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Why 95% of Traders Fail

The Long Descent – Peak Oil And Decline

Politics / Social Issues Aug 11, 2014 - 04:26 PM GMT

By: Andrew_McKillop


Western Decline Paradigm Redux
The current re-edited version of “The Long Descent” from New Society Publishers, by John Michael Greer was first published in 2008 when things looked mighty different for many things, including the economy. In 2008 oil briefly hit $147 per barrel in Nymex trading. Using the doctored US official CPI figures we would need over $160, or in real terms probably north of $170 to beat that today.

The two ASPO (Peak Oil Study Association) annual conferences preceding the 2008 run-up of prices were momentous events with huge press and media attention, and in the case of the Pisa conference had a delegation of ministers from Rome and over one hundred of their bodyguards in attendance. The 2006 peak oil event in the Cooper Union, NYC was likewise a massive multi-day event with total media coverage. Peak oil doom seemed credible – but was the 2008 run-up of oil prices a rush towards doom down a path greased or goosed by Goldman Sachs when it pushed Sem Group into receivership? That story was “Did Goldman goose oil prices?” and is easy to find on the Internet.

 I personally find it incredible that the time-worn paradigm of Western Decline - but only using the oil handle - is still being recycled in 2014. Greer's angle, basically, is that oil is the lifeblood of industry and without oil industrial civilization is finished.

The western decline paradigm can't be precisely dated as to its origins, but well before 1900 this genre-material was fully-fledged. We could even take the British science writer W. S. Jevons and his Coal Question of 1865 as an outrider. He subtitled his coal question as An Inquiry Concerning the Progress of the Nation and the Probable Exhaustion of Our Coal Mines. For sure and certain the fear of coal supplies running out accelerated the decision made by a young Winston Churchill to accelerate the shift of the British Navy's war fleet to oil fuel. It also triggered a British takeover of Iran with lasting sequels. Today's war fleets, and commercial shipping fleets are the focus of intense efforts to reduce or substitute their oil needs, including the re-use of coal!

Industrial Decline
After the 1914-1918 war, and in the 1930s Great Depression the declinist genre went “near-viral”. During the 1930s everything, including industry declined but it was hard to point the finger at oil as even a minor cause. The End of Empires moved to center-stage as the elite's key obsession and we can ask a few questions to John Michael Greer. Did the Roman Empire collapse because it ran out of oil? Did the Ottoman Empire disappear because it ran out of oil?

If we ask if the “American Empire” collapsed or is collapsing because of no more cheap oil we first have to believe there was an American Empire to start with. Where is it? Does it physically exist or are you are talking about Puerto Rico and Guam? If you are talking about Ukraine, go and see to Mr Putin about it! In any case the US now produces almost as much oil as Saudi Arabia or Russia and the USA's combined oil and gas output is well ahead of either of them. We can argue US and western civilization in general is declining with oil – not because of it.

For some reviewers, Greer is “beyond any doubt the greatest peak oil historian in the English language”. Oil decline is a long and twisting story and Greer is very economical on facts when it suits his purpose. His claimed personal status as Archdruid of the Ancient Order of Druids of America ( likely helps his strange writing style and frequent disinterest in reality as he recycles what was best assembled by Richard Duncan, well before year 2000, as the Olduvai Gorge theory ( One key supporter of Duncan's original thesis was Prince Charles of England but nobody talks about Tanzania's Olduvai Gorge any longer. The subject we could quip, has fallen off a cliff!
In brief, the Olduvai Gorge theory is post-industrial. The world's industries are “transient pulse” and are certain to end by the 2030's. Presumably all science and technology will be de-learned and forgotten. The decline will be mainly due to oil, coal and gas running out simultaneously, and after that we return to the Stone Age. William McDonough is generally credited with the saying that “The stone age didn't end because we ran out of stones. It ended because it was time for a rethink about how we live”. That isnt true but it is a nice one-liner.

Myth versus Myth
Greer's new version of “Long Descent” is described as fleshed out with additional examples and analysis. Casual bookstore browsers will find themselves attacked by “Greer’s mantra” on the future of industrial society – exclusively western, in fact - but Greer himself is able to complain that too many people are fixated on only two possible outcomes. These are business as usual and imminent apocalypse. Reconciling the two is impossible, but he tries.
People cling to polar opposites because of “existing cultural narratives” - that is two opposed and exclusive social paradigms – progress versus decline. The fundamental human reason for this is dialectical thought which takes us back to Parmenides and the late 6th century BC. Socrates said that Parmenides alone among the wise (Protagoras, Heraclitus,Empedocles, Epicharmus, and Homer) denied that existence is change and motion. He said reality is timeless and unchanging, and he was the father of dialectics. In other words any concept that you develop I can use to say the exact opposite.
The important point is that neither has to be true.

So Greer tries to square the circle by coining the term “catabolic collapse” as opposed to a purely theoretical concept of “anabolic collapse” which is oxymoronic – because it would mean collapse by larger and larger and more organized social entities being generated. Which is not collapse. Also he should note, catabolic reactions in our human bodies release energy, they do not dissipate it.

“The Long Descent” is styled as an attempt to help average readers make sense of the coming age of decline but as I already mentioned, decline paradigms are almost certainly hard-wired into our civilization like the others. The belief in progress and the fear of decline probably run together like ADN and RDN twin-strands in the human psyche.  When it concerns fast collapse, economic decline since 2008 is running so fast it is a lot easier to believe in than oil decline.

Greer's version of peak oil theory is described on the book jacket as “fleshed out” but his stuff on peak oil is rather skinny. Skeletal in fact. The “narrative” is unchanged since at latest 2008 and probably before. In fact his treatment of the subject is little different from Richard Duncan teetering on the edge of the Olduvai Gorge, first published in 1989.

The Long Emergency
The existence of polar opposite paradigms is certainly a predicament rather than a problem, which Greer uses over and over again to describe his oil-fired version of the Western Decline paradigm. He says that the predicament of peak oil is not a problem that we can solve. I say it will be self-solving but not necessarily through progress.

The Long Emergency by oil peakster Jim Kunsstler also treads the path to the Olduvai Gorge, but we can get there without oil. Many authors did it long ago, like Aldous Huxley or George Orwell. Huxley could be called “partly progressive” in his decline theory, for example on massive improvements in the efficacity of soft drugs to better control the masses. The progress-through-technology paradigm is a massively developed genre today, for example those who promote salvation by solar energy or by nanotechnology and the genetic re-engineering of food and fuel plants and microorganisms.

Talking only about oil or more precisely “hydrocarbon liquids”, a fast growing new genre of writing hails shale oil and shale gas fracking as salvation for industrial civilization. Greer of course calls this a band-aid and dismisses all “quick fixes”  because he thinks they will not be developed fast enough or they will not work – that is slow fixes will not head off his Long Emergency. Is this logical?

It would be educational for Greer to try the variable-speed fixes. The paradigm that he sets up says that some problems are only problems and therefore solvable, but predicaments like peak oil are impossible to solve. This is easy to call sophistry, a speaking trick rigorously criticized by Socrates a long time ago. The stratagem is to move the mental goalposts and get in a few easy goals because the keeper wasn't moved with the posts.

Greer like most other declinists heavily works the social psychology of decline, using more sophistry with his claim that because both the myth of progress and the anti-myth of apocalypse exist, this blinds our perception of real problems – that is predicaments!  Because we are hungry for Paradise or Disaster, we cannot accept Greer's Middle Way of Decline, where civilization heads for collapse in a gradual, downward step-by-step process of repeated crises and weakening recoveries. There is no sudden and catastrophic free fall of oil supplies although, quite amazingly, the International Energy Agency's more recent forecasts and statements on “long-term oil supply” can easily be interpreted as saying just that – by about 2035 or 2040.

The Price of Oil
What the IEA and Greer are saying in not-so-different ways is that oil has to get more expensive. The big problem is that oil is expensive already. This is not so much sophistry as rhetoric – which Socrates also heavily criticized. We are invited to believe that whatever the price of coal, natural gas, solar power or any other form of energy, oil will get more expensive – but we will go on using it! Back in 2008 for example, talk about oil at $250 per barrel was new normal. Today's oil fear is let us say $150 per barrel (of course depending on ISIS and “special factors”).

But natural gas in the USA at today's price of not even $4 a million BTU prices this gas at $23 per barrel equivalent. Put another way do you prefer whisky at $50 per bottle or $15 for a product, whisky, with a basic production cost of below $5 a bottle ? Certainly not remarked by Greer, the boom and bust in ethanol fuel production rising on the back of overpriced oil results in world ethanol production running at around 50 billion litres a year of 98-degree proof alcohol, enough to give every man, woman and child (if they drink alcohol) on the planet around 25 bottles each of 48-degree alcohol per year!

Aldous Huxley would certainly approve, but ethanol fuel output is now zero-growth because it is too expensive, takes too much land and water, and nobody wants that much alcohol.

Greer has to scenarize decades of economic contraction mainly driven by high oil prices and chronic energy shortage, alongside declining public health, political turmoil, and the wipeout of knowledge and culture. His scenario says the First Crisis will be followed by a respite of perhaps 25 years during which industrial civilization’s cutting down and back on its previous lavish oil demands caused by universal motoring, climate-controlled buildings, plastics and modern medicine and other facets of civilization will buy it some breathing room. Some but not enough. The crisis returns and the ride on the downward elevator resumes. Everybody tries to buy oil, whatever its price.

The long emergency gets longer because Greer's end-times civilization at the bottom of the Olduvai Gorge - an agrarian civilization built around local communities and sustainable resources – will take so long to happen that, he says, no one alive today will be around to see the end result. This of course is simply another dose of sophistry because it enables Greer to start talking about what we should do in the “between times” preceding the end-times.

Other Times
Anybody who wants to can check my long article “The Pangea Resource Mountain”.  Falling off that mountain would be vastly more impressive, and difficult, than falling off the Olduvai Gorge! Carbon resources of this planet – which do not not instantly equate to carbon energy resources – are insanely massive. The reason is stellar physics and that is rather fundamental. You can check up the C-N-O sequence of spallation and other processes. The right kind of GRB-gamma ray burst hitting our planet could trigger a massive and almost instant – possibly only a few minutes – transformation of the Earth's atmosphere by the C-N-O sequence.
Since 2008 a lot has happened, not only in energy. With a global warming handle to hide the Oil Fear label, low carbon energy and energy saving are now a new paradigm, not only in the developed countries. India for example simply used a government edict or decree to outlaw all use of any fuel but natural gas for public transport and taxis in New Delhi. We can do the same.

Claims by writers like Greer that “oil shortage” was a major driver of the 2008 economic crisis are just that – claims that I dispute – but since 2008 energy demand and especially oil demand is very slow growing. The outright decline of western civilization, in countries that have been de-industrializing for a long time, is not easy to pin on the spectre or myth of rare-and-therefore-expensive oil. 

Greer unsurprisingly tells us we have to “revitalize antique tools”, such as wooden ships and fireless cookers – and why not Zeppelin airships? He talks a little bit about urban utilities and their redesign, but as I work in that area myself I can say that both for greenfield and “rehab” or urban rehabilitation projects we can easily cut energy demand by at least 60% for the same quality and reliability of urban services, with no cost penalties. He of course features organic farming as a solution to industrial food production but here again things are moving fast, and not exclusively because oil is overpriced.

The final part of his book shifts to the spiritual dimension of the changes ahead. Nowhere does he seriously discuss the politics of change. His simplistic claim is that when human labor again becomes cheaper than machines, people will relearn presently-forgotten skills and will abandon consumerism in favor of “more spiritually fulfilling pursuits”. Without the energy slaves, back to slavery!

Greer is right for once when he says people will lose faith in the religion of progress, but this is above all political and it has already happened. The real world effects even include ISIS and the Flash Mob, which are uber-political. He is right to say that when people lose faith in the religion of progress they shift back to existing religions, but they also change in other ways.

Saying that all this is caused and driven by peak oil is a fantastic claim. What we have, in fact, is one more decline paradigm that has emerged and mutated in front of our noses.

By Andrew McKillop


Former chief policy analyst, Division A Policy, DG XVII Energy, European Commission. Andrew McKillop Biographic Highlights

Co-author 'The Doomsday Machine', Palgrave Macmillan USA, 2012

Andrew McKillop has more than 30 years experience in the energy, economic and finance domains. Trained at London UK’s University College, he has had specially long experience of energy policy, project administration and the development and financing of alternate energy. This included his role of in-house Expert on Policy and Programming at the DG XVII-Energy of the European Commission, Director of Information of the OAPEC technology transfer subsidiary, AREC and researcher for UN agencies including the ILO.

© 2014 Copyright Andrew McKillop - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisor.

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