow: Can unlimited growth be green? What’s the alternative?
Oil traders in Houston. By Own Oil Industry News – Own Own work, Public Domain, https://commons.wikimedia.org/w/index.php?curid=8266714
