Decline and Fall of America's Energy Empire

The current debate over offshore oil leases has put America's gargantuan energy appetite back on the discussion table this week. I've tried to stay out of it so far for two reasons.

The first is that (here comes the full disclosure) I married into a family that's been making its modest fortune in the oil patches of the American West for over a century, so there's some personal interest at stake here. (The upside: I've got a box seat from which to report on at least some of the festivities.) The second is that as a futurist — trained in America's oil center, Houston, no less — I take a much longer and systemic view of the situation. And that view gives my thinking about our energy future a rather different shape and direction.

For the bigger context on what's happening, we need to think in centuries, not just decades. There's a lot to this view — this article admittedly oversimplifies a lot, and bypasses a few important issues entirely — but that just means there's plenty more to discuss in future posts. For now, some basics.

Energy and Empire

The bottom line is this: All empires are built on vast amounts of energy. And no great empire in history has ever come to power without controlling and dominating the market in whatever the current preferred energy resource was at the time.

University of Toronto futurist Thomas Homer-Dixon lays out the argument in The Upside of Down [1], which I recommend to anyone seeking to understand the cause-and-effect relationship between energy and economic and political power. He carefully builds the argument that Rome rose on its ability to harness vast amounts of Mediterranean sunshine, turn it into food, and then reliably move that food around the empire to feed vast numbers of soldiers, builders, and horses and thus consolidate its regime. When that system failed, the empire crumbled.

Likewise, the Dutch built their short-lived empire on the ability to supply oil for Europe's lanterns. They were supplanted by England, which was able to supply better, cheaper fuel out of its vast coal resources. British dominance lasted until a rising America turned out to have unimaginable amounts of coal, which allowed it to undercut the British pound as the world's most stable currency — and outperform the UK economically.

And then came oil, which was soon preferred to coal because it proved to be a far more efficient (hence, cleaner and cheaper) and versatile fuel. You could get far more energy output from a smaller unit (coal's comparative inefficiency made it impractical for small vehicles like cars, for example) and with far less effort; and you could turn it into far more different kinds of products -- not just fuel, but plastics, fertilizers, wonder drugs, and much more.

As the world moved toward oil at the beginning of the last century, the UK — eager not to lose out again — made an early bid for the oil fields of Arabia. But North America counted among its original blessings more oil reserves than any other continent on the planet; and that, argues Homer-Dixon, was decisive. Unable to compete, the British Empire faded, and the American Century began.

But controlling the energy taps isn't the whole equation. To build the boon into a full-fledged empire, a country needs to create and export a whole infrastructure, a new and more productive way of life, based on the energy resources they control. The English built the first coal-fired railroads, ignited the Industrial Revolution with coal furnaces and steam power, and built a fleet of great ships that ran on coal oil. These, in turn, powered their global trading network and their military. Through the 18th and 19th centuries, Great Britain developed a complex and tightly interrelated technological, political, and economic system that established the pound as the global currency standard, and the Brits as lords of everything they touched.

In the 20th century, America repeated the feat. We built oil-fueled cars, power plants, farms and factories; and then exported that technology to client states all over the world. The American dollar, backed by control of both the world's oil and most of the technology that made it useful, became the global currency standard. Powered by oil, we became the richest nation in history — so permeated with the stuff that very few of us can even see the degree to which we're soaking in it, let alone really grasp the fact that almost all of the wealth we have originally flowed out of the ground as crude.

Regime Change Begins At Home

Homer-Dixon also points out another, more sober lesson. It's never happened that an empire that built its wealth on one energy resource also succeeded in dominating the next resource that supplanted it. Human nature being what it is, societies that are deeply invested in the current energy regime tend to fall into denial when that regime comes to its natural end — either because it simply runs out, or because it's superceded by something even more efficient and versatile. People can't believe things won't go on as they always have, or imagine that life could be any different. They shut their eyes to looming trouble, ignore the signs of impending doom, and refuse to make any reasonable plans to navigate the coming changes.

In the meantime, as old system falls apart, someone hungrier and more nimble finds a way to capitalize on a new, more efficient energy resource. And so old empires die, and new ones rise to take their places.

Put it in this perspective, and it becomes obvious that when we talk about running out of oil, we're not just talking about higher prices or low-carbon lifestyles or making an easy transition to something else that America (we like to think) will also dominate. When we fully grasp the foundational role oil played in securing America's wealth and global power, it becomes obvious that when we talk about moving off oil, we're really talking about nothing less than the demise of American power throughout the world, and the end of the American Way of Life as we've known it for generations.

That's serious stuff. But it's the truth that provides the backdrop for everything else that's going on right now. Against this larger process, it's easier to see that the dollar is weakening because our control over the whole oil economy that has supported its value for the past century is in serious trouble — and that we won't be out of financial danger until we can base on the dollar's value on something other than oil. Our political stature is tanking because the world doesn't need to kiss up to us anymore to keep the cars running and the lights on — and it won't rise again until we find something else of equally high value to offer. Our standard of living is falling because it always floated on a sea of oil — and that sea is drying up. Oil prices are high not because of market manipulations and oil company profit-taking (though plenty of oil economists are sure that's part of the story, too); they're high because the whole system is destabilizing, heading for a major tipping point.

There may be brief reprieves, rallies, and respites over the next few years; but over the long haul, we shouldn't assume that "normal" as we've known it will ever be coming back.

Even before 9/11, the Bush Administration has always had a sense of panicked desperation about it — a desperation we've usually attributed to conservative revolutionary zeal, religious fanaticism, or free-market fundamentalism. But it's also plausible to interpret some of this as the desperation of people who were tasked with protecting the American empire by keeping the oil taps open and under control at any cost — and who know, deep in their guts, that time is running out.

The Project for a New American Century's stated strategy for maintaining the American superpower in the face of a rising China was to invade and dominate the Middle East, and thus control China's access to oil for the next several decades. That was the intended long-term payoff of the Iraq War: control the oil, and thus control the world. In their minds, if we have to bankrupt the country, tear up the Constitution, and piss off every other country in the world along the way, it's worth it — since they know we're not worth a damn economically or politically without the oil anyway. Sure, the means are ugly; but according to their view of the ends, there's simply no alternative — and no other possible future worth discussing. They don't care if we hate them now, because they're convinced we'll thank them in 20 years for having the statesmanlike foresight to do what had to be done.

(Blame it on too much time in the oil patch. That toxic elixer of crude and money so easily goes to one's head....)

This perspective also provides some extra context for why locally-based power generation, like on-site or community wind and solar, are political non-starters for energy execs and their government minions. It's obvious that they hate it because they can't take profit from it; but they also know that America's global hegemony depends on keeping the world dependent on energy supplies they control. Since nobody can capture a monopoly on the wind or the sun, there's no way to build the next global empire on them. And therefore, renewables simply aren't very interesting to people whose first priority is geopolitical dominance and stratospheric profit.

The Long View

From this 10,000-foot view, it's easy to interpret the political spats and economic machinations and deal-making and climate debates and regional wars — the whole parade that dominates the news now — as simply opening acts in a long transition that could end up taking most of this century. Unless a) we discover vast new reserves on a globe that's been already explored from pole to pole (unlikely) and b) we come up with dramatic new evidence proving conclusively that climate change isn't a problem after all (even less likely), then the hard fact is: We will be spending the next several decades moving off oil.

It's going to be the most important work of this century. And Americans can either get out in front of this change and come out of it at the century's end with much of their greatness intact — or continue to fight it, and end up as another of history's has-beens.

Meeting this challenge means we're going to have to get very smart, very fast, about a lot of things.

• First, we need to accept that this change is happening, and start having serious conversations about how we're going to handle it. The Bush Administration's denial has already cost us eight valuable years. It's an understatement to say that the longer we avoid the issue, the worse the transition will be.

• Second, we need to stay mindful of the horrific pitfalls. The unimaginable grimness of the worst-case scenarios alone should be enough motivation to get and keep us talking.

Even the most-likely-case scenarios are disturbingly short on sunshine and roses. Historically, energy transitions (involving, as they do, the collapse of vast economic and political systems) have never happened smoothly. Rome fell so hard that it took a thousand years for anything like it to rise again. The stable world order held together by the British coal empire shattered apart in two vast world wars and another dozen colonial revolutions (some of which still aren't resolved decades later). It's not unreasonable to expect similar disruptions as the American oil empire begins to unravel. It's not going to be pretty.

When complex economic systems fail, they almost always fail catastrophically, leaving vast numbers of displaced, disoriented and righteously angry people in their wake. Bad economic and environmental decisions get made. Critical issues are ignored, or abandoned due to lack of resources. If folks get desperate enough for security, it's entirely likely that they'll reorganize into feudal kingdoms or even warlord-run clans, as has already happened in too many Middle Eastern countries in the wake of war. Restoring these lost democracies can take generations. Much of that risk can be averted — but only if we're aware of the potential for trouble, and start figuring out how to deal with it now.

• Third, an important part of that planning will involve taking stock of the carbon-based resources remaining to us, and figure out how to best invest them to smooth the way to the next era. We can use that remaining margin of oil to rebuild walkable cities, construct next-generation energy infrastructure, and install electric transit. We can leverage it to repave the world with agrichar [2], restoring millions of acres of arable land, creating a vast new carbon sink, and eliminating the need for petroleum-based fertilizers in the bargain. We will still be able to afford to run oil-fueled bulldozers and trucks and ships for a while yet. Let's use them wisely while we can.

• Fourth, "globalization" may take on a whole new meaning, one that's more about global governance than global trade. Executing transition plans necessarily means empowering planet-wide organizations that have the ability to make and enforce the rules. We've already done this on a limited scale in the CFC treaties, international non-proliferation efforts, and so on. But navigating a transition of this magnitude is going to force us to take the whole idea of global government to the next level. (Can't you hear the far right howling about this already?)

Creating these new powers will raise all kinds of hard questions about national sovereignty and the rights of the global collective. In the end, we may revisit the meaning and purpose of government, and perhaps create entirely new forms of government that better balance local needs against global goals.

What's Next?

Over the next decade, some of the most heated political battles of all will be pitched over questions like: Who wins the next round? What new energy regime will rise in place of oil? What countries will take the lead? What price will they exact? What corporations will profit? How do we make sure that the new energy order is more sustainable, just, and humane than the one that's soon to be past?

We can discuss possible answers to those questions in other posts. (This one's already long enough.) In general, I'm keeping an open mind. James Kunstler says that we're looking at the inevitable End Of The World As We Know it — but I see that as an absolute worst-case scenario, and far from the most likely one. The people who say we'll invent our way out of it have a somewhat better claim. We're well aware by now that all technologies come with a cost; but there are also a great many promising ideas already floating around out there, and we've barely started looking. Who knows what we'll find when we get serious about the search?

But the evidence is now overwhelmingly supporting the idea that the Age of Oil — and an American empire built on oil — is coming to an end, and there is no turning back. The small debates we're having today are the opening strains of a change process that most of us probably won't live to see the end of; but the choices we make now will have long-term reverberations down the century as that process unfolds.

And the conservatives who continue to distract us from that reality and commit atrocities in the name of maintaining an unsustainable status quo and "securing our future" are, in fact, setting us up for a decline of historic proportions. The future they want for us is no longer possible — or even desirable. When the century is over, we may not be an empire anymore -- but do have the choice to become a different kind of force for good in the world. The sooner we recognize that the 20th Century is over and that the 21st Century will demand different things of us, the sooner we can get on with remaking ourselves to fit the new era ahead.