At last Thursday’s Detroit Area Peace and Justice Network meeting, we were discussing how institutional corruption of the financial system is both allowed and created by corporate control of the political system. Some see this as the principal cause of our economic crisis, a crisis from which ordinary working people have not begun to recover.
The discussion grew out of comments on the documentary, “We’re Not Broke,” which clearly describes financial fraud and tax avoidance. Transition Ferndale showed the film in August of 2012. A group in Livonia showed it more recently.
Political corruption and corporate control are certainly realities, but they are not the only cause of the current economic crisis. The United States has been winning battles and losing the war for energy (mostly oil, in the shooting wars so far) for several decades.
For 250 years or so, prosperity for ordinary people has been generated by a growing economy which grows by using more and more cheap energy. For most of these years, more cheap energy – coal, then oil and gas, then nuclear – has been readily available. Economic theory and political practice both hold that economic growth is essential.
Over recent decades, there have been two major problems with growing the economy in that fashion. US energy consumption per capita was on a steady upward trend from 1950 until the late 1970s. It hit a peak around 1979-1980, and has been flat or trending slightly downward since – exactly like real wages have been flat or trending downward since 1980. Since 2008, the downward trends for both energy and real wages picked up speed.
One obstacle to consuming ever more energy is that our energy use is ruining the natural environment. The concentration of atmospheric carbon dioxide which allowed the climate in which our civilization developed over the last 10,000 or so years has gone way out of balance, leading to both acidification of the oceans and increasingly drastic climate change.
The type and scale of industrial pollution has grown with the industrial economy so that it can’t be covered in a single book, let alone a sentence or a paragraph. Every person alive today carries in their body detectable amounts of a hundred or more chemicals unknown before the 20th Century, and varying amounts of fallout from nuclear testing and other nuclear disasters.
In terms of further ruining the environment, which is in fact our life support system, reviving the high-energy economy would be a disaster. Just keeping the existing economy operating as it is, without growth, makes the disaster a little slower, but not slow enough to make a noticeable difference to the seventh generation. Instead of reviving the old economy, we really should do something entirely different.
The second problem with with growing the economy we actually have is that more energy, in the traditional forms needed by our legacy infrastructure, is not readily available. Because the traditional sources for over 90% of industrial energy are noticeably depleted, none of them are cheap. The bad news here is the same as the good news: It is just not possible to grow the industrial economy in the traditional way – more cars, more planes, more houses, more everything and more energy to run all the machinery.
It’s obvious to every individual who fills a tank weekly that we can’t afford to use as much gasoline. It should be obvious to everyone in DAPJN that we also can’t afford endless wars for oil and other resources. We can’t afford it economically, or morally, or politically. The permanent war is as corrosive to democracy as the excess carbon dioxide in the oceans is corrosive to the shells of oysters and lobsters.
Forbes and Fortune and such publications are loaded with stories praising increasing production of oil on this continent. Conventional production of oil is actually declining, even with application of a variety of techniques for enhanced oil recovery.
The increase is coming partly from the tar sands of Alberta. What they mine is not exactly oil. It’s bitumen, which is more like asphalt than the liquid ‘black gold’ with which John D. Rockefeller made his family’s fortune. Still, bitumen can be diluted with solvents and shipped in trains or pipelines to refineries. The refineries can turn it into standard liquid fuels.
Unfortunately, refining tar sands bitumen leaves the refineries, such as Detroit’s Marathon refinery, with a nasty waste product called petroleum coke, or “petcoke” if you want to make it sound more harmless. We now have small mountains of petroleum coke stored on the banks of the Detroit River near the Ambassador Bridge.
Mining and processing and refining tar sands bitumen, and disposing of the waste, results in more – repeat, more – carbon dioxide emissions than getting the same amount of energy from coal. It costs more to make the fuel than pumping and refining conventional oil. Only the high price of fuel makes it profitable to use tar sand bitumen.
The other part of the increase in American production of oil comes from fracking. North Dakota, and the Barnett shale region of Texas, and the Irish Hills region of Michigan are three places where frack wells are mainly drilled for oil, not natural gas. In other places, such as the Marcellus shale in Pennsylvania and Ohio or the Collingwood shale in Michigan, the frackers are looking for natural gas.
Whether the target is oil or gas, fracking uses up enormous quantities of fresh water. This creates enormous quantities of flowback water permanently contaminated with hazardous and toxic chemicals plus salt and varying amounts of radioactive minerals leached out of the shale. The waste water is not always disposed of properly – and even when it is, the disposal causes earthquakes.
Fracking for oil or gas is like tar sands mining, profitable only if fuel prices are high. It’s also like tar sands in that because the energy used in the process (including a thousand or more truck trips for one fracking operation) plus leakage of methane makes fracked gas and oil worse than coal in terms of greenhouse gases released per unit of energy.
Coal is, for the moment, relatively cheap in dollar terms. This means coal mining companies are allowed to shift environmental costs to the current public and to future generations.
We all know that nuclear energy is astoundingly expensive, even without counting the cost of meltdowns such as Fukushima and Chernobyl. The projected $15 billion cost of building Fermi 3 works out to roughly $3000 for every household in Michigan – and not every household in Michigan would get electricity from Fermi 3.
The summary is, cheap energy for the old pattern of economic growth has not been a reality for some time. It is not on the horizon, and it is not going to be. Reviving the old economy with cheap energy is simply not going to happen.
It might be that the corporate looting which has become so prevalent is a result of the wealthy using their political power to maintain their wealth at the expense of everyone else, when growth of the real economy proves impossible. That’s why the message of Occupy Wall Street was so correct, even if their organizational format was not durable. The 1% are in fact impoverishing the 99%.
The point is, if we are hoping for a revival of the economy, we are hoping for a fairy tale to come true. The old economy – McMansions, cars and air travel for everyone – is not going to revive. It does not matter how many people believe in this particular fairy, and cheer, and keep applauding.
The economy we have inherited is not sustainable even in its current no-prosperity mode. The old politics of chosing between two parties arguing over which one will be best at growing the economy is as nonsensical as chosing between McDonalds or Burger King for healthy meals. The correct choice is neither.
We need, somehow, to create a different economy. It will have to be low-energy, low-pollution, high-employment, more local than global and way more egalitarian than today’s corporate economy. Reducing energy use and using clean energy sources are essential steps in that direction, and we need to keep going in that direction for decades – even while the old fossil fuel and nuclear power economy is shrinking.
That’s why Ferndale, like thousands of other communities, needs an energy descent plan. Ferndale, like thousands of other communities, is going to have less and less energy available in coming decades. Some of us will deny it, and thus will be surprised and disappointed as it happens. The rest of us are able to plan for it now, and adapt while we have some resources with which to adapt.