Sunday, November 4, 2007

Peak tech?

by James Howard Kunstler
Published on 23 Jul 2007

energy bulletin

Go anywhere in America, among any class of people -- from the Nascar morons to the Ivy League -- and one expectation is pretty universal: that technology will only bring us more wonders and miracles, and it will certainly save-the-day where our energy problems are concerned. This would seem natural for people living in an age when a simple cassette SONY Walkman is superceded by an 80-gigabyte iPod in one generation. But what if this assumption is off? What if peak technology occurs roughly in the same wave as peak energy?

Of course, another nearly universal expectation is that we will go through an orderly transition between the end of the oil fiesta and whatever comes next -- implying, naturally, that some new sovereign energy resource is out there in destiny's green room, getting prepped up, waiting to be sent on-stage. The confusion about this, induced by strenuous wishing, is such that most people expect the next energy resource to consist of technology itself.

This has been the heart of my beef with the rosy future crowd. Energy and technology are not the same thing, not interchangeable or substitutable. If you run out of one (energy), you can't just plug in the other (technology). I certainly believe other energy resources exist besides oil and methane gas, but I maintain that we will be grossly disappointed by what they can do for us, given what we are currently running in society. Nor am I categorically against the idea of using these other things: solar, wind, bio-fuels, what-have-you. I can even be persuaded on nuclear with its many hazards, if that's the only way to keep the lights on. But all of these things will not preclude the extreme necessity to make severe changes in our manner of daily living -- and to do so rather quickly.

Far from evolving triumphantly to yet-higher realms of technological nirvana, I'd expect a raw struggle to preserve much of the knowledge and applied technique that has already been acquired. I do happen to believe that the petroleum twilight will bring quite a bit of disorder to our society, which almost certainly means that the institutional context for research and development will suffer. Most particularly, I doubt that the big universities will be able to carry on in an energy-and-capital-starved future. Exactly how they might disintegrate is an open question. Last year, for example, I was shown the new bio-medical research "facility" at the University of Michigan, a building at least the size of a Cunard ocean liner, and wondered as I beheld it exactly how they were going to heat the goddam thing ten years down the line. But one might as well ask how the U might fund the paychecks of the building's occupants as Michigan's economy falls into an ever-larger crater. Such is the hubris-induced weakness of mind among those in charge of things that these mundane questions are not even asked.

The same pretty much goes for the big corporations. Their world is going to change pretty rudely, too. Far from expecting them to take over our lives even more comprehensively than is the current case, I expect them to wobble, fall to their knees, and expire as the tonic of globalism vanishes down the drain of economic history. Just as most people expect technology to save-the-day for energy, the same people expect the world to keep becoming an ever-smaller place of more intricately co-wired parts. Not me. I expect the world to become a larger place. I expect the wiring to unravel in a contest over the world's remaining oil. I expect that the nations of the world will eventually retreat back into their own continental regions (while that retreat may be violent and messy). I expect our energy problems to limit any organization's ability to project power and influence -- whether it is a government or a corporation. I expect that anything now running at the giant scale will either have to downsize real fast or go out of business.

Few of the rosy futurists foresee anything but ever-greater peaks of affluence among an ever-larger pool of players. I think they have been watching too many installments of "Richistan" on cable TV. My own notion is that capital will dry up quicker than rain on a Scottsdale patio as our energy predicament becomes apparent, since expectations of future growth (of economies and the capital representing them) are keyed to an assumption of unlimited energy resources. When the truth finally hits -- that there are real limits to the things of this world -- it will knock the capital markets on their asses. We will see large numbers of men wearing Rolex watches weep into crumpled certificates as the tranches of hallucinated wealth dissolve in the mists of their hopes and dreams. This means, at least, that investment in technology R & D on the grand scale will probably not meet our current expectations.

In any case, it is getting pretty late in the day for us to just kick back and nurture fantasies about the future of technology while the prospect of an oil export shock resolves more vividly before us -- the first symptom of an industry that will shortly fly to pieces. Of course the very last thing we should be doing -- which everyone from the Nascar morons to the Ivy League "greenies" is doing -- is focus all effort on how to keep the American automobile fleet running by some magic means other than gasoline. I say, just as a mental jump-start, let's put at least some of that effort into getting the choo-choo trains running again -- but this is too silly for the boys at MIT or even the Pentagon.

A few years ago, I went to the famous TED conference in Monterrey, where the mandarins of computer tech gather every year to hear talks about the neat things happening in the world beyond Silicon Valley. (I was part of the "entertainment.") By far the most popular presentation of the whole conference was the one on flying cars. Yeah, I know. It was straight out of a 1937 edition of Popular Science Magazine. But that's where their heads were at. All those twenty billion dollar heads, and that was what really lit their wicks. In case you wonder why I'm skeptical about where we're going in this country.

2 comments:

jtflynn said...

Ra and I had a conversation with a friend the other night over dinner about how to protect ourselves against such a fall in the global economy. I've been giving thought to getting a 2nd house as a rental property and was discussing whether it would be a good investment. My friend spoke of investing in gold. I suppose that the 401k's are going into the toilet before we retire, but the timing is the tricky bit. Anyway, my real question is what folks think reasonable plans are for maximizing investment value growth while staying relatively safe from the cliff in the future that we can't see. Also in the mix is how sharp/sudden the change will be and whether there will be time to transfer funds into bottled water and gold bricks before the Dow falls out from under us.

-shiv

migo said...

man, you have to ask the tough questions...
gold may be a good hedge, and some gold may be worth buying: I'm told that coins from Canada, or South Africa sell for small premiums over the value of the gold itself, and in the future it may be fungible.

That said, you live in a pretty progressive place that has taken the time and effort to officially start dealing with this potential problem. how and when to buy additional property? when is it going to be the right time to buy, and how will buying additional property help you hedge?

from my experience, nothing seems to happen very quickly: as a matter of fact, we have been waiting for the "imminent" collapse of the economy for over thirty years now.
from the viewpoint of someone like myself, it seems that the pot takes forever to boil, and even then the adjustments you make, can somehow make you more or less oblivious, in a way.

certain investments in trading instruments (assuming the structure remains intact to some degree) try reading this,
or this

nother words, I don't know, what a good defensive position would be.
keep reading and thinking about it, and seeing what you need to do: then, let me know...