Repaying Debt in an Era of Energy Scarcity

first_imgOnce upon a time in a village there lived a wise old man. Legend had it that he could answer any question posed to him. A village boy hatched a plan to fool him. He caught a small bird, and approaching the wise old man with the bird in his hands, he asked, “Is this bird dead or alive?”  If the man said it was alive, the boy would secretly break its neck and then reveal it to be dead (or perhaps pining for the fjords). If the man said it was dead, the boy would release it alive from his hands.To the boy’s surprise, the wise man said, “It’s in your hands. That bird’s life is in your hands.” The trouble with the debt storyThe trouble with this story, and particularly with the massive amounts of debt taken on today at personal, municipal, state, and national levels, is that while the future has gotten bigger and bigger for the last 200 years, that trend has coincided with the exploitation of a onetime treasure trove of easy fossil fuels. Without the energy to fuel more exponential growth having peaked, the means to fuel the expansion required by our debt-based money system isn’t there.Martenson has a great way of answering questions that I didn’t know I had, in ways that transform the conversation. Writers since before E.F. Schumacher (“Small is Beautiful”) have been questioning the Western imperative to grow, grow, grow — and they have painted convincing pictures of how a world without a “growth is good” mentality could be a better place. A book that shows just how much is in our handsJust how many life-defining issues are in our hands right now (and just how much we are in danger of fooling ourselves) is the subject of the new book by Chris Martenson, The Crash Course: The Unsustainable Future of Our Economy, Energy and Environment (Wiley Publishers).Martenson began serious economic research in 2002 and went from there to forecasting the bursting of the housing bubble, and the banking crisis, years before they happened — all while taking his family from a prosperous life in Mystic, Connecticut to a simpler lifestyle in rural Mass. Global warming: A question mark?Examples like this have the needed — but painful — effect of shattering vague optimisms. Another one–the idea that technology will save our hides on the energy front — is demolished by Martenson with three scorching facts.Fact One: Technology does not create energy — it only finds and transforms it.Fact Two: Transforming energy is expensive. Look at the four units of wood heat that are wasted in creating one unit of electricity at the McNeil generating station, which I wrote about here recently.Fact Three: Energy transitions take time. “I won’t get excited about a transition to natural gas,” he says, “until I hear the U.S. president get on television and announce the equivalent of a WWII-era effort to immediately begin building out the necessary infrastructure to make it happen.On certain points it would be a relief if a skeptic checked all of Martenson’s facts and proved him wrong. I don’t think it will happen, even if I do have quibbles: Martenson’s treatment of global warming, and its potential to transform our world, is cursory, even as he makes us painfully aware of other environmental resource constraints such as those on our farms and fisheries.One parting Martenson gem: if you think $4-a-gallon gas is expensive, consider that if you put a single gallon in a car, drove it until the gas ran out, and then pushed it back home, it would take you 350 to 500 hours. If you paid someone $15 per hour to do this for you, that gallon of gas would be valued at around $6,000. Cheap gas lets us live like royalty.Tristan Roberts is Editorial Director at BuildingGreen, Inc., in Brattleboro, Vermont, which publishes information on green building solutions.center_img Not merely good at predicting financial disasterIf he were merely good at predicting financial disasters, however, his book (along with the series of free “Crash Course” videos at ChrisMartenson.com) wouldn’t qualify as a must-read. Martenson is equally good at looking at any of what he calls the “three E’s,” whose limits may define our standard of living for the next 20 years and beyond: energy, the economy, and the environment.Plenty of analysts have noted problems with our path on any one of these matters, but Martenson puts them together in new and compelling ways. He sums up our ongoing economic troubles with three common-sense words: “Too much debt.” Why too much debt is such a problem, though, comes into focus when he looks at energy.Debt, Martenson tells us, assumes that the future will be bigger than the present. We are happy to borrow money today and pay it back with interest tomorrow, because we will make investments to improve our prospects and our income generating potential. Or perhaps we simply hope that tomorrow will be more favorable and we’ll have money then that we don’t have now. What sustainability has been up againstMartenson shows us what these prescriptions have been up against: our monetary systems today, untethered from any stable anchor, and loaned into existence, require exponential growth — putting these systems on a collision course with our finite planet.We’re fortunate that Martenson not only does his research, but can also communicate about it, fitting skills for a self-styled “information scout.” Among other things, he takes the time to fully explore outcomes he considers unlikely, in the process showing us why.For example, Martenson looks at the next 40 years, asking what energy production we will need worldwide to bring online both to enjoy continued growth in energy supplies, and to offset depletion of existing oil fields. Among other options, Martenson tells us, we would need 200 new nuclear plants per year (the U.S. currently has 104 operating reactors).For anyone wondering when the home building or the construction sectors are “coming back like they were,” Martenson is one of a chorus out there saying that there is no going back. No more unbelievably favorable energy return on energy invested (EROEI), no more capacity to take on debt that we have a hope of paying off, no more abundance, well, really anywhere.last_img

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