I've suggested in several previous posts that the peak oil debate may be approaching a turning point—one of those shifts in the collective conversation in which topics that have been shut out for years or decades finally succeed in crashing the party, and other topics that have gotten more than their quota of attention during that time get put out to pasture or sent to the glue factory. I’d like to talk for a moment about some of the reasons I think that’s about to happen, and in the process, give a name to one of the common but generally unmentionable features of contemporary economic life. We can begin with the fracking bubble, that misbegotten brat fathered by Wall Street’s love of Ponzi schemes on Main Street’s stark terror of facing up to the end of the age of cheap abundant energy. That bubble has at least two significant functions in today’s world. The first function, as discussed in these essays already, is to fill an otherwise vacant niche in the string of giddy speculativedelusions that began with the stock market boom and bust of 1987 and is still going strong today. As with previous examples, the promoters of the fracking bubble dangled the prospect of what used to be normal returns on investment in front of the eager and clueless investors with which America seems to be so richly stocked these days. These then leapt at the bait, and handed their money over to the tender mercies of the same Wall Street investment firms who gave us Pets.com and zero-doc mortgages. You might think, dear reader, that after a quarter century of this, there might be a shortage of chumps willing to fall for such schemes. Whatever else might be depleting, though, the supply of lambs eager to be led to that particular slaughter seems to be keeping up handily with the demand. We live in what will doubtless be remembered as the Golden Age of financial fraud, an era of stunning fiscal idiocy in which even the most blatant swindles can count on drawing a crowd of suckersbegging to have their money taken from them. Millennia from now, the grifters, con men, and bunco artists of civilizations yet unborn will look back in awe at our time, and wish that they, too, might be fortunate enough to live in an era when tens of millions of investors passionately wanted to believe that the laws of economics, thermodynamics, and plain common sense must surely be suspended for their benefit. To some extent, in other words, the fracking bubble is simply one more reminder that Ben Franklin’s adage about a fool and his money has not lost any of its relevance since the old rascal slipped it into the pages of Poor Richard’s Almanac. Still, there’s more going on here than the ruthless fleecing of the unwary that’s the lifeblood of every healthy market economy. The fracking bubble, as most of my readers will be well aware, has not only served as an excuse for ordinary speculative larceny; it’s also provided a very large number of people with an excuse to scrunch up theireyes, stuff their fingers in their ears, shout "La, la, la, I can’t hear you," and thus keep clinging to the absurd faith that limitless resources really can be extracted from a finite planet. For the last three or four years, accordingly, the fracking bubble has been the most common item brandished by practitioners of peak oil denial as evidence that petroleum production can too keep on increasing forever, so there! The very modest additions to global petroleum production that resulted from hydrofracturing shales in North Dakota and Texas got talked up into an imaginary tidal wave of crude oil that would supposedly sweep all before it, and not incidentally restore the United States to its long-vanished status as the world’s premier oil producer. All that made good copy for the bunco artists mentioned earlier, to be sure, but it also fed into the futile attempts at denial that have taken the place of a sane energy policy in most industrial societies. The problem with this fondfantasy is that the numbers don’t even begin to add up. The latest figures, neatly summarized by Ron Patterson in , show just how bad the situation has become. Each year, on average, the oil industry has had had to increase its investments by 10% over the previous year to get the same amount of oil out of the ground. Even $100-a-barrel oil prices won’t support that kind of soaring overhead cost for long, and the problem has been made worse by the belated discovery that many of the shale beds ballyhooed in recent years don’t have anything like as much oil as their promoters claimed. As a result, oil companies around the world are cutting back on capital investment and selling off assets. That’s not the behavior of an industry poised on the brink of a new age of abundance; it’s the behavior of an industry that has just slammed face first into hard supply limits and is backing away groggily from the impact site while trying to stanch the bleeding from deep fiscal cuts. As a result,with mathematical certainty, a great many overpriced assets are going to lose most of their paper value in the years ahead of us, a great many businesses that have made their money providing goods and services to the drilling industry are going to downsize sharply or simply go bankrupt, a great many wells that can’t make money even at exorbitant oil prices are going to be shut in or go undrilled in the first place, and a very, very great many people who convinced themselves that they were going to get rich by investing in fracking are going to end up poor. It’s not going to be pretty. Exactly what effect this is going to have on the price of oil is an interesting question; my guess, though it’s only a guess, is that a couple of years from now the price of oil will spike, possibly to the $250-$300 a barrel range, then crash to $60 a barrel, and slowly recover to $175 or so over a period of several years. This has a great deal of relevance to the project of this blog. The last timepetroleum production failed to keep pace with potential demand, and the price of oil spiked accordingly, peak oil came in from the fringes and got discussed publicly in the pages of newspapers of record. That window of opportunity gaped open from 2004 to 2010, roughly speaking, and during that period a great deal got accomplished. That was when peak oil stopped being a concern of the furthest fringe and found an audience in many corners of contemporary alternative culture, when local groups—some under the Transition Town banner, others outside it—began to organize around the imminence of peak oil, and when books on resource depletion and its consequences found a market for the first time since the early 1980s. Those are significant gains. It’s true, of course, that these achievements didn’t make peak oil go away, or find some gimmick that will keep the lifestyles of the industrial world’s more privileged inmates rolling merrily along for the foreseeable future. What sometimes getsforgotten is that neither of those things was ever possible in the first place. The hard facts of our predicament have not changed a bit: the age of cheap abundant energy is ending; the economic systems, social structures, and lifestyle habits that were made possible by that temporary condition are accordingly going away, and nothing anyone can do will bring them back again, not now, not ever. It’s worth being precise here: for the rest of the time our species endures, we will have to deal with much more sharply constrained energy supplies than we’ve had handy over the last few centuries. That doesn’t mean that our descendants will be condemned to huddle in caves until the jaws of extinction close around them; I’ve argued at quite some length that the endpoint of the mess we’re currently in, centuries from now, will most likely be the emergence of ecotechnic societies—societies that maintain relatively high technology on the modest energy and resource inputs that can be providedby renewable sources. I’ve suggested, there and elsewhere, that there’s quite a bit that can be done here and now to lay the foundations for the ecotechnic societies of the far future. I’ve also tried to point out that there’s quite a bit that can be done here and now to make the unraveling of the age of abundance less traumatic than it will otherwise be. To my mind, those are worthwhile goals. What makes them difficult is simply that any meaningful attempt to pursue them has to start by accepting that the age of cheap abundant energy is ending, that the lifestyles that age made possible are ending with it, and that wasting all those fossil fuels on what amounts to a drunken binge three centuries long might not have been a very smart idea in the first place. Any one of those would be a bitter pill to take; all three of them together are far more than most people nowadays are willing to swallow, and so it’s not surprising that so much effort over the last few decades have gone intopretending that the squalid excesses of contemporary culture can somehow keep rolling along in the teeth of all the evidence to the contrary. The frantic attempts to sustain the unsustainable driven by this pretense have done much to make the present day such a halcyon time for swindles of every description. Not all of those, however, have taken aim at the wallets of what we might as well call the lumpen-investmentariat, that class of people who have money to invest and not a clue in their heads that Wall Street might not have their best interests at heart. Some of the most colorful flops of recent years have instead attracted money from a different though equally gullible source: government subsidies for new energy technologies. Those of my readers who were part of the peak oil scene a decade ago, for example, may remember the days when ethanol made from American corn was going to save us all. Many of the same claims more recently deployed to inflate the fracking bubble were used tojustify what was described, at the time, as America’s burgeoning new ethanol industry, but the target for these exercises was somewhat different. A certain amount of investment money from the clueless did find its way into the hands of ethanol-plant promoters, to be sure, but the financial core of the new industry was a flurry of federal mandates and federal and state subsidies, which in theory existed to lead America to a bright new energy future, and in practice existed to convince the voters that politicians really were doing something about gasoline prices that had just risen to the unheard-of level of $2 a gallon. You won’t hear much about America’s burgeoning new ethanol industry these days. A substantial fraction of the ethanol plants that were subsidized by governments and lavishly praised by politicians a decade ago are bankrupt and shuttered today, having failed to turn a profit or, in some cases, cover the costs of construction. The critics who pointed out that theburgeoning new industry made no economic sense, and that making ethanol from corn uses more energy than you get from burning the ethanol, turned out to be dead right, and the critics who dismissed them as naysayers turned out to be dead wrong. Still, the ethanol plants had accomplished the same two functions as the fracking bubble did later: it sucked a great deal of money into the hands of its promoters, and it helped everyone else pretend for a while that the end of the age of cheap abundant energy wasn’t going to happen after all. It’s hardly the only example of the phenomenon. Since I don’t want green-energy proponents to feel unduly picked on, let’s turn to the other side of the energy picture and take a look at nuclear fusion. Since the 1950s, a sizeable body of nuclear physicists have kept themselves gainfully employed and their laboratories stocked and staffed by proclaiming nuclear fusion as the wave of the future. In just another twenty years, we’ve repeatedly been told,clean, safe nuclear fusion plants will be churning out endless supplies of energy, if only the government subsidies keep pouring in. After sixty years of unbroken failure, even politicians are starting to have second thoughts, but the fusion-power industry keeps at it, pursuing a project that, as respected science writer Charles Seife pointed out trenchantly in Sun In A Bottle: The Strange History of Fusion and the Science of Wishful Thinking, has more in common with the quest for perpetual motion than its overeager fans like to think. Every few years the media carries yet another enthusiastic announcement that some new breakthrough has happened in the quest for fusion power. Now of course it’s worth noting that none of these widely ballyhooed breakthroughs ever amount to a working fusion reactor capable of putting power into the grid, but let’s let that pass for now, because the point I want to make is a different one. As I pointed out in , the question that matters about fusion isnot whether fusion power is technically feasible, but whether it’s economically viable. That’s not a question anyone in the fusion research industry wants to discuss, and there are good reasons for that. The ITER project in Europe offers a glimpse at the answer. ITER is the most complex and also the most expensive machine ever built by human beings—the latest estimate of the total cost has recently gone up from $14 billion to $17 billion, and if past performance is anything to go by, it will have gone up a good deal more before the scheduled completion in 2020. That stratospheric price tag results from the simple fact that six decades of hard work by physicists around the world, exploring scores of different approaches to fusion, have shown that any less expensive approach won’t produce a sustained fusion reaction. While commercial fusion reactors would doubtless cost less than ITER, it’s already clear that they won’t cost enough less to make fusion power economically viable. Evenif ITER succeeds in creating its "sun in a bottle," in other words, that fact will be an expensive laboratory curiosity, not a solution to the world’s energy needs. My more attentive readers will doubtless have noticed that the flaw in the current round of glowing prophecies of a future powered by fusion plants is the same as the flaw in the equally glowing sales pitches for corn-based ethanol fuel plants a decade ago. Turning corn into ethanol, and using the ethanol to fuel cars and trucks, is technically feasible; it just doesn’t happen to be economically viable. In the same way, whether fusion power is technically feasible or not may still be up in the air, but the question of its economic viability is not. The gap between technical capacity and economic reality provides the ecological niche in which both these projects make their home, and a great many other alleged solutions to the energy crisis of our time inhabit that same niche. I’d like to suggest that it’s high time to put aname to the technological fauna that fill this role in our social ecology, and I even have a name to propose. I think we should call them "subsidy dumpsters." A subsidy dumpster, if I may venture on a definition, is an energy technology that looks like a viable option so long as nobody pays attention to the economic realities. Because it’s technically feasible, or at least hasn’t yet been proven to be unfeasible, promoters can brandish enthusiastic estimates of how much energy it will yield if only the government provides adequate funding, and point to laboratory tests of technical feasibility as evidence that so tempting a bait is within reach. The promoters of such schemes can also rely on the foam-flecked ravings of economists, who have proven to be so stunningly clueless about energy in recent years, and they can also count on one of the pervasive blind spots in modern thinking: the almost visceral inability of most people these days to think in terms of whole systems. Armed withthese advantages, they descend upon politicians, and if energy costs are an irritation to the public—and these days, energy costs are always an irritation to the public—the politicians duly cough up a subsidy so they can claim to be doing something about the energy problem. Once the subsidy dumpster gets its funding, it goes through however many twists and turns its promoters can manage before economic realities take their inevitable toll. If the dumpster in question has to compete in the marketplace, as fuel ethanol plants did, the normal result is a series of messy bankruptcies as soon as the government money runs short. If it can be shielded from the market, preferably by always being almost ready for commercial deployment but never actually quite getting there—the fusion-research industry has this one down pat, though it’s fair to say that the laws of nature seem to be giving them a great deal of help—the dumpster can keep on being filled with subsidies for as long as the prospectof an imminent breakthrough can be dangled in front of politicians and the public. Since most people these days consistently mistake technical feasibility for economic viability, there’s no shortage of easy marks for this sort of sales pitch. There are plenty of subsidy dumpsters in the energy field just now. What makes this all the more unfortunate is that quite a few of them are based on technologies that could be used in less self-defeating ways. Solar power, to name only one example, could make a huge dent in America’s energy needs, if the available resources focused on proven technologies such as solar water heaters; once this sensible approach is replaced by attempts to claim that we can keep the grid powered by paving some substantial fraction of Nevada with solar PV cells, though, we’re in subsidy-dumpster territory, as has shown. Renewable energy is a viable option so long as its sharp limits of concentration and intermittency are kept in mind; ignore those, and pretend thatwe can keep on living today’s extravagant lifestyles on a basis that won’t support them, and you’ve got a perfect recipe for a subsidy dumpster. Now it’s only fair to point out that the energy issue is far from the only dimension of modern life that attracts subsidy dumpsters. Name a current crisis here in America—joblessness, urban blight, decaying infrastructure, and the list goes on—and there are plenty of subsidy dumpsters to be found, some empty and rusting like yesterday’s ethanol plants, some soaking up government funds like the ITER project, and many more that are still only a twinkle in the eyes of their eager promoters. Still, I’d like to suggest that subsidy dumpsters in the energy field have a particular importance just now. The end of the age of cheap abundant energy requires that we stop using anything like as much energy as we’ve been using in recent decades. Any approach to dealing with the crisis of our age that doesn’t start by using much less energy, in other words,simply isn’t serious. The parade of subsidy dumpsters being hawked to politicians these days is merely one more attempt to refuse to take our predicament as seriously as it deserves, and thus serves mostly as a way to make that predicament even worse than it has to be. By and large, to borrow a neatly Pharaonic turn of phrase from one of my longtime readers—tip of the archdruidical hat to Robin Datta—that’s the trouble with spending all your time splashing around in the waters of denial; all that happens, in the final analysis, is that you attract the attention of the crocodiles of reality. * * * In not unrelated news, I'm pleased to report that my latest book on peak oil and the future of industrial society, , is now in print. Those of my readers who have preordered copies will have them soon; those who haven't...well, what's keeping you? ;-)