I've been seeing some things lately that have substantially altered my opinions about how things are going to go in the medium future, yanking them first in one direction and then the other. This is stuff of almost fundamental importance but I don't see it being put together much out there even on the left so I thought I'd air my thoughts a bit.
For a while in the early 2000s, I thought that, while there might not be much deliberate action to stop climate change, we might well be saved by peak oil. Not that the world would actually run out of oil before we ran out of livable climate. Still, after peak or even during the sort of plateau stage it could be expected that demand would rapidly outstrip supply, driving prices so high that renewables would look good. At that time, natural gas supply was also looking distinctly cramped if one looked into the question a little bit. There was clearly plenty of coal, but there are so many reasons to try to get out of coal . . .
More recently, this began to seem a bit of a slower process. Here in Canada the boom of the tar sands and the accompanying hype started to erode the picture of peak oil emergency early. But that's to some extent an illusion. Alberta may do lots of oil sands, but it's still just one field really in a big world; tar sands was never going to singlehandedly stave off oil shortages no matter how hard the oil patch tried. Various other unconventional supplies were also always pretty limited. Collectively they moderated the peak oil picture, but it always seemed to me that industry projections that all would be tickety-boo because of deep sea this and innovative that were overblown. Most of those were pretty expensive oil, for one thing. In any case, there was still a long supply plateau followed by a decline, and while that doesn't sound too bad, with economic growth compounding it could mean high prices quite soon.
On natural gas, though, things had changed a lot. Suddenly natural gas prices were going down and supply seemed plentiful. Above all, this "fracking" thing was, on one hand, despoiling the environment in significant and dangerous ways, and on the other was making it harder to shift from fossil fuels as it ushered in an apparently endless supply of cheap gas. I think this had a bigger impact than a lot of people realize. Just as high gas prices have pushed people towards more efficient vehicles, consideration of hybrid and electric cars and even strengthened the political case for investing in rapid transit, high heating costs were for a while beginning to drive consideration of improving home efficiency, "green" office buildings and so on. These things have not disappeared, but the momentum they had has seriously ebbed; they haven't become nearly as mainstream as they might have by now.
Most recently, it seems fracking has been applied to oil. Suddenly the US started producing a bunch more oil domestically, thanks to this rather horrible dirty technology. It was unclear just how much oil was involved, but the talk seemed to suggest it was an awful lot. Peak oil? What peak oil? Now, a big part of the reason oil prices haven't continued rising is just that there's been this world recession thing which never really ended, reducing demand. But still, I'd always been very doubtful of the typical business line that technology would keep on solving the supply problems and there would always be new oil. I have been feeling rather embarrassed that it seemed like they might well have been right all along, at least for a while, and that recoverable oil reserves would turn out to be much greater than I'd been willing to believe.
More importantly, with a combination of more grabbable oil on one hand, and crushing neoliberal victories almost everywhere except Latin America on the other, the prospects of doing anything about climate change had never seemed more bleak. We appear to be going down hard. Sea levels gonna rise, droughts gonna spread, all the other stuff, and between that and all the other problems there's going to be war, famine, pestilence and death walking the world.
All this and I'm only getting to my actual point. Sorry folks. All right, the point: Just yesterday I saw this article on Counterpunch, which in turn referenced this, by J. David Hughes who is apparently a pretty distinguished oil geologist kind of guy, and this, by Deborah Rogers, who according to the blurb is pretty experienced in the finance and financial regulation kind of stuff.
They seem very persuasive to me, and make with a lot of facts and analysis on the whole fracking thing, the kind of serious run-down I'd looked for but never been able to find before. Normally all you get is things like "100 year supply!!1!" (which one doubts) and "it kills groundwater!" (which is clearly true but doesn't help me with the economic picture). And what these persuasive articles claim is . . .
Fracking's a bubble.
The supply of recoverable oil and even gas from these things is very short-lived; each well only lasts a very short time, like a year or two, before declining like crazy; they're drilling literally thousands of wells a year as old holes get played out. There aren't that many really promising areas for this to work, and as they move from the best ones to the more marginal ones they will see depletion set in even faster. The overall argument of these articles is that, on the oil side the supply is going to last maybe ten years with a steep decline in the last few years of those ten. And on the natural gas side, even now a lot of the frenzied action is driven not by fundamentals but by finance capital, which is making gigabucks selling the usual garbage assets all dressed up and then arranging mergers and buyouts when companies hit the wall. The actual companies can barely make ends meet because they've all been encouraged to push supply and now natural gas prices have gone through the floor. Reminds me of the way the IMF encouraged all these different third world countries to all make lots of coffee. In addition, apparently even on the natural gas side there is far, far less supply than one might think.
The implications of this are that in a few years, there will be yet another huge shock adding itself to all the other shoes dropping on the world economy. There are in my opinion a lot of factors that could well tip Canada and the world in general back into recession in the next couple of years. But even if we manage to stumble through the next few years with anemic growth and few new jobs but no massive crisis, when the oil and gas from fracking dry up it will very likely push things over the edge. There will be a new world economic meltdown and it will hit the US particularly hard. Heck, thinking about it I wouldn't be surprised if one of the things that has kept the US out of recession the last year or so has been quite simply this increased domestic oil supply. It has also made them feel a bit less anxious about dependence on foreign oil and all that jazz. When it goes away fairly suddenly, the US is likely to go somewhat berserk. We can expect some scary times.
On the plus side, the shock will likely push renewable energy far up the agenda when it happens. Might be a little late, but better than never.
So that's my deal here. Fracking (plus the Great Recession) seemed to kill peak oil, and high natural gas prices, but that may turn out to have been a mirage, a very short term blip. And the implications for the world economy and climate are sizable. Just thought it was worth mentioning.