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THE CALIFORNIA DROUGHT IS NOT OVER!
Rainstorms finally arrived in California, after a 14 month drought with no significant rain. But the big reservoirs are still pitifully low, and snow pack is less than a quarter of normal. Hundreds of thousands of acres will not be planted, and food bills will likely go up in North America, and possibly around the world.
This is the Radio Ecoshock special on the California drought, as a case study of what we can expect in many parts of the Earth. I’ve lined up 4 experts all with something new for you.
Dr. Peter Gleick is a climate and water specialist who has been warning this could happen for years.
Dr. Reagan Waskom is another water and agriculture expert from Colorado.
We connect with boots-on-the ground water conservation specialist David Schroeder in Montclair, right on the edge of thirsty Los Angeles.
Finally, we get back to the big picture, as Professor Jay Famiglietti at University of California Irvine warns of depletion of the ground water under one of the world’s biggest food producing areas. That’s a trend all over the world, as we race toward peak water.
PETER GLEICK: Is the drought climate change?
Our first guest is Dr. Peter Gleick. He’s president of the Pacific Institute in Oakland, California, one of the world’s leading independent think tanks on water issues. Peter is also a scientist known around the world.
Peter introduced the term “Bellwether Drought” for this event. We know climate change threatens the water cycle. Scientists believe the wet areas (like the UK!) will get wetter, and the dry areas like California, will get dryer. So the dice are loaded for more droughts to occur in this major food producing area.
Dr. Gleick points out we could say this drought started in at least 2006. There have been several drier-than-normal years since then. Scientists have found records showing California has experienced droughts lasting more than a hundred years in the past, in the 1100’s for example.
So we may be asking if human-induced climate change has triggered this drought cycle. The causes of regional weather events are complex. We have ocean currents, natural cycles like El Nino and El Nina, and changes to the Jet Stream. All of those, especially the Jet Stream (as shown by the work of Jennifer Francis et al at Rutgers) can be influenced by climate change.
It’s a Bellwether event because whether or not we can nail down direct causation by climate disruption – it’s a sure test of what is likely during the coming decades. As in Australia, it is possible Euro-humans arrived in California during a cyclical wet spell that was bound to end. But have we hastened that process?
I also talk with Peter about desalination, it’s promises and obstacles. A new desalination plant has been build to feed the San Diego water system. But really, it’s so energy intensive and expensive that desalination cannot save the whole California agricultural system.
Peter Gleick is an influential scientist in many places. He talks about the global work his institute is involved in, and it’s heavy-duty stuff. It’s cool he Tweeted this program link out to his 11,000 plus followers.
DR. JAY FAMIGLIETTI: Looking at the drought from space.
When the rains don’t fall in California, every one checks their wallet for rising food prices. But rain or not, cities and farmers are pumping out California groundwater at an alarming rate. Thanks to new satellite science, now we know how much of that unseen wealth has been depleted. It’s a problem for farmers and all humans all over the world, as we grab water stored over the ages, to keep us alive right now. At some point, the water runs out.
When the federal government, and state agencies cut off water supplies, as they did just this past month, farmers don’t just roll over and die. All those who can start pumping up groundwater furiously. They’ve been doing that for decades, always at an increasing level. You may think ground water gets replenished with rains, but some of it was captured and contained over millions of years. When I have a glass of water in my village, that water is 100,000 years old.
So just like oil, ground water is a limited resource. When you run out, that’s it.
Amazing to tell, scientists can measure the rate of groundwater depletion in California from space. The twin GRACE satellites have shown the loss of mass in Greenland as the glaciers melt. Now scientists at the University of California Irvine report that California is setting new records for groundwater loss. The state is literally getting lighter.
Find out about the GRACE satellites here. Oh, and by the way, one of their top stories is the discovery that climate change is causing the Earth’s poles to migrate. Don’t believe that? Read about it here.
One result is the land starts to sink, once the water below is removed. That’s serious in the Sacramento delta, where so much of North America’s fruits and vegetables are grown. Once it goes too low, a rush of salt water, say from a storm surge, can take thousands and thousands of prime acres out of production.
Jay Familietti describes what we know. He says the average of prediction of when California will run out of groundwater at current rates is 60 years from now. After that, the glory days of big populations and big cities may be done. Some experts say it will come sooner than that.
That same story is being repeated, even worse, in countries like China and India. India is pumping out the water tables at an alarming rate. In both countries, as thousands of wells go dry, they drill deeper, and burn even more energy with bigger pumps, just to keep up. Some places are already out of water, and out of production.
Keep this story in mind as you build the big picture: peak groundwater. It’s coming.
By the way, I ask Dr. Famiglietti what happens to all the water we pump out for our fields and cities. Some of it goes into the ocean, to become salt water. The warmer atmosphere can hold 4% more water vapor already, since 1970, and that’s a huge amount. Other water ends up falling in those places that are already wet.
Read a key article by Dr. Famiglietti “Epic California Drought and Groundwater: Where Do We Go From Here?“. And check out his LA Times Op-Ed from 2013, “California’s water house of cards“.
DR. REAGAN WASKOM – Feeding the western food supply
I was referred to Dr. Waskom by Michael Cohen of the Pacific Institute. Even though Waskom is the University of Colorado in Fort Collins, he’s one of the country’s wisemen when it comes to water supplies and our food system.
Reagan Waskom is the Director of the Colorado Water Institute, and Chair of the Colorado State University Water Center.
It turns out Colorado supplies much of the water to Southern California. We are not talking about the big food production areas, but more the heavy populations in places like Los Anglees. So what happens in Colorado matters a lot to California.
The good news is there is a heavy snow pack this year in Colorado. How useful that is depends on how fast the snow melt is, among other factors.
I ask Dr. Waskom what happens if California really is in a long-term drought. Could we replace all that food with farming somewhere else in the country?
Dr. Waskom has also been studying the big use of water by the fracking industry. We touch on that.
My final question is more personal: “You’ve taught a lot of students, and graduate students. Do you think young people are more disconnected from natural reality than when you were growing up?”
DAVID SCHROEDER on the ground outside of LA
I wanted to get you some reporting from right on the ground in southern California. Acting on a tip from a Radio Ecoshock listener, we’ve reached David Schroeder. He’s a Water Conservation Specialist with the Chino Basin Water District. That’s based in Montclair California, right on the edge of one of America’s biggest cities, Los Angeles.
We talk about where water for southern California comes from, and what to do when it doesn’t. Dave specializes in getting the public involved in tearing up grass to install natural vegetation, to use less water in the home, and so on. There isn’t much farming left in the south of the state. Now the challenge is huge cities and endless suburbs.
Dave lives in the mountains that used to be white with snow in winter, when I lived in L.A. many moons ago. No snow there this year he reports. That’s not good news for the coming fire season, for anything.
Download/listen to this 10 minute interview with David Schroeder in CD Quality
That wraps up my Radio Ecoshock special on the California drought, 2014. I hope you learned, as I did, about where our water comes from, where it’s going, and the dangerous tightrope we walk trying to feed a growing world population during climate disruption.
Radio Ecoshock is provided free to more than 75 non-profit radio stations. I depend on your financial help to keep going. Find ways to support this program in this blog, and at the show archive and web site, ecoshock.org
I’m Alex Smith. As always, thank you for listening, and caring about your world.
Federal Court Finds Canada Has Failed to Uphold Endangered Species Act – Ontario Could Be Next | A\J – Canada’s Environmental Voice
FEB 20 2014 |
Ontario’s Environmental Commissioner Gord Miller is warning Queen’s Park could face sharp reprimands by the courts for its failure to uphold wildlife protections under the Endangered Species Act.
Perhaps unsurprisingly, a federal court confirmed last week the Government of Canada does indeed have a responsibility to follow its own species at risk legislation.
The decision, handed down by Madam Justice Anne Mactavish on Feb. 14, stated the Department of Fisheries and Oceans (DFO) and the federal Ministry of the Environment “acted unlawfully in failing to post proposed recovery strategies” for the Pacific Humpback Whale, the Nechako White Sturgeon, the Marbled Murrelet and the Southern Mountain Caribou “within the statutory timelines prescribed in the Species At Risk Act.”
“It is simply not acceptable for the responsible Ministers to continue to miss the mandatory deadlines that have been established by Parliament,” Mactavish found.
Simply listing species as endangered is not the ultimate purpose of the Endangered Species Act (ESA). While being aware of their decline is a critical first step in improving their fortunes, it’s equally critical government create timely recovery strategies to facilitate moving threatened and endangered species off the ESA list. This is where DFO, Ministry of Environment (MOE) and Ministry of Natural Resources (MNR) provincially have fallen well behind in their work.
From the ruling:
To state the obvious, the Species at Risk Act was enacted because some wildlife species in Canada are at risk. As the applicants note, many are in a race against the clock as increased pressure is put on their critical habitat, and their ultimate survival may be at stake … There is indeed urgency in these matters.
The lawsuit was brought jointly by the Western Canada Wilderness Committee, the David Suzuki Foundation, Greenpeace Canada, the Sierra Club of British Columbia Foundation and Wildsight.
For his part, Miller is concerned the same fate awaits the provincial government for its own failures to uphold the tenets of the Endangered Species Act.
“As I have reported to the Legislature, the Ontario government has committed the very same offence by ignoring the statutory deadlines for producing recovery strategies for species at risk as required by the province’s Endangered Species Act, 2007,” Miller wrote Wednesday.
In his November report, Miller said the government has “failed miserably” in its efforts to protect endangered species in the province, accusing MNR of “stalling recovery strategies, crafting meaningless government response statements, delaying habitat protection, mismanaging the permitting process and deliberately ignoring public participation.”
The Ontario Ministry of Natural Resources, like its federal counterpart, is also required to produce recovery strategies for species listed as endangered on the ESA within specific timelines. And, much like at the federal level, MNR is “similarly plagued by delays and a chronic failure to meet statutory deadlines,” Miller states.
In September, a coalition of environmental groups announced a lawsuit against MNR over their July decision to gut the ESA through exemptions for industry from many of the strictest protections for species-at-risk and their habitat.
Ontario Nature and the Wildlands League hired lawyers from Ecojustice to represent them against the government and their implementation of Ontario Regulation 176/13.
The suit is calling for a judicial review of the regulation and alleges the July 2013 regulatory changes made it easier for industry to acquire exemptions from aspects of the act which forbade the killing, harming or harassing of species-at-risk and their habitat.
The new regulation “runs contrary to the objects and purposes of the ESA, which are ‘to protect species that are at risk and their habitats, and to promote the recovery of species that are at risk,’” according to the submission.
Anastasia Lintner, staff lawyer with Ecojustice, told reporters in September that MNR Minister David Orazietti “failed to meet his own legal duties before recommending this regulation be made by cabinet.”
Further, “we allege the minister failed to first assess whether the proposed regulation would jeopardize the survival of 155 species listed as threatened or endangered,” she said. “He also failed to first assess if the regulation would have any other significant adverse effects on these listed species.”
“It’s environmental deregulation, pure and simple,” said Ontario Nature’s executive director Caroline Schultz at the time. She believes industry has been left to police itself because government oversight of potentially harmful practices has been dramatically weakened as MNR’s budget has shrunk substantially over much of the past two decades.
But Orazietti told reporters in September he is confident his legislation can withstand the judicial challenge. “We have gone to great lengths to ensure the fundamental principles of this legislation remains intact,” he said. “I’m disappointed by [the environmental group’s] approach, but I believe we have very solid evidence that ensures species-at-risk will continue to be protected.”
In response to the developments this week and Miller’s statement, Orazietti told A\J:
We take this issue extremely seriously. I certainly respect the Environmental Commissioner’s opinion on this matter. We are going to do everything we can to move forward to ensure there is compliance on these issues and that Ontario is living up to its obligations within the legislation.
Miller concludes by hoping MNR responds to the warning from the federal court and that “accountability for taking action to protect species at risk does not have to be found in the Courts of Ontario.”
When Russia bid to host the 2014 Winter Olympic Games, they committed to green building standards and a “zero waste” policy that promised not to add to landfills. The $51-billion Sochi Olympics – the most expensive in history – will truly have costly consequences to the environment. The area of development includes a UNESCO World Heritage site and a national park – the most biodiverse location in Russia. Eight thousand acres of preserved forests have been damaged and wetlands important for migrating birds have been buried under two metres of crushed rock. Suren Gazaryan, a zoologist with Environmental Watch on North Caucasus (EWNC) who is living in exile due to criminal charges stemming from his humans rights work, says that parts of the park have been totally destroyed. He adds that much of the government’s much-vaunted reforestation efforts have been “pointless.” The planting of 1.5 million new trees was often done by unqualified personnel who violated conventional methodology.
The Associated Press reports that Russia’s state-owned rail monopoly has been using illegal landfills to dump construction waste from an $8.2-billion, 48-kilometre highway and railroad link between the airport and alpine venues. These illegal landfills are in a water protection zone, and could potentially lead to the contamination of Sochi’s groundwater. Some IOC members have reportedly admitted to making a poor choice when they selected Sochi. Former IOC member Els van Breda Vriesman told Dutch broadcaster NOS that many members would vote differently today.
The Russian government stepped up law enforcement activity against local environmentalists during Olympic construction. Activists have been detained and criminally charged, some have lost their jobs. The government plans to illegally shut down EWNC due to the group’s insistence on legal compliance during Olympic preparations.
Before we get too up-in-arms about Russia’s environmental misconduct, let’s not forget our own here in Canada.
More reason for concern: Environmental destruction and Indigenous rights abuses often go hand-in-hand. We saw this play out at the 2010 Olympics in Vancouver, where protestors linked environmental degradation and Indigenous sovereignty, and we’re seeing it again now with the Circassian community calling Sochi “the genocide Olympics.” The Circassians are indigenous to the North Caucasus region but were driven from driven from the area in the 19th Century. Historian Walter Richmond is calling Sochi the site of Europe’s first genocidein a new book.
Mark Twain once said, “It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.” And, there are many, many things that the public and policymakers know for sure about energy that just ain’t so.
That list is very long indeed and getting longer as the fossil fuel industry (which has little interest in intellectual honesty) continues its skillful manipulation of a gullible and sometimes careless media.
Below I’ve listed seven whoppers that it would be charitable to call misleading. Longtime readers will recognize that I’ve addressed them before in various pieces. But I thought that it would be useful to review the worst of the worst of 2013 as the year ends.
Here are seven things everyone knows about energy that just ain’t so:
1. Worldwide oil production has been growing by leaps and bounds in the last several years. Oil companies (with governments following suit) have cleverly redefined oil to include something called natural gas plant liquids (NGPLs) that you might surmise actually come from natural gas wells. These include propane, butane, ethane, and pentanes. The new definition also includes biofuels such as ethanol and biodiesel.
This mishmash is sometimes referred to as “total liquids,” but more often “total oil supply.” This redefinition, however, depends on something that just ain’t so, namely, that NGPLs and biofuels are 100 percent interchangeable with oil. There is some interchangeability, but the volume is relatively small. NGPLs make up just 10 percent of total liquids. I’ve seen investment research that asserts that probably less than one-fifth of that (equivalent to about 2 percent of total liquids) can be directly substituted for oil, primarily in petrochemical refineries. That portion could grow, but only with extensive and costly retooling of the refinery industry, a move that seems risky with U.S. natural gas production stalled (see below).
Now, the central problem with including NGPLs as part of the oil supply remains that they have only a very limited ability to be used as transportation fuel which is the main driver for oil consumption.
Moreover, the energy content of NGPLs is around 65 percent of oil per unit of volume. Ethanol has about 66 percent of oil’s energy, and biodiesel has slightly more than crude oil, but somewhat less than the diesel it is meant to replace. We must also consider all the energy including oil that goes into growing, harvesting, transporting and processing the crops that are feedstocks for biofuel refineries. Some studies show that more energy goes into making ethanol than ethanol produces when burned in an engine.
Despite these well-known facts, the industry and government continue to count NGPLs and biofuels in barrels right alongside oil as if they were all equivalent.
Ethanol and biodiesel do directly substitute for some motor fuels. But there are upper limits on what we can produce and use. We are near those limits with ethanol unless engines change to tolerate higher concentrations of ethanol. Moreover, neither ethanol nor biodiesel can be used for the wide variety of purposes that crude oil can.
It turns out that 2005 was an inflection point after which supply growth for both total liquids and oil proper slowed considerably. With all this in mind, let’s look at the actual numbers which come from the U.S. Energy Information Administration (EIA).
Growth from 1998 to 2005: 11.7 percent
Growth from 2005 to 2012: 5.7 percent
Oil Proper (Crude Oil Plus Lease Condensate):
Growth from 1998 to 2005: 9.9 percent
Growth from 2005 to 2012: 2.7 percent
You can see that the real oil supply (crude oil plus lease condensate) has been growing at just over one-quarter the pace it did in the previous seven years–even with record prices, record investment and the wide deployment of new extraction technologies. Slowing growth coupled with skyrocketing demand in places such as China and India has put a lot of upward pressure on oil prices. It’s one reason oil prices remain near record highs based on the average daily price of Brent Crude, the world benchmark.
In 2011 the average daily Brent Crude price was a record $111.26—which was followed by another record in 2012 of $111.63. The price in 2013 through December 26 has averaged $108.52.
2. U.S. natural gas production continues to grow by leaps and bounds.This claim is even more misleading than the first one. It’s true that natural gas production has grown in the United States in recent years due to the exploitation of gas trapped in deep shale deposits, deposits that new technology called hydraulic fracturing is now making accessible.
But, it turns out that the rate of production of these wells declines rapidly, and the numbers suggest that raising the overall U.S. rate of production is going to be very difficult and expensive. In fact, since January 2012, monthly U.S. marketed natural gas volumes have been nearly flat despite a more than doubling of natural gas prices from their April 2012 lows. The average monthly volume in 2012 was 2.11 trillion cubic feet (tcf). For 2013 the data are only available through September, but the average through that month was 2.12 tcf. It’s doubtful that the average will change that much when the final three months of the year are included.
The easy shale gas has been extracted. Now comes the hard stuff. We may already be on the shale gas treadmill.
3. There is enough natural gas under the United States to last the country for 100 years. This claim requires that you first do bad math on the numbers even the perpetrators of this falsehood provide. The number turns out to be 90 years using their figures and 2010 U.S. natural gas consumption (while assuming, improbably so, no growth in U.S. natural gas use for the next 90 years).
But even that number vastly overstates what we are likely to get out of the ground for it includes estimates of probable, possible and speculative technically recoverable resources. Now, just because something is judged to be technically recoverable does not mean it will be economically recoverable. And, if it is further labelled possible or speculative, it seems foolish to base our public policy on such resources as if they were proven to exist and were ready to extract.
Shale gas expert Art Berman suggests we focus on the probable resources category and assume generously that 50 percent of those resources will actually get turned into reserves. (Keep in mind that no resource is ever exploited to 100 percent and usually only to a fraction of that. Also, resources are what are thought to be in the ground based on sketchy evidence, while reserves are what the drill bit proves are actually there and, more importantly, amenable to extraction.) Based on these assumptions, the United States has about 550 tcf feet of probable and proven reserves which means that the country has a likely supply of about 23 years (again, assuming, improbably so, no increase in the rate of consumption during the entire period).
Since Berman made those calculations, some of the probable resources have moved into the reserves category. But, the outlook has not really changed because this was expected.
4. The United States is about to become the world’s largest oil producer. This claim depends on the same sleight-of-hand being used to inflate worldwide oil production numbers as noted above: the inclusion of NGPLs and biofuels in the production numbers. The United States has been furiously drilling natural gas wells in the last few years and has increased its supply of NGPLs greatly. The production of crude oil proper has also been growing for essentially the same reason natural gas production grew: the deployment of hydraulic fracturing techniques and horizontal drilling to extract previously inaccessible deposits of so-called tight oil.
The results have been impressive, lifting U.S. production of crude oil proper (crude oil plus lease condensate) from 5.2 million barrels per day (mbpd) in 2005 to 6.5 mbpd in 2012. The latest available monthly production results are for September 2013 and put U.S. crude oil production at 7.8 mbpd.
But, it seems unlikely given the very steep production declines that existing tight oil wells experience–about 40 percent per year–that production will be able to scale that of the world’s number one and number two oil producers.
Russia currently produces 9.9 mbpd of crude oil proper. Saudi Arabia produces 9.8 mbpd. Both numbers come from the EIA.
Could the United States produce more crude oil proper than these countries in the near future? Since we cannot know the future, anything is possible. But, consider that the United States has gotten most of the easy tight oil. Now, it must begin to rely on extraction of the hard-to-get oil. That oil will come out at a slower rate.
Meanwhile, the tight oil wells already drilled will continue to decline at colossal rates and their output will have to be replaced before any increase in production is possible. Trying to increase oil production under these circumstances can be likened to running up a down escalator since the declining production of existing wells cancels out much of the production from newly drilled wells.
If the United States were to attain the number one spot some day, it would be hard to maintain given the high production decline rates cited above.
5. The United States is on the verge of energy independence. This canard takes advantage of the lack of public awareness about U.S. energy resources. The country has long been self-sufficient in coal. This has never been an issue. It has also been nearly self-sufficient in natural gas, importing a little over 15 percent of its needs (almost all of it from Canada) from 1991 through 2011 according to the EIA. That percentage has trended down recently as U.S. production has increased. But the U.S. supply of imported natural gas was never in danger due to political disruptions or wars in faraway unfriendly countries.
So, it turns out that energy independence really means oil independence. On this count the country is still very far away from independence despite recent gains in domestic oil production. For the most recent week ending December 20, the United States’ net crude oil imports were 7.5 mbpd. The country would have to nearly double its rate of domestic crude oil production to meet its current consumption needs. That seems very unlikely given the production dynamics discussed above for tight oil which is where nearly all the growth in production is currently taking place.
6. The United States has 250 years of coal left. This claim keeps getting recycled even though a 2007 National Academy of Sciences study concluded that there was no basis for making such a claim. It suggested that the United States might have 100 years of coal left (assuming, improbably so, there would be absolutely no increase in the rate of consumption over that period). But, the report concluded that no comprehensive study of U.S. coal resources was currently available. The truth is nobody knows how much coal is left in the United States, nor how much of that might actually be accessible.
7. Peak oil is a myth. Peak oil is the idea that oil production inevitably reaches a maximum rate and thereafter begins an irreversible decline. It does NOT mean running out, but rather that production declines over time. It turns out that peak oil is actually an empirically demonstrated reality for every oil well, every mature oil field, and now for the majority of oil producing countries in the world. Those who tell us that peak oil is a myth can only be engaged in propaganda rather than a search for the truth. Ironically, many of them cite the upturn in U.S. production as “proof” that peak oil is a myth, forgetting that U.S. production peaked more than 40 years ago.
Oil is a finite resource and so, the real debate is over the timing of peak oil production for the world as a whole. Some say the peak is nearby. Others say it is two or three decades away. But no credible expert says that there will never be a peak.
The cases for and against a near-term peak would be difficult to relate in detail here. But, it’s worth noting that the optimists have been consistently wrong about prices and supplies in the last decade, and those predicting a near-term peak have been much closer to the mark.
That doesn’t mean that the peak must be nearby. But it suggests that the models and assumptions of the optimists are badly flawed.
There are so many other misconceptions about energy which remain that it would take a dozen seven-item lists just to begin to address them. But, I offer these seven as a starting point for a clearer and more honest discussion of our energy future in the coming year.
What do diminishing returns, energy return on energy invested (EROI or EROEI), and collapse have to do with each other? Let me start by explaining the connection between Diminishing Returns and Collapse.
Diminishing Returns and Collapse
We know that historically, many economies that have collapsed were ones that have hit “diminishing returns” with respect to human labor–that is, new workers added less production than existing workers were producing (on average). For example, in an agricultural economy, available land might already have as many farmers as the land can optimally use. Adding more farmers might add a little more production–perhaps the new workers would keep weeds down a bit better. But the amount of additional food the new workers would produce would be less than what earlier workers were producing, on average. If new workers were paid on the basis of their additional food production, they would find that their wages dropped relative to those of the original farmers.
Lack of good paying jobs for everyone leads to a need for workarounds of various kinds. For example, swamp land might be drained to add more farmland, or irrigation ditches might be added to increase the amount produced per acre. Or the government might hire a larger army might to conquer more territory. Joseph Tainter (1990) talks about this need for workarounds as a need for greater “complexity.” In many cases, greater complexity translates to a need for more government services to handle the problems at hand.
Turchin and Nefedof (2009) in Secular Cycles took Tainter’s analysis a step further, analyzing financial data relating to historical collapses of eight agricultural societies in operation between the years 30 B.C. E. and 1922 C. E.. Figure 1 shows my summary of the pattern they describe.
Figure 1. Shape of typical Secular Cycle, based on work of Peter Turkin and Sergey Nefedov.
Typically, a civilization developed a new resource which increased food availability, such as clearing a large plot of land of trees so that crops could be planted, or irrigating an existing plot of land. The economy tended to expand for well over 100 years, as the population grew in size to match the potential output of the new resource. Wages were relatively high.
Eventually, the civilization hit a period of stagflation, typically lasting 50 or 60 years, as the population hit the carrying capacity of the land, and as additional workers did not add proportionately more output. When this happened, the wages of common workers tended to stagnate or decrease, resulting in increased wage disparity. The price of food tended to spike. To counter these problems, the amount of government services rose, as did the amount of debt.
Ultimately, what brought the civilizations down was the inability of governments to collect enough taxes for expanded government services from the increasingly impoverished citizens. Other factors played a role as well–more resource wars, leading to more deaths; impoverished common workers not being able to afford an adequate diet, so plagues were more able to spread; overthrown or collapsing governments; and debt defaults. Populations tended to die off. Such collapses took place over a long period, typically 20 to 50 years.
For those who are familiar with economic theory, the shape of the curve in Figure 1 is very similar to the production function mentioned in Two Views of our Current Economic and Energy Crisis. In fact, the three main phases are the same as well. The issue in both cases is diminishing returns ultimately leading to collapse.
There seems to be a parallel to the current world situation. The energy resource that we learned to develop this time is fossil fuels, starting with coal about 1800. World population was able to expand greatly because of additional food production permitted by fossil fuels and because of improvements in hygiene. A period of stagflation began in the 1970s, when we first encountered problems with US oil production and spiking oil prices. Now, the question is whether we are approaching the Crisis Stage as described by Turchin and Nefedov.
Why Might an Economy Collapse?
Let’s think about how an economy operates. It is built up from many parts, over time. It includes one or more governments, together with the laws and regulations they pass and together with their financial systems. It includes businesses and consumers. It includes built infrastructure, such as roads and electricity transmission lines. It even includes traditions and customs, such as whether savings are held in gold jewelry or in banks, and whether farms are inherited by the oldest son. As each new business is formed, the owners make decisions based on the business environment at that time, including competing businesses, supporting businesses, and the number of customers available. Customers also make decisions on which product to buy, based on the choices available and the prices of these products.
Over time, the economy gradually changes. Some parts of the economy gradually wither and are replaced by new parts of the system. For example, as the economy moved from using horses to cars for transportation, the number of buggy whip manufacturers decreased, as did the number of businesses raising horses for use as draft animals. Customs and laws gradually changed, to reflect the availability of automobiles rather than horses for transportation. In some cases, governments changed over time, as increased wealth allowed more generous social programs and wider alliances, such as the European Union and the World Trade Organization.
In the academic field of systems science, an economy can be described as a complex adaptive system. Other examples of complex adaptive systems include ecosystems, the biosphere, and all living organisms, including humans. Because of the way the economy is knit together, changes in one part of the system tend to affect other parts of the system. Also, because of the way the system is knit together, the system has certain requirements–requirements which are gradually changing over time–to keep the economy operating. If these requirements are not met, the economy may collapse, just as the eight economies studied by Turchin and Nefedov collapsed. In many ways such a collapse is analogous to an animal dying, or climate changing, when conditions are not right for the complex adaptive systems that they are part of.
Clearly one of the requirements that an economy has, is that it needs to be wealthy enough to afford the government services that it has agreed to. Scaling back those government services is one option, but when these services are really needed because citizens are getting poorer and finding it harder to find a good-paying job, this is hard to do. The other option, unfortunately, seems to be collapse.
The wealth of an economy is very much tied to the availability of cheap energy. A huge uplift is added to an economy when the (value added to society) by an energy resource such as oil greatly exceeds its (cost of production). Over time, the cost of production tends to rise, something measured by declining EROI. The uplift added by the difference between (value added to society) and (cost of production) is gradually lost. Some would hypothesize that the falling gap between (value added to society) and the (cost of production) can be compensated for by technology changes and improvements in energy efficiency, but this has not been proven.
Our Economy is Already in a Precarious Position
As I indicated in my most recent post, if a person computes average wages by dividing total US wages by total US population (not just those employed), the average wage has flattened in recent years as oil prices rose. Median wages (not shown on Figure 2) have actually fallen. This is the same phenomenon observed in the 1970s, when oil prices rose. This is precisely the phenomenon that is expected when there are diminishing returns to human labor, as described above.
Figure 2. Average US wages compared to oil price, both in 2012$. US Wages are from Bureau of Labor Statistics Table 2.1, adjusted to 2012 using CPI-Urban inflation. Oil prices are Brent equivalent in 2012$, from BP’s 2013 Statistical Review of World Energy.
The reason for the flattening wages is too complicated to describe fully in this post, so I will only mention a couple of points. When consumers are forced to spend more for oil for commuting and food, they have less to spend on discretionary spending. The result is layoffs in discretionary sectors, leading to lower wage growth. Also, goods produced with high-priced oil are less competitive in the world market, if sellers try to recoup their higher costs of production. As a result, fewer of the products are sold, leading to layoffs and thus lower average wages for the economy.
In the last section, I mentioned that the economy is a complex adaptive system. Because of this, the economy acts as if there are hidden laws underlying the system, parallel to the laws of thermodynamics underlying physical systems. If oil supplies are excessively high-priced, very few new jobs are formed, and those that are created don’t pay very well. The economy doesn’t grow much, but it does stay in balance with the high-priced oil that is available.
The Government’s Role in Fixing Low Wages and Slow Economic Growth
The government ends up being the part of the economy most affected by slow economic growth and low job formation. This happens because tax revenue is reduced at the same time that government programs to help the poor and unemployed need to grow. The current approach to fixing the economy is (1) deficit spending and (2) interest rates that are kept artificially low, partly through Quantitative Easing.
The problem with Quantitative Easing is that it is a temporary “band-aid.” Once it is stopped, interest rates are likely to rise disproportionately. (See the recent Wall Street Journal editorial,” Janet Yellen’s Greatest Challenge.”) Once this happens, the economy is likely to fall into severe recession. This happens because higher interest rates lead to higher monthly payments for such diverse items as cars, homes, and factories, leading to a cutback in demand. Oil production may fall, because the cost of production will rise (because of higher interest rates), while the amount consumers have to spend on oil will fall–quite possibly reducing oil prices. If interest rates rise, the amount the government will need to collect in taxes will also rise, because interest on government debt will also rise.
So we are already sitting on the edge, waiting for something to push the economy over. The Affordable Care Act (“Obamacare”) may provide a push in that direction. Inability to pass a federal budget could provide a push as well. So could a European Union collapse. Debt defaults are another potential problem because debt defaults are likely to increase dramatically, as economic growth shrinks, as discussed in the next section.
Debt is Major Part of our Current Precarious Financial Situation
If an economy is growing, it is easy to add debt. People find it easy to find and keep jobs, so they can pay back debt. Businesses and governments find that their operations are growing, so borrowing from the future, even with interest, “makes sense.”
It is as also easy to add debt if the economy is not growing, but there is an ample supply of cheap oil that can be extracted if increasing debt can be used to ramp up demand. For example, after World War II, it was possible to ramp up demand for automobiles and trucks by allowing purchasers to use debt to finance their purchases. When this increased debt led to increased oil consumption, it greatly benefited the economy, because the (value to society) was much greater than the (cost of extraction). Governments were able to tax oil extraction heavily, and were also able to build new roads and other infrastructure with the cheap oil. The combination of new cars, trucks, and roads helped enable economic growth. With the economic growth that was enabled, paying back debt with interest was relatively easy.
The situation we are facing now is different. High oil prices–even in the $100 barrel range–tend to push the economy toward contraction, making debt hard to pay back. (This happens because we are borrowing from the future, and the amount available to repay debt in the future will be less rather than more.) The problem can be temporarily covered up with deficit spending and Quantitative Easing, but is not a long-term solution. If interest rates rise, there is likely to be a large increase in debt defaults.
The Role of Energy Return on Energy Invested (EROI or EROEI)
EROI is the ratio of energy output over energy input, a measure that was developed by Professor Charles Hall. To calculate this ratio, one takes all of the identifiable energy inputs at the well-head (or where the energy product is produced) and converts them to a common basis. EROI is then the ratio of the gross energy output to total energy inputs. Hall and his associates have shown that EROI of oil extraction has decreased in recent years (for example, Murphy 2013), meaning that we are using increasing amounts of energy of various kinds to produce oil.
In previous sections, I have been discussing diminishing returns with respect to human labor. Oil and other energy products are forms of energy that we humans use to leverage our own human energy. So indirectly, diminishing returns with respect to the extraction of oil and other energy products, as measured by declining EROI, will be one portion of the diminishing returns with respect to human labor. In fact, declining EROI may be the single largest contributor to diminishing returns with respect to human labor. This will happen if, in fact, low EROI correlates with high oil price, and high oil prices leads to diminished wages (Figure 2). This may be the case, because David Murphy (2013) indicates that the relationship between EROI and the price of oil is in fact inverse, with oil prices rising rapidly at low EROI levels.
Contributors to Declining Return on Human Labor
Human labor is the most basic form of energy. We humans supplement our own energy with energy from many other sources. It is this combination of energy from many sources that is reflected in the productivity of humans. For example, we take it for granted that we will have tools made using fossil fuels and that we will have electricity to power computers. Before fossil fuels, humans supplemented their energy with energy from animals, burned biomass, wind, and flowing water.
What besides declining EROI of fossil fuels would lead to diminishing returns with respect to human labor? Clearly, the same problems that were problems years ago continue to be problems. For example, growing world population tends to lead to diminishing returns with respect to human labor, because resources such as arable land and fresh water are close to fixed. Greater world population means that on average, each gets person less. Oil production is not rising as rapidly as world population, so the quantity available per person tends to drop as world population rises.
Soil degradation is another issue, according to David Montgomery, in Dirt: The Erosion of Civilizations (2007). Declining quality of ores for metals is another issue. The ores that are cheapest to extract are extracted first. We later move on to poorer quality ores, and ores in less accessible locations. These require more oil and other fossil fuels for extraction, leaving less for other purposes.
There are other more-modern issues as well. Growing populations in areas where water is scarce lead to the need for desalination plants. These desalination plants use huge amounts of fossil fuel resources (oil in the case of Saudi Arabia) (Lee 2010), leaving less energy resources for other purposes.
Globalization is another issue. As the developing world uses more oil, less oil is available for the part of the world that historically has used more oil per capita. The countries with falling oil consumption tend to be the ones that recently have had the most problems with recession and job loss.
Figure 3. Oil consumption based on BP’s 2013 Statistical Review of World Energy.
An indirect part of diminishing returns with respect to human labor has to do with what proportion of the citizens is actually able to find full-time work in the paid labor force, and whether the jobs available are actually using their training and abilities. The Bureau of Labor Statistics calculates increases in output per hour of paid labor. I would argue that this is not a broad enough measure. We really need a measure of output peravailable full-time worker.
Obviously, there are potential offsets. We hear much about technology improvements and increased efficiency offsetting whatever other problems may occur. To me, the real test of whether there is diminishing returns with respect to human labor is how wages are trending, especially median wages. If these are not keeping up with inflation, there is a problem.
We don’t often think about the return on human labor, and how the return on human labor could reach diminishing returns. In fact, human labor is the most basic source of energy we have. Stagnating wages and higher unemployment of the type experienced recently by the United States, much of Europe, and Japan look distressingly like diminishing returns to human labor.
Stagnation of wages is happening despite attempts by governments to prop up the economy using deficit spending, artificially low interest rates, and Quantitative Easing. Without these interventions, the results would likely be even worse. If QE is removed, or if interest rates rise on their own, there seems to be a distinct possibility that these countries will be reaching the “crisis” phase as described by Turchin and Nefedov.
Historical experience suggests that a major danger of diminishing returns to human labor is that governments costs will rise so high, and wages will drop so low, that it will be impossible for the government to collect enough taxes from wage-earners. In fact, there seems to be evidence we are already headed in this direction. Figure 4 (below) shows that the US ratio of government spending to wages has been rising since 1929. Government receipts have leveled off in recent years.
Figure 4. Based on Table 2.1 and Table 3.1 of Bureau of Economic Analysis data. Government spending includes Federal, State, and Local programs.
Adding more health care services under the Affordable Care Act will only increase this trend toward growing government expenditures.
One issue is how the financial benefit of human labor (together with the energy sources leveraging this labor) is split among businesses, governments, and humans. Businesses have the most control in this. If an endeavor is not profitable, they can discontinue it. If cheaper labor is available elsewhere, they can cut hold down wages in countries with higher wages. They also have the option of increased mechanization. Humans and governments both tend to get shortchanged. As the overall return of the system reaches limits, wages of humans tend to stagnate. Governments find themselves with greater and greater costs, and more and more difficulty collecting funds from increasingly impoverished citizens.
Most authors of academic articles assume that the challenge we are facing is one that can be solved over the next, say, fifty years. They also seem to believe that the fixes required are simply small adjustments to our current economy. This assumption seems optimistic, if we are really approaching financial collapse.
If we are in fact near the crisis stage described by Turchin and Nefedov, we will need to do something much closer to “start over”. We need to build a new economy that will work, rather than just “tweak” the current one. New (or radically changed) government and financial systems will likely be needed–ones that are much less expensive for taxpayers to fund. We are also likely to need to cut back on basic services, including maintaining paved roads and repairing long-distance electricity transmission lines.
Because of these changes, whole new ways of doing things will be needed. EROI analyses that have been to date represent analyses of how our current system operates. If major changes are needed, their indications may no longer be relevant. We cannot simply go backward, because methods that worked in the past, such as using draft horses and buggy whips, will no longer be available without a long development period. We are truly facing an unprecedented situation–one that is very hard to prepare for.
London, UK – The poet William Blake described Britain’s landscape as a “green and pleasant land” but much of the countryside – from the mighty oak tree to the humble hedgehog – are at serious risk.
Conservation groups and scientists have warned in an alarming report that a staggering 60 percent of UK plant and animal species have declined in recent decades, while more than 10 percent are at risk of being lost entirely.
Intensive farming, sprawling urbanisation and climate change as well as an invasion of species and diseases from abroad are combining in a perfect storm to threaten Britain’s fragile natural environment.
The State of Nature, a report compiled by a coalition of 25 conservation groups working together for the first time, warns that wildlife in the UK is under serious threat.
|Common species like the lesser spotted woodpecker, barbastelle bat and hedgehog are vanishing before our eyes.
-Dr Mark Eaton, conservation scientist
Its lead author, Dr Mark Eaton, a principal conservation scientist at the Royal Society for the Protection of Birds (RSPB), said: “This report reveals that the UK’s nature is in trouble – overall we are losing wildlife at an alarming rate. These declines are happening across all countries and UK overseas territories, habitats and species groups, although it is probably greatest amongst insects, such as our moths, butterflies and beetles.”…
- Green compensation scheme outlined (bbc.co.uk)
- We must grow the rural economy and improve the natural environment (economicvoice.com)
- Kill, or to kill for? (ecologyblogger.wordpress.com)
- What is Ecocide? (wildlawdoc.wordpress.com)