With Godspeed!

As I set out to write this I realize it will appear that I just listen to the CBC and wait until there is something worth reacting to for my blog content... It’s true that a pattern is emerging, but really it’s just a coincidence that I happened to learn of this story as I woke up to Daybreak this morning. As it turns out, I heard it all again later this on CBC’s Q with Jian Ghomeshi: Aparently the Montreal-based band Godspeed! You Black Emperror ruffled some feathers by accepting the annual Polaris Award in an unconventional manner. But the content I am reacting to is not actually stemming from the CBC, rather it can all be found on the website of Constellation Records (here: http://cstrecords.com/statement-from-godspeed-you-black-emperor-on-polaris/). Which delivers the following at its heart: 

 

3 quick bullet-points that almost anybody could agree on maybe=
-holding a gala during a time of austerity and normalized decline is a weird thing to do.
-organizing a gala just so musicians can compete against each other for a novelty-sized cheque doesn’t serve the cause of righteous music at all.
-asking the toyota motor company to help cover the tab for that gala, during a summer where the melting northern ice caps are live-streaming on the internet, IS FUCKING INSANE, and comes across as tone-deaf to the current horrifying malaise.

What’s more, I am not writing in order to respond to some form of disinformation (for once!)

Rather, I have this to say:

Kudos!

It’s damn refreshing that these guys found a way to raise a controversy on their own terms, in such a succinct manner. It’s easy to get caught up in the prevailing myth of growth and prosperity (propaganda) and forget that we are reaping the consequences of some pretty bad ideas and choices of recent history…

Godspeed! closes by saying,

“apologies for being such bores,
we love you so much / our country is fucked,”

Far be it from me to put words in Godspeed!’s mouths, but I will go out on a limb to say that their statement deserves some Kyotomotors styled elaboration in solidarity – at risk of boring you some more…

Addressing the second bullet point first, as a painter, I am familiar with similar prizes, awards and contests where multi-billion-dollar corporations dole out a paltry 20 to 50 thousand dollars or so a year to artists in my milieu, and then reap the benefits of the marketing that the whole charade represents, placing a big fat corporate seal of approval on contemporary art for all to see. It’s at least a tad disingenuous to say the least…

Would I say no to the $50 K Sobey award? Probably not.  But if the day ever came to pass, I may refer back to Godspeed!’s statement here for some inspiration on how to accept it.

But for the purposes of this blog, I will refrain from any digression on the subject.

The first and third points above, in my view, go hand in hand, and pertain in large measure to the central theme of this blog, which is to say: to the consequences of industrial society’s attempt to pursue exponential economic growth through the rapid consumption and squandering of the fossil fuels that have enabled global civilization to get to where it is now.

(Chew on that one for a while, if you will…)

The consequences are many; not the least of which is the spectre of climate change. Perhaps the most troubling aspect of this most pressing issue is our collective inability to have a level-headed dialogue about it, thus guaranteeing that we remain incapable of taking real action as a society. This ties in with the “bribe” mentioned in my previous post here: we are heavily invested (physically, psychologically) in a way of doing things, and we are hokked on the so called benefits that ensue. We are full of expectations that more of the same will bring better results. We feel entitled. After all, progress is inevitable, right?

And so, gone are the notions of sacrifice that had their place in the collective consciousness of our grandparents; yet we are faced with the cognitive dissonance that reverberates over the gap between our myth of prosperity and the real austerity on the ground.

Our country, in turn, is indeed fucked, since the man at the helm has delusions of petro-state grandeur. The tarsands will be exploited at all costs, because apart from the boom/bubble in shale oil fracking south of the border, our prospects for growing the oil supply are less than dim.

While this post is admittedly something of a rant, I assure you, I am not making this shit up. The consensus on climate change is a fait accompli, and the reality of peak oil is that it is literally undeniable, since petroleum is a finite resource. I have pointed out more than once that rather than discredit the peak oil story, the tarsands and shale oil projects confirm it, pushing back the day of reckoning just a little, perhaps, while ultimately amplifying its ramifications.

If you have some doubts about this, maybe you should look up a more “reputable” source in the likes of former CIBC economist Jeff Rubin, who foretold of $100 per barrel oil over a decade ago, and was practically tarred and feathered for it. Rubin has quite a lot of the facts together, and I recommend that anyone interested in understanding the economics of peak oil check him out. His first book on the subject(“Why Your World is About to Get a Whole Lot Smaller”) has now been followed by recent publication called “The End of Growth”, which gives you an idea of where he’s coming from…

Now, before I wax too enthusiastic about Rubin, I will say that I disagree strongly with some of his interpretations, particularly where he suggests that the market, and supply limits will take care of climate change. But this dangerous assertion I will have to leave for the subject of a future post.

What I will say for now is that he appears to be bang-on when he says that energy (especially tarsands) is what’s going to define our future as a country, which is to say fault-lines are already appearing over the matter, and the bribe it represents hangs over our heads like an novelty-sized cheque.

The Bribe

As someone who has followed energy issues in a quasi religious manner for more than ten years now, I am always intrigued to hear how their interpretation comes out in the wash via the mainstream(ish) media, like the CBC. Just today, the CBC aired a segment on pipelines [http://www.cbc.ca/player/Radio/The+180/ID/2406140355/ ], and closed with a commentary by Jean-Francois Minardi [at the 13th minute]. This, in turn, was followed by the question whether one would forego one’s smart phone and (of all things) plastic mayonnaise containers, if it meant no pipeline… I am inclined to answer yes, but I am hesitant, because the question smells of bait.

Indeed, it’s a trap; it’s a bribe.

As the guest commentator points out, if I may paraphrase, we live in the age of petroleum. Everywhere you care to look, with the exception of the remote wilderness accessed by foot, if you look for it, you’ll see petroleum at play. Anyone who has taken the time to connect the dots, has at least a good idea of just how intricately dependent we are on petroleum from everything from transport to agriculture, plastics (including textiles) to computers. What’s more, in ecological, anthropological terms the energy flow that petroleum represents has facilitated a degree of specialisation that no other civilization has ever known.

But stating indisputable facts such as these does not necessarily prove that we have put petroleum to the best possible of uses over the long run. Indeed, I would argue that we have squandered it, and in the case of the personalised automobile, we have over-invested in a fundamentally flawed living arrangement with a dubious future.

In his argument, Jean-Francois Minardi states that car-use accounts for “only” 43% of the petroleum pie, making the number seem small, as though it were a democratic vote. This rhetorical trick fails to acknowledge that this is by far the lion’s share of petroleum allocation, with at least another 30% dedicated to fuels that also go toward transportation (namely diesel and jet fuel).

See: http://www.ems.psu.edu/~pisupati/ACSOutreach/Petroleum_2.html

Or: http://en.wikipedia.org/wiki/Petroleum_product

So, yes, the Personal Automobile has a lot to answer to. We may well value the benefits and convenience of cars, but we must learn to weigh them against the well documented drawbacks, starting with pollution and GHG emissions, and including the dissolution of urban community and the physical dangers that cars pose to people. Furthermore, while cars may well indeed be useful, in the context of a finite resource (which petroleum is), their misuse and overuse may well be a mistake of historic import.

When you stop to consider the context in which we debate things like the tar sands, and “fracking”, as well as pipelines and the price at the pump, you might like to take in a few salient facts: We have already used over half of the known petroleum reserves in the Earth’s crust; what we’ve consumed to date has been the “low hanging fruit” and what remains represents the harder to reach stuff (i.e. the more expensive oil). What’s more, we are hooked on the notion of growing the economy year after year, always using more energy to do so. We are therefore committed to extracting more and more resources, at a greater and greater cost for a growing economy of a growing population. We may like to appreciate the benefits of petroleum, but we may well need to get our heads around the basic principles of sustainability first.

I have to admit, I do not know who Jean-Francois Minardi is, but I recognise his basic argument common to “cornucopian” economists, that states “since petroleum has delivered us what we like, we must therefore deserve more petroleum; and since we deserve it, we therefore will inevitably, rightly do what is necessary to ensure its availability.” It’s a line of reasoning that assumes that Nature is obliged to provide for us whatever our hearts desire. Minardi goes on to introduce a particularly emotionally charged example of hard working women in Africa, who now benefit from the use of plastic jugs when hauling water. Since I too benefit from various forms of plastic (as much as I do try to avoid the stuff) I would be hypocritical to decry this benefit. However, it is not a sound argument to point only to one feel-good story while ignoring countless examples of the downside of plastic as a pollutant in the biosphere – the tons of floating debris in the oceans comes to mind, as the most glaring example… At least the clay pots traditionally used by the African women in the example are biodegradable.

But the issue isn’t about any one particular example. Of course there is a narrative of progress that we can attach to petroleum. There is also the narrative of dehumanisation and destruction. Take your pick. The real issue with this natural resource is that Nature has the final say. Whether we want there to be endless supplies of petroleum or not, we will inevitably be faced with reduced access though rising prices, and eventually with global scarcity. This fact is so far off the radar of the mainstream media that you have to wade deep into the marshes of the blogosphere to get a good overview of this situation, while running the risk of being bogged down by some very twisted and dubious interpretations of the facts as well.

For my part, I mention scarcity not as a scare tactic, or part of a conspiracy theory, but because, if we could start to get our heads around it, we could seriously consider the importance of reducing that 43% to something like half or less, along with the other consumptive habits we developed in a culture of abundance and entitlement which is entering the its twilight phase.

As regular readers know, I am an avid cyclist. But I do use a car from time to time. I will not ever own one, and I may one day own as many as five bikes, so it’s no secret where my biases lie. I have made my choices, and I live by them as best I can. I happen to be well aware that the tires on my bike are derived from petroleum. The entire existence of a “cycling industry” is surely, wholly dependent on the stuff, I know. But there is no way to justify the comparison of this dependence to the dependence of car culture on the same resource when you look at the basic rates of overall consumption. Just because petroleum delivers us some valuable goods, it should not be assumed that cars, and the extravagance they represent, are beyond all criticism.

Remember This!

[KyotoMotors Blog Post #11]

We hear a lot of promises in our lifetimes. It’s the nature of  marketing, and the nature of politics, and – if you want to get down to it – it’s the nature of our faith in Progress that we believe a good many of them, even when we should know better.

When I was young, the year 2000 loomed large, and everything was going to be about space travel and robots. If you’re older than me, maybe you expected heli-ports and rocket packs in this future that has since passed. Of course, what we got was nothing of the sort – not even a good old fashioned apocalypse branded as “Y2K”.

To be fair, we do have the internet, and hand-held devices that would shame the best technicians aboard the original Starship Enterprise. So we’re pretty good at telecommunications and data storage that run on an infrastructure of satellites and rare earth elements. 

What we also have is a host of unforeseen consequences converging to form the mother of all predicaments for the current incarnation of civilisation. Atop the list is probably climate change caused by industrial activity and several resultant positive feed-back loops that accelerate the phenomenon, such as shrinking polar ice mass, and methane-released by melting permafrost. 

Another global problem surrounds energy, and the challenge of accessing enough of it to maintain normal operations for the global economy (including the operation of the internet and those hand-held devices, not to mention our beloved automobiles). That we face increasingly dire challenges to maintain the levels of energy that we have grown accustomed to, is not commonly spoken about in polite society. Instead, at all costs, we tend to look to the art of promise, and the faith in technological progress in order to convince ourselves that this challenge simply isn’t – simply must not be – true. Why, just recently I’ve been reading about a new era of energy independence dawning in America. Fracking, it seems, has come to answer our energy prayers, so that we can all continue to enjoy 20^th century levels of extravagance and specialisation that defines our civilisation. 

Such promises!

Well, don’t shoot the messenger, but have I got news for you: Some serious questions have arisen surrounding the validity of the hype. Fracking, it would seem, may not be all it’s cracked up to be. It may rather be yet another in the string of dubious promises we conjure up for mass consumption while avoiding the hard questions pertaining to the hard limits to growth set by Nature herself. Worse still, the whole shale oil bonanza may well prove to be the latest in a string of economic bubbles that characterise our troubled economy.

I’m not making this stuff up, so don’t credit me with the foresight… There are a number of commentators who seem to have connected the dots, and now there’s a concise book written on the subject: Snake Oil: How Fracking's False Promise of Plenty Imperils Our Future by Richard Heinberg. [http://www.resilience.org/resource-detail/1789950-snake-oil-how-fracking-s-false-promise ]

 

It appears the fracking industry is following the familiar pattern of a classic economic bubble, which like a pyramid scheme, leaves most investors in the lurch with a sense of having been duped out of however much money they were hyped into investing. Like the recent housing bubble, a bubble in fracking would be closely tied to our troubling insistence on furthering the consumptive patterns of car-oriented living arrangements and expectations (entitlement). Like the housing bubble, the fracking instalment of this tragi-farce will be shrouded in layers of denial and hand-waving-insistence that such a thing is impossible -- It is somehow always “different this time”-- until, of course, the whole thing has burst.

For me, what is different this time, is that I am comfortably in the camp that sees it coming, and will do the only thing I can do about it, and that’s to call it as I see it. There’s nothing that can be done to stop it from happening – this sucker will go down – but there is at least the possibility of keeping your money safely away from unsound fracking investments. 

After it does go down (within a year or two) think back to this blog and remember that checking in to Kyotomotors wasn’t such a bad idea! You may also want to get to know the issues a little more closely by visiting sites like the Post Carbon Institute’s www.resilience.org , which serves as a hub for lots of great info on alternatives worth pursuing…

Meanwhile, as the summer fades, and autumn sneaks in a little closer every morning, I will make every effort to resume regular posts here at kyotomotors. I will start by asking , what is a "kyoto motor" and offer a number of ways of answering the question next week. 

Please stay tuned.

Too Low? Too High?

When I heard on the radio that Newfoundland and Labrador (NL) is proceeding with austerity measures, I wasn’t particularly shocked, since it seemed to ring true with much of what’s going on these days. But when the same radio story reminded me that NL had been anticipating great new prosperity thanks to its untapped offshore oil reserves, I paid a little closer attention. When finally it was explained that NL could not further pursue said prosperity because oil prices just aren’t high enough, I had to check to see if my ears were clogged.

It has been a while since I’ve heard the opinion that oil prices aren’t high enough – in fact, I’ve never heard that opinion in the mainstream media (MSM) before: it’s usually coming from the perspective of those who believe we should drastically reduce our consumption and, to the best of our abilities, leave the black stuff in the ground.

Of course the conventional wisdom is that in NL’s case, things would be so much better if only we could unlock the treasure trove of black gold in their back yard. But alas, the price of oil, at $95.00 per barrel does not make for profitable offshore operations. So projected growth has been shelved and the job cuts have already begun – not to mention the great many jobs that simply will not materialize down the road.

This story has peak oil written all over it.

As it happens, the enthusiastic economic projections that NL had been anticipating were based on predictions that the price of oil would have ratcheted up to about $125.00 per barrel by now. Back in 2007, when the price of oil spiked to $147.00, and all sorts of hell was breaking loose on the financial and economic stage of the world, a believable case was being made for such predictions: almost overnight, the unthinkable had become entirely plausible.

However, partly as a result of the general turmoil, and partly because of the spike itself (which was a bit of a speculative run, at least in part) a new economic phenomenon emerged. What is now generally accepted as “demand destruction.” It appears as though high oil prices have such a “wet blanket” effect on the economy, that there is effectively a ceiling against which the price bounces quite hard. So while some peak-oilers were predicting $200 to $300 per barrel in short order, it seems more realistic to expect the price to bounce between the recession-caused ceiling, and the more familiar supply shortfall that is pushing the price ever upward.

In other words, while the global economy servicing a population of 7 billion people tries to expand, but has trouble finding enough light sweet crude to do so, it resorts to more costly efforts such as tar sands, shale oil, and off-shore operations. However, with rising prices associated with these costs, the average citizen has less incentive to consume, effecting a recessionary influence.

This may well explain why the price of oil seems to dip occasionally, and rises to about $100.00 per barrel, without ever spiking to the record highs. Interestingly, the new lows which were around $60.00 a barrel are at least double what was considered high a mere decade ago.

And yet in NL (and elsewhere, I expect) even at $100 per barrel, offshore oil operations just aren’t profitable enough!

So the fanfare, which was considerable just a few short years ago, trumpeting NL’s future as an economic engine has faded away. It’s one more economic stumbling block for a province that has had its fair share over the decades. But it’s a trend that is becoming familiar in the energy industry all over the place. Welcome to the era of diminishing returns.

Similar hype and fanfare is currently being aired over the shale oil and shale gas phenomenon. The political leaders looking to make some quick “hay” along with their stenographers in the MSM are giddy about a new era of US energy independence. More scrutinizing analysts have identified the story for what it is: the next economic bubble to hit the already faltering economy (wait for it!... ).

Meanwhile, in Canada, we are experiencing a more protracted period of hype in the form of government propaganda (under the banner of “the economic action plan”). This is a veiled effort to convince the nation to support the government’s efforts to drive our economy on tar sands extraction. The tar sands story is also another chapter in the story of peak oil: it is dependent upon high prices that are caused by the depletion and exhaustion of conventional oilfields. But, as mentioned, the effect of “demand destruction” puts a ceiling on those prices. What’s more, when demand is being “destroyed” it’s because of recession – usually characterised by high unemployment.

In other words, the so-called good news of tar sands viability is dependent on the bad news of high oil prices which in turn invites recessionary trends.

So beware the fanfare Canada. The government may be claiming that tar sands can solve our economic woes (even if our energy predicament goes un-addressed), but there are a number of facts that go unstated, and a few assumptions that may not stand up to the test of time. Investing in this resource full tilt, as we have been doing may simply prove to be a case of over-reach, where we make commitments to a way of doing business that hasn’t got legs.

The facts are that tar-sands extraction is ridiculously costly, especially in terms of energy returned on energy invested (EROEI). So as the price of oil goes up (purportedly a good thing, remember?) the cost of extraction goes up along with it, keeping the margin of profit much closer to the ground than with conventional sources of oil. And of course the big assumption here is the lesson coming out of NL: the price of oil may simply not go where we want it to in a timely manner. And if it does, tar sands oil will surely keep it there.

Peak oil is indeed a real phenomenon that we all have to get used to. But it is easily misunderstood, and often mis-represented. Grappling with the implications peak oil has on the economy is serious business. Assuming that the rules have not changed is the first most common mistake made by economists. But this is another topic.

The best economic advice I can think of is to do a collective energy “gut check” and pare down our collective energy diet. Comprehensive energy conservation is the only way that we can guarantee that the availability of energy (for when we really need it) will manifest itself in lower prices. The first step though is to become energy-literate, and try to understand that when it comes to energy, we are like heavy drinkers on a wild binge, throwing caution to the wind…