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For around a year now, America has been witnessing something of a natural gas boom. Thanks to the massive production capable through hydraulic fracturing (fracking), small towns like Bakken, ND were beginning to say the same kind of explosive growth as Tar Sands hotspots like Fort McMurray. Swept away by shale gas madness, many in the business press were beginning to envision the USA as the world’s next big energy exporter, like Canada or Saudi Arabia.

Are you frackin’ kidding me? America would first need to meet its own colossal appetite for energy, which isn’t likely to happen any time soon. The very fact that people believe this could happen (and are investing a heavily in it) is a testament to how little most people understand about energy – who uses it, where it comes from, or how that happens.

America was a major oil exporter decades ago, but production in the lower 48 states peaked decades ago and has been in decline since. Anybody who doubts “Peak Oil” should take a look at these charts, as they paint a very good picture of how this can happen even in a nation as rich and technologically advanced as the US. A nation defined largely by the Texas Oilman suddenly found itself at the mercy of Arab oil embargoes with no ability to pump enough to compensate, and more than three decades of promises to “get off foreign oil” have done nothing to reverse this decline.

In all likelihood, we’re at, near, or already past this point globally. The last decade saw prices skyrocket from under $20/barrel to over $100. This brought a lot more “capacity” online which could never have been practical at former prices – deep offshore drilling rigs, mining tar sands and oil shale or warzones in the Third World. In spite of this, global production has stayed fairly steady since about 2005. This has put an enormous strain on the world’s already weak economy, leading to the only really effective form of conservation we’ve found: recessions.

Natural gas, unlike oil, doesn’t “peak” – the analogy usually used is a “cliff”. Rather than the long, drawn-out declines seen with thick, viscous oil, pressure in a gas well can drop off very quickly. When “good” wells are hard to find, oil production turns to even slower processes like the tar sands. The Gas industry has turned, instead, to hydraulic fracturing (“fracking”), a rather explosive process which moves much faster, accelerating the decline after an initial period of euphoria.

It now looks like that euphoria is starting to fade. Over the past few years fracking has flooded the market with cheap gas, pushing prices to a third or quarter of the price of actually producing it. Prices bottomed out in April, and the number of drilling rigs online has now sunk back to 1999 levels. This ridiculous state of affairs was driven by tens of billions of dollars invested in the dream that Bakken and others like it would become the next Fort McMurray. These investment funds have been used to sell gas at a loss, in the hopes of maintaining the illusion – in essence, a Ponzi scheme. This is the epitome of bad financial planning – as it not only prevents those funds from being used to build new rigs (or rigs in places they might turn a profit), but also because investors inevitably catch on. This process is starting to show cracks, as companies start going broke, scaling back production or finding their wells empty, putting our continent in the position for a huge price shock in the near future.

In many ways, energy has been the domain of large centralised corporations since the days portrayed in There Will Be Blood. Edison himself consciously developed electricity to be a centralized, profitable system, and we’ve seen the process repeated many times with hydro, nuclear and other new means of generation which ultimately became better engines for generating money than energy. Unfortunately, while we can print as much money as we want, energy is subject to the basic rules of thermodynamics: it has to come from somewhere, and only in finite amounts.

America’s fracking boom is in serious danger of becoming a bust. Beyond the danger of groundwater contamination, past the risk of earthquakes and leaving out the obvious consequences of burning all this gas, we must also accept the limits of physical reality. Extracting gas faster doesn’t mean there’s any more in the ground than before – only that we’ll run through it much sooner. It’s time to accept that there are no giant oil or gas fields waiting for discovery or brilliant new ways of accessing them which will solve our growing energy woes. We’ve known for a decade now that this crunch was coming, it’s long-past time to start preparing for it.

Once again, the price of gasoline is on the rise. In the past week, it’s shot up to $1.26-8 per litre around here, a rise shadowed by a few dollars a barrel raise in the price of oil yesterday. Whether these prices, along with many other markets, can continue their rapid rise from the depths of depression into some of the heights seen just before the crash is uncertain, but the rising cost of oil is without a doubt one of the most threatening factors.

It isn’t just consumers who pay for gas. Oil products play an important role in industries from agriculture to plastics, transportation, medicines and heavy construction. Everything rises with the price of oil, leaving many already-struggling folks to pay even higher rates for food, heating and transportation. Petrochemicals are the lifeblood of our industrial economy, and cutting our supply is like choking our society.

Why so high? Tensions with Iran certainly aren’t helping, but it would be utterly dishonest to ignore the rest of the world. Oil production is maxxed-out worldwide, a problem which has been recurring since the middle of the last decade, where evidence now suggests “peak oil” has probably already occurred. Despite an enormous rise in price (3-4 times where it was a decade ago, even at it’s depths), major exporters like Saudi Arabia have been unable to bring much ‘spare capacity’ online, and alternative “dirty oil” sources like Canada’s Tar Sands are far more expensive (and destructive). In spite of this, there’s been an enormous growing thirst for oil as industrial nations like ours refuse to cut back and developing nations like India and China rapidly industrialize. The Oil Drum reports that humanity just passed “500 Exajoules”, or a total of 10 times the energy we used a century ago, showing clearly that our demands on this planet are still growing.

Many had hoped that the “oil shocks” of the last decade were simply a result of financial manipulation, but it’s becoming clear that we’re going to see a repeat of this precipitous rise with every apparent step toward “economic recovery”. It will act as a brake on the world economy and only get worse as the supplies dwindle. Along with that will come increased wars over oil-rich regions, and industrial “gigaaprojects” like the Tar Sands which are beginning to span a continent at incredible costs. The added cost of both will only further burden our economy. We are entering a frightening spiral of resource depletion here, and it’s going to challenge the very way our society operates.

At what point do we stop pretending this isn’t happening?

Sometime soon, those in charge will have to choose between “they’ve been saying that for decades” and “nobody saw this coming”. The arguments levelled against “peak oil” today are little different than those which I encountered a decade ago, acting seemingly as if the last decade’s oil shocks and global meltdown didn’t happen or were somehow unrelated. Decades of policy were written based on the premise of endlessly expanding energy use, even when it became apparent that it was totally impossible.

Peak oil theories never stated that the oil would “run out” one day – just that a slight “peak” would be passed on a long plateau near the middle of our oil supply, after which it would dwindle. Smaller oilfields have always followed this bell-curve, and the sum of a lot of small bell-curves is, of course, a much larger one. After the “peak” is passed, the cost of extracting oil in those volumes rapidly rises. For a short while volumes can be maintained through much larger investment (higher prices, subsidies, frantic pumping etc), but sooner or later they will dwindle. If this theory continues to hold true, the economic shock-waves we’ve seen so far are the tip of the iceberg.

Of course, saying such things labels me an alarmist, an apocalyptic doom-sayer or simply a “nut-job”. Civilizations, we’re told, cannot end and only change for the better. If there is a problem, we’re told, our leaders will deal with it. Unfortunately, “keep calm and carry on” can only work for so long. Those in power have done nothing to suggest that they understand these problems or have any workable solutions to them – instead they’re trying more of the same, but bigger, harder, and with more power. Any real “solutions” are going to have to come from elsewhere. This issue strikes at the heart of our communities, homes and everyday lives, and that’s where resistance has to (and already has) begun. There are no easy lines between “activism” and “lifestylism” here – a real paradigm shift in the way we live requires both, and nothing less can begin to grapple with the scope of the problem here.

Tim Hudak is under fire for his promise to kill the McGuinty goverment’s Green Energy bill, this time for the possible loss of 200 jobs in London at a Samsung solar panel plant. “We just can’t afford it”, he claims, and plans to kill the proposed subsidy for Samsung. McGuinty, touring another Solar plant, was not impressed and wasted no time attacking him over it.

Putting aside, for a second, the issue of subsidizing foreign multinationals for opening up shops in Ontario, this seems a pretty awful approach to getting cheaper power for Ontario. Solar panels produce electricity, and solar panel factories produce them – so the net effect on our province’s generating capacity is going to be very negative. How is Hudak going to deal with our growing demand for electricity in these days of skyrocketing energy prices? He’ll cut taxes on gas and electricity bills. This way, he can use public money to cushion the blows without actually addressing the questions of energy production behind it.

The allegation that “we can’t afford it”, also, seems strange given his many expensive promises, such as tax cuts and the $35 billion infrastructure budget he’s prepared for building projects like the Mid-Peninsula Highway. Hudak boasts about the state-sponsored job creation which will happen around Hamilton if this highway is created. We may not need it, and it may cost us dearly in land, but this enormous trench filled with money will spur “economic growth”, so why not, eh?

The “jobs” argument can be made for any colossally expensive development boondoggle. Any money the government spends will enter the economy and do something. Frankly, I’m surprised these people don’t just build valleys full of pyramids. Highway development is additionally “useful” because they open up land for development into new suburbs, power-centres and business parks. Given Hudak’s avoidance of spelling out exactly what he plans to do about the Greenbelt legislation he dislikes so much, as well as what happened to suburban expansion during the Harris years, it’s likely that such sprawl is poised to grow even faster.

What does sprawl have to do with solar panels? Other than being a vast energy sink filled with distant, poorly-performing buildings, it’s a dramatic example of just how far some in government are willing to go in subsidizing certain technologies and industries. Solar won’t catch on without subsidies – not because it’s an inferior technology, but because the nastier alternatives (like oil, coal and internal combustion engines) are already heavily subsidized. What’s different about solar is that it encourages local “Energy Autonomy” as described by Hermann Scheer. Though efficient, sustainable and very liberating, this kind of vision isn’t compatible with the kind of profits which today come from fossil fuels, and drive the kinds of industry and development Hudak wishes to see.

Our energy woes stem from the fact that modern-day Canadians have some of the highest rates of per-person energy use on Earth or in history. This is in no small part a result of decisions by governments to invest in models of development and economic growth which require massive amounts of coal, oil and electricity. While I generally detest electoral politics and have no great love for McGuinty, Hudak’s ambitions scare me a lot. Ontario definitely does not need another Common Sense Revolution – but perhaps a bit of common sense would do.

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