ASPO Newsletter 91: a Brief History of Petroleum Man

Posted: July 6th, 2008 by: h-2

This is from the July Issue of the ASPO newsletter, Issue 91.

One of the more interesting articles in it was a decent timeline for what’s happened to us as a species, I’m quoting the whole section since they don’t mind reproduction of the material.

By odd coincidence, Nate Hagens from the also just published a new article on human development and oil addiction, which fits in quite well with the following ASPO article, being largely historical/biologically oriented too.

1061. Peak Oil : A Turning Point for Mankind

The term Peak Oil now enters the dictionary as the importance of the issue finally hits the mainstream. The International Energy Agency, which is the OECD watchdog, has long been aware of it having issued a warning in 1998 that demand would outpace supply by 2010 save for the entry of a mysterious element, termed Unidentified Unconventional, which was evidently a coded term for shortage. But recent statements made to the Press suggest that it is finally going to come clean in the 2008 issue of the World Energy Outlook to be published in November, and explain the true position in no uncertain terms.

Given the central role of oil and gas in the modern economy, the peak of production is likely to be a turning point for mankind of almost unparalleled magnitude. It prompts consideration of the historical evolution of societies as a basis for evaluating what the reactions might be.

It seems that land-ownership was the critical determinant during the first seventeen centuries of the last millennium. We can consider the case of Britain as an example. It was invaded in 1066 by recycled Vikings from Normandy, and the new King allocated lands to his barons, who in turn controlled a peasantry that worked the land. One may suppose that they did so happily as that was the only life they knew.

Then in the early 19th Century came coal mining which provided the energy for the Industrial Revolution, led by Britain. The social structure changed as the importance of land-ownership diminished, and the peasants became industrial workers earning wages and living in gruesome slums. Power shifted from the baron to a new managerial and financial elite. Increasing longevity and other factors evidently gave an unsustainable population growth, leading to massive emigration from Europe to the United States, Canada and Australasia, where the indigenous people were expropriated and largely exterminated.

The banks increasingly lent more than they had on deposit confident that tomorrow’s industrial expansion was collateral for to-day’s debt. The British Empire blossomed as the pound sterling became a global currency for trade, delivering a massive hidden tribute to the banks of London, which later set up the Federal Reserve Bank in New York to control that economy. Britain, as an island, had natural frontiers, which was not the case on the Continent of Europe where territorial disputes and the quest for new markets and empires led to two world wars of unparalleled severity. It seems that economic expansion encouraged nationalism as different countries sought competitive strength by emphasising their identity. The First World War evidently arose from tensions as Russia was seeking to control its trade route to the Mediterranean which it felt was being threatened by Germany’s moves to exert a commercial and military influence on Turkey, then controlling much of the Middle East under the Ottoman Empire. The Second World War was essentially a continuation of the first, although some countries had changed sides.

Oil and gas gradually replaced coal as the driving force for an expanding economy, which allowed the world population to grow in parallel.

Social pressures developed as the industrial workers sought a greater reward for their efforts. That led to the rise of socialism under which was the State was expected to assume the role of a benign landlord providing a fair allocation of wealth. A more extreme variant developed in Russia in 1917 with a revolution that brought the Communists to power. Still another variant was the National Socialist movement of Germany, which in the inter-war years tried to weld together German identity under a form of Social Darwinism to give its people the competitive edge, breaking the grip of the international banking fraternity.

Post-war Britain faced a difficult economic situation having lost its empire and surrendered the pound sterling to the US dollar which became the world trading currency. At first, it adopted socialist principles with high levels of taxation for the elite. But despite having a sympathetic government, the trade unions pressed for ever more, giving rise to a time of much industrial unrest, especially driven by the coal miners, who controlled the country’s energy supply. But the development of North Sea oil broke the power of the coal miners, and ushered in an epoch of affluence, much of which was channelled to a financial elite, who built a new empire through the stock market. Immigration increased rapidly to provide the workforce for a dwindling and aging indigenous society. America for its part built its military power in the so-called Cold War as it sought to strengthen its global economic and financial hegemony, even though its industrial base largely moved overseas to use near slave-labour.

Britain’s oil production peaked in 1999 before falling at a relatively high rate of around 7% thanks to the high efficiency and advanced technology of its offshore operations. It had produced its oil and gas at the maximum rate possible without a thought for the future, exporting its surplus at a time of low oil prices before becoming an importer at a time of soaring prices: a strategy that was hardly in the national interest, whatever the short-term gains. Now, the world as a whole comes to the peak of production. Oil prices have soared almost ten-fold in as many years. The increases have caused rising food prices, which have prompted unrest in many places. Since the average cost of oil production has not changed in parallel, the soaring prices mainly reflect profiteering from shortage by the Middle East governments, which in turn has contributed to world financial instability, growing recession and a collapse in the value of the dollar.

The United States and Britain invaded Iraq on a false pretext, no doubt both hoping to gain more control of the Middle East, which holds about half of the world’s remaining of oil and gas, and reacting to Israeli pressures. It has not been an unqualified success as conventional forces, being trained for pitched battles, are ill-equipped to face dedicated Resistance fighters who are even willing to undertake suicide missions. Under the principles of globalism, the resources of any country are supposed to belong to the highest bidder, but that concept now seems to have run its course as countries, led by Russia, move to conserve their oil and gas for their own use, seeing little merit in subsidizing their industrial competitors with cheap energy.

The growing economic recession may well evolve into the Second Great Depression. Being based on the fundamental decline in critical energy supply, it is likely to be much more severe than the first Great Depression which was little more than the bursting of a speculative Stock Market bubble in 1929. In Britain, we already see moves to devolution, as Scotland and, to a lesser extent, Wales seek greater control of their destinies. Industrial disputes return as the cost-of-living soars. While immigrant workers from eastern Europe now head for home, the main immigrant communities remain, such that there are now more Muslims than practicing Christians in the country, whose character is changing rapidly. The Government moves to strengthen its control with greater surveillance as the tensions begin to mount, being in part accompanied by rising murder and gang warfare in the once gentle cities.

It seems, on reflection, that the past two centuries of rapid world expansion were built on the quest for money that came to be accepted as the prime motive for living, although it did not in itself deliver any particular degree of corresponding happiness. Another day – another dollar was a perceptive slogan. Now, we face a corresponding century of economic contraction during which the quest for money will become ever less realistic. This may in turn prompt new attitudes which could be positive. Cuba is an interesting anomaly where there is apparently a strong feeling of communal egalitarianism and a fair reward for work, far removed from the quest for money as such. In Britain, we find an echo in the Transition Town Movement, whereby mainly rural communities are encouraged to a new selfsufficiency and co-operation, even adopting local currencies to facilitate barter, thereby breaking the hegemony of the bankers.

Petroleum Man will be extinct by the end of this Century, but there may be survivors who find a new way to live happily within the resources of the Planet. This presumably means reverting to a traditional rural condition. But the transition, even if moderated by new energy from nuclear power, coal, non-conventional oil and gas, and various renewable sources, is likely to be a time of great tension unless people come to grasp that the contraction is ordained by Nature. In all probability, the world population will have to fall to a new sustainable level, with the greatest challenge being to achieve that with the minimum of suffering. Future historians may look back and describe Petroleum Man in less than positive terms, as he was responsible for changing the natural balance and causing a massive destruction of species and environments.

It is a complex large subject that is hard to grasp or summarise, but it looks as if the winds of change are blowing ever stronger.

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