Pivot Point

I like the concept of a pivot. To me it is the pin on which something rotates, but the implication is that the pin itself does not more, but rather is a fixed point, a reference. When we think of history, we tend to think of pivot points, of 'pivotal' junctures in history where the entire structure of human events shifted...

As I'm interested in the history of oil, I tend to view much of history through the lens of energy, as a quest to acquire the best, most secure supply of energy. The United States in the 20th century was remarkably gifted with a vast supply of oil, and ever since its production hit peak in the early 1970s, it has done well not only to control but to assure a steadily increasing supply of oil.

I can't say with certainty what events will be important to historians in 200 years, or even in 5 years. Personally I believe the decade of the 1970's was the critical pivot point in the history of oil, which more than centuries and more than political or philosophical movements will bracket modernity. Modernity has always been about speed, and speed, in the modern world, was delivered by fossil fuels.

In the 1970's it became evident that the US was no longer the swing producer for the world...in other words the US no longer controlled the world price of oil, as it no longer controlled the excess supply. The 1970's showed the world the price of relying on fossil fuel and the oil shocks in the early 70's led the drive towards conservation and prudence.

The 1970's also gave us the Carter Doctrine, which stated that the US would use military force to defend its 'interests' in the Persian Gulf. I'm sure such policy has always been in effect, but to state it with such rawness and boldness signaled a new era in elite and public consciousness about oil.

Much of the ramifications of the 1970's were obscured by the Saudis, who stepped in to fulfill the role of swing producer, and by the deregulation of the financial markets in the 1980's.

Before the 1970's, oil had mostly been a regional issue, and where the world had been concerned there was always plenty of oil. Instead of dealing with the obvious problems of an oil addicted world, the US choose to pursue more oil resources, to drill more, to find other sources of this valuable energy.

And yet the problems of basing an economy and a society on oil -- those never went away. They were simply deferred by 30 or so years. And now, once again, we are waking up to the grim reality that the reality has NOT changed, that oil dependence has gotten worse instead of better AND the fundamental problem of an addiction to a depleting resource was still in play.

The world pivoted in the 1970s. The momentum of the Saudis, of the North Sea oil, of Prudhoe Bay in Alaska -- those discoveries carried further into the age of oil. But the truth is that we're dealing with a shift that took place almost 40 years ago and once again the world is on the cusp of a great pivot. I can't say what that is, but I doubt very much that it will be easy, and I doubt very much that the world has ever seen anything like what is coming in the next 30 or so years.

We live in a fascinating time.

Break Point

I've been reading "A Thousand Barrels A Second" by Peter Tertzakian, a book about the peaking of oil production. Tertzakian introduces an interesting concept called the "Break Point", a society's re-evaluation point of an energy source.

In the past break points happened, for the most part, to coincide with the discovery of a more energy-rich, aka 'better' fuel, think of the transition of industrializing England from burning wood to burning coal, or the world-wide transition in the 19th century from whale oil to petroleum.

Of course history provides examples of break points where societies were simply unable to move to a higher source of energy / raw materials. Jerod Diamond has a couple of examples of such societies in his book "Collapse" but rather than refer to a scarcity of resources, Diamond typically seems to reference an over-abundance of people. In my mind these are one in the same problem, in our day and age we can look at the balance of population to available resources.

Our re-evaluation of petroleum hasn't nearly been hit, although we are noticing a minor change in driving habits. For the first time in 5 years, the number of miles driven in the US declined. Still our way of life is intact. I believe that in order for our society to truly re-evaluate petroleum, the price of gasoline will have to double or triple in price, as it did in 1973 and again 1979. That world was able to re-adjust its energy sources, and continue growing.

Our break point will be different. As we are approaching peak production in numerous areas (including, I believe, peak food, peak minerals, peak 'work' and peak wealth) we will also reach a break point in the American dream, the concept that anyone can be rich, the idea of perpetual growth and an ever increasing level of wealth and prosperity.

Our energy break point will quickly become a mental break point. Jimmy Carter's 'malaise' speech is mocked for its dour tone, but mark my words we will in the next 5-10 years hear a US president address exactly the same crisis of confidence, and within ourselves we will each have to reformulate (as we do many many times in our lives) exactly what it is we expect out of life and how we will exist within the limits imposed on us by our environment.