The View From the Golden Mesa

    Humanity stands on a high vantage point, looking back over the past, at empires that rose and fell. We tell ourselves that the industrial world is unique, untethered from the constrains of the past. But if we turn and look to the future, we see cloud and shadow. We step forward and the ground beneath our feet undulates. The gold dust that spreads out around us bounces into the air with each step forward. Then the realization hits; what we mistook for solid ground is just a thick, black goo. The endless expanse of oil-fueled wealth does, in fact, have an edge. We stand atop a golden mesa, and beyond the edge lies a steep cliff.

Imagine the pitch meeting, "Yeah, it's gonna smell 
awful, and you won't want to go to the beach,
but it's gonna make you rich, fellas! Well,
it will make the local nobility rich..."

    While humans have know about and used petroleum oils for thousands of years, Russian engineer Vasily Semyonov drilled the first modern well near Baku, in 1846. In North America, the first commercial wells went into operation in Canada and the US in 1858 and 1859 respectively. It took a bit more than a century for oil to become the largest source of energy, in the USA by 1950, and globally in 1964. Since then, it has only grown in importance as a natural resource. Some 95% of all transport fuels are oil based: gasoline, diesel, marine fuels, and aviation fuel. Oil makes up 33% of global primary energy supplies. Add on to that the dizzying array of plastic products made from oil, and it seems reasonable tot say that no other single resource contributes more to the continued viability of the industrial age. And this primacy of oil as an industrial resource, makes the question of how much longer it will remain available for human use, important to the future trajectory of North America as an industrial economy. 

    Before continuing, I do want to address two issue: one semantic, and the other farcical. Liquid petroleum is a nonrenewable resource. This simply means it is a resource used by human beings that does not naturally replenish itself on a timeline meaningful to human beings. In the broad sense in terms of geologic time, yes, fossil fuel will probably replenish themselves via Earth’s carbon cycle. Eventually, today’s plant life and animal life will die and return to the Earth. Some small fraction of it will be trapped, compressed and heated over time into fossil fuels. How long will that take, you may ask. Well, consider that the Permian basic in West Texas, one of the most productive layers of petroleum-bearing rock in North America, formed between 485-320 years ago. The oil-bearing rock of the the relatively young field of Gehwar in Saudi Arabia, is about 160 million years old. 

Abiotic Oil Theory: wish fulfillment for people
 who's mother didn't tell them 'no' as kids.. 

    Semantics aside, I suppose this is the point where I need to address the abiotic oil theory. This theory as been around for decades, and holds that somewhere deep within the mantle, kindly Mother Earth produces new petroleum from mysterious processes. Processes which stand completely at odds with our understanding of the chemistry of hydrocarbons. Because of the tremendous pressures within the mantle and under the Earth’s crust, this a-biotic oil then seeps up to the surface to pool conveniently in cap rocks, where it waits patiently for us to use. This theory has been debunked over and over and over again, by people for understand the geology and chemistry better than I do. Even if this theory were true, which, again, it isn’t, it doesn't really matter because the rate of depletion of mature fields suggests that the Earth doesn’t replenish the abiotic oil supply at a rate sufficient to match human consumption.

    Now that we’ve gotten the minor quibbles out of the way, we should get to the core of the issue; what will the future hold for world oil production, and what does that imply for the future of North America? To assess the situation, I will focus on United States oil production, as it is three times higher than Canada, and Mexico's production has been in decline for almost a decade. With the US data, I'd like to direct your attention to the details, rather than the big, top-line numbers. And as we all know, the devil is always in the details. Much like Mephistopheles, this devil offers us a few more decades of oil, but at a very real, economic cost. And like the two horned Prince of Darkness, this devil has two horns, rate of depletion and energy returns. So let us get acquainted with the fracking devil, shall we?

    Setting aside local environmental impacts and the longer-term impacts of more CO2 in the atmosphere, both the US and Canada increased petroleum production from sources that historically have been considered unconventional. While the technology underlying both ‘tight’ oil production and oil sands processing goes back decades, until the 2000s, both sources weren’t economically viable. Until roughly 2005, the low cost of production of conventional crude oil kept global prices below $30 per barrel. But starting in 2005, global crude oil production stalled, and prices tarted to rise. Anyone reading this who bought gas in around 2008 surely remembers the high prices at the pump. Global price peaked that year at $147 per barrel. What most may not remember is that in the wake of the 2008-09 recession, global prices crashed, then rose again. By 2011, global crude prices were back around $100 per barrel. These higher prices made fracking for tight oil and digging up and processing oil sands economically viable.

Welcome to Mordor. No, wait, that's Alberta!

    Currently, a fracking  well costs between $46 and $58 per barrel, though can cost upwards of $90 per barrel, just to drill and pump out of the ground. And that price doesn’t include the cost of shipping and refining these barrels of tight oil. Tar sands run a broader range of costs, but mostly vary between $48 and $84 per barrel. Over 2023, the West Texas Intermediate price, which is the benchmark in the North American market, averaged $77 for a barrel of oil, compared with the Brent crude price of $83 per barrel.

    These trends imply two things: one - that higher prices are the new normal, to support North American oil production from unconventional sources, and that the lower priced conventional crude oil production cannot keep prices down through more drilling. 

        And who is that? Well, buried in the US Energy Information Agency projections which assume growing oil production over the next 20 years is a bit of an admission; conventional production has remained roughly flat from 5 million barrels per day in 2008 to 4.6 million barrels per day in  2023, so in a certain sense, we’ve already seen the future. This last point cannot be overstated, as it cast a whole lot of lamplight over the dim outlines of the future. North American oil production will, more and more, come from more expensive, dirtier sources of petroleum. The EIA estimates that fracked tight oil and shale gas, accounts for 64% and 70% of US production respectively.

Ignore the colorful bits and take a second look at the gray area.

    One might argue that the higher costs, both economic and environmental, are worth is to keep the petroleum party going. But before you consider fracking a solution to North America’s oil production problem, it’s worth considering that fracked wells experience much steeper rates of decline after the first few years of production. So where conventional wells can remain productive, albeit at very low levels, for decades, fracked wells typically experience decline rates of 50-75% over their first year in production, leaving them with negligible rates of production within a 60 months. While it wouldn’t be technically true to say these wells run dry within a decade, the typically have to be shut down or re-fracked, just to maintain production. This means that drillers must work fast and faster to maintain the same rates of production from any given field. In other words, fracked wells producing tight oil, won’t put an end to long term production decline. The tar sands face a similar problem, one a slightly longer timeline. Here's a good examination of that issue.

    But wait, there’s more! The problem isn’t just about the economics of tight oil and the swiftly approaching decline of oil production. Another, sneakier problem lurks in the background of all this: net energy. The light sweet crude that used to build industrial civilization and support the 8 billion or so people that live in it, was incredibly easy to get out of the ground. In most cases in the late 19th century all it took to dig in oil well was a team of mules a whole lot of iron piping and a drill bit. In most cases you didn't have to dig too deep and once you got there, the oil came to you. That first well drilled by Semyonov outside Baku, was a whopping 21 meters deep. In fact even as late as the 1920s, a lot of the oil that came out of the ground was so light and so sweet that you could literally scoop it with a bucket pour it directly into a car's gas tank and drive off. Nowadays I'm pretty sure that you couldn't perform that feat using the oil from any well in the world, even Saudi Arabia and Russia. 

Mules - keeping costs down for thousands of years.

    But the problem isn't just with refining. The energy return on energy invested in the 19th century was possibly as high as 300 to 1. Even as late as the 1920s, the energy return on energy invested was still a phenomenally good 100 to 1. By the 1950s, that ratio dropped to 75 to 1. I've read that by 1970 the ratio was down to about 50 to one which is still a really good investment but it's nowhere near what it started out at. The problem is that as improved techniques made technically difficult wells viable, more and more specialized equipment and more and more specialized people had to be brought in to produce the same amount of oil. Today, the EROEI ratio globally hovers somewhere between 20 to 1 and 4 to 1. This is of course a difficult number to qualify, especially because you're talking about investments that compound over time, but the trend is clear and the trend is down. Why does this matter going forward? 

Windmills, like mules, have a 
place in the future...

    Eventually we will reach a point where the energy invested in extraction of the resource is equal to the energy pulled from that resource. But before we get to a 1 to 1 breakeven point, we will probably pass a point where, even when the energy return is still positive, the energy return won't be enough to maintain everything else in the industrial economy which depends of fossil fuels. That's probably when the oil age will end. 

    And one might cheer the end of the oil age, until one recalls that roughly 31% of all energy used by human beings in the world today comes from liquid petroleum. 24% comes from natural gas in another 27% comes from coal. Those keeping track at home that means roughly 82% of the world’s energy production and consumption, comes from fossil fuels. The remainder is split between hydroelectric dams (7%), nuclear power plants (4.3%) and a tiny fraction, about 5.7% comes, from other renewables. Even the ‘renewable’ sources of electricity generation, wind, solar, hydroelectric and geothermal, are also produced using fossil fuels. To my knowledge, nowhere in the world uses a wind turbine or photovoltaic cells solar to produce more solar panels or wind turbines. Compounding this is the problem that industrial civilization built an entire economic model around perpetual growth. What happens when economic growth no longer materializes, because fossil fuel production is in decline, and renewable can't fill the gap?

    But again, the decline is not instantaneous, or even necessarily steep. The oil age began 180 years ago, so the implication for the future is that if we are at the end of the plateau and oil production is about to go into decline, we may have 150 to 180 years of oil “left.” The difference is this time, the about of oil produced for human use will go down, not up. And since oil is the basis of industrial economies, this implies both extended economic contraction, and eventually, contraction of the human population. 

    What will this contraction look like, and where will it end up? The global human population in 1846 was somewhere around one billion people. Industrial production was largely limited to the northwest Europe and the east coast of the United States. The population of the United States in according to the 1850 census US population was 23.1 million people. The vast majority, somewhere around 90%, lived outside of urban areas and overwhelmingly engaged in agriculture or some trade that directly supported agriculture. The estimated annual energy used per person in was 1/10 of what it is today.

... but they probably won't look like these.

    Two things: first, that the bedrock resource of industrial civilization will be more expensive going forward, and second, the fundamental, underlying problem hasn’t gone away: oil is a non-renewable resource that will not be with us forever. It's also worth remembering that when someone that tells you that we can have a future full of battery powered vehicles, lithium is not a renewable resource, or even particularly plentiful. Just like oil, coal and natural gas, it will also hit hit a peak of production and go into decline.

    But do you know what isn’t in decline? The amount of carbon dioxide in the atmosphere. Next week we will take an overview of the flip side of burning all these fossil fuels - the man-made destabilization of the climate. That's right, we're going to go where Al Gore has gone before, and talk about anthropogenic climate change!

An Introduction to the Future

    Over the next couple months, I plan to outline what I think will happen to North America over the coming century. The impetus to create this series of posts comes from a novel I’ve been working on for the past few years. The story follows three siblings swept up in a struggle for power and family glory. It takes place 1,200 years in the future, amongst the city-states along the Arkansas River. But more on that later. 

A ship, powered by the wind? 
What will they think of next?
Subtle metaphors?

    In short, this is both an exercise in world building, as much as a prognostication about where the vast forces of history appear set to propel our continent. It also ties in with a non-fiction book I’ve co-authored with Dr Ryan Mattson. This book, Inequality by Design, written for a wide audience, shines a light on the economic forces driving wealth and income inequality in the United States. The book concludes by drawing on historical examples to sketch three scenarios of what may be in store for the USA over the coming decades. The publication date for Inequality by Design is set for Spring of 2025, by Upriver Press.

    First I'd like to outline the major forces that I feel will have the biggest impact on North Americas specifically, though these forces will impact everyone, everywhere, though maybe not all at once. The first force will be the peak and decline of non-renewable resource extraction, and its impact on the industrial economy.

There's a reason I chose a picture of the sun setting...

Next, I will outline the probable trajectory of anthropogenic (man-made) climate destabilization. Third, we will look at the impact of broader ecological damage done by industrial production. Fourth, we will examine the history of mass human migration, grafting past examples onto the modern world. Fifth, we will take a quick look at the implications of wealth and income inequality and the corrosive impact it will have on the political economy of North America. Finally, we will speculate on the big wild card: the politics of the USA, and how the simple twists of fate can cascade into epoch-defining historical forces.

    Once I finish outlining the six major factors, I will offer a broad overview of the constituent nations or regions of North America. I plan to break this up into at least five posts discussing the current affairs of Canada, the United States, Mexico, Central America and the Caribbean. Depending on how the research and writing goes this may just be combined down into one single post outlining vague measures such as size of economy, demographics and the current state of governance.

    With the scene set, we can move on to the meat of the project; outlining what I think will happen over the next century to the peoples of North America. I plan a series of 10 posts covering each decade from 2025 to 2125. Within each post, I will outline the ways in which the six factors will impact the continent. I will try to include a section outlining specific geographical regions of North America for each decade, though some decades will impact different regions more than others. 

    In case I somehow forget, I will reiterate several times that the scenario I'm constructing is the one that I think is most likely. One might think of it as the line of best fit. For instance, I will NOT include black swan events that could be so fundamentally game changing as to completely upend the scenario. This is partly to keep the series focused on what we know about the trends now, but also because black swan events are, by nature, unknowable before they happen.

The right amount of air pollution, but too many robots...

    What will this mean in practice? On the negative side of the ledger, It means no Rise of the Terminators. Nor do I assume we will end up trapped in the Matrix. As impressive a technical feet as current “AI” is, I think it's highly unlikely that sentient computers will get a hold of the nuclear codes and launch the world’s ICBM arsenals. That makes for entertaining science-fiction I don't think it's likely to ever become science fact.

    On the positive side of the ledger, unfortunately, I don’t think lab-grown food will replace old-fashioned rain-and-topsoil agriculture. As much as I would love replicators to end human hunger and free up vast tracts of farmland to return to nature, I don’t think that will happen either. And as I outline issues like resource depletion and climate instability, it should become clear why I don't think utopia or armageddon are around the corner. Unfortunately, I think it's very unlikely to near impossible that some combination of solar, nuclear, wind and hydroelectric energy will solve our energy crisis. 

Like fusion power, replicators are the technology of the future,
and probably always will be...

    It’s also worth pointing out the semantics involved; a crisis is often viewed as a problem, and a problem often has solutions. I'm not sure that the situation we find ourselves in right now fits that description. Instead we've backed ourselves into a corner where every factor we face exacerbates another. Besides calling it the normal cycle of history, I think it would be more appropriate to call the impending crisis of the 21st-century a set of predicaments. Predicaments often involve two bad choices rather that a good/bad dichotomy implied by a problem. For the most part, I think our situation involves a perpetual choice between the lesser of two evils. And it will be by no means clear, which of choice is actually less evil over the long-term. 

    To illustrate the nature of the situation, consider electricity generation. Setting aside storage issues, wind, solar and hydroelectric power provide only a fraction fo the content’s electricity generation capacity. To take one example, the USA Energy Information Agency estimates the USA could build 10 terawatt hours of wind electricity capacity. Last year, the USA consumed just shy of 4,000 terawatt hours of electricity. Even with aggressive conservation efforts and extensive build-out, renewable sources can provide, at best, about a third of current demand. Another source will have to satisfy the demand, but if we want to get to net-zero carbon emissions, the obvious choice to fill the gap would be nuclear power. Yes, nuclear power is (largely) carbon free, but produces long-term radioactive waste, and still depends on a fuel source which is fundamentally non-renewable. So what’s the lesser evil; less but cleaner electricity generation, or ample electric capacity with the same core problem as coal and natural gas?

Wind power: the technology of the past and the future!

    Depending on how this all goes, I may write a pair of posts covering a pessimistic scenario, and an optimistic one. As with this main series, both the optimistic and pessimistic scenarios will follow the line of best fit, they will just veer more towards one extreme or the other. I may slip in a black swan or two, just to spice things up.

    I look forward to this new project, and I hope that you, dear reader, will enjoy it as well. The topic and difficulties presented may seem upsetting or depressing, but I believe that only with a clear vision of the future, can we as individuals, families and communities, handle the predicaments to come. I welcome comments and feedback. If you think that I'm missing a factor, or have overlooked a local situation, please let me know. If this thought-experiment interests you, please join me on a brief tour of the future…