The Ways of Contraction: Compounding Consequences

Back when I wrote my old blog, Of The Hands, I spent a fair amount of time discussing the concept of voluntary poverty. During the time I wrote that blog, I worked on a small-scale, off-grid (more or less) vegetable farm for room and board. A side job as a farm hand provided me as much as an additional $500 per month in income for other expenses. I had plenty of safeguards, as well; credit cards, family, a bit of savings I had managed to cobble together, and a certain amount of capital I brought with me to the work—primarily, a functioning car and laptop. Taken together—the covered room and board, the very small income, the previously-acquired capital, and a few last ditch safeguards—these elements kept me living comfortably (to my mind) and with a relatively low level of stress. By income level, I of course lived in poverty. By security, I did not.

Yet I lived on the edge in a few different ways. The primary one was the risk of injury. Any serious injury would eliminate my ability to work and, should it incur bills, would quickly wipe out what little financial security I had. A secondary one was through potential loss of capital. If my laptop died, I could have afforded to replace it if I so chose—which I probably would not have chose—but it would have taken a good chunk of my income or savings or both. More critically, if my car died or was to require any major repairs, I would have had some hard choices to make. Living in a rural area, it would have been very hard, though not impossible, to live without the convenience of a functional car. I knew that if anything major happened to my vehicle, I would have some tough choices to make.

That’s the thing about living with so little a cushion: a good series of unexpected expenses can make your life very challenging indeed, and even runs the risk of permanently altering your safety and security. Alternately, a continuing series of minor but also unexpected expenses parceled out over time can wear you down, slowly draining your small income and savings and pushing you ever closer to the edge. Eventually you get so close to the edge that it’s not only a big hit that could send you falling, but even an unexpected small one.

Welcome to the likely fate of America and, on a greater time scale, industrial civilization as a whole.

Understanding the full ramifications of this particular aspect of our predicament requires some thoughtful consideration of the other key elements of continued decline that I outlined in the last two posts here on Litterfall. The first is America’s sclerotic and failing empire, which puts us on the verge of losing access to quite a bit of the out-sized share of the world’s energy and physical resources we currently use, with no current plan or effort to use less in an organized way. While I still have some small hope that we may wise up enough to start the process of backing away from our empire—even if we don’t acknowledge that that’s what we’re doing, a possibility I’ll be writing about in a future post—current trend lines suggest quite the opposite. Instead, it appears that we’re intent on clinging tight to it no matter how deep into troubled waters it drags us, and suffering the consequences of that lack of foresight. The second consideration is that of the declining energy and resource base upon which we’ve built America’s economy and empire, as well as industrial civilization as a whole. Simply put, we are running low on oil and other fossil fuels and on a wide variety of key resources, minerals, and so on. We’ve entered an era of decline and resource shortage that promises to tighten the vise around our civilization with each coming year.

Not only, in fact, are we running ever lower on key energy sources and resources—as I outlined in last week’s post—but we also are directing more of the energy and resources we do have toward extracting new supplies of those same resources. Having already extracted and exploited the most easily-accessible oil, highest quality ores, and so on, we have dived deep into the lower grade versions of the same. Rather than opening up crude oil sources close to the surface that flow under their own internal pressure, we’re now conducting deep water drilling and fracking shale in what is little more than activities designed to scrape the bottom of the barrel. This means that we’re using far more energy and resources to get a barrel of oil in today’s world than we were a hundred years ago, when America and the industrial world were kicking growth into overdrive and reaping the benefits of the upslope of energy and resource extraction.

This is not hyperbole; while the calculations are complex and uncertain, it’s widely accepted that the energy return on energy invested (EROEI) of today’s oil is far lower than that of the early days of oil production. Early returns were estimated at 100 to 1; in other words, one barrel of oil’s worth of energy could produce 100 barrels of new oil. Today, that estimate is down closer to 20:1 for the world’s oil production, meaning we get 20 barrels of oil in return for every one invested. Shale oil, meanwhile, is estimated at a 5:1 EROEI while ultra deep water drilling is in the same approximate range.

This is important, as it tells us how resilient our economy is and how much energy we have available for parts of the economy not dedicated to energy extraction. For instance, the world produced an estimated 78 million barrels per day of crude oil and condensate in 2014, which works out to 28.47 billion barrels over the course of the year. If the EROEI of that crude and condensate was 20:1, then about 1.42 billion barrels of that oil was used to extract the 28.47 billion barrels, leaving a bit over 27 billion barrels for use in the rest of the world’s economy. Now let’s say that the overall EROEI was 5:1, which is in the range of tight oil and tar sands (which may actually be lower), both of which have been growing their share of the oil market and providing most all of the world’s recent growth in oil production. At a 5:1 EROEI, you would have to quadruple the amount of oil you are dedicating to the simple business of extracting oil, boosting your 1.42 billion barrels to about 5.7 billion—and dropping your available oil for the rest of the economy from 27 billion to 22 billion barrels. That’s still a heck of a lot of oil, obviously, but it’s a significant amount less that’s available to the non-extraction economy, and that difference matters.

The trouble here is multifold. First of all, we built a good share of our industrial economy on an energy supply featuring a 100:1 EROEI or better, and we designed it for that sort of slack, crafting it based on the realities of the day. Over time, we’ve changed the way we craft our economy and its new infrastructure, creating an ever-greater focus on energy efficiency and tighter operations as an economically rational, if not particularly conscious, response to ever-tightening EROEI’s and thinner margins. We have also gone back to retrofit much of the existing infrastructure to the degree that we can. Much of the industrial focus on energy efficiency and conservation did not come about due to any particular concern about the ecological health of this planet, though many consider that a nice side benefit; it was a close look at the simple economics, and the realization that in a time of increased energy costs, efficiency was a smart economic decision in a way that it wasn’t when we produced energy at a much higher EROEI. These are the sort of straightforward economic decisions that come with scraping the bottom of the barrel.

Those decisions can only dial back so much of the initial slack, though. Conservation is critical, but you can only tighten up your energy usage so much if you aren’t willing to change your behavior, and industrial attempts at energy-efficiency most commonly are looking at ways to save on energy use within the confines of maintained production levels. If your EROEI is steadily pushing downward with each passing year and each transition into more marginal sources of extraction, you likely will only be able to keep up with that EROEI via efficiency initiatives at best, and you may not even be able to do that. As it continues to push further downward and more energy is directed toward energy extraction and away from the broader economy, elements of that economy eventually are going to have to be shed.

In other words, the constant increase in extraction costs—which is a result of depletion—pushes our economy to become ever more efficient in response, running tighter and tighter margins, and removing the spare capacity that creates resiliency as a result. As it becomes more efficient and less resilient, it also becomes far more vulnerable to surprising shocks. That’s why the different in EROEI matters so much. Under tight margins, a loss of five billion barrels of productive oil is a big loss, even if you have another 22 billion barrels waiting. It likely means shedding some aspects of the economy that aren’t critical to energy and resource extraction. But it also means that you have less capacity with which to deal with unexpected or unaccounted-for costs.

That’s unfortunate, because each passing year seems to be bringing increased costs to our system that we have assiduously avoided budgeting for in an effort to pretend they don’t exist. But exist they do, and they are heaping a massive amount of strain onto a system that is already looking strained to the breaking point.

Where are these increasing costs? Well, they’re everywhere, flowing out of the compounding consequences of our brain dead ways of living. California’s years-long drought continues, and the costs of it can be seen mounting in various ways: food prices increasing due to decreased production; the costs of fighting forest fires soaring, as well as the cost of damages done by them; expensive water projects designed to deal with unforeseen shortages; the disruption of lives and jobs and investments from forest fire evacuations, from farm fields left fallow, from crops and orchards abandoned due to lack of water, from lost timber harvests, and so on; reduced hydroelectric output; reduced taxes; and on and on and on. A UC Davis study pegged the cost of the drought to California at $2.7 billion in 2015 alone. I suspect it would prove even more if you truly teased out all the whole system implications. And as the article notes at one point, farmers have proven partly resilient to the drought due to underground water supplies—in other words, due to spare capacity. Yet underground water is also subject to depletion and land in California is literally sinking (creating a whole host of other unexpected costs) due to heavy pumping of aquifers to make up for the lost above-ground flows. That noted resiliency, therefore, is being depleted as a response to other effects of depletion, and once it’s gone, the system as a whole will become immensely more vulnerable to new disruptions. Who reading this believes the worst of California’s drought is behind us? Who thinks the future decades won’t bring even greater challenges for that state? And how will they respond once they’ve removed the final remnants of resiliency from their system?

It’s of course not just California. The eastern portions of Washington and Oregon are burning each summer, as well. Hell, even the western portions are now catching fire. Last summer, the rainforests on Washington’s Olympic Peninsula burned. Louisiana just suffered a 1,000-year flood a few weeks after a city in Maryland suffered a 1,000-year flood event, which took place about two months after West Virginia suffered a 1,000-year flood event, which happened about two months after Houston suffered historic floods. History is always unfolding around us, but it seems to be unfolding at quite the historical pace these days. We are in trouble, folks. The consequences are piling up fast.

These climate disasters are coming more frequently as our climatic systems become ever stranger and more chaotic, thanks in large part to our continued abuse of the planet’s air, water, and soil. With the continuing and increasing disasters come continuing and increasing costs, piling onto an already shaky economy pulled drum tight by resource depletion and, in America’s case, a continuing decline in the share of the world’s wealth and resources we receive, marching in lockstep with the continuing decline of our imperial power and influence. These mounting costs are, ultimately, the costs of impudently doing business the way we’ve been doing it the last few hundred years, and are simply a matter of the many external costs of our industrial systems coming due in very big ways. For it’s not just our economic resiliency that we’ve been depleting over the years—it’s our ecological resiliency, too. As we’ve loaded up the climate and the world’s various ecosystems with the wastes, poisons, and destruction of our ways of living, the ability of those systems to handle our waste and destruction have been seriously depleted. If you dump a tiny amount of poison into a very large amount of water and then have a glass of it to drink, you may very well get by with no noticeable effects on your body. If you continue to dump that tiny amount of poison into it day after day—and if you then start increasing it day after day, as well—eventually drinking that water starts to sicken you. And if you continue the process and continuously dump more and more poison into the water you’re drinking, it will one day kill you. The water’s capacity to dilute the poison to a level that reduces its effect on you shrinks with each passing day until it no longer can take any more, and you can’t either.

We are reaching that point everywhere: in our seas, in our climate, in our soil, in our waterways. We are sickening and dying the same way that the species around us are, and our economy and ways of living our doing the same. We have relentlessly stripped the resiliency from every system around us in our never-ending intent to live far too out-sized lives—lives that don’t even bring us anywhere near as much joy as they bring us pain and destruction—and now as the ever-larger bills are coming due, we no longer have the spare income to pay them. As a result, we are facing the chaos of hard choices and extreme changes with little or no plan, clawed out of the debris of crumbling economic and political systems, and all while we remain largely unwilling even to admit to this reality, let alone tackle it head on.

And so let’s step back a moment and return to this post’s opening. What are we doing? Put in terms of my farming life, we are:

  • Spending more money each month to bring in the same amount of income. The corollary would be if I started out spending $20 in gas per month to get to my job bringing in $500 in income. That leaves me with $480 in income available for other aspects of my living. But if gas prices start rising, my available income starts dropping. In month two, gas costs me $30; now I only have $470 to spare. A few months later, it’s up to $50 and I’m down to $450. A year later it’s at $100 per month for gas and I’m panicking because $400 in spare income simply isn’t enough. I’m losing my financial resiliency, and fast.
  • While also suffering increased costs as our net income is dropping. Not only am I spending more for gas, but my car is starting to have more frequent mechanical problems as it ages, even while I can barely afford the regular upkeep. My car really needs that oil change, for instance, which I barely have enough money for. Then it starts making a funny sound and needs a $200 repair. That doesn’t sink me, but it’s tough, and it leaves me scrambling financially. Things are okay for a couple months and I’m just barely starting to catch up when a tire blows, and there’s another $125 bill. Again I’m scrambling, and I tighten my belt, cut out the final incidentals, and maybe miss a few meals to get by. I start to catch up again. But then my transmission goes out and I find out it’s going to cost $2,000 to get it rebuilt. I’m sunk. I can’t absorb this cost, and now I’m going to have to make some hard decisions and very possibly make dramatic changes to my life to get by, but I’m going to make those hard decisions and tough changes under duress, which is hardly the best way to make them.

This is the reality of compounding consequences taking their toll on an already-strained system lacking in resiliency. As these external costs keep piling up, they will continue to depress our economy and wreak havoc with our political system as people feel pushed ever closer to the edge—or, for many, already falling. And this is where our continued decline and contraction are virtually guaranteed. We are not confronting these problems head on and we are not creating or enacting any sort of plan to begin rebuilding resiliency in our system by reducing our out-sized lives. Instead, we’re ignoring the problems and hoping that we can find some magical way out, even as our ways of living are pushed to their breaking point.

The costs and consequences are not going away. They are only going to get worse, and as we respond to that by eliminating what little resiliency our system has left rather than reducing the expenses of our living so that we can maintain that precious resiliency, we’re setting ourselves up for even worse consequences down the road while ensuring that the mounting costs of business as usual continue to wreak havoc in our lives. At the end of the day, we won’t be able to avoid the consequences; we’ll only be left scrambling to respond to them under the weight of stress, chaos, and desperation; and that virtually ensures that many of the desperate decisions we make will be bad ones, creating greater chaos and pain than might otherwise be needed if we responded to our predicament with a clear-eyed honesty and intent starting now.


Addendum: If you haven’t already, please consider checking out my recent post on the Into the Ruins blog, “Mentioning the Unmentionable.” In it, I am soliciting letters to the editor for the third issue of Into the Ruins, centered around a very particular question related to the political outlook in America. Take a look and add your thoughts if you feel so inclined. Thanks!

6 Comments

  1. Very much enjoying the ideation and flow of this blog. One thing I might offer as constructive crit would be ‘concision’. Too much syllababble detracts from the important message of ‘degrowth’. So, be concise.

  2. Hi Joel,

    I’m just now finding time to read this new blog and I enjoy it very much.

    Your point about lack of resiliency on both a personal and a societal level hits home. Because my husband and I don’t have any medical insurance (too much of the wrong kind of income to qualify for any premium reductions, too little income to pay full-price premiums, and disgust with the conventional medical industry all playing into that situation), we are one major injury away from serious financial ills. A major illness would actually be less of an issue; we’ve accepted that an early death may well result from the lack of conventional treatment that we’d choose. But it would be more difficult to refuse treatment for a serious injury than a serious illness, I think.

    Longer term I feel the potential for a large drop in income hanging over our heads. I don’t consider any of our income resilient since all of it is based on interest levels continuing to be what they were years ago when EROEI levels were much higher and material resources less depleted. We’ve been retired from paid employment for a long time, now old enough to be drawing pensions. One or both of us may have to figure out how we can get paid to do something just when we have to take care of aging mothers, feel the effects of age ourselves, and find our savings depleting fast, or possibly confiscated via a haircut skimming off a percentage of it.

    Still, I can’t complain. We have lived on less for years and have had time to improve the resiliency of our personal systems to an extent. Because of that, we’ve had good lives and have less fear of the future than many. It doesn’t mean we won’t suffer from difficulties, but I hope that even as that happens, we’ll be in a position to be of help to others who are having more difficulties. And I’ll keep looking for ways to live on less.

    Claire

    • Hi Claire,

      Thank you! Yes, some of what you say rings a bell. I actually have health insurance these days, though it’s terribly overpriced for very little coverage. It’s from the exchange, and I grit my teeth a bit each month that I pay it. I thought long and hard about whether or not even to sign up, but this is the decision I made, for better or worse. We’ll see about next year; everything I hear is that premiums are going to take a very serious jump.

      I still feel in a transition time of having moved somewhat away from my life of less, yet maintaining it to the degree I can, too. I’m still working on finding that balance. My income is higher, but it also feels less secure. On the other hand, I’m confident enough in my skills, experience, and internal flexibility that, should I lose that income, I would be able to find something to replace it, though very possibly at a lower level. I suppose one of the benefits of having changed jobs quite often—but due to choice, rather than being fired or the like—is the sense that losing a job isn’t as scary to me. I figure I can just transition into something else, though of course it may not be that simple depending on the external circumstances.

      Hopefully you continue to enjoy future blog posts. I’m moving toward some that I’m pretty excited about and I hope will stimulate some good thought and discussion among readers. I do feel like we’re at the edge of an opening to possibly make some helpful political changes. Of course, that also puts us at the edge of an opening to make some truly terrible decisions, so we’ll see what all comes of it.

  3. Great post! Lots of good (though depressing) info; I think about this subject a lot, as I also chose a simple life about 9 years ago, and have struggled through the pluses and minuses. Like you, I see that many decisions that might be minor if I had more money become big decisions because I don’t. As I age, and lose strength and flexibility, I see that our society isn’t really set up for a “simple life old age” – it’s geared toward buying services that you can’t do anymore… that’s gonna be a hassle. On the one hand, my needs have become smaller and I am content with Nature and quiet (and books and creativity) – on the other hand, the price of everything is going up, but disability (and soon, retirement) income is not. And yet I feel much more prepared for the downward slope than most of my friends, who refuse to think about it, and predicate their lives on always being able to buy what they need. One thing I’ve been working on is learning what my “trigger needs” are – like good chocolate and coffee. The “luxuries” that somehow I’ve become very attached to. I think that each of us has “minor” needs that will trip us up if they vanish suddenly – and that we’ll become more anxious, irritable & less able to cope. So I’m trying to figure out what they are now, and inch away from them – at least be sure I can be without for a while w/o a fuss. Even a natural disaster could temporarily make things unavailable (so many friends get itchy if they can’t check their smartphones!) We’ve had two power outtages this summer – unexplained, and I think the infrastructure is wearing out, so they may become more common and take longer to fix. And no internet is something that gets me itchy… gotta learn to wean myself, so that it’s not a craving.
    Anyway, that’s just another aspect of learning to do with less. Thanks for the food for thought!
    Cathy

    • Thanks so much for the thoughts, Cathy. All good points. I have to say that I am firmly addicted to my morning coffee at this point, both in the actual consumption and the ritual of making it. It would be hard to go without. Chocolate also would be hard, but less so, I think—despite how terribly much I love it.

      Having moved up to a smartphone nearly two years ago (due in part to my new job at the time, though it wasn’t a requirement) I have to say that it is quite impressive how quickly you can become addicted to them. I have gotten to the point that I spend too much time looking at it (though I very rarely do it in company, as that’s a line I won’t step over) and therefore I’m looking at intentional technological regression. Honestly, I don’t have to have the phone, though it has its conveniences. I’m looking at starting off by cutting off the data. It would still work on wifi, but not elsewhere. Really, though, I think I’d prefer to just downgrade to a flip phone and make everything simpler by only having calling and texting in my pocket. A landline would be pretty great, actually, but that one would probably still be a challenge with the job. We’ll see if I get there.

      Interesting on the power outage. I thought about that infrastructure a lot when I was out on the coast. I still think I’m likely to see quite a bit of rural de-electrification in my lifetime, but we’ll see. I don’t know, in general, how it is out your way, but I will say that I was quite impressed at how well the local PUD responded to power outages when I was outside of Nehalem. Very responsive. But then, there’s more money out that way than a lot of other rural areas.

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