Monday, January 7, 2019

"Energy Dominance," what does it mean? Decoding a Fashionable Slogan


"Now, I know for a fact that American energy dominance is within our grasp as a nation.” Ryan Zinke, U.S. Secretary of the Interior (source)

"All Warfare is Based on Deception" Sun Tzu, "The Art of War"



Over nearly a half-century, since the time of Richard Nixon, American presidents have proclaimed the need for "energy independence" for the US, without ever succeeding in attaining it. During the past few years, it has become fashionable to say that the US has, in fact, become energy independent, even though it is not true. And, doubling down on this concept, there came the idea of "energy dominance," introduced by the Trump administration in June 2017.  It is now used at all levels in the press and in the political debate.

No doubt, the US has good reasons to be bullish on oil production. Of the three major world producers, it is the only one growing: it has overtaken Saudi Arabia and it seems to be poised to overtake Russia in a few years. (graphic source).


This rebound in the US production after the decline that started in the early 1970s is nearly miraculous. And the miracle as a name: shale oil. A great success, sure, but, if you think about it, the whole story looks weird: the US is trying to gain this "dominance" by means of resources which, once burned, will be forever gone. It is like people competing at who is burning their own house faster. What sense does it make?

Art Berman keeps telling us that shale oil is an expensive resource that could be produced at a profit only for market conditions that are unrealistic to expect. So far, much more money has been poured into shale oil production than it has returned from the sales of shale oil. "Energy dominance" seems to be just an elaborate way to lose money and resources. Again, what sense does that make?

But there is a logic in the term "energy dominance." It has to do with the way slogans are used in politics: a slogan is not just a compact way of expressing a certain political concept, it is often a coded message that hides much more than it says. So, we know that "bringing democracy" to a foreign country means to bomb it to smithereens. "Make America great again" means subsidizing the fossil fuel industry. "The Indispensable Country" means, "The American Empire." And more.

There is nothing wrong in using coded slogans: you only have to know how to decode them. So, "energy dominance" has to be decoded and turned into "military dominance." Then, things start making sense.

One quick note before you accuse me of being a conspiracy theorist: I am reasonably sure that there is no "control room" in a dark basement of the Pentagon or of the White House deciding long-term economic and military objectives. The decision mechanism of modern states is collective and networked. It is akin to that of anthills: there is nobody in charge, plenty of people push in different directions and, eventually, the giant structure may start moving in a certain direction.

So, the fact that so much money has been directed toward the exploitation of shale oil and gas doesn't mean that someone at the top decided that it was the thing to be done. It is simply, that investors tend to direct their financial resources where they think they'll have returns, and that may well be the result of a collective hallucination. Investing in shale oil is, basically, a Ponzi scheme but if Ponzi schemes exist there is a reason for them to exist. Even if investing in something doesn't generate overall profits, it moves money, benefits contractors, raises the GDP, and the more money is invested the more expectations of profits grow. And so it goes until the bubble bursts, but that may take time.

But there is more than that in this story: it is the military side. We all know that wars are won by the side that can pour more resources into the fight. It was in this way that the first and the second world war were won: the allies could produce more energy in the form of oil, coal, and gas. And, with these energy sources, they could produce more stuff: planes, tanks, cannons, bombs, bullets, and more stuff that was thrown at the Germans until they gave up. Matthieu Auzeannau gives us plenty of examples of this mechanism in his book "Oil, Power, and War." The Germans were always lacking enough oil to power their military machine and that's why they were doomed from the beginning.

For the military, the lesson of the past world wars is that wars are won by the side which has the largest oil supply. And they remember it. So, if you want to attain military dominance, energy independence is not enough, you need to attain energy dominance.

Everything makes sense also in view of some recent results on the statistical patterns of wars. Wars, it seems, are correlated to the thermodynamic phenomenon of entropy dissipation in complex systems. The more energy there is to dissipate, the faster it is dissipated. And if this dissipation is really fast, it may take the shape of a war -- war is the fastest way to destroy (dissipate) accumulated resources. But, in order to dissipate resources, you need to accumulate them first, and that's the role of shale oil in the current situation.

Which means that shale oil is not a natural resource, it is a military resource. As such, it doesn't matter if it brings a profit or not for the investors. What matters is how it can be used to maintain and expand that gigantic social and economic structure that we call "Globalization" (another slogan that can be decoded as "the global empire").

As long as the production of shale oil increases, we face the risk of a new, major world war. We can only hope that the shale bubble bursts by itself first. One more good reason why a Seneca Collapse of oil production would be good for all of us.






18 comments:

  1. Our society runs on oil

    the general consensus on the level of energy return on that oil in order to sustain our current existence is reckoned to be around 14:1

    A profitable oilwell at the present time gives a return of about 20:1 on energy investment. so on conventional oilwells we are still ahead in investment terms---though not by very much

    The return on shale oils, tarsands etc is about 6:1

    well below that needed to maintain our current infrastructure.

    On that simple reckoning then, it is obvious that shale oil is not supporting us, we are supporting shale oil--or to be more specific, profitable oilwells are supporting unprofitable oilwells

    this explains our crisis in more detail

    https://medium.com/@End_of_More/the-oilparty-is-over-c06d3c723655

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    1. Norm - You are correct and it is important to note that the same can be said for "renewables".

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    2. I am constantly pointing out how much of the US economy consists of mega companies that don't make profits yet no one seems to think that that is a problem. I don't get it.

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    3. But all those numbers are very uncertain.

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  2. I admit having doubts about the usefulness of this "wars are a phenomenon of exergy dissipation in complex systems" hypothesis. Having a negative power relation between war intensity and probability, and beeing somehow related to energy use, isn't justification enough.
    The other way around does make more sense: preparing for war, I realize I'll need a lot of exergy.
    One part of the our genetic heritage is the preponderance of the males to wage war. Over time, we developed a thin lacquer of civilization masquerading this, but it may emerge again at any moment, if the suitable frame of perception becomes dominant. One is "we can get away with it", which applies to US-Iraq and the like, another is "revenge for an insult", whicht might one day apply to a China against the west conflict.

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  3. All Empires consume unreasonable amounts of energy but the Mega-Machine has the fuse built in. When Empire draws too much energy fuse heats up and blows, bringing collapse and implosion to the Mega-Machine. US Empire is already overstretched with expenses to the point that it must mistreat not only foreigners but it's own citizens to keep going. The problem is that when the fuse blows Ugo Bardi and the people who comment on his blog may perish in the process.

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    1. That is why everyone who doesn't want to perish should be hunkering down in an out of the way place where one can gather life's necessities from the land. It still won't be truly safe even then, but the odds of survival do go up.

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    2. Death is the wish of some, the relief of many, and the end of all. (Seneca)

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  4. An interesting viewpoint, I like it.

    So given this:

    The more energy there is to dissipate, the faster it is dissipated... -- war is the fastest way to destroy (dissipate) accumulated resources.


    Then to avoid war, we in the Imperium should waste resources as quickly as possible to make the runup to war impossible, and the dissipation of resources less violent (and more fun). My wife tells me that airplane tickets to Buenos Aires are really cheap just now.

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    1. See it like this: the fuel your plane uses will not be used to drop bombs on people. Your trip to Buenos Aires is for a noble cause! :-)

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  5. I believe that another explanation for the acceleration in shale oil (and US oil production in general) may be the realization that oil is 'soon' going to be an obsolete resource. The mounting pressure on CO2 emissions, climate change, etc. and the rise of renewables make it clear that there is not much more time left to burn oil. So there is no purpose to keep a lot of reserves in the ground that are sufficient for many decades to come: burn the house as long as there is still time to burn it!
    Of course, this would be a terrible and stupid strategy but, as mentioned, it moves money around, as long as this way to move it is still available...

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    1. Oil powers 98% of transportation — 100% for planes, ships, and pretty much all trucks.

      Forget about renewables.

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    2. Written in 1818: "horses power 98% of transportation, forget about steam locomotives"

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  6. I am assuming that Shale oil as a military feedstock fuel doesn't have the value of conventional oil because most shale oil has an API gravity/density of light oil which is of little value to most military vehicles which generally require middle density distillates like diesel#2 and diesel#1. Shale oil is generally more suitable as a gasoline feedstock. It is possible to make diesel from light grades just as it was possible for germany to make diesel from coal but the economics don't favor going in that direction as I understand it.

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    1. That's true, but it is the whole industrial system accumulating resources. The availability of light fuel frees resources in the form of heavy fuels.

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  7. Biofuel will not be able to satisfie all our needs. I think we shall reserve fossil fuel for tractors, combiners, construction vehicles, logging vehicles. I believe that modern man and woman are not able to cultivate the soil, harvest the crop, building railroads only with help from horses 8-10 hours a day.

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    1. Biofuel is only one option.
      Today, every form of ground and sea transportation can work with one of electric (whereby energy can be accumulated via renewables), natural gas (compressed or liquefied), or hydrogen (also produced via renewables). Natural gas is a fossil fuel, but I was making a point about oil.

      I can grant you that long-range (but not short range) air transportation will have to happen via oil products to the best of today's knowledge, as we do not have yet a technology with enough energy density, but for everything else there is a credible alternative to oil (biofuels included).

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Who

Ugo Bardi is a member of the Club of Rome and the author of "Extracted: how the quest for mineral resources is plundering the Planet" (Chelsea Green 2014). His most recent book is "The Seneca Effect" (Springer 2017)