Sunday, February 26, 2017

The Dutch love affair with natural gas: A cautionary tale for the United States?

The story sounds familiar. For decades oil and natural gas drilling have been proceeding and creating prosperity for those involved. At some point significant earthquakes occur in areas where they were formerly very rare or nonexistent. Those quakes are linked to oil and gas drilling and production. The industry denies the link.

The quakes continue, get worse and finally get strong enough to do damage.

To those living in the United States, this reads like stories coming out of the fracking boom in states that include Oklahoma, Texas, Ohio, Kansas and Arkansas. To those living in Europe, it's the story coming out of The Netherlands, home to the Groningen Gas Field, one of the largest natural gas finds ever.

The Groningen field has been both a blessing and a curse for the Dutch. Since its discovery in 1959 the Dutch have reaped huge financial benefits from having their own secure and abundant source of natural gas. Beyond that, the country has until recently been a major exporter of natural gas to its European neighbors.

But the field has also proven to be a drag on the rest of the economy, inflicting what has been dubbed the "Dutch disease." In short, the Dutch disease refers to negative effects that a huge natural resource find can visit upon a society. These include a decline in other sectors of the economy and a strong currency which makes exports less affordable to foreign buyers. The moniker "Dutch disease" results from the fact that The Netherlands was the first place such effects were studied in detail.

What has caught the Dutch by surprise--and may someday soon catch America by surprise--is the speed with which its decades-long reliance on a large initial endowment of natural gas has turned into a liability.

First, there were the earthquakes linked to drilling and production operations in Groningen which have forced the government (part owner of the field) to scale back production to reduce the frequency and severity of those quakes. This production decline of more than 50 percent has meant a serious loss of revenue for the government which used those revenues for decades to supplement the government's budget. Government gas revenues dropped by more than half from €13 billion to around €5 billion from 2013 to 2014.

Second, as a result of the production cutbacks The Netherlands is now a net importer of natural gas, instantly losing its self-sufficiency status. Europe's gas now will likely have to come increasingly from Russia whose relations with Europe are replete with complications.

Third, the Dutch have failed to prepare for this day. Instead, they blithely made themselves deeply dependent on natural gas for their energy needs. Some 98 percent of Dutch homes use natural gas for heating and cooking. Renewable energy makes up a paltry 5.5 percent of the country's energy mix as of 2014.

Fourth, the Dutch are still obliged to honor long-term contracts which force them to deliver substantial quantities of natural gas to customers outside the country. The country is increasingly facing the strange predicament of having to import more and more natural gas to offset what it must ship abroad. This is in a country whose dominant field, Groningen, is now 80 percent depleted.

And, here is where the Dutch situation ought to be a warning to the United States. America is entering into more and more long-term contracts to export liquefied natural gas (LNG) to customers in Europe and Asia even as the country remains a net importer. There is good reason to believe that most estimates of future natural gas production in the United States are far too optimistic. Let me quote for the second time in three weeks from an independent analysis of U.S. shale gas production trends (the only class of natural gas experiencing production growth in recent years):

Shale gas production overall has declined by 4.7% since peaking in February 2016 (down 2.1 billion cubic feet per day...). All shale plays have peaked and older plays, like the Barnett and Haynesville, are down 38% and 52%, respectively.

Second, the U.S. electric utility industry has added significant natural gas-fired generating capacity in response to two trends: government regulation of greenhouse gas emissions and the low price and rising availability of natural gas. Despite the election of Donald Trump, who favors a return to coal, the low price of natural gas will probably allow the conversion to and expansion of natural gas-fired capacity to continue...until it can't. At which time we may be stuck with much higher electricity costs.

The promised natural gas deliveries will likely not be available at low prices. Production declines will result in a battle over who gets the remaining supplies, thereby hiking prices for U.S. consumers. The U.S. utility industry may rue the day it chose to make itself so heavily dependent on natural gas.

Finally, states that became addicted to money from the natural gas boom are finding the bust difficult to navigate. In comparison, the Dutch had one large boom that lasted for decades. The kind of exploration and development that is taking place in U.S. shale gas fields requires constant drilling just to maintain production at current levels. We can expect boom and bust in short spurts from here forward. That signals that the cost of exploiting the remaining shale gas resource (again, until now the only growth area in U.S. natural gas production in recent years) will almost surely stairstep higher as lower-quality deposits are tapped at greater and greater expense.

The Dutch have had a very long love affair with natural gas. But, as it turns out, a seemingly comfortable, stable relationship with natural gas can unravel just as quickly as a real love affair, leaving one dazed and asking how it all happened so fast.

Americans may not be as dependent on natural gas as the Dutch. But they have rushed into their own torrid love affair with natural gas and lost sight of the fact that affairs which start out torrid are the same ones that tend to flame out quickly, surprising everyone with their sudden demise.

Kurt Cobb is an author, speaker, and columnist focusing on energy and the environment. He has been a regular contributor to the Energy Voices section of The Christian Science Monitor and is author of the peak-oil-themed novel Prelude. In addition, he has written columns for the Paris-based science news site Scitizen, and his work has been featured on Energy Bulletin (now Resilience.org), The Oil Drum, OilPrice.com, Econ Matters, Peak Oil Review, 321energy, Common Dreams, Le Monde Diplomatique and many other sites. He maintains a blog called Resource Insights and can be contacted at kurtcobb2001@yahoo.com.

Sunday, February 19, 2017

Taking a short break - no post this week

I'm taking a short break and expect to post again on Sunday, February 26.

Sunday, February 12, 2017

Does the Australian LNG export experience foreshadow soaring U.S. natural gas prices?

Two times last winter Australians living in the country's eastern region paid more than twice as much for natural gas as did Japanese customers taking delivery of liquefied natural gas (LNG) from the same region. (Australia has three separate natural gas pipeline networks which create three domestic natural gas markets, Eastern, Northern and Western.)

The price spikes had eastern natural gas users, particularly business users, hopping mad about what they perceive as foolish energy policy. That policy, they say, gives away Australian energy resources at bargain prices to foreign countries while making domestic industries that are reliant on those resources less competitive because of high energy costs. In addition, the new volatility in gas prices makes planning difficult and expansion financially risky.

The dust-up in Australia has some people thinking that the same thing could happen in the United States, something I pointed out in 2013. In the United States the Federal Energy Regulatory Commission has approved natural gas export terminals with a capacity of 17 billion cubic feet (bcf) per day. That represents 19 percent of current U.S. natural gas production. If all terminals for which applications are pending or expected are included, the number goes up to 42 bcf per day or about 47 percent of current production. Only one U.S. export facility is currently in operation in the lower 48 states. Another facility in Alaska has been exporting LNG to Asia since 1969.

It's worth noting that U.S. marketed natural gas production is down a little over 1 percent for the 12-month period ending November 2016. During the same 12-month period net imports were about 654 bcf or about 2.7 percent of total consumption. That's right. The United States remains a net importer of natural gas even as it contemplates a major expansion of LNG export capacity.

Back in Australia electricity blackouts in the state of South Australia are being blamed partly on the mothballing of a major new natural-gas-fired electric generating plant. The operator had contracted for large deliveries of natural gas at low prices to fuel the plant. But with the price of LNG exports from Australia soaring, it became so profitable to resell the gas for export that the plant was never opened. (That was before the domestic price spike. But by then the plant's gas was already committed.)

The rapid expansion of natural-gas-fired electricity generating plants in the United States leaves the country vulnerable to similar dynamics that also include higher electricity rates. Most utilities get to pass fuel price increases on to their customers. And, LNG exporters cannot withhold deliveries and sell their contracted gas back into the domestic market if prices spike. They are obliged by long-term contracts with their customers to deliver. In addition, LNG customers are typically bound by take-or-pay contracts which oblige them to take LNG deliveries or pay for them anyway. Which do you think they'll choose to do?

The U.S. natural gas industry argues that natural gas production is bound to rise and keep on rising for a long time. The U.S. Energy Information Administration (EIA) is forecasting a continuous increase in annual U.S. production through 2050 when production is supposed to reach 40 trillion cubic feet (tcf), up from just 26.5 tcf in 2016. The EIA is basing its forecast on dramatic gains in so-called shale gas production since conventional gas production continues to decline.

But the reality is already much different. As geoscientist David Hughes tells us in Shale Gas Reality Check published in December 2016:

Shale gas production overall has declined by 4.7% since peaking in February 2016 (down 2.1 billion cubic feet per day...). All shale plays have peaked and older plays, like the Barnett and Haynesville, are down 38% and 52%, respectively.

Higher prices might turn the trend around. But higher prices will also make LNG exports less attractive to world markets. A deeper reading of Shale Gas Reality Check--which provides detailed analysis of all major shale gas plays based on actual production trends, not company press releases--suggests a declining U.S. natural gas industry rather than a growing one in the years ahead.

The industry promise of large and growing supplies at low prices was a fiction from the beginning designed to get regulators to approve export facilities that would bring U.S. natural gas prices closer to world levels--and thus make the natural gas industry more profitable.

There is actually a principled argument for the industry position. But it would be popular neither with voters nor with the legislators who represent them, and the industry understood this. Here is the argument: The natural gas industry should be allowed to sell its products to the highest bidder anywhere in the world just like every other industry in America. If we are now truly in a global economy, then natural gas should become a global commodity and Americans should pay the global price.

Some governments, however, perceive that the central role of energy in the economy warrants special rules that retain domestic energy sources for domestic uses. After all, nothing gets done without energy. Along these lines the Australian government is currently getting an earful from irate natural gas business and household customers.

In theory environmentalists should be content to see fossil fuel prices including natural gas prices drift higher in the United States. That makes renewable energy more attractive to investors. But environmentalists fear that providing an outlet for America's shale gas via LNG to world markets will only make the environmental nightmare associated with fracking in shale gas fields that much worse. The industry would then be able to go after deposits that only higher world prices make viable.

In all likelihood many of the proposed LNG export projects in the United States will never be built. Glutted world LNG markets are giving investors pause. As it turns out, the U.S. natural gas industry wasn't the only one that saw opportunity in gaining access to the LNG export market.

Whether the United States will see more frequent natural gas price spikes or an overall long-term increase in domestic natural gas prices will depend partly on how investors and regulators perceive the availability of future U.S. natural gas supplies and the conditions of the LNG export market. On balance the evidence suggests that they remain too optimistic about both.

Kurt Cobb is an author, speaker, and columnist focusing on energy and the environment. He has been a regular contributor to the Energy Voices section of The Christian Science Monitor and is author of the peak-oil-themed novel Prelude. In addition, he has written columns for the Paris-based science news site Scitizen, and his work has been featured on Energy Bulletin (now Resilience.org), The Oil Drum, OilPrice.com, Econ Matters, Peak Oil Review, 321energy, Common Dreams, Le Monde Diplomatique and many other sites. He maintains a blog called Resource Insights and can be contacted at kurtcobb2001@yahoo.com.

Sunday, February 05, 2017

Risk, double-edged swords and imagining the worst

A friend of mine recently said that intellectual honesty often requires imagining the worst. Of course, in the study of climate change and natural resources one needs only to read the analyses of scientists to imagine the worst.

Imagining the worst in not necessarily the same as believing the worst is inevitable or even likely. It can be merely a standard part of both scenario and emergency planning. Of course, imagining the worst can also be a double-edged sword with a sinister edge, sometimes eliciting Richard Hofstadter's paranoid style of politics.

When we imagine the worst concerning our political opponents or our enemies (sadly often placed into the same category), this is merely a reflex designed to justify our own hatreds and also a tool for broadly smearing those with whom we disagree. Clearly, this is not the same as seeking out solid evidence and using logic to construct a worst-case scenario.

In scenario planning the whole point is to consider seriously a range of possible outcomes and formulate plans for dealing with those outcomes. For example, the U.S. Energy Information Administration (EIA) reference case for world oil production (defined as crude oil and lease condensate) shows it rising from about 76 million barrels per day (mbpd) in 2012 to 99.5 mbpd in 2040. The low production case is 92 mbpd and the high production case is almost 103 mbpd.

You may feel that this range doesn't reflect more extreme scenarios, but at least the agency offers a range. Some forecasters pretend to know to the second decimal point the future of oil production and reserves decades hence. It's hard to put this down to anything but hubris.

Compare these forecasts to a forecast based on much sounder data, this one made by an EIA researcher in 2009 about how much oil we would have to find and deliver to meet rather extravagant future demand expectations:

The researcher demonstrated that we will have to find more than five new Saudi Arabias by the early 2030s (or 2040s if demand growth slows somewhat as the EIA anticipates) if we are going to fill the gap between production from existing fields and expected future demand (in this case for so-called total liquids which include natural gas plant liquids and other non-oil items). He based this on the estimated average production decline rate of 4 percent per year for existing fields, a fairly conservative number given that other estimates range as high as 6 to 9 percent. We know with a fair degree of accuracy what existing fields will on average be producing decades hence because we have a long series of actual field data.

This graph looks more like imagining the worst than the other forecasts. Without being hyperbolic, this one graph suggests that our confidence that future oil production will match our expectations--and that therefore we will NOT need to plan for a disappointing outcome--deserves considerable scrutiny.

What imagining the worst can do is allow us to discern the risks in our lives and our futures, collective and individual. This does not have to be a glum exercise. We can, as the saying goes, prepare for the worst and hope for the best. We can prepare responses to any anticipated challenges as a positive way forward.

The naturally optimistic disposition of humans tends to make them critical of those who point out possible catastrophic downsides, especially when those observations conflict with business-as-usual. But it is the ability to hold in one's mind both optimistic promises and the possibility of catastrophic failures that makes for intellectual honesty.

It is intellectually honest to acknowledge that we live in a tragic universe. Things often don't turn out for the best. The future of humankind is not assured either by technology or by religious prophecy (and sometimes it is hard to tell them apart). But, we can learn to live with uncertainty and risk without living in fear.

This piece on the so-called high-reliability organization tells us that "[t]o avoid failure we must look for it and be sensitive to early signs of failure." That is just prudence.

But we live in an age where unchecked technological optimism is treated as prudence, and intellectual honesty is treated with disdain. Questioning is not the same as gainsaying. But the questions are frequently batted away with protestations that "you just don't understand."

I am reminded of the film Melancholia in which the severely depressed character turns out to be the sane one in the face of global catastrophe. You don't have to be depressed to begin questioning the path we are on. But if depression comes from imagining the worst, then you have come by it honestly.

It will be hard in the years ahead to be intellectually honest. Like virtue that honesty will have to be its own reward. If you are intellectually honest, you may be made to feel like the narrator of Thomas Hardy's poem In Tenebris II who says: "I think I am one born out of due time, who has no calling here." But you can more easily remain true to yourself when you understand as Hardy does that "if way to the Better there be, it exacts a full look at the Worst."

Kurt Cobb is an author, speaker, and columnist focusing on energy and the environment. He has been a regular contributor to the Energy Voices section of The Christian Science Monitor and is author of the peak-oil-themed novel Prelude. In addition, he has written columns for the Paris-based science news site Scitizen, and his work has been featured on Energy Bulletin (now Resilience.org), The Oil Drum, OilPrice.com, Econ Matters, Peak Oil Review, 321energy, Common Dreams, Le Monde Diplomatique and many other sites. He maintains a blog called Resource Insights and can be contacted at kurtcobb2001@yahoo.com.

Sunday, January 29, 2017

Trump's wall and the imaginary lines we draw

There was quick reaction to President Donald Trump's announcement last week that he plans to follow through on his campaign pledge to build a wall on the U.S.-Mexican border. Conservative and liberal commentators alike were channeling their inner Robert Frost, referencing his poem "Mending Walls" that starts "Something there is that doesn't love a wall" and contains the well-known proverb, "Good fences make good neighbors."

It is worth remembering that this border is an imaginary line we draw ourselves. It's true that the Rio Grande separates Texas and Mexico. But much of the rest of the border is dirt. The only way to see the border is to draw a line.

Animals don't really respect borders the way we'd like them to. The jaguars, gray wolves and ocelots which depend on ranges that cross the U.S.-Mexican border don't see it. Humans can detect the human signs of a border. But they tend to think about how to get across it rather than how to stay on one side. Even East Berliners in the days of the famously lethal Berlin Wall found ways to get across to West Berlin. They went up, around, under and through it again and again.

I am reminded of my days in South Texas when the federal government decided enough was enough and erected a floating border of sorts around Florida to stop rising seaborne drug trafficking. As a result much of that drug trafficking merely shifted westward, some of it to the Texas coast.

The French imagined that the Maginot Line, built to halt a German invasion, did not have to extend to the English Channel. When the Second World War broke out, the Germans felt no obligation to march directly into French machine guns and artillery along the fortified line. Instead, they invaded Belgium and then turned south toward France. Who could have guess it? (Actually, a lot of people did.)

Humans are making a mockery of the current border barrier daily by simply walking or driving through regular border crossings. It's hard to see how that will change with a wall. The wall will have to allow for current bridges and land crossings. And, it will have to allow rivers on the American side to flow into the Rio Grande or out of and into Mexico where it touches the Colorado River basin.

As for the current barrier, people can just climb over it or through it where there are holes made by wire cutters.

Yes, yes, I know. This new wall will be concrete, and it will be 55 feet tall. My source for the material and height specifications is Donald Trump. I'm sure in Trumpian language the wall will be fabulous and the best wall ever built by the smartest engineers. It will be "beautiful," he says.

We have no actual plans or specifications for such a wall from the Trump administration yet. But, a fanciful attempt by a Mexican architectural firm imagined a pink wall (so it would be beautiful) stretching from the Pacific Ocean to the Gulf of Mexico. The architects estimated it would take 16 years to complete in part because the mountainous terrain along some of the border will be difficult to access and build on. Perhaps adding to the difficulty for this design will be the shopping malls and detention centers built right into the wall.

Still, unless the wall is attended to by guards all along its length, people will just find ways over it or possibly under it. Ladders are pretty handy. Of course, wire cutters may also be needed. Where there is water, boats are a good choice and can be navigated up the tributaries of the Rio Grande well beyond the wall. Those crossing the border have a lot of experience with all of these.

It's hard to imagine that at one time the United States had a formal agreement with Mexico called the Bracero Program to import Mexican laborers to overcome a labor shortage, primarily for seasonal agricultural work during World War II. The program lasted until 1965 when new immigration legislation ended it. The need for Mexican seasonal labor, however, didn't end which is why much of the movement of 500,000 Mexican workers in and out of the United States each year continued as that movement went from being legally sanctioned and administered to being illegal.

Given all the goods and people crossing the Mexican border every day, the hoopla over the proposed wall must actually be about something other than keeping goods and people on the Mexican side out. It's more about the lines we construct in our minds between us and others.

Denizens of the U.S. coastal regions are used to the cacophony of voices and subcultures that populate their daily lives. There is no convenient line that can be drawn to separate cultures from one another in those places. In so-called flyover country, where Trump was hugely popular, recent immigrants are more sparse. It is easier to draw a line between "us" and "them." By this I do not mean that people living in the Plains states or the Midwest are not charitable. One can find plenty of stories about kindness to newcomers from foreign lands.

But the newcomers do not simply melt into a polyglot culture in those places. They are aliens and remain so for a very long time after arrival.

The wall--whether it is ever built or not--signifies a desire to reduce the number of newcomers and to preserve a way of life that is threatened economically and culturally by the globalism embraced by the country's bi-coastal elites. Stop the invasion of newcomers and you will stop the forces bearing down on a threatened way of life in flyover country; so goes the visceral logic.

It's doubtful that such a wall can do either. But a promise to build one signifies sympathy for a certain fearful and nostalgic outlook and an opposition to a globalism that has devastated the economies of small towns and rural communities--by shipping manufacturing jobs overseas and by favoring the consolidation of agricultural in a way that is driving more and more people off the land.

Sometimes when we put up barriers to others, it can actually be to draw them nearer in steps. Lovers love the chase. Businesspeople stake out negotiating positions, but do so only as part of a game to come to an agreement. Lines are drawn to be crossed. That's how new friends and new opportunities enter our lives.

Sometimes we put up barriers to protect ourselves from others who might harm us physically or who might merely reject us or shame us publicly for sport. Sometimes, we put up barriers to those who are culturally alien, too, not because we necessarily dislike them, but oftentimes because we are not certain of the stability of our own cultural lives.

The maelstrom of change which is now sweeping over American culture (and much of the world) can overwhelm those without secure anchorage. We are beyond the relative stability that prevailed prior to the 2008 financial crisis and into an in-between period of rapidly changing technological, social, economic and environmental forces, all of which demand new arrangements.

The globalism that promised to put to rest old divisions has instead reawakened them. A retreat behind a wall won't reconcile those divisions. But neither will a rapid advance toward a socially untenable and ecologically disastrous globalism based on a neoliberal economic ideology that has led to financial stagnation and decline among so many low- and middle-income families.

Economics thought that it could replace politics. Politics has come back to reassert itself and challenge what could not be publicly challenged before. The repressed always returns, often in ways which surprise and distress us.

We now have no choice. We are obliged to cross lines into uncharted territory to discover a new politics and a new economics. There will be many barriers and detours, and it won't be an easy journey.

Kurt Cobb is an author, speaker, and columnist focusing on energy and the environment. He has been a regular contributor to the Energy Voices section of The Christian Science Monitor and is author of the peak-oil-themed novel Prelude. In addition, he has written columns for the Paris-based science news site Scitizen, and his work has been featured on Energy Bulletin (now Resilience.org), The Oil Drum, OilPrice.com, Econ Matters, Peak Oil Review, 321energy, Common Dreams, Le Monde Diplomatique and many other sites. He maintains a blog called Resource Insights and can be contacted at kurtcobb2001@yahoo.com.

Sunday, January 22, 2017

Which species are we sure we can survive without?

As a new administration takes over in Washington, both houses of Congress and the presidency will be in the hands of one party. As it turns out, that party, the Republicans, want to curtail the protections of the Endangered Species Act (ESA). Many Republicans complain that the act hinders ranching, logging, oil and gas exploration and water projects.

The key question they are not asking is this: Which species are we sure we can survive without? More on that later.

The act has in practice been used "for control of the land," says one congressman, and not for the rehabilitation of species. His statement stems from a misunderstanding about what it takes to revive an endangered species, namely habitat. That means the land, air, water and other species (plant and/or animal) which any particular species depends on in order to survive.

First, it's important to understand how humans and, in fact, all organisms obtain the resources they need. There are basically two strategies, takeover and drawdown. Takeover simply refers to taking over the habitat of other species to extract resources.

Humans routinely take over land with diverse plant and animal species and use it to grow crops of our choosing, tearing out trees and boulders and turning over the soil to kill the remaining plant life. We keep away nutrient-leeching weeds by pulling them out, plowing them under or killing them with chemicals. We also kill and repel insects that can eat part of what we grow.

Drawdown refers to the drawdown of finite resources such as fossil fuels, metal ores and other mineral deposits such as phosphates for fertilizer. Usable deposits of these are not regenerated by the Earth on any timescale that matters to humans.

Ranchers who take over rangeland for grazing livestock don't like it when wolves protected by the ESA decide to assert their desire to "take over" livestock and eat them. Ranchers are in peril if they try to kill protected wolves even to defend their investment. The conflict isn't over whether the livestock will die. It's about who gets to kill and eat the livestock and when.

We humans, it turns out, are in competition with other predators for food. What the opponents of the ESA are complaining about is that we are fighting these competing predators with both arms tied behind our backs. Why be concerned about what other competing species need? The priority should be what we humans need, right?

Now we arrive at the crux of the matter. Are we humans merely in a war of all against all in the biosphere? Don't all species compete with one another for advantage in the struggle for survival?

The answer to this question is yes and no. Species both compete and cooperate to survive. Dogs have evolved to cooperate with humans. Cooperation has been kind to the household dog population which now numbers close to 78 million in the United States alone.

Compare the ancient relative of the dog, the wolf. As a competitor, the wolf is definitely losing the competition with dogs (and humans). Only about 5,600 remain in the lower 48 states. A far less developed Alaska may have up to 11,000 wolves. But both numbers are minuscule compared to dog populations. Seeking to outcompete other species isn't always the most successful survival strategy (though I wouldn't count the adaptive strategies of dogs and wolves as consciously chosen.)

We have another very recent example of a species the population of which dropped precipitously as a result of unintended consequences of human action. The widespread adoption of the herbicide glyphosate is thought to be responsible for wiping out much of the milkweed in North America, the only plant that monarch butterfly larvae feed on. East of the Rocky Mountains, monarch populations have declined up to 90 percent. We humans didn't know that this would be one of the results of the widespread use of glyphosate. We found out the hard way.

Which brings us to the question of which species we are sure we can survive without. The answer so far is the ones that have already gone extinct while we humans have been around on the planet. We are now in what many scientists consider the Sixth Great Extinction. The main culprit is human activity and our sheer numbers.

As we are learning each day more and more, human survival relies on complex interdependencies with other microorganisms in our own bodies. We are also dependent on the microbiota of the soil that impart the fertility necessary to grow crops. In both areas we are learning just how much we do NOT know about these microorganisms and their interactions with us and with the soil.

If you consider that the broader world with which we interact has millions of species of which we are not aware, it becomes apparent that the Sixth Great Extinction is a rather clumsy and thoughtless way to play Russian roulette with human existence. We could easily cause an organism essential to our survival to go extinct without even realizing it.

The surprising decline of phytoplankton in the oceans comes to mind. The cause is likely rising ocean temperatures due to climate change. Phytoplankton are microscopic plants that form the base of the ocean food chain and produce two-thirds of the world's oxygen. Recent research suggests a rise of 6 degrees C in ocean temperatures "could stop oxygen production by phytoplankton by disrupting the process of photosynthesis." How many other species might pose this kind of outsized danger to our existence if they were to decline, disappear or cease to function in a normal way?

You will now have an answer when a congressman, businessperson or fellow citizen asks, "Why be concerned about what other competing species need? The priority should be what we humans need, right?" Perhaps. But if one of those needs is to prevent our own extinction by keeping other organisms alive, then we'll have to define "need" differently than we do now.

I am under no illusion that the ESA in its current form is somehow the critical firewall to forestalling rapid biodiversity loss. There are too many human activities outside U.S. control and outside the jurisdiction of the act inside the United States that are responsible for the vast biodiversity loss we are experiencing. As a result I have what I believe is a not unreasonable fear that our experiment in species management called the Sixth Great Extinction could lead to the extinction of the one species we think we are saving by killing off so many others.

Kurt Cobb is an author, speaker, and columnist focusing on energy and the environment. He has been a regular contributor to the Energy Voices section of The Christian Science Monitor and is author of the peak-oil-themed novel Prelude. In addition, he has written columns for the Paris-based science news site Scitizen, and his work has been featured on Energy Bulletin (now Resilience.org), The Oil Drum, OilPrice.com, Econ Matters, Peak Oil Review, 321energy, Common Dreams, Le Monde Diplomatique and many other sites. He maintains a blog called Resource Insights and can be contacted at kurtcobb2001@yahoo.com.

Sunday, January 15, 2017

Neoliberals know the price of everything and the value of nothing

My father likes to say that some people know the price of everything and the value of nothing. The same could be said of the neoliberals of the world, who--in case you missed my previous piece--are now transcendent in most policy circles across the world.

To review, the neoliberal agenda is one of deregulation, unfettered trade, fiscal austerity (with the attendant reduction in social programs), privatization and tax reduction. Fundamental to the neoliberal ideology is that government regulation and planning of economic activity are inherently flawed and cannot bring about the desired ends of efficiency, prosperity and social harmony.

Instead, price is the great and sufficient transmitter of information across the economy and across society at large. Price is the best barometer for all decisions. Hence, the emphasis on privatizing almost everything in society including education and health care.

Neoliberals believe that voting with your money is at least, if not more important, than voting in elections in a free society. The freer the market, the more choices consumers will have, and the more competitive the market, the better the quality will be.

There are several problems, of course, with the price mechanism. First, it only takes into account costs which are directly borne by the provider of a product or service. So-called externalities such as pollution and climate change are not tallied in the price. In order for those costs to be included, say, by the imposition of a carbon tax, the government would have to intervene, something not consistent with neoliberal ideas.

Second, such a monomaniacal focus on price alone pre-empts a broader view of social goals, reducing them merely to price signals. But not every social good can be reduced to a price signal in a nominally "free" market.

Here we have a case of knowing the price of everything and the value of nothing. The neoliberal who ignores climate change sacrifices a habitable climate for his or her children and grandchildren in favor of cheap prices for goods and services now. This is the supposed "economic rationality" which the neoliberal espouses because he or she does not seem to know the VALUE of a habitable climate. What the neoliberals would like you to believe is that a neoliberal world is inevitable--which translates into a suicide-by-climate-change pact among peoples.

The theorists, policymakers, propagandists and business leaders also tell us that "globalization"--another vague, but central tenet--is inevitable, that it is a product of technological change, that it is akin to a natural law which we cannot violate without consequences.

In fact, it is nothing more than a conscious set of policies set out in worldwide trade agreements administered in part by the World Trade Organization--policies that favor the wealthy over everyone else and which break down national barriers (read: eliminate protections against the destruction of local industries and agriculture) that hinder the free flow of capital and goods (and, of course, the search for profits). As it turns out, French sociologist Pierre Bourdieu tells us in his book of essays Sociology is a Martial Art, "the global market is a political creation."

It is no accident that neoliberals advocate neither for the globalization of a minimum wage nor for the globalization of free education nor for the globalization of universal health care. Why is that? Well, these areas of social uplift are considered merely to be cost centers which reduce competitiveness. But if these were available to everyone, then no country or industry would be at a disadvantage. So, it becomes obvious that the neoliberal agenda is to UNDERMINE all these social goods in order to lower costs (that is, lower wages, benefits, and taxes) and to increase profits by pitting one country against another in a race to the bottom of the social ladder.

Moreover, creating anxiety and uncertainty among employees, even ones at the highest level, is actually the point. Such anxiety and uncertainty hinders them from taking risks in participating fully in society as political actors.

The same logic would apply to environmental, health and safety regulations designed to protect workers, consumers and the population at large. If you want your country to be competitive, it is best to keep such regulations to a minimum.

Bourdieu points out that neoliberal policymakers are obsessed with the "confidence of the markets." Why, he asks, are they not equally concerned about the "confidence of the people"? Recent developments such as the decision by British voters to exit the European Union and the election of Donald Trump to the presidency in the United States suggest that the confidence of the people in the neoliberal globalist experiment is becoming shaky.

Bourdieu adds that instead of a universal minimum wage, we get what economist Frédéric Lordon calls the "minimum guaranteed shareholder income."

Any demand that education, health care, pensions and other benefits for workers be maintained, let alone expanded, is now styled as old-fashioned and backward-looking. These benefits must be "reformed" (read: destroyed). In fact, basic protections for the middle and lower classes are some of the most important human achievements ever, Bourdieu explains. Rolling them back isn't progress, it is anti-progress.

The neoliberal agenda styles itself as a revolution--the Reagan revolution, the Thatcher revolution--and anyone who opposes it is labeled parochial, retrograde and opposed to the march of progress. What these supposed "revolutions" really turn out to be are the latest versions of a very old system of wildcat crony capitalism supported by a combination of corporate and state power in which the corporations tell the state how to govern.

The neoliberal agenda undermines the hard-won gains of average people whose autonomy and independence--far from being undermined by social insurance programs--are predicated on a degree of financial security and access to health care and education which allow meaningful participation in democratic life. This participation would be what philosopher Isaiah Berlin refers to as "positive freedom," that is, the ability to take action based on our resources and previously developed capabilities.

The neoliberal agenda also threatens to undo any progress we've made so far in addressing the myriad existential environmental challenges that threaten to undo civilization as we know it.

We would not presume to understand the Sun by examining merely one wavelength of light coming from it. We would not presume to understand the forest by examining one tree. Nor would we presume to know all of humanity and human society by examining one individual. But somehow neoliberals believe that we can understand and govern society by focusing on price alone.

What gets sacrificed in such a system is social stability and harmony and a habitable biosphere inside which we can all live and prosper. This is what is now at stake when we know the price of everything and the value of nothing.

Kurt Cobb is an author, speaker, and columnist focusing on energy and the environment. He has been a regular contributor to the Energy Voices section of The Christian Science Monitor and is author of the peak-oil-themed novel Prelude. In addition, he has written columns for the Paris-based science news site Scitizen, and his work has been featured on Energy Bulletin (now Resilience.org), The Oil Drum, OilPrice.com, Econ Matters, Peak Oil Review, 321energy, Common Dreams, Le Monde Diplomatique and many other sites. He maintains a blog called Resource Insights and can be contacted at kurtcobb2001@yahoo.com.