What will bring an end to the Oil Age? Hint: The Stone Age did not end because we ran out of stones.
[This is the second in a series of articles addressing the USA’s energy situation. See article 1 here.]
Energy is a huge subject, because it’s not just about economics; it also has implications for national security, the environment, and global politics. My own top two priorities are economics and national security (not necessarily in that order) because of their long-term implications for future generations. If your priorities differ, so be it. In any case...
...here are three truths:
• A growing economy requires growing energy input (see End Note for details).
• Energy sourcing has significant national security implications.
• National security is a fundamental duty of government.
I presume those three bullets are unarguable. The first bullet is backed by the Second Law of Thermodynamics, as explained in the End Note below. The second bullet should be obvious to anyone who has watched CNN, Fox News, or The Daily Show for more than ten minutes in the last 4.95 years. The third one comes to us from Adam Smith, in his 1776 best-seller, An Inquiry Into The Nature and Causes of The Wealth of Nations (specifically, Book V, Chapter I, Part I).
This article lays some groundwork regarding government actions and their results. Because most actions by government require—horror of horrors—"government spending" ...and because there is so much oversimplified, bumpersticker-grade rhetoric cluttering up the national debate about government spending, I have no choice but to address this issue before I can address the rest of the energy topic.
By the time you finish reading this post, I hope two things will be a lot clearer:
1: Not only is government spending not always synonymous with "burning the money," but...
2: Frequently, the choice not to spend money is detrimental if not catastrophic.
Figure 1 below is a simple matrix showing four combinations of government actions and their consequences. (Government actions almost always require "government spending," by the way.)
Believe it or not, government action can have positive results (see green boxes, 1 and 4). That is, not only can government “create something good”; government can also “prevent something bad.”
The opposites of those two scenarios, unfortunately, are also true—see black boxes, 2 and 3. But I think way too many people (including libertarians, Republicans, and Democrats) categorize too much government spending as burning-the-money. Well, to put it mildly: I disagree with that. I am far less concerned with the money than I am with what we get for the money: if it’s a bad investment, we should refuse to spend any money on it—neither taxpayer money, nor borrowed money; if, however, it’s a good investment that falls into one of the green smiley-face boxes above, we should spend the money without hesitation, regardless of whether we finance that spending by taxing money from ourselves or by borrowing it from willing lenders. I’ve said that a hundred times before, and I’ll keep saying it again and again.
Let me make Figure 1 a little more specific by listing just a few quick examples of government actions that fall into each of the four boxes; if you can think of one more for each box, send me an email and I'll add them to my lists. [By the way: Too bad there isn't a box for "supreme political idiocy," because that's where I'd put "Start building multibillion-dollar Supercollider, then stop midstream, say 'OOPS, we can't afford this because we'll have a bigger dificit,' then fill in the hole."]
Anyway, here’s Figure 2.
But the story doesn’t end with Figure 2. There’s one more nuance. It’s the one that has, in my experience, been the toughest concept to convey, because it’s kind of a double-negative with a full twist: it’s when government fails to take actions that would yield positive results, especially failing to prevent something bad. But the bottom line is still this: Inaction can be catastrophic. The reason for inaction doesn't matter—whether it’s incompetence, political posturing, or perceived funding constraints, the result is negative.
Examples are in order. The WW2 generation, just ahead of mine, could no doubt illustrate this point with some Pearl-Harbor-avoidance scenarios that could have happened, but didn't. But I'm a baby boomer, and the first example that comes to my mind happened more recently, during the Clinton administration: late-1990s bipartisan myopia—well-marinated for decades in oversimplified, spoon-fed pablum about “fiscal responsibility”—that misled us into sacrificing our national security on the false altar of surplus-worship. Because it was bipartisan, finger-pointing by either side won’t work here; sorry. We all did it to ourselves. [Republicans wanted a reduction in Big Government; Democrats wanted a reduction in military spending. The resultant compromise: Big Cuts in national security spending, which in turn resulted in surpluses galore—that is, until just after the war started. Then the deficits came back, didn't they?]
In any case, here’s Figure 3 illustrating the negative effects that government inaction can have.
Can I prove that steady spending of 5% GDP on national security (intelligence + diplomacy + military force potential) would have prevented 9-11 and the subsequent Hundred Year War, now in its fifth year? Nope, sure can’t. But can anyone prove it wouldn’t have?
Or, how about an easier question, now that we're armed with 20-20 hindsight? Try question number two at the bottom of this article I wrote a year ago. (Nostalgia buffs should enjoy that one, because the letter I quote in that article is almost eight years old; I've been asking question #2 for twelve years, but I still haven't received one coherent answer.)
Energy articles coming up
The energy discussion in subsequent articles will lean heavily on the key points I hope I’ve made here:
• More growth requires more energy.
• Energy has national security implications.
• National security is government’s duty.
• Some, maybe much, government action is beneficial.
• Failing to take action can be catastrophic.
Don’t worry, I will not be advocating that government start “picking winners” on the energy technology front. But don’t think laissez-faire is quite the solution, either. If it hadn’t been for "government spending" (on DARPA), we wouldn’t have today’s internet. Similarly, if we can handle government’s energy role properly, we just might be able to speed up Oil Independence Day. By a few decades.
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Read on to see the End Note explaining why a growing economy requires growing energy input.
End note:
Why a growing economy requires growing energy input
If you’ve been to this blog before, you already know that economic growth (i.e., “escaping from poverty”) is a top priority with me. Any nation that puts more distance between itself and poverty is getting better off in the aggregate; it’s “growing.”
Escaping further and further from poverty means creating more and more useful order in our lives, gaining more and more control over our environment, and becoming more and more able to prevent destruction and discomfort. (Scientists and engineers will no doubt recognize that “creating more and more useful order” is better known as “defeating entropy locally, in a bigger and better way.”)
The capper: Any successful "creation of more and more useful order" requires more and more energy input at a given conversion efficiency. Sorry, this is most definitely not up for debate; it’s the Second Law of Thermodynamics talking, not me.
Moreover, whenever we humans have improved our energy conversion efficiency, we have invariably chosen to create more order at a faster rate, which in turn requires more energy input, not less. A good example is the exponential decrease, from 5000 BC through 2006 AD, in the energy (and cost) required to light a 10’ x 10’ room at night: Today, although we use infinitely fewer cave fires to light our 10’ x 10’ rooms, we are using many, many more quadrillions of BTUs for that purpose.
Inescapable conclusion: A growing economy requires growing energy input.
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Here are links to all seven articles in the energy series:
• Article 1: Energy facts, certainties, and possibilities
• Article 2: Government spending and its consequences
• Article 3: Yes, growth DOES require more energy
• Article 4: Dissenting from Mr. Gore
• Article 5: The obstacle to oil independence
• Article 6: A tankful of electrons
• Article 7: A 21st Century “GI Bill”
