Fracking and drilling and fuels! Oh my!

Remember the sudden sense of crisis sparked in the US and elsewhere by the surge in fuel prices a few years ago? No? Hardly anyone else does either. Thanks to hydraulic fracturing and horizontal drilling, America manages to extract great quantities of hydrocarbons from areas previously off limits, so much so that US oil production has increased from 5 to 7.75 million barrels per day.

Richard Heinberg recently published an interesting piece on why the problem hasn’t been solved, so much as kicked further down the road.

He says that, when it comes to energy productions, the important numbers aren’t gross but net – not simply how much energy you generate but also how much energy you expend in doing so.

Fossil fuels underpinned a massive rise in living standards because, initially at least, they could be harnessed with very little effort. You got a lot of energy and you used very little in getting it. The cliché of newly discovered oil reserves geysering from the earth stems from the early days of the industry, when the first reservoirs were being tapped. Today, the gushers have long since gone, and fresh deposits depend on complex, expensive and destructive techniques like fracking.

Heinberg argues:

We’ll never run out of any fossil fuel, in the sense of extracting every last molecule of coal, oil, or gas. Long before we get to that point, we will confront the dreaded double line in the diagram, labeled ‘energy in equals energy out.’ At that stage, it will cost as much energy to find, pump, transport, and process a barrel of oil as the oil’s refined products will yield when burned in even the most perfectly efficient engine.

He claims the process is already well underway.

When America’s current gross oil production numbers appear rosy, from an energy accounting perspective the figures are frightening: Energy profit margins are declining fast.

Each year, a greater percentage of U.S. oil production comes from unconventional sources – primarily tight oil and deepwater oil. Compared to conventional oil from most onshore, vertical wells, these sources demand much higher capital investment per barrel produced. Tight oil wells typically require directional drilling and fracking, which take lots of money and energy (not to mention water); Initial production rates per well are modest, and production from each tends to decline quickly. Therefore, more wells have to be drilled just to maintain a constant rate of flow. …[I]t will soon take all the drilling the industry can do just to keep production in the fracking fields steady. But the plateau won’t last; As the best drilling areas become saturated with wells and companies are forced toward the periphery of fuel-bearing geological formations, costs will rise and production will fall. When, exactly, will the decline begin? Probably before the end of this decade. […]

All net new production during the 2005–13 period came from unconventional sources; of the $4 trillion spent, it took $350 billion to achieve a bump in production. Subtracting unconventionals from the total, world oil production actually fell by about a million barrels a day during these years. That means the oil industry spent over $3.5 trillion to achieve a decline in overall conventional production.

Last year was one of the worst ever for new discoveries, and companies are cutting exploration budgets.

Not knowing anything about the oil industry, I’m not in a position to assess these figures or forecasts. Nonetheless, you don’t have to be an expert to recognise how the unplanned exploitation of a finite resource inevitably trends to disaster, not simply because fossil fuels won’t last for ever but because those with a vested interest in pretending they will pose a tremendous obstacle in developing alternatives.

In some ways, that’s the most interesting – and depressing – part of the Heinberg piece.

He writes:

[I]t will take a lot of effort to minimize the human impact of a societal shift from relative energy abundance to relative energy scarcity. In fact, there is virtually no discussion occurring among officials about the larger economic implications of declining energy returns on investment. Indeed, rather than soberly assessing the situation and its imminent economic challenges, our policymakers are stuck in a state of public relations-induced euphoria, high on temporarily spiking gross U.S. oil and gas production numbers.

Not coincidentally, he might also be describing the official refusal to discuss seriously responses to the related problem of climate change.

The description’s sobering but not unexpected. We all understand the tremendous power the fossil fuel industry and its apologists wield.

But what’s more important is the contrast between Heinberg’s detailed diagnosis of the problem and the paucity of the solution he prescribes.

What would the world look and feel like if we deliberately and intelligently nudged the brakes on material consumption, reduced our energy throughput, and relearned some general skills? Quite a few people have already done the relevant experiment.

Take a virtual tour of Dancing Rabbit ecovillage in northeast Missouri. or Lakabe in northern Spain. But you don’t have to move to an ecovillage to join in the fun; there are thousands of transition initiatives worldwide running essentially the same experiment in ordinary towns and cities, just not so intensively.

All of these efforts have a couple of things in common: First, they entail a lot of hard work and (according to what I hear) yield considerable satisfaction. Second, they are self-organized and self-directed, not funded or overseen by government.

The latter point is crucial—not because government is inherently wicked, but because it’s just not likely to be of much help in present circumstances. That’s because our political system is currently too broken to grasp the nature of the problems facing us.

Quite simply, we must learn to be successfully and happily poorer. For people in wealthy industrialized countries, this requires a major adjustment in thinking. When it comes to energy, we have deluded ourselves into believing that gross is the same as net. That’s because in the early days of fossil fuels, it very nearly was. But now we have to go back to thinking the way people did when energy profit margins were smaller. We must learn to operate within budgets and limits.

This means decentralization, simplification, and localization. Becoming less reliant on long-term debt, paying as we go. It means living closer to the ground, learning general skills, and keeping a hand in basic productive activities like growing food.

Think of our future as the Lean Society.

We can make this transition successfully, if not happily, if enough of us embrace Lean Society thinking and habits. But things likely won’t go well at all if we continue to hide reality from ourselves with gross numbers that delay our adaptation to accelerating, inevitable trends.

What we have here is, essentially, a return to the old tradition of utopian socialism, albeit with a post-carbon twist. And it’s simply not good enough.

This is not meant as an attack on Heinberg per se, because I doubt anyone else could do much better. There’s no serious public debate about the possibility of life after capitalism – and that means even the most sophisticated critiques tail off into embarrassing naiveties, groping blindly back to the ideological flotsam and jetsam of the nineteenth century because that’s all that seems available.

Obviously, you can trace the problem (at least in part) from the collapse of the tradition that provided the most obvious alternative, Marxism.

The Marxist response to these kind of ‘back to nature’ utopian projects (which have been around in almost exactly this form since at least the eighteenth century) rested on two pillars.

Firstly, it provided a theoretical explanation of why they inevitably failed (if they were small, they either meant an atavistic retreat to the poverty of self-sufficiency or simply a more collective form of capitalist exploitation or both; if they were more ambitious, they came into conflict with the capitalist state).

Secondly, it offered the contrast of an actually-existing alternative, a utopia that had more attractive power than non-Communist alternatives because it was supposedly working, governing some of the most powerful nations on earth.

Clearly, that second aspect is a busted flush, even for anti-Stalinists. Yes, you can make a distinction between the heroic phase of the Russian revolution and the genocidal cruelty unleashed by Stalin but a few airy references to the workers’ councils immediately after the uprising do not suffice as a convincing model in the way that, say, what Hewlett Johnson called ‘the socialist sixth of the world’ did. No-one reads about the starving, militarised Petrograd of 1920 and thinks, yes, that’s what I’d like Australia to be like.

But if Marxism no longer functions as a utopia itself, that doesn’t lessen the force of its critique of utopian thinking. Robert Owen and Edward Bellamy do not become more persuasive just because the Berlin Wall came down – and neither do their twenty-first century incarnations.

We need to renew the debate about alternatives to capitalism, as a matter of urgency. Yes, there are still wiseacres who snigger at the very notion of a post-capitalist world but the extraordinary success of Thomas Piketty’s Capital in the Twenty First Century (when was the last time a book of economic theory topped the NYT bestseller lists?) suggests the shift that’s taking place.

Yet the new thinking we need cannot simply pretend the past never happened. We need a discussion that takes into account the hard-won knowledge acquired by previous generations, rather than one proceeding as if those old debates had never taken place.

The Left needs, in short, to reclaim its history and to bring it into the mainstream. No, there are no ready-made answers waiting to be recycled for today. But the mistakes of the past are just as important as the successes – and the situation today’s too dire to waste more time making the same errors again.

Jeff Sparrow

Jeff Sparrow is a Walkley Award-winning writer, broadcaster and former editor of Overland.

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  1. The reference to Petrograd in 1920 is a truly bizarre analogy. Russia prior to the revolution of 1917 was a nation with large swathes of the population still mired in a way of life closer to the Middle Ages than the 20th century. It was also riven by civil war and then besieged by several imperialist nations. Not surprisingly it was a difficult time with a much lower standard of living than 21st century Australia.

    The reason Marxists point to it is the success the worker’s councils (soviets) had in breaking the power of capital and the state and which allowed the working class in alliance with the peasantry to take power for the first time in history. That this power was not sustained is due to the specific historical circumstances and not an inherent flaw in the process itself, which has been replicated in every major uprising since.

  2. Um. Isn’t that exactly my point? Riven by civil war, besieged by several imperialist nations … like I said, no-one looks at that and says, huzzah, I’d like some of that.

  3. No they don’t, but those conditions are historically specific and not determined by the process of revolution including the forming of worker’s councils.

  4. Splitting hairs, but Heinberg’s projected future reads more arcadian than utopian to me, a sort of wordy (literary) individualism rather than socialism (Thoreau and his ilk), perhaps?

  5. I completely sympathise with your plea for an open and historically informed discussion in the Left about our collective future. But why don’t you write about what you think post-capitalism might look like and how you think we should/could get there rather than whinge about people (like me) who believe in ‘decentralisation, simplification and localisation’?

    Happy to debate you but, if my position automatically puts me in the grave before I open my mouth, then there’s not much to say — you won’t listen. Still, happy to read and respond to your ideas for our future, which BTW are utopian by definition and therefore a primary reason Leftists traditionally ban themselves from indulging in such discussion — a ‘mistake of the past’ or ????

    Pratyush Chandra interviewed me for Radical Notes on our Life Without Money book taking such a tack. His first question was: “Isn’t the title itself sufficiently utopian? In fact, the whole collection seems to present an explicit defence of the utopian element in the socialist project. How do you relate this utopianism to the scientificity that the critique of political economy claims? Aren’t we being prescriptive, which Marx tried to avoid all his life?”

    You might cut to the chase by reading my response to him first — see — but, more importantly than that, I really would like a constructive discussion about what you, and others who want a socially just and environmentally sustainable Earth, think would be good and what might work. So if you just want to start there that is fine.

  6. that is a bit odd, for a couple of reasons- there seems to be a vast amount of discussion about this stuff around at the moment, from the p2p movement, to (erk) ‘commonism’ to zero marginal cost, to reprap, etc etc. all these are anti-scarcity visions of post-capitalism, being extensively debated.

    piketty by contrast is no post-capitalist, far as i can see – a social democrat arguing for redistribution. cant see how his social vision is much more than post-war UK or scandinavia.

    agreed that his popularity marks a new appetite for system critique – but not a vision beyond. the stuff mentioned above – and its popularisation in rifkin’s new book – seems the sort of discussion yr calling for, already cooking along

    1. Piketty’s book sounds like quite the indictment of socdem reformism to me.

      As I understand it his analysis suggests that despite the efforts of the reformist Left since about 1960, nothing short of global warfare has ever really “civilised” capital and no political action within the existing system is likely to prevent the continued concentration of wealth in the hands of a tiny elite.

      His prescription for redistribution by taxation is a political impossibility, in the Anglosphere at least …

  7. The point I was trying to make is that arguments about, say, the depletion of oil are rigorously researched and documented and yet, in the mainstream public sphere at least, they very often end with a reference to an alternative that comes across as almost entirely throwaway. There’s not sense of a debate about a future conducted with any of the rigour of a debate about science. In particular, the history of various post capitalist ventures feels like it’s been completely effaced, as if this debate is entirely starting again from scratch. I don’t see that any of guy’s examples contradict that. In fact, the milieu he mentions is particularly noteworthy for not seeing itself as part of any tradition.
    I take your point, Anitra, that you have done a lot of work on these arguments. But surely the basis of that work is precisely along the lines that I’m suggesting — that there’s a need to get this kind of debate (irrespective of whether we agree on the precise position) into the mainstream, precisely because it’s so entirely excluded at the moment.
    As for Picketty, I haven’t read the book but from the reviews it’s clear that he’s not a post-capitalist. But that’s not really the issue. The success of his book surely indicates the extent of dissatisfaction with the status quo, a status quo that depends more and more on people thinking, well, things are crap but there’s no alternative.

  8. Jeff

    Your argument seems to shift within the posting. You’re arguing that detailed arguments about post-capitalism aren’t being publicly discussed – but you don’t mention any discussions that are happening just below the surface of that, instead referring back to Owen and Bellamy.

    I think it’s simply, demonstrably, wrong to say that post-capitalism isn’t being discussed all over the place, wrong to say that people coming to it from the new technologies aren’t consciously drawing on a range of traditions – Marxian full communism, Bookchin’s post-scarcity anarchism, Hayek’s critique of the ‘millions’, Freire, Allende and cybersyn, the Economic Democracy movement and so on.

    Furthermore, I’m not sure what people would refer back to, in more than passing. No-one’s proposing state socialism of any model, nor are they proposing atavistic communalism. Some of the thousands of people who are racing ahead with these new models have an idea of what has gone before, some don’t, but that’s how it is with every movement

    Well i agree with you to a degree – some of the examples I’ve given – such as the Rifkin – are simply restating things (such as the falling rate of profit) without realising, or acknowledging they’re doing so.

    But an enormous amount of it does draw on such traditions as exist, including Marx’s sketchy allusions to full communism, Bookchin’s post-scarcity anarchism, Stafford Beer’s Chilean cybersyn experiment and the like. Nor do i think that the transition towns movement in the UK is a lapse into atavistic communalism, despite Heinberg yoking it with various small communalist projects.

    So i think you’re misplacing the debate by simply refusing to engage in any detail with these projects or their writings. It’s a little magisterial and a little parochial not to – surely that would be a better starting point than saying that no-one’s discussing something, that, as far as I can see, people are discussing everywhere.

    There seems also a hint that the discussion should be had in a Marxist framework. I can see that Marxian analysis of capital, falling profit rates, labour-value vs time-value etc, are of considerable use – and it’s galling that people such as Rifkin can ‘rediscover’ them without acknowledgement – but let’s face it, Marx’s model of transitional socialism (a la COTGP etc) was as foolishly simpleminded as Owens’s barrack socialism, and his idea of communism was a young Hegelian fantasy.

    What histories and examples is it that you would want people to refer back to?

  9. Okay, so I get where you’re coming from better now Jeff but I still think it’s up to us. You’re right, lots of people who ought to know better are asleep, so let’s wake them up with our debates. Might this be the basis for a future special issue of Overland, future Overland event and/or theme to conscientiously follow through in these online posts? I’m happy to put my position and/or dialogue in detail with other people’s visions and suggested strategies for realising them.

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