As the energy-return-on-energy-invested (EROEI) falls for energy sources and in order to procure the energy necessary to support the metabolism of technological society, there are only a few courses open: 1). Competitively acquire high EROEI sources of energy by force if necessary, 2). Find a new, higher EROEI source of energy. 3). Make available to society much greater volumes of low EROEI energy. We’re currently are involved in all three strategies. First, the Middle-East still maintains many of the legacy high EROEI oil and gas fields which must be controlled. Second, there is some switching to solar and wind power, even though these are currently below the EROEI of oil and natural gas and coal. And third, we’re trying to maintain high volumes by accessing low-grade sources (oil-shale, tar-sands) and maintaining volume through fracking small pockets of oil.
A combination of these efforts should maintain BAU for a few more years and at least the illusion of growth. Once EROEI begins to fall and/or volumes fall, growth will only occur at the expense of maintenance in some other region of the existing system. The cessation of growth in energy, the reduction in worker compensation and therefore ability to service debt can be compensated for with things like zero-percent interest rates and/or reducing variable costs of new growth like low wages to compensate for the increasing cost of energy. Unfortunately, by lowering wages to offset the cost of energy, one deficiency is substituted for another in the economy overall. Once free loans and free workers are tapped, and available energy is still falling, the economy is likely to stall with a gross maldistribution of wealth.
Eventually the workers, the RNA within technological cells, will have difficulty completing their tasks, getting the kids to school for training, showing up at work, maintaining the car, paying utilities and also paying all of the debt. Many will succumb in this effort. Many will be put out of work, their respective cells bankrupted while others will earn minimum wage or have only part-time work. Because falling energy EROEI and growth can no longer service loans made in the past, they will be serviced by taking more of the worker’s disposable income if they have any. Likewise, students will be tapped for their earning as soon as they graduate and enter the workforce and then will be tapped again when they buy a home and car. If falling worker income is compensated with debt to make ends meet in expectation of future good times, then they will be trapped when the good times fail to appear. Good times do not reappear when net energy is falling and therefore the typical RNA will be trapped in debt.
If growth will soon be over, financial assets worthless and the banks without business, why bail them out in 2008? Maybe because with bank failure goes currency failure goes the petrodollar goes the ability to trade paper for oil. Then we would not only be looking at a cessation of growth in the US economy but rather a full-blown major contraction. It’s better to tax the world with the petrodollar to enable the continued servicing of debt held by citizens. Citizens are taxed directly by Federal state and local authorities and then taxed indirectly through debt interest to pay-off infrastructure loans that will become worthless as the resources that once gave them value, become scarce.
I’ve wondered how the decline will happen on the ground, in the towns and neighborhoods and what I see is that a substantial portion of the employable population has been put to pasture and likely eventual poverty. The remainder are employed part-time or at a low wages, making too little to jump-start any kind of growth or take-on additional debt. As the trickle coming out of the wage tap is cut off and debt is substituted, the middle-class is being tapped for all of its wealth. Eventually most of the debt will be forgiven or defaulted upon or both. The typical RNA wage slave is already saturated with taxes, interest and fees of various kinds with decreasing wages and increasing costs. They seem to take the abuse pretty well and in return they are rewarded with the illusion that everything is going to be all right. Technological civilization has an expiration date, but no one has really bothered to define just when that is. It will just happen one day and the decay will proceed exponentially. Below is a link to a paper that goes into much more detail on energy, systems and EROEI.
Bombing victim, Dresden, WWII. Photo by Peter Richard, Deutsche Fototech.
When fungi or bacteria encroach upon each others territories while growing they go to war and start lobbing antibiotics at each other, or at least release them into the medium. Even cells within a tumor compete, but not well enough to obliterate each other and leave the host system intact. Technological growths seem to do the same and there’s not much difference between the two. By severing essential distribution facilities, warfare can cause rapid collapse just as major trauma to a human body can result in sudden death. If difficulties placed upon the German people following WWI resulted in the subsequent militaristic behaviors and genocide, what will we have when all nations feel the pain from diminishing resources?