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Context Four: Oil and Empire

There is one commodity unlike any other: oil.

Standard-issue economists tend to treat oil/fossil fuels as a commodity like any other; when demand rises, new or alternative supplies will emerge once they become profitable. But this model is utterly misleading, for liquid hydrocarbons are special in three distinctive ways: they contain very high energy densities, they are stable at normal temperatures and they are readily transportable via pipeline, ship, train or vehicle. No other energy source possesses all these traits, and those that get close (lithium ion batteries, for instance) are very costly to manufacture and are dependent on dwindling metals/ores (in this case, lithium).

Supposedly "renewable" sources like biofuels and "unlimited" sources like shale oil require so much energy to produce, process and transport (when calculated in equivalent energy densities) that the net energy (useful energy produced minus energy used in production) is actually rather paltry.

Until very recently, oil had the distinct advantage of being cheap to extract. Super-giant fields under pressure produced oil for as little as $1 per barrel in raw costs. But the super-giant fields which supply much of the world's oil now require costly extraction technologies such as water or gas pressurization. New production has been located offshore, in deep water or in extreme climates like the Arctic Circle. It is no longer cheap to locate, extract or process oil or oil equivalents like shale oil.

Oil's most unique characteristic is that every other industry in the global economy depends on oil or oil equivalents: transportation, military, agriculture, tourism, and on and on. Thus a global shortage or disruption will quickly cascade into every corner of the global economy, for new supplies of oil cannot be brought on line quickly (five years would be incredibly quick, ten years would be average). Even worse, new production is not even replacing fields in decline; that is the essence of Peak Oil.

As for alternatives: currently, all alternative energy production, including both "old technology" like hydropower and new wind, solar, biofuels and tidal technologies, account for about 3% of the world's energy consumption. Thus a ten-fold increase in alternative energy--a scaling up which is not yet even technologically feasible, and one that in any event would cost trillions of dollars to accomplish--would leave the global economy totally dependent on petroleum for 2/3 of energy consumption.

Various standard-issue pundits (and always those outside the energy complex, I note) promote the easy-to-swallow notion that gasifying coal "cleanly" and transforming "unlimited" tar sands and shale oil is the "answer." But turning mountains of low-energy coal into gasoline and jet fuel is not clean, cheap or easy, especially when we are talking about stupendous quantities of liquid fuel: the U.S. consumes roughly 500 million gallons a day of liquid fuels (gasoline, diesel and jet fuel).

Thus any model which views energy/petroleum/fossil fuels as subject to the same forces as other commodities such as copper is fatally flawed. Every industry and financial sector ultimately rests on cheap, abundant petroleum. Once petroleum is no longer cheap or available in sufficient quantity to meet demand, then the energy domino will topple all the rest in rapid succession.

The unique commodity petroleum is thus the very foundation of interlocking crises on a global scale.

For more on these topics, please read John Michael Greer's two books, The Long Descent: A User's Guide to the End of the Industrial Age and The Ecotechnic Future: Envisioning a Post-Peak World.

The American Empire

I use the word "Empire" because to avoid it would be artifice. What word other than Empire describes a nation with a commercial, diplomatic and military presence in most of the planet's nations?

I use the term without ideological spin. For the purposes of this analysis, it is not a structure to deny, deplore