Hard times here to stay

Murray Grimwood argues that with peak oil past, our civilisation could be in for a long, slow decline - and that we should plan for a permanent recession.

French President Nicolas Sarkozy calls for a new Bretton Woods, and rightly so, for without doubt one is needed.

In the same breath though, he calls for renewed growth, and in doing so epitomises the endemic dissonance which may be the downfall of our current civilisation.

If he had bothered to work out why the current system failed (extended leverage is a symptom, not a cause) he would not be making the second call.

Make no bones about it, every past civilisation has decayed into the dry leaves of history - why should this one be different?

All those past efforts outgrew their carrying capacity, be it the Mayans with corn, the Sumerians with irrigation, or the colonist economies with dwindling extractables.

Anthropologist Jared Diamond catalogues them in his insightful book Collapse.

Those partial to more easily-digested literary offerings should try The Lorax, by Dr Seuss.

The message is identical: the collapse is usually a decline over decades or centuries, and that zero growth does not signal zero activity, just its peak.

Meaning we have to plan for a long, permanent recession.

Our society has been able to do so much more that previous ones, thanks only to the one-off use of fossil fuels.

The International Energy Agency has now signalled that we are past the peak of global oil supply, citing a cumulative depletion rate of 6.8% per annum.

For various reasons, I go with a figure between 4.5 and 5%, but the difference will only control the speed of the change, not the change itself.

Efficiencies cannot take up that kind of slack, nor can any replacement demonstrate the ability to maintain the status quo, let alone address an increase in demand.

For those who are sceptical of the correlation between energy and economic activity, ponder this: Britain powered her post-industrial revolution supremacy on a coal-driven economy.

The transition to oil as (particularly) a transport fuel, mirrored the passing of her baton to the USA.

The USA prospered while using her own oil, the supply of which peaked in 1970.

Until 1970, the USA was a country capable of being in permanent credit (failing to do so after 1958 only through aid, and military adventure).

At that point, President Nixon had to disengage the dollar from the gold standard, and subsequently devalue.

Thereafter it has been in permanent (and increasing) deficit.

Just a coincidence? I think not.

We can assume, then, that global growth has hit the ceiling with the peak in global energy supply.

Sadly, all previous civilisations have clung to their pre-peak ways while in decline, the difference being that this time, we are running the re-enactment globally - an unprecedented, but predictable (and predicted) human crisis.

Cling to the pre-peak ways, and we are staring down the barrel of The Chrysalids, Mad Max, or Waterworld, depending on your vintage.

There are several scenarios from here - a conflict, or series of conflicts, over dwindling resources is most likely.

The avoidance of angst-driven war in a power-down world requires a new approach to finance, particularly its relativity to real things like food, water, shelter, pollution - in a word, to sustainability.

And incredibly gifted leadership.

As avoiding conflict is the only way to go, Sarkozy is right on the money with his call for a new Bretton Woods.

It is a challenging task: how does one value wealth, in a power-down economy? Which currency is used as the base-line, or is the cost of energy (the most essential limited commodity) the better standard?

How do you borrow, when the average ability to repay is sequentially diminishing?

How do you reconcile the induced aspirations of billions of people, with reality?

How do you control the reduction from seven billion people, to two billion within, say, two generations?

The chances are that the current crop of leaders will not have what it takes to get there, and that it will take a major hiatus to produce appropriate leadership.

We are watching a classic example - Obama is no mug, but he is already stuck touting consumerism and jobs, and his appointments are largely dinosaurs.

To be fair, an energy-poor, essentially bankrupt collection of frustrated expectations is a poor hand to be dealt, but you see what I mean.

It may even be that we have outrun the usefulness of democracy, given that hip-pocket greed may vote to delay the needed changes until the window has well and truly closed.

Having tried these many years to alert people to the need for change, I am pessimistic.

The dissonance I mentioned at the beginning is rife, make that endemic, in politics, business, and the media.

Politics and business are somewhat understandable.

The real failure has been the media, the so-called purveyors of truth.

Whether it be owner interference, editorial denial, or narrowness of scribal perception, they have failed us in this one.

So Quo Vadis - where to from here? Well, promoting growth front and centre is not the answer.

In fact, that will only waste three precious, fuel-available years. How many are left?

If you worked on the assumption that the available energy in 2030 would be 70% of the current global supply, you would be in the ball-park.

How long a tiny, unarmed country at the whip-end of the feeding-chain can continue to be fuelled, is anyone's guess.

It has to be remembered that the cheapest oil has been tapped first - not only will demand and scarcity be in play, higher relative extraction costs will exacerbate the squeeze.

The sooner we get sustainable, the better.

There are two main planning approaches to sustainability: infrastructure has to be made efficient, and it has to be able to function usefully, post-oil.

Ring-roads, motorways and toll-ways do not qualify, two-way, electrified, Bluff-to-Reinga rail does.

Urban sprawl over productive farmland does not qualify, having market gardens next to major population centres does.

Large new energy-demanding houses do not qualify, retrofits of existing ones do.

Much thought has to be given to containment of items like food - will it still be in plastics?

Will there be a replacement for (finite) gas in the fertiliser industry?

Will there be a replacement for bitumen?

How will we power at present-essential machinery such as tractors?

Ultimately, all energy comes from the sun, and all transmission is a loss.

The logical approach, then, is solar energy captured on site - with one kilowatt a square metre available, this is an achievable goal.

I give us a 10-year window at most, probably less, to complete the transition.

We are just about to squander three - a waste for which there is clear precedent; Winston Churchill addressed the House of Commons in 1936, thus: "the era of procrastination, of half-measures, of soothing and baffling expedients, of delays, is coming to a close. In its place we are entering a period of consequences . . ."

And thus: "unless the House resolves to find out the truth for itself it will have committed an act of abdication of duty without parallel it its long history."

As regards the majority of New Zealand politicians, business lobbyists, and journalists, I couldn't have put it better.

• Murray Grimwood is Co-Chair of Solar Action.

His house is powered by a single $650 solar panel.


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