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Real Solutions to the Energy and Climate Crises
Fri, December 11, 2009 12:30:58 PMFrom: Energy and Capital

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Real Solutions to the Energy and Climate Crises
By Chris Nelder | Friday, December 11th, 2009
As my regular readers know, I've spent much of this year contemplating big themes, like the long-term picture for energy, energy and monetary policy, black swans and the human penchant for valuing the present more than the future, the problems of complex systems like the energy-food-water nexus, sustainability, and the relationship between climate change and peak oil.

As this year draws to a close and I review my work, the biggest question that emerges is about why it is so incredibly difficult to reach people on these subjects.

It's more than the usual culprits. Yes, the corporate media and the ad-supported business model are problems — like when I was called a "peak freak" on television and given no opportunity to respond to my opponent's disinformation.

Yes, the overweening influence of corporate lobbyists has effectively neutralized policy and confused the public debate on our most serious problems. Yes, the capitalistic system favors short-term concentrated profits over long-term public good. And yes, the simple human preference for happy talk over sad stories plays a role in our denial.

The real problem is much more pervasive. Those actors cannot explain more fundamental questions:

Why has our economic theory failed us?
Why is the reality of climate change so hard to accept?
Why does climate change dominate public dialogue while the more proximate threat of peak oil remains far off the radar?
Why do we have such resistance to change?
Why would anyone ever think Dubai World was a good idea?
Why is talking about population control — arguably the only real way out of our predicament — taboo?


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For over 40 years, our public dialogue has gotten progressively dumber and more polarized. The one "town hall meeting" I attended on health care was a horrifying display of tribal theater, with both sides screaming at the other and drowning out the elected official. It did not even remotely resemble intelligent discussion of issues.

Our news media have substituted entertainment for information and sponsor-endorsed opinion for neutral reportage, while the literacy of the public and the capacity for critical thought have progressively declined. Orwell, Huxley, Bradbury, Vonnegut, Chomsky, and a long line of others have decried it all along.

Yet it persists, and grows. Why?

Addicted to Fantasy
I discovered a partial answer to this question in the terrific new book, Empire of Illusion: The End of Literacy and the Triumph of Spectacle by veteran journalist Chris Hedges. He argues that America has been slowly transformed into a nation entranced by Horatio Alger-wrapped fantasies of personal wealth, fame, and power. Our culture has been utterly subsumed by a fantasy world, he says, in which celebrity worship, dumbed-down "news," and consumer messaging form an impenetrable veil of manipulated reality.

Hedges offers some compelling evidence: Nearly a third of the population is almost or fully illiterate. A third of high school graduates, and 42% of college graduates, never read another book for the rest of their lives. Eighty percent of U.S. families didn't buy or read one book in 2007. We did, however, watch 28 hours a week of television. Each.

Television, where we have hundreds of channels but nothing is on... nothing but unimaginative, formulaic entertainment packages for highly crafted messages designed to make you buy, buy, buy.

Jon Stewart offered a great example this week in his takedown of Fox News anchor Gretchen Carlson — a high school class valedictorian, Stanford honors graduate, and former Miss America with classical violin chops — who pretended to resort to the dictionary to find out what the words "ignoramus," "double-dip recession," and "czar" meant.

Instead of discussing the content or import of the leaked "Climategate" emails, Carlson cited a poll asking if global warming research had been falsified... a poll which added up to 120%. Public opinion, however dumb, is now more important than facts.

I had to sort though dozens of articles and hours of radio and television that merely repeated the corruption allegations before discovering two decent articles (at New Scientist and Real Climate) that described what the "scandalous" e-mails said and what they meant.

What I found was... nothing interesting. Just scientists, doing their regular jobs of sorting through and correcting the errors in data.

But a few words, made in private conversation and taken out of context, is all Sen. James Inhofe and his tribe of right-wing activists needed to renew their assault on climate change legislation. His effort is no doubt enabled by the fact that only 11 of the 538 members of the Senate and House have backgrounds in science or engineering, and most are functionally illiterate about energy or climate science.

In fact, the deniers have no alternate scientific theory for global warming, nor do they care to formulate one. They only need to cast doubt on the existing research and claim that the scientific process has been corrupted.

The actual significance of the science, or lack thereof, in Climategate was quickly rendered irrelevant; that irrelevance was then seized and gloriously amplified in the media. The spectacle is more exciting than the dull facts about the science, so the media only care to perpetuate the spectacle. It's entertainment, not news.

The "climate change is bunk" message was sent, but how many Americans who heard it then spent any effort trying to figure out what the e-mail leak actually meant, as I did? I'm guessing very few.

Perhaps a third of the public now believes that there is some sort of conspiracy to destroy the economy by taking action on climate change. The obvious lack of any conspirators is irrelevant. Merely saying there is a conspiracy is enough.

Global media king Rupert Murdoch pounded the final nail into the Fourth Estate's coffin this week in a Wall Street Journal editorial where he argued passionately that media should only give consumers what they want. Government help, non-profit status, or any other mechanism that would support journalism without a profit motive is insidiously evil in his view. Yet he asserts that merely giving customers what they want — even if they only want illusions and circuses, and have no patience for thoughtful discussion of matters like policy or science — produces a free and informed citizenry.

This seems an utterly indefensible stance. The Fourth Estate is much wider, but also considerably shallower now than it was in 1888 when Oscar Wilde wrote: "The Lords Temporal say nothing, the Lords Spiritual have nothing to say, and the House of Commons has nothing to say and says it. We are dominated by Journalism."

Our appetite for illusion has made us, as Aldous Huxley feared, a nation of passive, self-centered consumer idiots, endlessly distracted by trivia and irrelevance, embedded in a alternate reality matrix, saturated with information we don't comprehend, easily confused, and easily led down paths we would never choose if we were informed and thinking clearly.


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Peter Pan Meets Financial Truck Bomb
If you think I'm off on a tangential rant here, let me bring it home, for it has everything to do with our utter failure to respond in a meaningful way to our impending challenges, and with investing in general.

An outstanding and extremely important recent white paper by an oil and gas exploration consultant, "The Tragedy of 21 Darts," confirmed the worst of what I have come to understand about the game of projecting oil and gas reserves. Reserve calculations are essentially mathematical simulations, which are regularly distorted and misrepresented by the companies that claim them. As a hedge fund manager and oil and gas producer friend of mine commented on the paper, "The oil and gas business is a bunch of holes in the ground with liars on top."

To understand what you're buying as an oil and gas investor, you'd have to spend many hours digging through technical papers full of unfamiliar jargon. You'd have to be able to read critically and understand probability distributions. I've done it, and it's hard work. Harder than most people are willing to do.

The regulators and policymakers won't read that paper, nor will most of the industry's investors. As a result of this ignorance, the author warns, new SEC regulations will set off "a financial truck bomb that's going to blow away ‘proved reserves' as a meaningful metric of oil company assets" in January. The liars will get away with it... at least until the wells run dry.

This is why peddlers of absurd fantasies about the future of oil production, like Phil Flynn and Dan Yergin, are in the press and on the TV every day, while the people like me — patiently and diligently sorting through the facts and the fictions in search of reality — are continually marginalized.

This is why wingnuts like Sen. Inhofe get more airtime than those who could explain what the science on climate change really says.

This is why simple, rational solutions to our tangle of developing crises — like resource scarcity planning, or carbon taxes, or population control — are immediately disregarded as unworkable.

And it's why we elect leaders who massage our egos and assure us that everything will be fine, when it clearly won't.

If it doesn't conform to our fantasies and the people don't want it, then men like Murdoch will ensure we don't get it. But they'll happily sell us snake oil like space-based solar power for as long as we keep buying it.

We are not only lost in our illusions... we're in love with them.

We desperately want to believe that there are no physical limits to our insatiable desires, even on a finite planet. We'd rather poke holes in the multiplying signs that humanity on Planet Earth is fundamentally in overshoot than face the hard work of figuring out how to adapt and survive.

We're clinging to 17th Century remnants of the Age of Enlightenment, still trying to believe that humanity has a special elevated place above Nature when it's becoming increasingly obvious that it does not. Our models of the future, our economic theory, our educational regimen, our personal and cultural ambitions, our national identity, even our very conception of Man's place in Creation have been rendered intellectually bankrupt. But we refuse to see it.

Our emotional progress is even worse. We've barely budged from total nihilism to tribalism... "The American way of life is non-negotiable," and all that rot.

We can't afford to go on this way because, as James Baldwin put it in the prologue to Hedges' book: "People who shut their eyes to reality simply invite their own destruction, and anyone who insists on remaining in a state of innocence long after that innocence is dead turns himself into a monster."

It's Up to You Now
In the absence of rational leadership, neutral journalism for the public good, or a free and informed citizenry, the task of meeting the challenges ahead falls to each of us, individually. There is no "them" who are going to sort all this out. There is only "us."

We have to own the problems of energy, food, water, climate change, population, and investments that don't go sour. They're ours.

So will be the solutions. Fortunately, there is much we can do.

Concentrate on efficiency first: Insulate your house. Get a more efficient vehicle and more efficient appliances. When an opportunity like Cash for Clunkers/Caulkers comes around, jump on it. Try to limit your driving and use public transit. Move closer to work, or vice versa.

Then do something on the supply side: Add solar PV and solar hot water to your house. Tear up your lawn and plant a vegetable garden, even if it means paying a fine to your HOA.

Rebalance your investment portfolio with a view toward long-term sustainability. Limit your exposure to dollar-denominated assets and invest in hard assets. Do your own due diligence. Eliminate your debt as quickly as possible.

Instead of hoping that your fantasies of wealth will be restored when the economy recovers, think about how you can live within your means if it never does.

And finally, don't wait for leadership in Washington. Be a leader, wherever you are. Work toward sustainable solutions, not at town hall meetings — but with your family, neighbors, friends, and local governments.

Until next time,



Chris

Energy and Capital


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Economic Releases for the week of Monday, December 14th, 2009:

Dec 15 - PPI
Dec 16 - Building Permits
Dec 16 - CPI
Dec 16 - Housing Starts
Dec 16 - Crude Inventories
Dec 17 - Initial Claims
Dec 17 - Leading Indicators
Dec 17 - Philadelphia Fed

Brought to you by Wealth Daily


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From the Archives...
The Utilities' View of the Smart Grid
2009-12-09 - Nick Hodge

Oil and Dollar ETFs Show Separation
2009-12-08 - Sam Hopkins

Putting the Pieces to Peak Oil Together
2009-12-07 - Keith Kohl

This Week in Energy
2009-12-05 - Keith Kohl

Buy Gold As UK Sinks
2009-12-04 - Christian A. DeHaemer



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