The Big Flatline

Jeff Rubin is the former chief economist at a major Canadian investment bank.  His book, The Big Flatline, gives readers an opportunity to see Peak Cheap Energy through the eyes of someone from the executive suites.  He spent 20 years flying around the world, hanging out with the rich and powerful, and this was a mind-altering experience.  In the process, he lost the rose-colored glasses that are mandatory in his field, and this cost him his job.

Rubin’s overview of the current geopolitical state of affairs is fascinating.  Energy costs far more than it did a decade ago.  Oil was $30 a barrel in 2004, and $147 in 2008 (crash!).  Since energy is the driving force behind the global economy, this sharp increase is a game changer.  When energy is cheap, we can grow like crazy, but triple-digit oil prices slam down on the brake pedal.

High energy prices are not a passing storm, they’re here to stay.  Perpetual growth is never a free lunch.  The inevitable approach of genuine scarcity guarantees rising prices.  In the world of geology, resources are the amount of oil in the ground, and reserves are the amount of oil that can economically be extracted.  For example, the Canadian tar sands contain 1.6 trillion barrels of oil resources, but only 170 billion barrels of reserves (11 percent of total).

As an economist, Rubin focuses on the price trends in energy, but the energy industry is paying close attention to EROEI (energy returned on energy invested).*  In the good old days of high-profit gushers, it was common to invest one calorie of energy to produce 100 calories of oil (100:1).  By 2010, typical EROEI was about 17:1, and some are predicting 5:1 by 2020. 

Rising prices enable the extraction of difficult and expensive non-conventional energy.  At some point, declining EROEI makes extraction pointless, regardless of market prices.  Consequently, most of the oil in Canadian tar sands will be left where it is.  (The EROEI of tar sands now in production is about 3:1, and 5:1 for shale deposits)

The world of coal is a similar story.  Coal resources are enormous, but coal reserves are far less than proclaimed by industry cheerleaders.  Anthracite is premium coal, and its production peaked in 1950.  Grade B bituminous coal peaked in 1990.  There is abundant grade C coal, lignite, which contains only a fifth of the energy in anthracite, and is especially filthy to burn.  Since grade C coal is so low in energy, it cannot be shipped long distances profitably.  The coal industry is also constrained by EROEI, and much of this resource will be left in the ground forever.

As we zoom toward a static no-growth economy, it would be intelligent to prepare for it, to make the transition less turbulent.  We aren’t.  The end of growth is intolerable, inconceivable, and unacceptable.  There is only one path forward, by any means necessary — a beautiful recovery followed by an eternity of perpetual growth and heavenly prosperity.  Rubin gives us a dope slap.  Recovery is impossible.  The era of wasteful excess is behind us.  Turn your brain to the ON position, pay attention, and prepare for a new reality.

Following the 2008 crash, governments borrowed vast sums of money bailing out pathologically reckless banks.  The trendy deregulation movement of the ’80s and ’90s dismantled prudent time-proven rules that prohibited bankers from behaving like spoiled two-year olds with other people’s money.  Bailouts created enormous strains for many nations.  As a consequence, “central banks are running printing presses almost nonstop to kickstart economic growth.”  As the value of the dollar declines, we’ll pay even more for energy, and dig a grave for growth.

Flooding the economy with new money will do nothing to encourage recovery, because it does not address the core problem, energy scarcity.  But it is creating catastrophic levels of debt that are guaranteed to inflate the misery down the road (beyond the next election cycle, hopefully).  Greece has a dim future, and Ireland, Portugal, Spain, and Italy are not far behind.  Debt-crippled economies will be helpless sitting ducks when the next recession strikes.

In the first half of the book, Rubin describes the global mess, as he understands it, and he does a great job.  It’s important information, and it’s coming from a lad close to the inner circle of the banking industry, not wild-eyed radical extremists from the Sierra Club, or crazy doomsters like Richard Heinberg.  It’s a triple-shot of full-strength reality, and it brings many issues into sharp focus.

In the second half, he makes a heroic effort to recommend strategies for responding to the mess.  His goal is a fairly smooth transition to a static economy, which he presents as a realistic possibility.  For readers who have not been making a serious effort to understand the complex challenges of the Earth Crisis, Rubin’s analysis will be soothing.  The future isn’t roaring with danger.  Everything will be mostly OK, sort of.

The magic of the marketplace will rescue us by continually raising the prices on our bad habits, forcing us to live slower and lighter.  If governments raise taxes on energy, we’ll use less.  We don’t need more regulations on corporations.  If governments do nothing, we’ll still use less, because of ever-growing energy costs.

Mature people should be mindful of climate change, because it is not a trivial problem, but our fear of climate disaster exceeds the actual threat.  The gloomy IPCC warnings are based on silly energy resource projections — in a hundred years, we will not be consuming more energy than today.  We’ll be forced to quit our addiction to hydrocarbon fuels before emissions have time to cause catastrophic problems.

Manufacturing jobs will come back home, as rising energy prices drive up the cost of moving products across long distances.  The benefits of cheap Asian labor will be lost to rising shipping costs.  Transportation costs will also encourage the recovery of localized economies.  The food we eat will travel far fewer miles.  Local farm labor needs will provide exciting new careers for folks abandoned by obsolete industries (i.e., investing, insurance, real estate, etc.).

Trained as an economist, Rubin has an outlook focused on cost trends in the here and now.  He doesn’t slam nuclear energy, because it produces respectable output numbers every day.  It doesn’t matter that we have yet to figure out a safe and permanent way of disposing the waste, which can remain extremely toxic for many thousands of years.  It doesn’t matter that deactivating reactors can cost as much as building them, because the bill is sent to taxpayers and unborn generations, not today’s stockholders.

Critical thinkers who are well informed about the complex challenges of the Earth Crisis are not likely to be soothed by Rubin’s vision of the future, but his discussion of the present is excellent.  This should not be the only book you ever read. 

Rubin concludes with wise advice: “As the boundaries of a finite world continue to close in on us, our challenge is to learn that making do with less is better than always wanting more.”

*For a great illustration of EROEI trends, see figure 5.12 on page 75 of Perfect Storm by Tim Morgan.

 

Rubin, Jeff, The Big Flatline: Oil and the No-growth Economy, Palgrave Macmillan, New York, 2012.  This book was first published in Canada as The End of Growth.  Here is a 27-minute video of Rubin talking about his book.

My Name is Chellis...

Chellis Glendinning grew up in Cleveland.  Her father was a caring doctor and a brutal child abuser.  She and her brother were raped, beaten, and tortured.  Her pain was swept under the carpet by the magic of dissociation — a portion of her personality split off and became unconscious.  Memories of her traumatic childhood were forgotten for 40 years.  Amnesia allowed her to function in the world.  She earned a PhD and became a psychotherapist.

One day, in a therapy session, her childhood traumas suddenly began to return to consciousness.  Chellis was determined to fully understand them, resolve them, and recover a healthy state of wholeness.  She wanted to heal herself 100 percent. 

Understanding matters of great importance often requires the use of a powerful medicine called history.  To know who we are, we must know where we came from.  Trauma and pathology are almost the norm throughout today’s society.  A daunting number of people are in therapy, or taking medication, or hobbled by untreated mental imbalances.  These problems are frequently passed from generation to generation.

Chellis explored her family tree and discovered patterns of ancestors who were damaged by alcoholism or mental illness.  She strongly suspected that her father had also been abused.  She learned about her Puritan ancestors in colonial times.  Reverend Thomas Hooker lived in what was to become Connecticut.  On Sundays, he preached the sweet love of Jesus to the faithful, and then he spent the rest of the week as a bloody terrorist, determined to exterminate the diabolical Native American savages.

Looking even deeper into the past, the trail of trauma kept unfolding.  Prior to the invasion of America, Europe was also a realm of intense craziness.  For 300 years the skies were darkened by the smoke of burning witches.  Insane leaders routinely led their people into countless wars.  The written history of Europe was insane from page one.  By and by, Chellis came to comprehend that her father’s madness was just a wee speck of pathology in an enormous tsunami of pathology that spanned many centuries and regions.

Very importantly, she also came to comprehend that this torrent of pathology did not in any way represent the normal human condition.  It was obvious that nature-based societies, like the Native Americans, inhabited a fundamentally different spiritual universe.  They did not devour the land and leave wreckage in their wake.  She could see that nature-based societies more closely represented balance and normality.  They suffered little from mental illness.  Their reverent relationship with the Earth was rooted in a million-year tradition — 35,000 generations of low-impact living. 

It became clear that the madness of modern technological society could readily be traced back to a recent fork in the human journey that occurred about 10,000 years ago, just 300 generations back — the domestication of plants and animals.  “This was the purposeful separation of human existence from the rest of life,” and the fence was its symbol.  It divided the world into two new realms: wild and tamed.  This shattered the ancient wholeness, and replaced it with chronic traumatic stress.

The transition to domestication blindsided human societies.  It was completely out of balance with our traditional, time-proven way of life — living with respect and reverence for the natural world.  The new game was about owning and controlling nature.  Eventually, these unlucky people forgot what it meant to be human beings, and they ended up living like fish out of water — flippity-floppity-flappity.  Gasp!  Gasp!  Gasp!  It was a temporary way of life with no future. 

The last six generations have witnessed the horrific transition to industrial civilization.  The nightmare shifted into fast forward, and we are racing toward a future where nature has been erased by endless shopping enterprises, clear-cuts, crumbling pavement, rotting cities, eroded farms, toxic wastelands, and endless flocks of zombies entranced by glowing cell phones.  Billions of traumatized people perceive this living death as being the normal human existence.  It is no coincidence that our era of flourishing ecological annihilation is also an era of flourishing mental illness. 

“Well-being and wholeness depend on, and exist in constant and complex intimacy with, the well-being and wholeness of the Earth,” according to Chellis.  “It’s well past time for us to come home, to return to the matrix from which we came, to recover what we have lost, to remember again the wisdom and balance of the natural world.”  To explain this process, she sat down with a wooden pencil, and wrote a book called My Name Is Chellis & I’m in Recovery from Western Civilization. 

Readers salivating to finally discover the simple, no sacrifice, silver bullet solution to the Earth Crisis will be reduced to sobs and sniffles once again.  Chellis describes a healing process that will likely take generations to complete.  It’s not about healing individuals, it’s about healing the entire society.  I must say that this book truly does provide readers with general guidelines for not only ending the Earth Crisis, but also restoring humankind to genuine sustainability, boundless joy, and complete wildness and freedom.  

There are seven-point-something billion people alive now, many of whom are victims of traumatic stress — paranoid, hyperactive, infantile, powerless, alienated, fearful, depressed, near-comatose beings whose mental wholeness has been shattered into many pieces.  Imagine for a moment repairing this mess — the individuals, the society, the ecosystem, and our history.  Imagine unlocking the shackles of technological society and walking away.  Imagine guiding humankind to a point where we are willing and able to abandon our exploitation of domesticated plants and animals.  Imagine returning home, to the family of life, to wholeness.

Many thinkers have concluded that the reason we got into this mess was a combination of excessive cleverness and inadequate foresight.  Chellis adds another chapter to the story — the immense, highly-contagious, psychological damage resulting from our terrible plunge from balance.  When we become aware of the corrosive presence of this madness, we can more fully comprehend the anatomy of our predicament.

Chellis has given humankind an important Big Vision, a potent idea to explore.  Obviously, the healing process will not be quick or simple.  Our challenge is simply to take a deep breath, roll up our sleeves, and take the first step.

Glendinning, Chellis, My Name Is Chellis & I’m in Recovery from Western Civilization, Shambhala, Boston, 1994.