Sunday, August 30, 2015

Anxiety turns to fear: Markets, energy, Pan and the Zeitgeist

The characteristic feeling of the post-2008 world has been one of anxiety. Occasionally, that anxiety breaks out into fear as it did in the last two weeks when stock markets around the world swooned and middle class and wealthy investors had a sudden visitation from Pan, the god from whose name we get the word "panic." Pan's appearance is yet another reminder that the relative stability of the globe from the end of World War II right up until 2008 is over. We are in uncharted waters.

Here is the crux of the matter as expressed in a piece which I wrote last year:

The relentless, if zigzag, rise in financial markets for the past 150 years has been sustained by cheap fossil fuels and a benign climate. We cannot count on either from here on out....
Another thing we cannot necessarily count on is the remarkable geopolitical stability that the world experienced for two long stretches during the fossil fuel age. The first one lasted from the end of the Napoleonic Wars in 1815 to the beginning of World War I in 1914 (interrupted only by the brief Franco-Prussian War). The second lasted from the end of World War II in 1945 until now.
Following the withdrawal of U.S. military forces from Iraq, the Middle East has experienced increasing chaos devolving into a civil war in Syria; the rapid success of forces calling themselves the Islamic State of Iraq and Syria which are busily reshaping the borders of those two countries; and now the renewed chaos in Libya. We must add to this the Russian-Ukranian conflict. It is no accident that all of these conflicts are related to oil and natural gas.

As I view the current world landscape, I am reminded of two movies (which I've written about before) that I think capture the Zeitgeist: Melancholia and Take Shelter. In both the protagonists increasingly sense that something is terribly wrong, but can't quite put their finger on it. Everyone around them thinks they are ill or crazy. But for both protagonists, their anxiety comes from an inner vision that stems not from mere psychic disturbances, but rather from alarming real-world circumstances that are about to break into the open.

In a sense, these two characters represent those of us who cannot repress the pervasive anxiety of our times and who seek not merely to alleviate it, but rather to face it--to find out its origins and address its causes.

And here we return to the god Pan, mentioned at the outset. It is fitting that this god of nature--of shepherds, flocks, and wild places--should also in our age be associated with the panic we feel. For it is nature itself which is weighing on our economy in the form of climate change and fossil fuel depletion. As California--the seventh largest economy in the world behind France--burns in the heat of a multi-year drought, the grim consequences of our poor stewardship are becoming apparent. The images of fiery forests and dust-dry fields command our attention.

But hidden from the view of most is the role that increasingly expensive energy has played since the beginning of this century in slowing economic growth. The shorthand way of understanding this is that in the last century we extracted all the easy-to-get fossil fuels. Now we are going after the hard-to-get remainder which are costly to extract. That takes resources away from the energy-consuming part of the economy and creates a drag on economic growth. Hence, a dramatically slower economy in 2015 after four years of record or near record average daily prices for the most critical fossil fuel, oil. (The recent drop in oil prices is primarily a reflection of slowing demand that comes from a slowing economy.)

The financial industry through the media has intervened forcefully during the recent stock market sell-off to tell us all not to panic. These corrections are normal, they say, and long-term investors--that is, virtually everyone except Wall Street--should ignore them. What the industry and the media do not tell us is that these are not normal times.

Circumstances have changed dramatically. The evidence is there if only we have eyes to see it. Interest rates in much of the world are still stuck at or near zero seven years after the last worldwide downturn. How will the world's central banks stimulate the economy after the next inevitable recession? By lowering interest rates that are already at zero? In the post-World War II paradigm, rates would be at much higher levels today, say four or five percent, and economic growth would be much faster.

Annual world economic growth from 1961 through 2000 according to the World Bank was 3.8 percent per year. From 2000 to 2013, an era of increasingly expensive energy, it slowed to 2.4 percent. From the initial spurt of 4.1 percent growth in 2010 (after a contraction of 2.1 percent in 2009), growth settled down to 2.3 percent in 2012 and 2013, slightly below the recent average. This is despite unprecedented efforts to stimulate the world economy through large increases in government spending and record low interest rates.

And, as mentioned above, the geopolitical stability that has been the backdrop to the pervasive buy-and-hold investment mentality has disappeared. Like the protagonists of Melancholia and Take Shelter, we anxiously await we-know-not-what.

As we do, Pan makes his ever-more-frequent appearances. Franklin Roosevelt is famous for saying: "The only thing we have to fear is fear itself." But fear is a protective mechanism. We are right to fear things that can hurt us and to act accordingly. We cannot solve our problems if we refuse to accept that we have them.

Sometimes Pan is trying to help us by warning us. Sometimes it is possible to hear him playing his flute long before he arrives on the scene. But can we listen and act in some way other than panic?

Kurt Cobb is an author, speaker, and columnist focusing on energy and the environment. He is a regular contributor to the Energy Voices section of The Christian Science Monitor and 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, The Oil Drum,, 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

Sunday, August 23, 2015

Counterintuitive: (Some) volatility is good for you, stability not so much

With stock markets around the world plunging and commodity prices in free fall, it seems appropriate to return to a theme which I've taken up previously: That a certain amount of volatility is good for humans and the systems they build, and that attempts to stifle the natural and healthy volatility of a system can lead to greater and even catastrophic volatility in the end.

All of this runs counter to the propaganda with which we are regaled on a daily basis. For example, investors are told that the lower the volatility of their portfolios, the lower the risk. But, in 2008 that turned out not to be true. More recently, as volatility in the widely watched S&P 500 settled down to historic lows this year, investors believed that the magic of low volatility was here to stay. Central banks--through their periodic interventions when markets began to fall--had somehow engineered a no-lose situation for investors. It was going to be clear sailing ahead for...well, forever if you listen to Wall Street.

The history of volatility in markets and in life suggests that high volatility lies just around the bend after a prolonged period of low volatility. It is impossible to say what would trigger the kind of crash we saw in 2008. For now, the Chinese stock market crash and recent negative economic news in China and the United States have unnerved many investors. The Chinese stock market is now more than halfway to a 2008-style meltdown. Stocks in Europe and the United States have finally started to fall in earnest after holding up and even advancing in the face of major declines in emerging markets such as Brazil, Indonesia, Malaysia, and Turkey. Money rushed from the emerging markets to major developed economies looking for--you guessed it--stability.

In the wake of the 2008 crash central banks and governments were determined to revive economic growth. They didn't care that we had too much manufacturing capacity, too much housing, too many banks, too many brokerages, and too much of many other things as well. That excess had to be taken up by consumers and businesses with access to cheap borrowed funds, funds those groups would spend to revive the economy. Marginal enterprises, overleveraged speculators in real estate, and insolvent banks and brokerages had to be bailed out so they could live to speculate and operate another day. The excesses of the previous bubble would be carried over to the next. Few would be disciplined for their mistakes.

Having had several cycles of this brand of policy starting back with the 1987 crash, marginal parts of the economy--like large overleveraged, overextended money center banks--have been allowed not only to survive, but actually to flourish and engage in ever more risky behavior, confident that authorities would always bail them out if they became insolvent.

The seeming market stability and low volatility engineered by central bank bond buying and zero interest rate policy after the 2008 crash is an illusion. It is very much like the illusion that a quiescent earthquake fault gives to people who live over it. The stress on the unseen fault builds gradually over a long period. Everything is fine until the sudden adjustment comes and the ground starts to shake taking highways, bridges and buildings with it. It's the geological equivalent of a market crash.

But as Nassim Nicholas Taleb and his coauthor, Gregory Treverton, pointed out earlier this year in Foreign Affairs, these ideas about volatility apply not only to markets, but also to entire countries.

The piece contrasts the seeming stability of Syria with the relatively chaotic environment in Lebanon just prior to the Arab Spring. But Lebanon which has had to adapt itself to new conditions after a 15-year civil war has proven robust in the face of widespread upheaval throughout the Middle East. Syria which seemed to be a picture of stability is now in shambles, a victim of its own rigidity.

The authors outline five causes for this fragility among seemingly stable regimes:

  1. Concentrated decision-making system
  2. Absence of economic diversity
  3. High overall indebtedness and high leverage to particular industries
  4. Lack of political variability
  5. No record of surviving shocks

Counterintuitively, Italy is rated as far more robust than France because of Italy's highly decentralized political system, a system in which 14 different prime ministers in 25 years have caused minimal upheaval in Italian governance. France, which is much more centralized and also heavily indebted, is fragile in comparison with regard to economic shocks and changes in top leadership. The almost constant parliamentary political crises in Italy hardly register on the country. The rise of the anti-immigration right in France is sending shudders through the electorate.

Japan which has been a paragon of stability in Asia is actually quite vulnerable for two reasons: the highest debt-to-GDP ratio in the world and the uninterrupted reign of the Liberal Democratic Party from 1955 to 2009. High debt and lack of political variability await a trigger that would bring about unusual volatility.

Turkey, a highly centralized country heavily dependent on tourism for its foreign currency, is experiencing intense turmoil related to internal dissent from the ethnic Kurds, the spillover of the civil war in neighboring Syria, and the consequent loss of tourist revenues. In Taleb's and Treverton's parlance, the country is highly leveraged to tourism.

Moderate volatility in economies in the form of periodic recessions weeds out weak firms thus making the overall economy stronger. When that volatility is suppressed, as it has been again and again in the last 30 years, many of the weak and reckless survive along with the strong and prudent. In fact, the reckless get rewarded for taking dangerous risks, especially in the financial sector where they get to keep their bonuses while taxpayers clean up the mess.

Moderate volatility in the affairs of nations teaches them lessons, forces them to adjust to changing circumstances and in general keeps people sharp and on their toes. Difficulties teach us far more than successes and thus make us far more robust in the face of future difficulties.

There is such a thing as too much volatility. Exercising is good for your health. Dying of heat exhaustion because of an overly long workout in excessive heat is too much volatility. On the other hand, sitting and watching television for most of the day only sets up the mind and body for catastrophic volatility in the form of major health problems such as a heart attack and an impaired ability to think through and solve major life problems.

Finding the right level of volatility for individuals and for societies and their institutions isn't as hard as it seems. What's hard is accepting that level.

Kurt Cobb is an author, speaker, and columnist focusing on energy and the environment. He is a regular contributor to the Energy Voices section of The Christian Science Monitor and 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, The Oil Drum,, 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

Sunday, August 16, 2015

What is the price of oil telling us?

Market fundamentalists tell us that prices convey information. Yet, while our barbers and hairdressers might be able to give us an extended account of why their prices have changed in the last few years, commodities such as oil--which reached a six-year low last week--stand mute. To fill that silence, many people are only too eager to speak for oil. And, they have been speaking volumes. So much information in that one price!

First, as prices fell last year when OPEC refused to cut its oil production in the face of slowing world demand, the industry kept saying that it could continue to produce from American tight oil fields at around $80 a barrel and be profitable. Then, as prices fell further, the industry and its consultants assured everyone that while growth in tight oil production would slow, it would still be profitable for the vast majority of wells planned.

Petroleum geologist and consultant Art Berman is probably the best representative from the skeptical camp. For many years Berman has been pointing to the high cost of getting fracked oil out of the ground. And, those costs led to negative free cash flow for most tight oil operators for several years in a row--that is, they spent considerably more cash than they took in, making up the balance with debt and stock issuance. Not surprisingly, the operators took that money and kept drilling as fast as they could.

It was a recipe for oversupply and a crash, one that is now threatening the solvency of many fracking-dependent U.S. oil companies.

As if to the rescue, the giant consulting firm Deloitte called a bottom in the oil price when U.S. futures prices hit $48 a barrel on February 4--a little prematurely it seems. Friday's price for September futures on the NYMEX closed at $42.50.

Not to worry. Two major international oil companies, Chevron and Exxon, declared back in December that $40-a-barrel oil won't be a problem for them. One of the sources cited was Exxon CEO Rex Tillerson whose company has had trouble replacing its oil reserves for more than a decade at much higher average prices. In fact, oil majors have been cutting exploration budgets since early 2014 when oil prices were still hovering above $100.

It seemed as if the message that the price of oil was sending from about the middle of last year until just recently was going unheeded by American oil producers. U.S. oil production kept rising despite dramatically falling prices. But when production growth finally stopped in June, there was hope that less supply would be weighing on prices, and predictions abounded that the price would go higher.

The reasoning behind this call was that continuing economic growth worldwide would combine with stagnating growth in oil supplies to squeeze the market enough to move prices up.

While low oil prices were supposed to "spur the global economy" according the the International Monetary Fund, The Economist magazine took a more measured view. It also looked at the decline in employment and investment in oil which had previously been booming.

High-cost oil from the Canadian tar sands is also taking a significant hit as investment is slashed in the face of low prices.

With the recent renewed slump in oil prices, the industry is trotting out the same kind of stories it trotted out when oil was around $80 and then $60. Oil at $30 a barrel will be no problem for a special breed of drillers in the Bakken Formation of North Dakota, we are told. If you actually read the story, it is stating the obvious: That break-even prices vary from well to well. And, the writer refers to "realized" prices, not the NYMEX futures price. It turns out that because Bakken lacks pipelines for transporting oil, it must use oil trains. That's expensive.

So, those buying oil from North Dakota take the freight costs into account. The average realized price on Friday $28.75 for the type of oil extracted from Bakken's deep shales in North Dakota. While wells that are already drilled often produce regardless of price because those who operate them must pay back debt, it is doubtful that very many new wells would be profitable at this price. And, it is worth noting those investing their capital do not as a rule seek to break even. A break-even proposition usually sends them looking elsewhere to invest their money.

Beyond this, there is a broader consideration. And, it is something which very few people seem to be talking about when it comes to all the information that is supposed to be conveyed by the oil price.

As the world's central energy commodity, oil is a good indicator of economic activity. With the nearly universal conviction that the previous bounce in oil prices to around $60 signaled a stronger economy and thus stronger oil demand, logic would dictate that we now consider the opposite: That the new slide in oil prices is signaling new weakness in the world economy. If so, it's the kind that ought to frighten even the optimists this time.

Having said all this, it might be wise to take any day's price reports in the same way as the low or high temperatures on a particular day. A cool morning in summer does not mean winter is right around the corner. Nor does a hot day in mid-winter spell the end of the season. What's more important is to look at the overall picture to see if the season is changing--or even more important, if the climate itself has shifted, both literally and metaphorically.

That takes a lot more analysis than the daily market reports can provide and than most people--even those whose job it is to follow markets--have patience for.

In that regard the long view suggests that the acute investment slump in oil which is unfolding will lead to tight supplies in a few years (because of all the wells that are not going to be drilled to replace the depletion from existing wells). That would set us up for a price spike at some point as it takes a considerable amount of time to ramp up new drilling after a long period of decline.

All this assumes that the current seeming weakness in the economy doesn't morph into something that would cause a long-term economic decline or stagnation which would keep oil prices low for a much longer period.

Kurt Cobb is an author, speaker, and columnist focusing on energy and the environment. He is a regular contributor to the Energy Voices section of The Christian Science Monitor and 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, The Oil Drum,, 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

Sunday, August 09, 2015

The future isn't what it used to be

Two recent films couldn't be more at odds in their vision of the future. Mad Max: Fury Road is the long-awaited continuation of the Mad Max movie series. The movie is essentially a relentless chase scene set in a world burned to desert by climate change and bereft of civilization which has long since vanished in a haze of war and resource shortages.

(Spoiler alert: In this piece I discuss many events at the end of each film. For Mad Max fans this should make no difference in their enjoyment of the long and injurious chase scenes that are the meat of the film. I do not see how the confusing concatenation of nonsequiters that make up Tomorrowland could be ruined by my commentary. But, those who want to see the film without knowing the end should read no further--until they return from a showing.)

In Disney's Tomorrowland something's gone wrong in the mysterious Platonic dimension of forms called Tomorrowland which communicates with and influences the real world of today. Hugh Laurie plays the ruler of Tomorrowland. He laments that he has been sending messages to the real world for years about all the stupid things people are doing: wasting resources, changing the climate, polluting the planet, engaging in senseless wars. But almost no one seems to be listening. For those few who are, all they do is talk about the negative without offering any solutions.

By now--meaning present-day global society--we were supposed to have gleaming, clean, clockwork cities everywhere--with flying cars, of course. So, where did we go wrong?

The answer according to the scriptwriters is that we failed to dream big enough. We lost faith in the modern project--my words, not theirs--and that faith needs to be restored. So, animatronic emissaries are sent from Tomorrowland to bring "dreamers" from our own lowly dimension to Tomorrowland in order to stimulate their spirits and help them envision a glorious technotopian future. There is nothing inherently wrong or self-destructive about modernism. We just have to redouble our efforts.

But, isn't doing the same thing and expecting different results defined as insanity somewhere? And besides, Tomorrowland appears to be a dictatorship. That should give us pause even though Laurie's character is killed in the end. But I digress.

With one line of dialogue we can summarize the contrast between the film Tomorrowland and Mad Max: Fury Road. Most of the way through the very long and desperate segmented chase scene that makes up the bulk of Fury Road, the eponymous Max has a relatively quiet moment to deliver one of the few lines of dialogue in the film. He speaks to his new buddy Imperator Furiosa (played by Charlize Theron) with whom he ends up (accidentally) making common cause to escape from his former warlord captor who happens to be her former warlord boss. Max tells her: "Hope is a mistake."

It turns out that he's wrong, that is, wrong with regard to subsequent action in the film. And, a lot of people and hardware get chewed up to prove it. If there ever were a film to illustrate the notion of creative destruction, this is it. There is a surprising amount of sentimentality conveyed (usually wordlessly) during the heat of the mayhem and during the few moments when it is in abeyance. The new connections that are made on this fiery journey lead to a more enlightened leadership of the groveling masses when the nasty warlord is finally extinguished.

This is a minor consolation in what otherwise appears to be a desert road rally gone wrong and turned into something resembling the Texas Chainsaw Massacre. After all is finished, there is still very little water for the people of the desert settlement--though it is now shared more liberally and fairly. Fuel for the ubiquitous engines-of-war-on-wheels is still extremely precious. In short, the people are now going to act out of solidarity rather than fear to deal with the very lousy cards they've been dealt. It's progress, but not the Disney kind.

In Tomorrowland there is some higher intelligence guiding our inevitable progress and ultimate triumph over the forces of nature. This film is a badly written exposition of the modern myth, namely, that humans are inexorably heading toward a technotopian future guided by some innate wisdom that insures not only that humans will survive, but that they will thrive while building ever greater monuments to civilized life--following the template of Tomorrowland, of course.

In Mad Max: Fury Road if there is some higher intelligence guiding human destiny, we do not see or feel it. Humans left to their own devices will ruin everything on Earth. They will ultimately leave it barely habitable for the few who survive. And, the only slim reed of hope is to ignore Max's dictum and focus on building relationships that are based on something other than fear and domination.

The Mad Max franchise survives not because people take its prognostications seriously, but because it is good entertainment. Most moviegoers unconsciously project their apocalyptic fears onto these films to obtain a catharsis. This allows them to put aside any serious concerns about the future as mere fantasy.

But there are a few viewers who take the film as an indication of the anxieties we face about a society based primarily on finite resources--resources which must be extracted at ever-increasing velocities to satisfy unquenchable demand. This is something that by definition can't go on forever and yet, we humans appear to be putting on no real brake--very much like the characters in the Mad Max films who almost never tap the brakes in their nonstop militarized speed-a-thon that is a metaphor for our modern way of life.

Kurt Cobb is an author, speaker, and columnist focusing on energy and the environment. He is a regular contributor to the Energy Voices section of The Christian Science Monitor and 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, The Oil Drum,, 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

Sunday, August 02, 2015

Energy, the repressed: Paging Dr. Freud

Jeremy Rifkin announced the end of work in a book by that title in 1995. Today, we are once again being told that the end of work is nigh. The Atlantic Monthly tells us so in a piece entitled, "A World Without Work." Automation and computer technology will bring unimaginable change and prosperity--and result in the loss of millions of jobs that will not be replaced.

I heard this before when I was young. In the 1960s there was talk of a three-day workweek for similar reasons. Obviously, it didn't work out.

My purpose here is not to provide a detailed critique of such prognostications. Rather, I ask the same question I ask when I see a science-fiction film depicting widespread space travel and planetary colonization. Where are they getting all the energy to do these things?

In the Atlantic piece--a clever and rather more subtle discussion of the post-work world than I've seen elsewhere--the word "energy" appears exactly zero times. It is assumed that humans will somehow extract enough energy to run all the new machines that will serve (or run?) us. It is assumed that climate change will not be so disruptive as to make our current technical civilization crumble or at least falter significantly. It is assumed that the modeled effects of climate change on the world's major grain growing areas--lots of drought--won't change our priorities drastically toward growing more food in more places. In short, the future is just the past with a lot more energy-guzzling gadgets and apparently a lot more playtime.

Victorian culture repressed sex, not the act itself--population rose briskly in 19th century Britain--but discussion of sex, examination of it. Today, one can walk into any decent-sized bookstore and get an illustrated manual on sexual positions. Today, people get therapy to improve their sex lives, brag openly about their sexual conquests, and have frank discussions with one another about each other's sexual preferences. That repression is over--to the dismay of some and to the delight of others.

Today, a new psychological repression hides in plain sight. It is the servant of a modern ideology, a religion really, that says the material world is soulless and merely fodder for economic growth. This repression prevents most from seeing our ecological predicament and therefore from understanding it or acting in response to it. This repression is of the very physical world about us and the vast and complex interconnections which govern our lives and the life of the planet.

Our psyche is now programmed to register the physical world as a substrate for our fantasies of dominion and mastery, but rarely as a master to us. The fantasy is that humans are in one category and nature in another, a nature that is very much subservient to our wishes.

A subset of this repression is the difficulty in talking about the vulnerability of an energy system that relies for more than 80 percent of its energy on finite fossil fuels. A friend of mine related a conversation with an engineer who disputed that oil is a finite resource. My friend being clever and patient got the engineer to agree that the Earth is a sphere and that it has a calculable volume. He then got the engineer to agree that that volume is finite, and that oil, being a subset of the Earth's volume, must also be finite. The engineer had never thought about the issue that way. And, neither have most people on the planet as astonishing as that may seem. But, it's really no wonder since they've been propagandized by a constant advertising and public relations juggernaut from the fossil fuel industry saying (or more likely deceptively implying) things which cannot on their face be true.

An understanding of the finite nature of fossil fuels is a prerequisite to discussing, for example, how much of the oil that the Earth's crust does contain is actually available to society, at what cost and whether society can bear that cost. And yet, until recently the well-trained engineer mentioned above had never thought very deeply about a topic central to the functioning of modern civilization. Now, that's repression. Fortunately, the one-on-one therapy intervention performed by my friend was successful in lifting the repression and opening the way for a more informed discussion.

But how might we lift a repression that is embedded in the entire culture? Yes, culture. Another friend of mine once tried to explain to me that the consumption of oil is a culturally determined act. I am only now beginning to see what he means, and I have little to suggest to overcome the repression that I see. The history of societies with highly consequential repressions--ones related to things central to their existence and which, if not lifted, threaten their survival--shows that these societies often destroy themselves. Nazi Germany comes to mind. Also, Jared Diamond's Collapse and Joseph Tainter's The Collapse of Complex Societies which catalogue societies that repressed the obvious signs of collapse until it was too late.

Today, so many of the optimistic pronouncements about our human future have to do with technological advancements. But technology runs on energy. Critics will respond that technology will help us find the energy we need for our supposedly inevitable post-work society. This is merely an assertion of faith. It assumes that energy consumption can continue to grow exponentially for many decades if not centuries. Yet, with more than 80 percent of our energy currently coming from finite fossil fuels, there is no clear path to replace them completely--especially when it comes to liquid fuels for transportation and agriculture.

But the assertion that technology will give us the energy we need also gets things backwards. The scientific revolution of the 17th century brought us a new way of looking at nature, a way that revealed many of its secrets. The ingredients that made speedy technical progress and exponential economic growth possible, however, were the discovery and use of fossil fuels, first coal, then oil, and then natural gas.

These dense, cheap sources of energy made it possible for many people to leave the increasingly mechanized and productive farm to seek employment in emerging industries powered by fossil fuels and pioneered by scientists and engineers who now had the luxury of time to work on inventions and refinements of previous inventions--rather than toiling in farm fields or mines. Energy first, technology second.

Without the enormous surplus of energy offered to us by the world's coal mines and oil and gas fields, most all of us would be back on the land toiling for a living growing food. For the moment, vast armies of engineers, scientists and technicians, often laboring in teams, continue to work on our technological future without any seeming worry about where the food to feed them or the energy to power their lives at home and at work will come from.

They should worry, and they should discuss. But if both the physical world as an agent in our lives and the energy we extract from it are repressed, then discussion becomes impossible. Limits cannot be discussed in polite company any more because the subject is too disturbing and unmannerly. In many circles it is actually forbidden.

Neo-classical economists--the kind who inhabit Wall Street and Washington and control most academic economics departments--treat the physical world as a candy store open 24/7 and always overflowing with what we want, in the quantities we need at the prices we like. If the store runs out of gumballs, then we'll just switch to candy canes without any serious interruption. Any discussion of limits is usually met with calls to quickly shut down the person bringing them up. That there can be no limits is simply an article of faith and articles of faith cannot be challenged without serious consequences.

So, how to lift this repression? One-on-one therapy can be effective. It was in the case I cited. But we need to work faster than that. Literature, movies, art and music can reach people in ways that rational discourse cannot. They can reflect new realities in visceral ways that allow people to see anew. Beyond this there is the catharsis of a tragedy, a real-life emergency that changes people's perceptions profoundly. The California drought comes to mind.

Unfortunately, it is the real-life tragedies that seem to work best to lift repressions. And, I think we're in for a lot of those tragedies. In the meantime, those who've awakened from the repression of our age can prepare themselves and their friends and families as much as is possible for the changes ahead. And, they can be ready to offer an alternate view when tragedy strikes about what to do next--beyond simply trying to return to business-as-usual.

By the way, haven't we been trying to return to business-as-usual since the crash of 2008 with great difficulty? The physical world which imposes its limits acts like dark matter on our economy, invisible (to most), but creating unmistakable effects. The record high average daily prices for oil--the world's most important energy source--prices which lasted from 2011 through most of 2014, created a huge headwind for the world economy. Economist James Hamilton noted that 10 out of the last 11 recessions have been preceded by an oil price spike. And yet, the economic weakness we see around the world today is rarely linked to previously high oil prices.

When you repress something, it almost always comes back to bite you. Climate change is already doing that. Fossil fuel depletion which is at the root of the record oil price spike of 2008 and the record high prices of 2011 through 2014 has already done it.

Where is Dr. Freud when you need him?

Kurt Cobb is an author, speaker, and columnist focusing on energy and the environment. He is a regular contributor to the Energy Voices section of The Christian Science Monitor and 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, The Oil Drum,, 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