Saturday, November 2, 2013

Consider two things. First, oil is done with -- whether it's 30 years or 50 years. Your children's old age will be spent in a world without petroleum products, whether it's gasoline or plastic IV bags or the rubber case around your iPhone. Second, technology will not conquer all. Thomas Kuhn already made hash out of the idea of "progress" more than 40 years ago. But consider this: No technology has ever overcome the previous energy crisis. Whether it was peat and wood being replaced by coal, whale oil being replaced by petroleum, or nuclear instead of coal -- technology has never solved our energy problems. Indeed, with peak oil, technology is pretty much doomed.

Think it through: Right now, petroleum products provide about 40 percent of world energy needs. Whether in 30 years or 50 years, it is going to go away. As oil production begins to peak (not fall, just peak), demand will continue to rise. This will cause strong inflationary increases on the basic things which people rely on. For example, most of the food on America's tables currently comes from overseas. Most of the food is grown with pesticides and fertilizer derived from petroleum. Even minor increases in the price of oil caused massive inflationary dislocations in food prices worldwide. It took the collapse of the worldwide economy in 2008 to remove this inflationary pressure -- but who wants economic growth to plunge by 20 percent all the time?

Food is but one product which relies heavily on oil. Transportation of that food -- indeed, transporation of nearly all consumer and industrial products -- relies on oil: Oil for cargo ships, oil for trains, oil for trucks. That oil is going to become so expensive, few items will be moving any more. Those cheap Chilean grapes are going to go away. It will take years to grow the vineyards which can produce grapes domestically, and even then the grapes will need to be grown organically and huge losses will occur due to pests. Huge dislocations will occur in the automobile industry (already a dinosaur). But watch for similar dislocations in industrial machinery (farm equipment, diesel semi-trailers, etc.), plastics production, and all manufactured goods (machinery requires lubricant).

Alternative sources of energy simply are not available. Hydro power in the U.S. is already tapped out. Although coal power could be greatly expanded, it comes with substantial side-effects that make it unlikely to be used unless you want Chicago, St. Louis, New York City, and Atlanta to look like Beijing -- suffocating under daily black clouds of soot with tens of thousands dying each year from respiratory disease. Nuclear power comes with similar side-effects, primarily because plants can only function for about 30 years before decommissioning. Uranium reserves are like petroleum (low, in geographically unstable regions, etc.). A switch to breeder reactors (which generate more plutonium then they consume) could solve the problem, but the issue in either case is the immense amount of exceptionally deadly waste. And no technology has been developed in 70 years to handle that.

Even so, alternative sources of energy simply cannot replace fossil fuel. Who really believes we'll have battery-operated cargo ships? Solar-powered semi-trucks?

Even if additional sources of power (nuclear, hydro, coal, solar) are developed, the competition for these sources will be extremely high as industries compete to tap into them in order to replace oil. Consider just one technology: The microchip. Advances in computing power, it's claimed, will help solve the coming energy crisis. Except that creating microchips is one of the most energy-intensive industry there is. Most microchip manufacturing firms rely heavily on cheap hydroelectrical power to function and provide inexpensive products. But as competition for hydro power heats up, microchip manufacturing will fall dramatically.

Cloud-computing, too, will suffer as well. Currently, nearly all cloud-computing facilities in the U.S. rely on cheap hydro power to not only run the system but provide the extensive cooling systems needed to keep the system operating. Cloud-computing, too, will begin to fail as companies providing it cannot afford to pay for the exorbitant energy costs needed. Fewer and fewer customers will be able to pay for cloud-computing (certainly not your everyday consumer who wants an e-book or PDA).

Moreover, consumers will be unable to pay for these kinds of technologies even if they do exist. More and more consumers will be under-employed and unemployed as economic dislocation eliminates entire industries and no new industries arise to replace them. More people will return to agriculture (as it's cheaper to provide low-cost human labor than it is to run a gas-guzzling combine). But as people take grunt-work jobs to simply put (expensive) food on the table, they will have less discretionary income to apply to technology and less time to enjoy it.

Many futurists like to talk about a future in which technology is causing the disintegration of society.

Well, it ain't gonna happen. That technology is just going to go away. Cheap broadband, cheap Internet, cheap streaming video, cheap email, cheap cloud-computing, cheap computers: All going to go away.

The future is much more likely to be high-cost, hot, crowded, and impoverished. It's gonna be more like Soylent Green than Star Trek.

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