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Stirling Newberry: Peak Olives

Peak Olives

By Stirling Newberry
t r u t h o u t | Perspective

Thursday 14 July 2005

I often joke that every week I could write and sell a one thousand word piece that would consist of "Peak Oil" repeated five hundred times. There is a bottomless appetite for information, and confirmation, about the future of energy, but sadly, explaining it has often been difficult. People grab onto bits and pieces, and they don’t step back and look at the big picture. So rather than talking about petroleum, I am going to talk about something closely related: grease. Specifically, pizza.

Imagine you are hungry and don't want to cook. You decide you are going to order pizza to be delivered. They don't take credit cards, and so you start scrounging money. First you grab the quarters in the change dish, then you get serious and pillage your wallet. Finally, you start turning over the couch and checking pockets. It is at this point that your significant other asks you what you are doing, and you explain. Immediately there is the suggestion to turn your medium cheese pizza into a large green peppers and olives. And, while you are at it, why don't you ask some friends over? Make that two large pizzas. So you tap into your penny bottle, and you count out enough.

However, after the order is placed, you realize that you've got a good deal of extra fat around the middle. Maybe a lipid laden extravaganza isn't the best idea. And then the delivery guy shows up, and says he only takes a dollar in coins, the rest has to be bills. He goes away, and you realize that for this trouble, you could have gone to the supermarket, shopped for real food, and made a home cooked meal.

This little hunt for change highlights the important elements of the energy problem. The first is the peak oil problem itself: there is only so much money in your house. You might be more or less efficient at looking for it, but there is still a fixed amount of ultimately recoverable money.

But there is another component, one underlined by the driver not taking credit cards or coins. That problem is that not all of the money in the house is of the same usability. Some of it is more usable than the rest. This has been called a "quality" of energy problem. The same is true with petroleum. Some petroleum is "light" and "sweet," that is, easy to turn into gasoline and other forms of transportation fuel. Some is "heavy" and/or "sour," meaning harder to refine. When the Saudis and the Republicans push more refineries, they aren't saying that right now there is much of a refinery bottleneck; there is slightly, but not enough to push down the price of gasoline much once you factor in the cost of building the refineries. It is that the Saudis are admitting that in order to be able to pump more oil, they are going to have to put on line the sour crude they have. Previously, it wasn't worth it to them. Now it is.

The same thing that is true with hunting money is true of hunting oil: as soon as you get serious, you are likely to find the big trove of bills. There may be other good finds, but they will get rarer and rarer, and smaller and smaller. And they will consist more and more of junk.

However, there are two other major problems that are not related to peak oil in any meaningful way.

The first is the demand problem. Right now the people in China and the people in India want to join the affluent world economy. In order to meet that new demand with our current rate of improvement in GDP per barrel of oil, we would need to triple the flow of oil in a generation. It doesn't matter which theory or which estimate of ultimately recoverable oil you subscribe to - that level of demand isn't going to be met by any of them. Worse still, the better the oil situation is, the more demand there is going to be, because oil is still cheaper, in the short run, than doing things another way. Not because it, itself, is really all that much cheaper, but because the infrastructure is largely in place. That's the same deal with the pizza, you are ordering out because they've got everything needed to make the pizza, where as you would have to go out and get it.

The second major problem corresponds to the "spare tire" in the pizza scenario. That is, burning petroleum, particularly in small internal combustion engines, puts carbon into the atmosphere. Mining it puts methane into the atmosphere. These are two of the gasses that contribute to the increase in temperature we have seen in the last decade, a rise in "anthropogenic global warming." That's a long way of saying it is our fault. But just like extra weight, the increased carbon is only the first part of the problem, the problem is much worse because excess weight causes things like heart disease. Increased temperatures from carbon dioxide changes the water cycle - and it is water that holds and moves most of the heat in the atmosphere. A high temperature earth starts developing features such as "super El Niño" currents, and generates more tropical cyclones. It loses glaciers, which changes which areas get water run-off. In otherwords, the follow on problems may well be as bad, or worse locally, as the headline problem.

So the real dangers attached to petroleum are quantity, quality, demand and sink. We are running out of in, and we are running out of out. Right now we have a choice - scrounge the house for yet more dollars and call a different pizza place, or set about doing some cooking - that is place our faith in "capital energy."

And that gets me to the next problem: the relationship between money and energy, which is not often explained as clearly as it should be. I'll explain that in my next column, but I will need some help from a German communist who wrote back in the 19th century. No, not Karl Marx, but Richard Wagner.


Stirling Newberry is an internet business and strategy consultant, with experience in international telecom, consumer marketing, e-commerce and forensic database analysis. He has acted as an advisor to Democratic political campaigns and organizations and is the the co-founder, along with Christopher Lydon, Jay Rosen and Matt Stoller, of BopNews, as well as being the military affairs editor of The Agonist.

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