Wishful thinking now runs so thick and deep across the USA that our hopes for a credible future are being drowned in a tidal wave of yellow smiley-face stories recklessly issued by institutions that ought to know better.
A case in point is the Charles C. Mann’s tragically dumb cover story in the current Atlantic magazine — “WE WILL NEVER RUN OUT OF OIL” * — setting out in great detail the entire panoply of techno-narcissistic “solutions” to our energy predicament.
Another case in point was senior financial writer Joe Nocera’s moronic op-ed in last week’s New York Times beating the drum for American “energy independence.”
You could call these two examples mendacious if it weren’t so predictable that a desperate society would do everything possible to defend its sunk costs, including the making up of fairy tales to justify its wishes. Instead, they’re merely tragic because the zeitgeist now requires once-honorable forums of a free press to indulge in self-esteem building rather than truth-telling.
It also represents a culmination of the political correctness disease that has terminally disabled the professional thinking class for the last three decades, since this feel-good propaganda comes from the supposedly progressive organs of the media — and, of course, the cornucopian view has been a staple of the idiot right wing media forever.
We have become a nation incapable of thinking, or at least of constructing a consensus that jibes with reality. In not a very few years, the American public will be so disappointed and demoralized by broken promises like these that they will turn the nation upside down and inside out, probably with violence and bloodshed.
Charles Mann’s Atlantic article begins by cheerleading for the mining of methane hydrates from the ocean floor. These are natural gas molecules trapped in ice formations in the muck around the continental shelves. Mann spotlights the efforts of a Japanese research ship conducting tests.
Guess what: the Japanese are engaging in this because they have absolutely no fossil fuels of their own, and a failing consensus about nuclear power, and they are on a course to become the first advanced industrial nation to be forced to return to a medieval economy. That is, they are the most desperate among the desperate. You could say they’ve got nothing to lose (but a few billion of their rapidly depreciating Yen).
Methane hydrates are stable only at extreme pressures or very low temperatures. They also exist in the arctic permafrost- for instance – Siberia, where conventional natural gas drilling operations have been carried out for decades, with no contributions from methane hydrates.
Undersea methane hydrate exploration projects have gone on for decades in the US, Canada, India, Russia, China, and Japan. The hope is that this so-called “hot ice” would turn out to be the gas equivalent of tar sands, which would mean at best a very expensive way to get more fossil fuels as the conventional sources dry up.
That hope has dimmed in nations other than extremely desperate Japan. Like a lot of techno-wonders, the recovery of methane hydrates can be demonstrated on the “science project” scale. For now, no viable technique exists for getting commercially-scaled streams of natural gas out of methane hydrates.
The Japanese themselves state that it would take at least ten years, if ever, to commercially mine methane hydrates. Japan doesn’t have ten years. It’s banking system is imploding, and without capital even the science projects will come to an end.
Charles Mann is equally rapturous about shale oil and gas. He writes:
“Today, though, fracking is unleashing torrents of oil in North Dakota and Texas–it may create a second boom in the San Joaquin Valley–and floods of natural gas in Pennsylvania, West Virginia, and Ohio. So bright are the fracking prospects that the U.S. may become, if only briefly, the world’s top petroleum producer. (“Saudi America,” crowed The Wall Street Journal. But the parallel is inexact, because the U.S. is likely to consume most of its bonanza at home, rather than exporting it.)”
This is very misleading. The US consumes roughly 19 million barrels a day. The Bakken and Eagle Ford shale formations produce about a million barrels a day combined now, and guaranteed to get a whole lot lower within the next five years.
Today’s near-peak production is based on furious drilling and fracking of extremely expensive wells — known as “the Red Queen syndrome”, because they are running as fast as they can to keep production up. Meanwhile, the depletion curve on shale oil is a reverse “hockey stick.”
The situation is similar for shale gas, the difference being that the temporary glut of 2005 – 2012 happened because we didn’t have the means to export surplus gas from the initial burst of development and it briefly flooded the domestic market. The price of shale gas is still below the level that makes it economic to produce and when it eventually rises to that level, and beyond, it will be too expensive for its customers to buy. Shale gas is also subject to the Red Queen Syndrome.
These arguments have been well-rehearsed many times in this blog and elsewhere. But the key to understanding our energy predicament is ignored in cornucopian cases like Charles Mann’s Atlantic piece, which is the role of capital.
Non-cheap oil has already worked its hoodoo on advanced industrial economies: it has already destroyed the process of capital formation.
These economies were not designed to run on non-cheap oil and they can’t
… and the capital is no longer there for even the research-and-development to change out the infrastructure, let alone carry out any as-yet-undesigned changes.
Furthermore, there is no prospect that we can rescue the process of capital formation at the scale required to continue financing things like shale oil.
The absence of real growth in the USA, Europe, and Japan has already destroyed the operations of interest and repayment of debt, and any new debt issued will never be repaid, meaning it is functionally worthless (we just don’t know it yet). These impairments of capital formation have left the major commercial banks insolvent and central banks have worked tirelessly to rescue them by issuing more “money” in the form of credit that can never be paid back.
What all this means is that the capital does not exist to run non-cheap oil economies, or to continue indefinitely the production of non-cheap oil and gas, not to mention methane hydrates and other fantasy fuels.
JOE NOCERA’S OP-ED in last week’s New York Times was shorter and even dumber (and lazier) than Charles Mann’s foolish Atlantic article. It was based on remarks made by Canada’s Energy Minister, Joe Oliver, who said (among other patently false and idiotic things) that Canada “has the resources to meet all of America’s future needs for oil.”
Oliver was pimping for the Keystone pipeline project to transport tar sands byproducts from Alberta down to the US. Nocera swallowed everything Oliver said whole, such as “oil mined from the sands is simply not as environmentally disastrous as opponents like to claim.”
Is that so, Joe? And what’s your source for that assertion? Canada’s Energy Minister?
The slug at the bottom of Nocera’s column said he was invited onto the op-ed page because regular columnists Gail Collins and Nicholas Kristoff were off (or on book leave). Nocera’s column was disgracefully ignorant. The editors should send him back to the Times business section where unreality is the order-of-the-day.
Now, many people may draw the conclusion that some conspiracy is underway when the major mainstream media report the news so disingenuously, but that is just not so. The reason we, in effect, lie to ourselves incessantly is because of the master wish behind all the subsidiary wishes:
We want to keep driving to WalMart forever
and we can’t imagine any other way of life
let alone the way of life that the contraction of industrial economies is tending toward
which is to say a way, way downscaled and re-localized economic life centered on farming and artisanal manufacture.
Yes, we are going medieval too, eventually, just like the Japanese, who will get there a little sooner than we will. It’s hard to swallow, I’m sure. That’s why we prefer the more digestible propaganda gummi bear treats like Charles Mann’s Atlantic article and Joe Nocera’s stupid op ed.
* This was the title on The Atlantic’s cover. Charle’s C. Mann’s article inside was titled “Why We Will Never Run Out of Oil.” Shame on the editors of The Atlantic.
For a complete list of books by James Howard Kunstler and purchase links, CLICK HERE.