low toppers, anyone?

The political talking heads may be right – it might be that this year’s elections will be all about Iraq and Iran. LI, however, thinks this discounts what might well be on the minds of voters in November – the series of storms that are going to be rolling across the Gulf like huge bowling balls this hurricane season.

Of course, there are always variables that could kick in. There is no certainty that we have so fucked with the Gulf and the weather that the one two combination is going to be hammering at our door this year. There is a certainty that, if it isn’t this year, it will be next, or next. For five years we have done nothing but pour more shit into the ocean and more CO2 into the atmosphere, and in between driving the forty miles daily in the SUV, watched scintillating specials on PBS entitled Cheating Housewives on Shrinking Glaciers, or whatever.

It is funny how the news item that beeped a few weeks ago – the one about the extent of damage to the Gulf oil extraction biz from last year’s storm – went into the memory hole. In fact, the U.S. depends on offshore Gulf fields that are right in the storm path – and it isn’t as if it is even possible to build offshore rigs that will resist the kind of damage the Katrinas dish up.

All of which is a roundabout way of getting to today’s topic. LI has a suspicion of those who indulge in flamboyant apocalypses, when apocalypse is a household thing, a matter of humble accidents accumulating before our eyes. The peak oil people have always struck us as way too fevered, but – doing our duty – we have been reading The Empty Tank, by Jeremy Leggett, who is a peak oil person – or as he calls it, a Low Topper, which has a nice erotic ring about it. Of course, we are reading The Empty Tank in intervals between the account of Edmond Dantés imprisonment on the Chateau D’If. The latter is much more riveting.

Still, Leggett’s book does give both a history of the Low Topper movement and the sources of its concern. Basically, the Low and High Toppers aren’t that far apart. The former think that the world’s cheap oil supply will top out this decade, and the latter think it will be in 2030. Leggett makes a good case for mistrusting the BP’s review of oil reserves – the foundation of the orthodoxy – by pointing out that the figures BP is relying on have been mysteriously tweaked by the big oil suppliers – the Saudis, the Kuwaitis – who have upped their estimate of their oil reserves without presenting a lot of evidence that the new, inflated numbers are correct. Leggett’s notion is that we are going to experience the first wave of panic over the low topping point in the next two years, and that this is going to drive some very bad things – including pressure to use coal much more extensively. Coal is a real CO2 menace. In Leggett’s opinion, the hype about using, say, shale oil or tar sands ignores the startling costs of extraction – starting with the enormous energy costs, and including the water use.

The nightmare scenario is that we start to look for really deep sea deposits. The reason this is a nightmare scenario is that we one of the sure ways to end life on this planet is to release enormous volumes of methane underseas – what he calls methane hydrate destabilization. The USGS estimates that there is more than 10,000 billion metric tons of carbon in methane hydrate deposits. And the USGS actually and insanely is optimistic about mining the stuff. As Leggett says: “This despite knowing, presumably, that methane is many times more powerful than carbon dioxide as a greenhouse gas, molecule for molecule, and that much methane would escape into the atmosphere during any mining process...’ Which is a rather calm way of saying that mining would turn Earth into Venus.

On the other hand, it is unlikely that any company is going to start trying to draw up the methane hydrate, since the expense would simply be too great. Otherwise, of course, the buzzards would be busy doing it.

At the back of any discussion of the depletion of a natural resource is the bet between Paul Ehrlich and Julian Simon, which has become a economists’ myth, to be trotted out whenever an economists meets an environmentalist. Wired, which in the 90s became athe Johnny Appleseed of the techno cargo cult still popular on the right published a pretty good portrait of Simon. This is the wager:

“The battle lines now drawn, it was not long before Ehrlich and Simon met for a duel in the sun. The face-off occurred in the pages of Social Science Quarterly, where Simon challenged Ehrlich to put his money where his mouth was. In response to Ehrlich's published claim that "If I were a gambler, I would take even money that England will not exist in the year 2000" - a proposition Simon regarded as too silly to bother with - Simon countered with "a public offer to stake US$10,000 ... on my belief that the cost of non-government-controlled raw materials (including grain and oil) will not rise in the long run."

You could name your own terms: select any raw material you wanted - copper, tin, whatever - and select any date in the future, "any date more than a year away," and Simon would bet that the commodity's price on that date would be lower than what it was at the time of the wager.

"How about it, doomsayers and catastrophists? First come, first served."

In California, Paul Ehrlich stepped right up - and why not? He'd been repeating the Malthusian argument for years; he was sure that things were running out, that resources were getting scarcer - "nearing depletion," as he'd said - and therefore would have to become more expensive. A public wager would be the chance to demonstrate the shrewdness of his forecasts, draw attention to the catastrophic state of the world situation, and, not least, force this Julian Simon character to eat his words. So he jumped at the chance: "I and my colleagues, John P. Holdren (University of California, Berkeley) and John Harte (Lawrence Berkeley Laboratory), jointly accept Simon's astonishing offer before other greedy people jump in."

Ehrlich and his colleagues picked five metals that they thought would undergo big price rises: chromium, copper, nickel, tin, and tungsten. Then, on paper, they bought $200 worth of each, for a total bet of $1,000, using the prices on September 29, 1980, as an index. They designated September 29, 1990, 10 years hence, as the payoff date. If the inflation-adjusted prices of the various metals rose in the interim, Simon would pay Ehrlich the combined difference; if the prices fell, Ehrlich et alia would pay Simon.”

Simon, of course, triumphed. All of those metals went down in price – as did oil. In the 80s and 90s, the boom times were on the back of a primary product glut. Ehrlich reportedly refused to bet again in 1990. Too bad. If he had set the terms at twelve years, he would have cleaned up. And if Simon and Ehrlich were old Dean (k)yK and Qfwfq, it is good money that Qfwfq (Ehrlich) would lose at first and then win. The Simonian libertarians are betting on the bell curve never having a down side. It was Simon’s ghost in 2004 assuring us that the future’s market in petroleum had it wrong – a rare bout of irrationality in the market.

Still, the Simon-Ehrlich bet’s larger story is that one shouldn’t dismiss three hundred years of history like it was yesterday’s garbage. The triumph of technology over scarcity that is the essence of the treadmill of production is not something you can understand the way a biologist can understand, say, the population density of some fish having only its ability to reproduce standing between it and environmental accidents.