Engineering in an Age of Limits

Discusses the role of engineers as society enters an Age of Limits — particularly with oil supplies.

Monthly Archives: July 2015

18. Solving the Wrong Problem

Engineering in an Age of Limits

Post #18. Solving the Wrong Problem

Phytomass

Engineers did not invent the steam engine — the steam engine invented them.
What will a post-oil society invent?

This is the eighteenth post in the series “Engineering in an Age of Limits”. We are facing limits in natural resources, particularly oil; our finances (money seems to be increasingly disconnected from actual goods and services); and the environment as we continue to dump waste products into the air, the sea and on to land.

We are also facing a transition as the Oil Age comes to an end. This is not the first time that society has faced such a shift. At the beginning of the 18th century the principal source of energy in northern Europe was wood. However the forests were mostly depleted so a new source of energy, coal, had to be developed and exploited. The extraction of coal from underground mines posed new technical challenges particularly with regard to removing the water that flooded those mines. So new technologies, particularly the steam engine, had to be developed. Necessity was indeed the mother of invention. These technological developments led to many changes in society, including the creation of the profession of engineering. The transitions that we are currently experiencing as we look for alternatives to oil are likely to generate equally profound paradigm shifts.

In this blog we consider two questions:

  1. What new paradigms, new ways of looking at the world, will develop, analogous to the development of engineering in the early 18th century; and
  2. How can engineers and other technical professionals help navigate the troubled waters that we are entering?

These posts are published at our Welcome page. We also have a LinkedIn forum that you are welcome to join. 

Trickle Down Phytomass

If I had an hour to solve a problem I’d spend 55 minutes thinking about the problem and 5 minutes thinking about solutions. 

Albert Einstein

Just when you thought that things could not get any worse they get worse.

Most ‘Age of Limits’ discussions revolve around the use of fossil fuels: the coal, oil and gas that was formed from the remains of photosynthetic plants hundreds of millions of years ago. We are both using them up (resource depletion) and also turning them into waste products such as CO2 in the atmosphere and acid in the oceans that are killing the environment. These problems are bad enough, but it turns out that the real concern is to do with the the earth’s inventory of living plant and animal material because that is what nourishes us, either directly or indirectly.

The technical term for this living material is phytomass.

Phytomass is critical to the survival of human beings because all of the food that we eat comes from living organisms. The energy stored in fossil fuels can help us extract and use that food more effectively but it does not create food. A person cannot eat a lump of coal or drink a barrel of oil. Phytomass is also vital because it maintains biodiversity and biochemical recycling.

In her latest essay at Our Finite World Gail Tverberg references the paper Human domination of the biosphere: Rapid discharge of earth-space battery foretells the future of humankind (lead author John R. Schramski). Published in June 2015 the paper compares the earth to a battery that has been trickle-charged for hundreds of millions of years by energy from the sun. The energy has been stored as biomass, some that is living now (mostly as trees) but most of which is stored underground in the form of oil, gas and coal. The authors argue that humanity is rapidly and irreversibly discharging that battery. They compare the earth to a house whose only electrical power comes from a battery. While the battery is charged all is well. But once it is discharged it is no longer possible to live in the house, except in the most rudimentary way.

The paper states, “Living things use photo-synthesis to convert diffuse but reliable sunlight into energy-rich organic compounds, and they use respiration to break down these compounds, release stored energy and do the biological work of living . . . humans also use technological innovations to burn organic chemicals and use this extrametabolic energy to do the additional work of fueling complex socioeconomic activities.” In other words, over a time span of hundreds of millions of years the earth’s battery has been trickle charged by sunlight being converted by plants into biomass. We are now using up that biomass and running down the battery.

With regard to the energy stored in fossil fuels there is nothing new in the above statements — the depletion of these resources is a central element of the Age of Limits thesis. However, what is new to most of us is that it is the energy stored in living biomass that really matters to our survival. After all, humans lived in rough equilibrium with the planet for tends of thousands of years. It was only with the start of the industrial revolution 300 years ago that the balance was thrown badly off kilter.

The paper estimates that the total energy stored in the earth’s current inventory of phytomass is 19 ZJ (zetajoules) and that 2 ZJ of new phytomass is created each year by plants from sunlight. (A zetajoule equals 1021 joules and is roughly half the amount of energy used by humanity per year.) “An input of 2 ZJ/y of photosynthesis maintains a standing stock of 19 ZJ of stored biomass.” In other words, if humanity were to consume phytomass at a rate of 2 ZJ per annum then we would be in balance with nature. But, needless to say, we are not so sensible.

In fact, in addition to irreversibly using fossil fuel resources, humans are also depleting the earth’s store of phytomass. The authors estimate that its value 2,000 years ago was around 35 ZJ but that now, as already noted, it is down to 19 ZJ. Causes for this depletion include deforestation, over-fishing and paving over vegetated landscapes. And the rate at which we are depleting the phytomass is increasing due to population growth and increased use of energy and phytomass per head of population. The authors of the paper calculate that humanity is consuming something like 0.53 ZJ/y more than is being replaced by the trickle down energy from the sun. This number is likely to increase as the population grows and as people strive for a higher material standard of living.

The Wrong Problem

To put it plainly, it looks as if we have been trying to solve the wrong problem. 

Our fundamental challenge is not the conservation of fossil fuel resources, nor is it reducing our impact on the environment. Our fundamental problem is that we are depleting the earth’s inventory of phytomass. Resource and environmental problems are secondary.

The chart shown below is from the journal Nature. The red line shows that startling growth in total energy consumption that has occurred in the last 300 years.

Total Energy Consumption

Based on information such as that shown in the chart the authors of the paper calculate that humanity has round 1,029 years left before the earth’s store of phytomass is exhausted. This sounds bad enough, but it is overly optimistic for the following reasons.

  1. No all phytomass can be consumed — a large proportion of it consists of trees, and we cannot eat wood.
  2. Although we cannot directly consume the energy in fossil fuel (we cannot eat lumps of coal) we still need that energy to extract phytomass energy through activities such as the manufacture of synthetic fertilizers. And, as we have discussed many, many times fossil fuel energy is declining.
  3. Human actions such as the reduction of biodiversity and pollution of the seas and atmosphere will reduce the rate at which phytomass is created.
  4. The earth’s human population (the blue line in the chart) continues to grow, at least in the short and medium term.

Therefore the value of 1,029 years before the store of phytomass is gone is probably wildly optimistic given the trends. Therefore the red line, the total energy consumed by humanity, will grow with it.

The unspoken assumption in most Age of Limits discussions is that if we can somehow control our use of fossil fuels then all will be well and we will be able to maintain our current lifestyle, or something close to it. Based on the insights of this paper such a conclusion is hopelessly naïve. Moreover, non-biological sources of energy such as wind, tidal power or nuclear energy are all essentially immaterial to the central problem — which is that we need phytomass to live; all that these  other energy sources can do is help us create and extract phytomass more effectively, thus ironically bringing about our demise even more quickly.

End Point

Schramski and his colleagues are saying that it is not enough to achieve a balance with our resources and environment — the current balance is unsustainable. We must cut back both the total population and we must drastically reduce our per capita consumption of phytomass. Simply stopping growth is not enough — we need to drastically shrink our presence on this earth because, “Unless phytomass stores stabilize, human civilization is unsustainable”. 

The authors go on to say,  “Living biomass is the energy capital that runs the biosphere and supports the human population and economy. There is an urgent need not only to halt the depletion of this biological capital, but to move as rapidly as possible toward an approximate equilibrium between [photosynthesis] and respiration. There is simply no reserve tank of biomass for plant Earth. The laws of thermodynamics have no mercy. Equilibrium is inhospitable, sterile, and final . . . the laws of thermodynamics offer little room for negotiation.”

I started this post by noting that I ran across the Schrmaski paper at the Finite World site. One of the commenters there, Fast Eddy, showed the following picture and said, “If that paper is correct… this is the future”.

Dead Plant Earth

l’Optimise

Voltaire

Voltaire

The above sub-title comes from Voltaire’s book Candide, a work that I have referred to in previous posts. His satirical writing can be seen as a work of optimism in spite of all the bad things that take place. Therefore, where possible, I will end these posts with a few words of optimism.

Rhino-1

After reading and thinking about the paper Human domination of the biosphere I can think of little to be optimistic about. We will have to drastically cut back on our energy consumption and on our depletion of phytomass. We need to reduce our energy consumption so that it is no more than what trickles down to us from the sun and is then converted to living plant and animal material. But, based on what we see around us, it would appear that the chances of us doing so voluntarily are slim indeed.

This line of thought takes us inexorably back to Voltaire’s Il faut cultiver notre jardin. Live simply, grow your own food and hope for the best. But there is one other conclusion that can be drawn from the above line of reasoning. Maintaining the world’s vegetative cover and diversity of plant and animal life is not just something we ought to do — it is something that is vital to our existence.

Books

Our books, published by Elsevier, include the following titles.

Books from Sutton Technical Books

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17. The Red Queen Dilemma

Engineering in an Age of Limits

Post #17. The Red Queen Dilemma

Red Queen in Alice in Wonderland
Engineers did not invent the steam engine — the steam engine invented them.
What will a post-oil society invent?

This is the seventeenth post in the series “Engineering in an Age of Limits”. We are facing limits in natural resources, particularly oil; our finances (money seems to be increasingly disconnected from actual goods and services); and the environment as we continue to dump waste products into the air, the sea and on to land.

We are also facing a transition as the Oil Age comes to an end. This is not the first time that society has faced such a shift. At the beginning of the 18th century the principal source of energy in northern Europe was wood. However the forests were mostly depleted so a new source of energy, coal, had to be developed and exploited. The extraction of coal from underground mines posed new technical challenges particularly with regard to removing the water that flooded those mines. So new technologies, particularly the steam engine, had to be developed. Necessity was indeed the mother of invention. These technological developments led to many changes in society, including the creation of the profession of engineering. The transitions that we are currently experiencing as we look for alternatives to oil are likely to generate equally profound paradigm shifts.

In this blog we consider two questions:

  1. What new paradigms, new ways of looking at the world, will develop, analogous to the development of engineering in the early 18th century; and
  2. How can engineers and other technical professionals help navigate the troubled waters that we are entering?

These posts are published at our Welcome page. We also have a LinkedIn forum that you are welcome to join. 

Productivity Slowdown

Trojan Horse
In last week’s post, Greek Gifts, I suggested that one of the root causes of the on-going Greek economic problems is that the world’s economies are hitting ‘Age of Limits’ barriers. In the post I stated,

Once we realize that our problems are caused by resource and environmental limits that prevent the creation of additional complexity then we may be able to work toward solutions, even though those solutions could well result in a conscious decision to simplify and therefore shrink our industrial systems.

The thinking behind this statement is that societies such as ours solve problems by increasing complexity. But increased complexity requires ever increasing expenditures of energy; if that energy is not available then it is no longer possible to add either complexity or growth. If this theory has merit then what we are seeing in Greece is the reverse effect: reduced affordable energy supplies lead to a simplification of systems which will lead, not to growth, but shrinkage. To repeat the words of Joseph Tainter in his book The Collapse of Complex Societies. 

  1. Growth comes from increased complexity because it is useful in solving problems;
  2. Increased growth and increased energy use go hand in hand — they cannot be separated;
  3. Complexity is not free — there is always a cost;
  4. When the cost/benefit crosses a threshold decline starts; and
  5. Decline is associated with increased simplification (which is generally involuntary).

If this analysis is true then attempting to solve the economic problems of Greece through ever-increasing austerity will simply make a bad problem worse.

Samuelson-Robert-1

Robert Samuelson

This week Robert Samuelson of the Washington Post wrote an editorial “Productivity mysteriously goes bust”. He starts off by saying,

What’s surprising about the disappointing slowdown in productivity is that, by all outward signs, it ought to be booming.What’s especially baffling is that, superficially, outside forces seem to favor faster productivity growth. 

He notes that this slowdown is a world-wide phenomenon and lists some of the reasons that should have caused an increase in productivity. They include,

  1. The Internet;
  2. Activist investors; and
  3. Globalization

He concludes by saying,

The productivity bust is a big story. It’s also a bit of a mystery.

The Red Queen

Red Queen as a symbol of the need for evolution

Faster! Faster!

Actually, there is no “bit of a mystery” — like most economists he does not realize that growth in productivity requires an abundant supply of affordable resources, particularly oil, as illustrated in Lewis Carroll’s famous story Through the Looking-Glass. In it the protagonist, Alice, meets the Red Queen. Suddenly they start running.

Alice never could quite make out, in thinking it over afterwards, how it was that they began: all she remembers is, that they were running hand in hand, and the Queen went so fast that it was all she could do to keep up with her: and still the Queen kept crying ‘Faster! Faster!’ but Alice felt she COULD NOT go faster, though she had not breath left to say so.

The most curious part of the thing was, that the trees and the other things round them never changed their places at all: however fast they went, they never seemed to pass anything. ‘I wonder if all the things move along with us?’ thought poor puzzled Alice. And the Queen seemed to guess her thoughts, for she cried, ‘Faster! Don’t try to talk!’ . . . and still the Queen cried ‘Faster! Faster!’ and dragged her along. ‘Are we nearly there?’ Alice managed to pant out at last.

‘Nearly there!’ the Queen repeated. ‘Why, we passed it ten minutes ago! . . . ‘Faster! Faster!’ And they went so fast that at last they seemed to skim through the air, hardly touching the ground with their feet, till suddenly, just as Alice was getting quite exhausted, they stopped, and she found herself sitting on the ground, breathless and giddy.

The Queen propped her up against a tree, and said kindly, ‘You may rest a little now.’

Alice looked round her in great surprise. ‘Why, I do believe we’ve been under this tree the whole time! Everything’s just as it was!’

‘Of course it is,’ said the Queen, ‘what would you have it?’

‘Well, in OUR country,’ said Alice, still panting a little, ‘you’d generally get to somewhere else—if you ran very fast for a long time, as we’ve been doing.’

‘A slow sort of country!’ said the Queen. ‘Now, HERE, you see, it takes all the running YOU can do, to keep in the same place. 

This image, with Greece being Alice and the Red Queen being Europe, in which they both must run faster and faster just to stay in one place, is compelling — and extends to most other countries in the world. It also provides an  answer to Samuelson’s conundrum. As a society we are spending more and more effort just to maintain what we have, just to stay in one place, there is little or nothing left over for growth. And this predicament (not problem) will only get worse as the world’s ERoEI (Energy Returned on Energy Invested) continues to fall (see Nine Pounds of Gold). 

Which brings us to our second Victorian girl: Goldilocks.

Goldilocks and the Three Bears

Goldilocks and the Three Bears
In Goldilocks is Dead Richard Heinberg compares our plight to that of Goldilocks. She has entered an empty house and sees three bowls of porridge on the table. She tastes them and finds that the first is too hot, the second is too cold but the third is just right. Heinberg uses this story as an analogy for the problems we are facing now. We need a price for oil that is “is not too hot, and not too cold”. If the price of oil is too high then the world economy wilts; if it is too low then oil companies cannot make money on their new, low ERoEI prospects (back to Nine Pounds of Gold).

Heinberg asserts that we have left the “just right” zone.

. . . I discussed what I call the Goldilocks price zone for oil, natural gas, and coal, a zone in which prices are “just right” — high enough to reward producers but low enough to entice consumers. Ever since the start of the fossil fuel era, such a zone has existed. Sometimes price boundaries were transgressed on the upside, sometimes the downside, but it was always possible to revert to the zone. 

But now, for oil, the Goldilocks zone has ceased to exist. 

Price of Oil

One of the most startling developments of the last twelve months was the drop in the price of oil during the second half of 2014 from around $110 to $55 per barrel. As we have discussed elsewhere the proximate cause of this event was likely a decision by OPEC to maintain high production rates in order to drive new producers, particularly U.S. tight oil, out of the market. But there are reasons to believe that there are longer-term reasons for the drop in the price of oil. Most analysts would argue on the following lines:

  1. It is getting more and more expensive to find and extract new sources of oil.
  2. Hence the price of oil will go up.
  3. General inflation of prices will follow on.

However, another line of reasoning would be:

  1. High oil prices cause an economic slowdown.
  2. This leads to increased unemployment and/or low wages.
  3. Hence demand for oil drops.
  4. Hence the price of oil drops.

When we look at what is going on in the world’s economies the second explanation seems to be the better one.

We have seen that that Robert Samuelson faced a dilemma with regard to the productivity of world economies. His puzzlement may lie in the fact that he has failed to recognize the role of diminishing affordable energy supplies. Indeed it would seem as if a structural weakness of most economic analyses is that they rarely recognize the physical limits of the world. For example, they may say, “If prices go up then supply will increase correspondingly”. This may be true for manufactured goods but it is not true for natural resources such as oil. Although there is plenty of oil in the ground its ERoEI is inexorably falling — the supply cannot go up to match prices.

The Red Queen and the Age of Limits

Red Queen in Alice in Wonderland

Alice and the Red Queen

We started this post by describing the with the Red Queen Dilemma  — Alice and the Red Queen need to run faster and faster just to stay in one place. This trope has been used to explain the nature of evolution. In a constantly changing environment all species must adapt just in order to stay in place. If they do not then they eventually disappear. Such a concept is well understood by most of us in the context of endless progress. Businesses and organizations of all types know that they have to develop new products and systems just to keep up. These advances create the productivity gains of recent years — the gains that are, as Samuelson points out, no longer being repeated.

The Red Queen principle applies equally well to the Age of Limits. But successful adaptation will require an understanding that resources are declining and that successful organizations will have to learn to work in a much simpler world than the one we live in now. Failure to do so will lead to their eventual failure.

l’Optimise

Voltaire

Voltaire

The above sub-title comes from Voltaire’s book Candide, a work that I have referred to in previous posts. His satirical writing can be seen as a work of optimism in spite of all the bad things that take place. Therefore, where possible, I will end these posts with a few words of optimism. (I started doing this in Denying Blackbeard — Part 2 and Renaissance Man and Climate Change.) In this post I offer the following thought.

Our economies and societies are going to become much simpler. This is not a choice.

Books

Our books, published by Elsevier, include the following titles.

Books from Sutton Technical Books

16. Greek Gifts

Engineering in an Age of Limits

Post #16. Greek Gifts

Trojan Horse
Engineers did not invent the steam engine — the steam engine invented them.
What will a post-oil society invent?

This is the sixteenth post in the series “Engineering in an Age of Limits”. We are facing limits in natural resources, particularly oil; our finances (money seems to be increasingly disconnected from actual goods and services); and the environment as we continue to dump waste products into the air, the sea and on to land.

We are also facing a transition as the Oil Age comes to an end. This is not the first time that society has faced such a shift. At the beginning of the 18th century the principal source of energy in northern Europe was wood. However the forests were mostly depleted so a new source of energy, coal, had to be developed and exploited. The extraction of coal from underground mines posed new technical challenges particularly with regard to removing the water that flooded those mines. So new technologies, particularly the steam engine, had to be developed. Necessity was indeed the mother of invention. These technological developments led to many changes in society, including the creation of the profession of engineering. The transitions that we are currently experiencing as we look for alternatives to oil are likely to generate equally profound paradigm shifts.

In this blog we consider two questions:

  1. What new paradigms, new ways of looking at the world, will develop, analogous to the development of engineering in the early 18th century; and
  2. How can engineers and other technical professionals help navigate the troubled waters that we are entering?

These posts are published at our Welcome page. We also have a LinkedIn forum that you are welcome to join. For a complete list of posts to do with the Age of Limits please visit our . Thank you.

Unpayable Debt

Greek-Flag-1
Much of the news of late has been to do with the the financial crisis in Greece. There are many theories and explanations as to the causes of this crisis. Most of these theories look at economic and financial issues such as over-generous pension programs, a failure to collect taxes from the wealthy citizens, the flight of savings to other countries and the strait-jacket effect of a single currency among different economies. But, as we think about the Age of Limits and its impact on the engineering professions, there are at least two deeper lessons that we can derive from the suffering and confusion that we witness in today’s Greece. Indeed, the proverb “Beware of Greeks bearing Gifts” comes to mind (the phrase derives from Virgil’s story of the Trojan Horse.) What is going on in Greece now may provide guidance to engineers as they navigate the upcoming Age of Limits.

A fundamental theme of this series of posts is that our society is running into physical limits in all areas: resources, environmental and financial. And this seems to be what is going on in Greece — a nation that has accumulated enormous debts but one that has very little in the way of natural or industrial resources. Normally these debts would be paid off, or at least deferred, through growth in the economy. But if physical economic growth has not only stopped and is unlikely to return then the problems cannot be solved by taking on more debt because there is no way that the new interest payments can be made. Supporting this point of view, Gail Tverberg suggests that the European countries with the greatest economic problems (Cyprus, Greece, Portugal, Italy, Spain and Ireland) along with Puerto Rico in the western hemisphere all have the greatest percentage of their energy supplied by oil.

If this were just a Greek problem then we could probably find some way of finessing it. But most other nations have also taken on enormous debt burdens yet few of them are likely to see much physical growth any more. Hence the confusion and hardship that we are seeing now in Greece is likely to repeat itself in those other nations in years to come. Government and financial leaders will try to solve these problems with financial tools of one sort or another — not realizing that none of their actions are likely to make much difference, except to pile on ever-greater burdens of unpayable interest payments associated with new debt. Indeed, their actions will probably make the problems worse by adding unnecessary and confusing complexity.

This is the first gift that the Greeks bring us: what we are seeing in Greece is not just “the end of growth” — we are witnessing the “start of shrinkage”. More on this in future posts — suffice to say for now that this is a very scary observation.

Complexity

The physical limits that we face as a result of the upcoming Age of Limits is a theme that we will keep coming back to. But there is another lesson that the Greeks give us and that is the diminishing returns to do with increased complexity. And it is a lesson that engineers and technical professionals would do well to heed.

 The European Union (EU) is bureaucratic — it issues thousands of rules in all walks of life. The reason for this is not a casual byproduct of the Union — it is the basis of its existence. By forcing the different nations to conform to the rules the people will become more unified (it is hoped).

Straight banana
Most of the rules can probably be justified on their own merits. But some, such as the one that led to the infamous “Straight Banana” controversy, are questionable. In this case Commission Regulation Number 2257/94 stipulated that bananas must be “free from abnormal curvature of the fingers”. This rule led to many jokes about grocery stores being forced to sell only straight bananas. But jokes are funny because they reflect real life. In this case it would, of course, be much simpler to let grocers offer different types of banana and let the customers choose those that they prefer. But allowing the free market to operate in this manner is against the very philosophy of the EU. The burden on society generated by EU rules is not an accidental byproduct — it is the very raison d’être for the EU’s existence.

Not only does a plethora of rules create the occasional absurdity, at a deeper level they create huge amount of complexity. This complexity then creates two problems. First is the direct cost. It takes money to hire the people who write and enforce the rules. And that money has to be paid by taxes. In addition, the companies that are subject to all the rules and regulations have to hire their own people to make sure that they are in compliance. And they have to modify their facilities in order to conform to the rules. None of this investment is subject to financial scrutiny: rules are rules and they must be followed — arguments to do with common sense and return on investment receive very little attention. Yet the taxes and other costs to do with increased rule-making must come, at the end of the day, from productive activities to do with industry and agriculture. If the rules have the effect of killing industry, or driving it to a less restrictive location, then the whole system will starve to death.

So, the reaction of industrial managers tends to be, “Why bother?” Why go to all the trouble of building a chemical plant or refinery when the rules are so onerous? In my post A Magnificent Navy on Land I quote from an open letter from Jim Ratcliffe, Chairman of INEOS, to Mr. Barroso of the European Commission.

I wish to express my deepest concerns about the future of the European chemical industry. Sadly, I predict that much of it will face closure within the next 10 years . . .

In the UK we have seen 22 chemical plant closures since 2009 and no new builds . . .

I can see green taxes, I can see no shale gas, I can see closure of nuclear, I can see manufacturing being driven away.

Hence the physical economy continues to decline and debts that paid off because the rules contribute little to true growth.

But a second problem to do with increased complexity, and one that gets less attention, is that no one can really understand or manage complex systems. People operate in their professional silos; they do not understand how their actions are affecting the overall system. This is not because these people are foolish or willfully ignorant — it is because the systems that they supposedly manage are so complex that they cannot be understood by any human being.

An example was provided this week at the Resource Crisis site. In it the author, Ugo Bardi, reported on a conference to do with food supply that he attended. He states,

The food supply system is a devilishly complex system and it involves a series of cross linked subsystems interacting with each other. 

He notes that each person at the conference was generally very knowledgeable about one area such as agriculture or food distribution or climate change or resource limits. But no one understood all of these issues, nor how they might interact with one another. Instead each person pursues a process of linearization whereby making one change will have a desired effect without considering its systems impact. In particular, they do not give consideration to the possibility that their particular solution might actually make overall conditions worse.

In his book The Collapse of Complex Societies Joseph Tainter states that the response of many (not all) societies to problems is to increase complexity. This process continues until the costs of incremental complexity are greater than the commensurate benefits. At that point collapse starts. He makes the following points:

  1. Growth comes from increased complexity because it is useful in solving problems;
  2. Increased growth and increased energy use go hand in hand — they cannot be separated;
  3. Complexity is not free — there is always a cost;
  4. When the cost/benefit crosses a threshold decline starts; and
  5. Decline is associated with increased simplification (which is generally involuntary).

In other words societies initially respond to problems by adding complexity. However there is a cost associated with this complexity. The costs rise but the returns become increasingly marginal. Eventually a tipping point is reached and the society collapses to a much simpler state.

There are reasons to believe that our society may be at such a point because the supply of available energy is decreasing (point #2 above).

The Greek Gift

At the start of this essay we alluded to the gift that the Greeks brought. The Greeks (actually the Achaeans) placed a wooden horse at the gates of Troy. The Trojans foolishly dragged that horse into their city, whereupon Greek soldiers leaped from the belly of the horse and conquered Troy.

But in our situation, if we look more deeply into what is going on in Greece (and many other highly indebted nations), there are useful if difficult lessons to be learned, particularly if we understand that the issues go beyond day to day economics and politics. Once we realize that our problems are caused by resource and environmental limits that prevent the creation of additional complexity then we may be able to work toward solutions, even though those solutions could well result in a conscious decision to simplify and therefore shrink our industrial systems.

l’Optimise

Voltaire

Voltaire

The above sub-title comes from Voltaire’s book Candide, a work that I have referred to in previous posts. His satirical writing can be seen as a work of optimism in spite of all the bad things that take place. Therefore, where possible, I will end these posts with a few words of optimism. (I started doing this in Denying Blackbeard — Part 2 and Renaissance Man and Climate Change.) In this post I offer the following thought.

Our industrial and management systems are  complex. A return to simplicity will occur. Those organizations that wish to achieve high levels of safety and profitability in the new world of an Age of Limits will intentionally seek to make their systems simpler.

Books

Our books, published by Elsevier, include the following titles.

Books from Sutton Technical Books

15. The Future Has No Narrative

Engineering in an Age of Limits

Post #15. The Future Has No Narrative

The FutureEngineers did not invent the steam engine — the steam engine invented them.
What will a post-oil society invent?

This is the fourteenth post in the series “Engineering in an Age of Limits”. We are facing limits in natural resources, particularly oil; our finances (money seems to be increasingly disconnected from actual goods and services); and the environment as we continue to dump waste products into the air, the sea and on to land.

We are also facing a transition as the Oil Age comes to an end. This is not the first time that society has faced such a shift. At the beginning of the 18th century the principal source of energy in northern Europe was wood. However the forests were mostly depleted so a new source of energy, coal, had to be developed and exploited. The extraction of coal from underground mines posed new technical challenges particularly with regard to removing the water that flooded those mines. So new technologies, particularly the steam engine, had to be developed. Necessity was indeed the mother of invention. These technological developments led to many changes in society, including the creation of the profession of engineering. The transitions that we are currently experiencing as we look for alternatives to oil are likely to generate equally profound paradigm shifts.

In this blog we consider two questions:

  1. What new paradigms, new ways of looking at the world, will develop, analogous to the development of engineering in the early 18th century; and
  2. How can engineers and other technical professionals help navigate the troubled waters that we are entering?

These posts are published at our Welcome page. We also have a LinkedIn forum that you are welcome to join. For a complete list of posts to do with the Age of Limits please visit our . Thank you.

Predicting the Future

This series of posts to do with the upcoming Age of Limits requires that I make predictions about the future. But I find that when I make specific predictions I am often — in fact, usually — wrong. Moreover, when I look at the predictions of writers for whom I have a great deal of respect I find that they are often wrong also when they are discussing specific events and scenarios. So what is the purpose of writing a blog such as this given that none us know what the future holds?

I think that there are two answers to this question. First, we all make predictions about the future in our daily lives, even if those predictions are implicit. For example if someone is deciding whether to buy or rent a house in a particular area he or she needs to think through issues such as long-term trends in house prices and how long he plans to stay in that area.

Second, there is a distinction between identifying broad trends and making hard forecasts as to specific events and when they will occur. For example it is clear the sea level are rising and that many coastal cities will be threatened with floods. But no one knows how much the levels will rise by particular dates.

A Lesson in Humility

If we need a lesson in humility all we need do is look at the following chart.

Crude Oil Price

Crude Oil Price

It shows the price of Crude Oil from 2000 to 2015. Up until the end of 2014 the price rose quite steadily at around 9% per annum — considerably more than inflation during the same time period. (There was a big swing in 2008 but that dampened out quite quickly.) But then, in the latter half of 2014, the price of oil plunged by 50% to below $60 and has remained at about that level since.

As part of my research into Age of Limits issues I spend quite a lot of time reading the work of expert authors who write about resource depletion and related topics. Not one of these authors, to the best of my knowledge, said at the start of 2014 , “I predict that the price of oil in the second half of 2014 will drop by 50%”. Nor did any of the financial pundits or oil company experts publicly anticipate what happened. If ever we needed a lesson in humility this was it. Yet I cannot recall any of these experts saying at the start of 2105, “I completely missed it last year — I totally failed to foresee the dramatic drop in oil prices therefore any forecast I make as to what might happen in 2016 could be completely wrong”.

Yet I have not noticed much humility among the experts.

(I should probably point out that I also make predictions that are, at best, wobbly. For example, when I first started looking at Peak Oil issues the world production of oil had reached what looked like a peak of around 75 million barrels per day. I was quite sure that we would see a decline from that point. Actually we have remained on a plateau for the last ten years, and there are indications that production rates have increased in the last year or two.)

We All Know Why

Given that most  experts missed the dramatic price plunge it might be expected that they would recognize that they cannot explain the causes of such events. Some of the factors that go into oil price movements include: the availability of finance, political rivalries, the geology of the oil fields and the economic health of the consuming nations. No one can possibly understand all of these or how they interact with one another. Yet, within a matter of months, everyone knew for certain what had caused the changes (although the reasons differed from one expert to another). Once more humility was not to the fore.

The book Black Swan by Nicholas Taleb received considerable attention because he talked about wrenching, unexpected changes and how conventional risk management tools fail to forecast such changes. He states that there are three key features of a Black Swan event.

  1. They are a surprise and were not forecast by the risk models in use;
  2. They have a major impact; and
  3. After their occurrence, those involved rationalize what happened.

Most people look only at the first insight — the fact that these events are a surprise and not predicted. But I find the third point to be of particular interest: people quickly rationalize what happened — the surprise factor is quickly forgotten.

It should also be recognized that although most analysts are confident in their explanations they do not necessarily agree with one another. For example,  Stanford economist, Dr. Wolak in a March 2015 paper provides seven possible reasons for the fall in price. Yet he does not mention two reasons that are widely touted by many other authors: the desire by OPEC to drive the American shale oil producers out of business and the possibility that the economy simply cannot sustain higher prices without slipping into recession. Nor does he explain why the price fell so quickly. This does not mean that he is wrong. But it does mean that, six months after the event, there is profound disagreement among analysts as to the causes of that event.

Linear Thinking

I recently attended the 2015 EIA (Energy Information Administrati0n) annual meeting held in June 2015 in Washington D.C. The role of this government agency is to provide “Independent Statistics and Analysis” on energy-related topics. There were two tracks, so I could not attend all of the presentations. However I did attend probably about 75% of the talks. The speakers were from different organizations and companies and each had their own topic. But I was struck by the following.

  • Not one of the speakers said words to the effect, “I did not predict the dramatic drop in the price of oil last year so maybe you should use caution when listening to what I say this year”.
  • They all assumed that the current price of oil would stay at about its present level, say $50-60, for the next few years.
  • They also assumed that there would be a continuing glut of oil on the market and the OPEC would have trouble moving its surplus.

Other analysts take the same approach. For example, Frank Wolak, , whose work has already been cited, states “Global oil prices may stay low for the next 10 or 20 years”. He also said, “predicting the future is always fraught with uncertainty.” Yet his forecast does not express such uncertainty.

The fact is that a new reality concerning oil prices has developed, everyone is confident in their predictions and it is obvious as to what is causing these changes. What we see going on is linear thinking, an assumption that tomorrow will be very much like today and any changes will be gradual and manageable — in other worlds there are no blacks swans about to land.

Weasel Words

Of course, most speakers and writers hedge their statements, as illustrated in the words of Dr. Wolak quoted above. There was one particularly egregious form of this type of hedging at the EIA conference when one of the senior staff members said, “The price of oil in the year 2030 could be anywhere between $50 and $250 per barrel”. My reaction was, “Is that what I am paying my tax dollars for?”

People who are confident in their statements do not need to hedge their statements so much. In last week’s post we discussed the draft encyclical that Pope Francis is about to circulate. In it he talks about the ills that we face — not just climate change, but also excessive use of digital media and our lack of attention to the needs of poor people. He does not mince his words. He speaks with confidence and authority.

Climate and Weather

One of the reasons that forecasts tend to miss the mark is that people making those forecasts tend to mix ‘climate’ with ‘weather’. Regarding the climate we can see long-term trends and talk about them with some confidence. It is reasonable to say that, over the next twenty years, global temperatures will increase and sea levels will rise. However, the weather in my part of the world has been cooler than normal for the last three years — particularly in the winter. Therefore I would be foolish to make strong predictions about next winter’s temperatures or snowfalls for my town.

Doomer Predictions

Another problem to do with forecasting in an Age of Limits is that many of the people who work in this area tend to make “doomer” forecasts that do not pan out. Their extreme comments damage the credibility of not only themselves, but the movement that they represent.

For example, one analyst who has shrewd insights regarding the economy and its relationship to financial systems is Stoneleigh (Nicole Foss). She published a post 40 ways to lose your future in June of 2009 . In it she makes predictions as to what changes are likely to take place.

Point #34 says,

Energy prices are first affected by demand collapse, then supply collapse, so that prices first fall and then rise enormously

Although we have not seen demand collapse prices have fallen a lot.

But then Point #35 says,

Ordinary people are unlikely to be able to afford oil products AT ALL within 5 years.

Here we are in the year 2015 and the freeways seem to be as congested as ever.

No Narrative

Wendell Berry

Wendell Berry

Just a handful of people are willing to be humble about their ability to predict the future. One of those people is Wendell Berry who, in the Spring 2015 edition of “Yes” magazine said,

So far as I am concerned, the future has no narrative. The future does not exist until it has become the past. To a very limited extent, prediction has worked. The sun, so far, has set and risen as we have expected it to do. And the world, I suppose, will predictably end, but all of its predicted deadlines, so far, have been wrong. The End of Something—history, the novel, Christianity, the human race, the world—has long been an irresistible subject. Many of the things predicted to end have so far continued, evidently to the embarrassment of none of the predictors . . . How can so many people of certified intelligence have written so many pages on a subject about which nobody knows anything?

He advises that we do the right thing, which in his case is to tend the earth properly, and not worry about what the future might bring. Voltaire expresses the same sentiment at the conclusion of his book Candide, ou l’Optimisme (written in the year 1758) when he says,  Il faut cultiver son jardin — we must cultivate our garden/fields (although this sentiment does not protect his protagonists from an invasion of Bulgars).

Conclusions

Predicting the future is fraught — the truth is no one knows what tomorrow will bring, much less what the world will look like a generation from now. But some tentative conclusions can be made.

  • Distinguish between weather and climate
    I cannot tell if it next winter will be colder than normal but I am confident that twenty years from now many coastal cities will be building barricades to keep out the rising sea water and/or simply evacuating.
  • Allow time
    Sooner or later the world supply of oil will start to move inexorably downward but it will probably be at a later date than we anticipate.
  • Recognize complexity
    We are discussing enormously complex systems here; trying to understand the relationships between all the parameters and variables is impossible.
  • Watch out for black swans
  • Be both confident and humble
  • Live a modest lifestyle consistent with your forecasts.

l’Optimise

Voltaire’s satire that we have just alluded to can be seen as a work of optimism in spite of all the bad things that take place. Therefore, where possible, I will end these posts with a few words of optimism. (I started doing this in Denying Blackbeard — Part 2 and Renaissance Man and Climate Change.) In this post I offer the following thought.

Even though the future looks bleak focus on what we can achieve in the current circumstances.

Books

Our books, published by Elsevier, include the following titles.

Books from Sutton Technical Books