Europe: How to Become Poor Peasants Again

 

"Les Glaneuses"  (the gleaners). A painting by Francois Millet (1857). Is this the destiny of the people of Western Europe?

All wars are wars for resources and, in modern times, they have been mostly for the resources that make the very existence of our civilization possible: fossil fuels. We all know how during WWII the attempt of the Germans to subdue the Soviet Union failed when they could not take control of the oil resources of the Caucasus. More recently, after President Carter declared that the oil resources of the Middle East are a "vital interest" for the United States (the "Carter Doctrine"), no one was surprised by the numerous wars and bombing campaigns waged by the US in the region. 

Sometimes, though, the role of fossil fuels in wars is more subtle than just someone trying to steal someone else's resources. Wars may not be a question of scarcity but of abundance. That may be the case of the war in Ukraine that we can interpret as a direct result of the impact of "fracking" in the United States. During the past 10 years or so, the development of fracking led to a reversal of the static or declining production trend of fossil fuels that had been ongoing in the US for about 40 years. 

The result was that American producers could reappear in the global market as exporters of both oil and gas. A potentially lucrative area where to expand was Western Europe. The problem was that the European market was in the hands of Russian producers, who had established a network of pipelines that could export natural gas at low prices to Europe. "Liquefied natural gas" (LNG) from the US just could not be competitive with pipeline gas because of the costs of liquefaction, transport, and regasification. 

In the manuals of economics it is said that, in a free market, the cheaper product always wins against the more expensive one. In the real world, though, markets are far from being free. As any mafia boss can tell you, the cocaine market is not just a question of prices: you have to defend your turf. And not just that: sometimes, you can expand the area you control by friendly (or not-so-friendly) interactions with neighboring competitors. That's sometimes called "arm-twisting," but it may involve much more drastic and painful methods than just dislocating a shoulder. Similar considerations hold for fossil fuels, a market in which states normally behave exactly like mafia families. 

During the past few months, we saw a case of a not-so-friendly interaction aimed at expelling Russia from the natural gas market in Europe. The war in Ukraine is mostly a sideshow: the real thing is the market of natural gas, and the critical point was the sabotage of the Nord Stream pipeline. Whoever did it, sent a clear message to everybody, not unlike placing the severed head of a horse in someone's bed: the European gas market is now the turf of another mafia family. 

That does not mean that Russian exports of gas to Europe will immediately cease. Completely replacing the Russian gas would require increasing the exports from the US to Europe by about a factor of 10. Maybe not impossible, and other gas-supplying countries may step in to help. But it is not something that can be done in a short time. You can see the situation in the graphs, below. The EU states import some 150 billion m3 of gas from Russia and only about 15 from the US. The US has a total export of more than 100 billion m3, but most of it goes to Canada and Mexico via pipelines. 

(images courtesy of Giuseppina Ranalli)

Hopefully, Russia will not stop sending gas to Europe using the existing pipelines. Then, a strong push toward renewable energy may help Europeans a lot. But the market is likely to behave exactly the way they say it should in the textbooks: a situation of scarcity leads to higher prices. In other words, with Europe desperate to get enough gas, producers are going to have a great time. Don't expect them to be kind to the poor Europeans: why should they be? Mafias are not supposed to be charitable institutions. 

So, in the coming years, we are looking at a situation of both scarcity and high prices of gas in Europe. That will have consequences. Many European citizens, especially the poor, will have to stay in the dark and in the cold this winter, and for several winters in the future. And there will be no European leader who will declare that the European lifestyle is "not up for negotiations," as President Bush 1st said about the American lifestyle. Can you imagine Ms. von der Leyen, the never-elected president of the never-elected European Commission, saying something like that? So, the lifestyle of European citizens is going to go down the drain, and perhaps it was unavoidable that it would, one day or another. But the real question is: will the European industrial system survive the high prices of energy? 

That's not obvious at all, and the Americans may soon discover that they killed the hen whose eggs they wanted. With energy prices five to ten times higher than before, European products may not be competitive any longer in the global market. That implies the collapse of the European industrial system and the return of the continent to the agricultural economy of a couple of centuries ago. It would be a return of the old "Morgenthau Plan" that aimed at doing exactly that to Germany after that WWII was over: destroying Germany's industrial economy and starving to death a large fraction of the German population. If something similar were to happen in Europe nowadays, that would also imply a certain reduction in the European population but, hey, I already noted how mafias are not supposed to be charitable organizations! And, as Ms. Victoria Nuland clearly explained to us not long ago, who cares about Europeans? They were peasants, once, so let those who survive return to tilling fields. 

Below, an article that I recently published in the Italian newspaper "Il Fatto Quotidiano" 

From the "Fatto Quotidiano" of 29 September 2022 (slightly modified)

by Ugo Bardi

The convulsive events on the global geopolitical scene continue to take us by surprise. What is behind the destruction of the Nord Stream pipeline? We can't say who did it, but one thing is certain: the conflict we are seeing is a war for resources much more than it is a warring war. To understand what is happening, we need to go back in time to find the roots of the current situation. 

In the book "Sea and Sardinia" (1921), DH Lawrence tells us how a favorite subject in the conversations among Italians was insulting the English. It was because English coal had become expensive, something that the Italians attributed to the wickedness of the English. The term "Perfidious Albion" had been invented a long time before but was beginning to become fashionable at that time. 

The history of English coal in Italy illustrates the factors still at play in the functioning of the Italian economy today. Italian industry needs energy, but there are not enough fossil energy resources in Italy to support a functioning industrial system. Thus, the industrial revolution arrived in Italy in the 19th century brought by English coal, imported by sea. But, with the end of the First World War, British coal had suddenly become much more expensive than before. It wasn't because the British were perfidious (maybe a little, but no worse than many others), it was because of depletion. As the British economist William Jevons predicted decades earlier, the costs of coal mining were rising and investments falling. As a consequence, the British coal production reached its peak in 1914, and then it began an irreversible decline. In the 1930s, coal shortages forced Italy into a deadly embrace with Germany - which could still produce it at low prices. We all know the results. 

Having emerged half-destroyed from the Second World War, the Italian industry was able to rebuild itself thanks to the US oil provided by the Marshall Plan. Even for oil, however, depletion had to be felt sooner or later. In 1970, the United States reached its production peak. The first major "oil crisis" followed, but the global market could offset the decline with other sources. Meanwhile, natural gas was rapidly becoming a low-cost alternative to oil. Gradually, Europe turned to import gas from Russia via pipelines. With this relatively low-cost gas, the Italian industrial system could survive.

In the last 10 years, however, things have changed dramatically. With the technology of "fracking", the United States has managed to reverse the decline in its production of both gas and oil. As a result, they have re-entered the world market as exporters. This explains many things: the oil and gas market is strategic in the great game of world domination and, in this game, there are no rules. Pushing Russia out of the Western European market makes it possible for the American industry to take back a market they had long lost. That's what's happening. The sabotage of the Nord Stream pipeline is a signal that Europe will have to live without Russian gas, one day or another. 

And now? In this global strategy game, everything is always changing. It is true that imports from the United States are now able to replace Russian gas in Europe, at least in part. But it is also true that importing natural gas from the US is only possible in the form of liquid natural gas and this involves high costs, as well as a heavy contribution to global warming due to the inevitable losses in the process. To this, we should add a fundamental unknown: how long will the United States be able to maintain its production at the levels needed to supply Europe? 

Fracking has been seen as a miracle technology, but it isn't. As always, forecasts are difficult, but we can be sure of one thing: no mineral resource is infinite and sooner or later we will face the peak of fracking gas. And it all starts all over again with the frantic search for energy to keep the industrial society alive. 

In Italy, we are in a position of extreme weakness. We lack the infrastructure (regasifiers) necessary to import liquefied gas. We can build them, but it will take time and, meanwhile, the Italian industry could suffer irreparable damage. It is not certain that when we have regasifiers there will be sufficient gas available to import. Not only that, but the Italian industry could find itself not competitive in the world market if it has to bear the high costs of liquid natural gas. In both cases, we could be facing the end of the industrial cycle of the Italian economy, about two centuries after its beginning. The problem is that, before the industrial revolution, there were fewer than 20 million inhabitants in Italy and famines were not uncommon. 

It seems clear that for us there are no other ways out than a decisive shift toward renewables, already today much cheaper than fossil fuels and capable of completely replacing them. Politicians have not yet understood this, but moving to renewables would protect us from new crises of energy availability and from blackmail by producers. But it's not something that can be done overnight. Only a diplomatic solution to the conflict in Ukraine would give us the time needed to build a new infrastructure based on renewables. Can we make it? Nothing prevents us from trying. 

Megalomaniacs Anonymous -- Simon Sheridan on the Current Crisis

Simon Sheridan continues publishing a series of insightful posts where he tries to understand why the West is engaging in this self-destructive, and frankly idiotic, behavior. Here are some excerpts from his most recent one, "Megalomaniacs Anonymous"

by Simon Sheridan

Until a couple of years ago, I would have counted myself in the slow collapse group. I assumed that, yes, we were pushing a bunch of dumb policies that weren’t going to work. Yes, these were mostly a combination of ambitious politicians promising what they couldn’t deliver, idealistic voters wanting what they couldn’t get and greedy capitalists profiting off that combination. Yes, it was all pie-in-the-sky fantasies that were only ever possible due to the enormous economic surplus enjoyed by modern western societies. But when the proverbial hit the fan, the people who actually understood how things worked in the “real world” would come to the fore. We would stop listening to shysters and charlatans and fall back to the things that worked.

During corona, even in the early days of the hysteria, there were such people who came forward to remind us of the things that had been shown to work. A good example was the Great Barrington Declaration, signed by tens of thousands of experts from around the world. It was little more than a reiteration of the established public health guidelines on how to respond to a middling pandemic. But, of course, it was those exact guidelines that had been thrown out the window in early March 2020. Thus, the Great Barrington Declaration was a bit like the Great Don’t Poke a Bear Declaration or the Great Don’t Stick Your Finger in an Electrical Socket Declaration. It was a statement of the obvious. But we were no longer listening to the obvious.

... If we zoom out, we see that corona is one example of a pattern that has been in play in the West for several decades. It’s the one I described above; pie-in-the-sky fantasies with no basis in history or reality. Why should anything have a basis in history anymore? With the collapse of the USSR, history was over. That’s what we told ourselves. All the old rules were gone and we were free to come up with whatever we liked. And that’s exactly what happened. We came up with a whole bunch of ideas and told ourselves that they had to work because, well, we said so.

In this sense, the Ukraine War is not unrelated to corona. Some pro-Russian commentators have pointed out that the behaviour of the West in relation to Russia since the fall of the USSR has been stunningly dumb. Russia could easily have been integrated into the European economy. It’s what everybody expected to happen. It’s what most people in Russia wanted at the time. And it happened anyway, despite efforts to prevent it. That’s why there’s an energy crisis facing Europe at the moment.

If Russia had been properly integrated into Europe, the West could have completely encircled China and prevented its economic rise from translating into political and military might. With just a modicum of common sense, pragmatism and realpolitik, the unchallenged hegemony of the West that began in the 1990s could have been kept going indefinitely, at least until other problems intervened. But we had other ideas; brand new ideas with no basis in history or reality.

Up until corona, it was possible to argue that such stupidities were allowed to happen because the damage was done in far flung countries where the western voting public didn’t notice or care. But with corona and the Ukraine War, the damage is now being done at home and is going to be felt at home for a long time to come. It is no longer possible to avoid the consequences of the mindset that led to these decisions. ...



Karl Rove put it best when he said “we create our own reality.” The “we” he was referring to were the western “elites”. They were now in the position of Yahweh i.e. all powerful. Anybody who was not a western elite was in the position of Job, although it wasn’t until corona that this fact became clear to the rest of us. It’s plainly obvious now that western elites simply couldn’t care less about representing the interests of their constituents.

It’s quite ironic that Neo-conservatism was actually inspired by postmodernism

What they do care about is a source of much speculation. Some think they are trying to usher in a new world order or a great reset. A couple of posts ago, I posited that they were possessed by their own Magic. I still think that’s true. But maybe that is just a symptom. If so, what is the disease?

I see no meaningful difference between Karl Rove’s idea that we “create our own reality” and the notion that became popular in early 2020 that we could eliminate a respiratory virus. These are examples of megalomania pure and simple. And the results of that megalomania have been identical: total failure. The difference now is that while the damage caused by the neocons was mostly suffered by people somewhere else, the damage caused by corona and the Ukraine War is being felt right here at home. Our megalomania is now actively causing damage to ourselves. I say our megalomania because, although it’s clear that western elites suffer the worst from this malady, they also enjoy much support in the general culture.

What does all this mean? It seems almost certain now that western hegemony is finished and there is going to be an extended period dealing with the consequences of the last several decades of megalomaniacal madness. Of course, this is going to have material ramifications. But it will also have psychological and, dare I say it, spiritual consequences. In our materialist culture, we don’t take psychology or spirituality seriously. These are personal issues to be worked through with your shrink or priest. But what seems up for grabs now is not just some psychological symptom but an entire worldview. What comes after megalomania?

...

What if we either can’t or won’t find anybody else to blame? This would make sense. Yahweh had nobody else to blame. He was an all-powerful God. The megalomania of our culture puts us in a similar position, at least psychologically. If we are all-powerful, if we create our own reality, then how can Putin or China be the cause of our problems? Like Yahweh, we must be the cause. Is it possible that it’s precisely the megalomania of the West that opens up the possibility for individuation to occur?

In some respects, corona represents an ideal possibility for that to happen. I’ve been fascinated to see that in just the last few weeks the powers that be have begun to float the idea that lockdowns were a mistake and maybe, just maybe, the vaccines were too. For reasons that I don’t really understand, perhaps raw political survival instinct, the politicians seem to be getting ready to throw the “experts” under the bus. Leaving aside why and how this might happen, what would it mean if it does?

The lockdowns and the vaccine had majority public approval. Many people were vociferously in favour of both and not just in an abstract, idealistic sense but in a real, emotional sense. A sizeable portion of the public really thought we were going to stop a respiratory virus. This wouldn’t be the usual business of somebody supporting a political party and then the party not delivering. This would be a real, tangible error made by individuals.
 

....

Spengler predicts people will deal with the cognitive dissonance by looking for external things to blame but there is good reason to think that we may not be able to find anybody to blame but ourselves. ..

It seems to me that one of the central points of the Integral Consciousness is to transcend this bias against the unconscious and perhaps even to transcend the whole conscious-unconscious dichotomy. Megalomania can be seen as the complete identification with the Ego-conscious mind. The belief that nothing else matters; that we create our own reality.

What if the unconscious is simply what is not currently elevated to focus. In that case, what is currently elevated to focus has no necessary superiority. It is not the truth, the whole truth and nothing but the truth, but simply one perspective among many. The imperative then becomes to ensure that other perspectives are integrated too. To understand that is to overcome megalomania and also to begin to see the Integral.

Read the complete post by Simon Sheridan at this link

The Limits to Growth 50 years later: an Indispensable Book

 

A Comment by Bernard Paquito on the New Report of the club of Rome, "Limits and Beyond" 

Reproduced with the kind permission of the author

25/08/2022 BERNARD PAQUITO

Bardi & Pereira did a great job with this collective book: Limits and Beyond. Authors have different backgrounds, cultures, point of views about the Limits to Growth consequences and perspectives.

For instance, the first chapter is absolutely necessary. Bardi presents a brief history of this report, and most importantly a history of critics and misinterpretations (e.g., market vs physical factors in economy).

Other authors highlighted that the original messages of the LtG book were misunderstood: “the message of overshoot caused by decision delays was not picked up by the Limits to Growth readership”. They remind us that the most important variable of Limits to Growth was the well-being of people and not the gross domestic product.

Dennis Meadow’s chapter presents a short answer for the most frequent questions about the Limits to Growth, e.g., How can the world’s population be reduced ? Does World3 take wars into account ?

Also, a chapter (written by Gianfranco Bologna) presents the links between Limits to Growth readership, understanding and the current model of Planetary Boundaries, Safe Operating Space and Doughnut Economics.

Other chapters introduce the authors' personal experience and reception of Limits to Growth in South Africa, Asian countries or soviet bloc.

According to the Conway’s law, Pezeshki explains the roles of empathy (at different levels in a system) to provoke social changes.

Finally, Gaya Herrington summarize his work about the checking of Limits to Growth with current data and presents a nuanced vision of tested scenarios. She performed an updated World3 modelization with following variables: population, fertility, mortality, pollution, industrial output, food, services, non-renewable natural resources, human welfare and ecological footprint. Her discussion is brilliant.

“If we do not change the framing through which we formulate the questions and their responses there is a little chance that the general orientation of our relationships (among humans, with life, with time) could change.” Carlos Alvarez Pereira p259

Limits and Beyond: Data Check on World3

 

I have been posting a series of review of the recent report to the Club of Rome "Limits and Beyond." Here is a recent post by Ian Sutton on his blog, "Netzero205."  Many people still think that the original work of 1972, "The Limits to Growth" was "wrong." They'll have to change their minds, sooner or later. Here is a comment on how Gaya Herrington examined how the base case scenario of the 1972 book fared in 50 years. Judge by yourself! 

Chapter 18: Better Windmills

Ian Sutton

The book Limits and Beyond, edited by Ugo Bardi and Carlos Alvarez Pereira, provides a 50th anniversary review of the seminal report Limits to Growth (LtG). The following is from the back cover of the book.

50 years ago the Club of Rome commissioned a report: Limits to Growth. They told us that, on our current path, we are heading for collapse in the first half of the 21st century. This book, published in the year 2022, reviews what has happened in the intervening time period. It asks three basic questions:

• Were their models right?

• Why was there such a backlash?

• What did the world do about it?

The book consists of 19 chapters, each written by a different author, two of whom — Dennis Meadows and Jorgen Randers — were part of the team that wrote the report.

This post is the seventh in a series that reviews chapters of the book Limits and Beyond. We look at Chapter 18: I did a data check on World3 - Here’s what I found. (Previous reviews are summarized here.)

Four Scenarios

Gaya Herrington

The author of Chapter 18, Gaya Herrington, compares four scenarios from the 2004 edition of Limits to Growth with empirical data. The scenarios are:

• Business as Usual (BAU).

• Business as Usual 2 (BAU2). This is BAU with double the natural resources.

• Comprehensive Technology (CT).

• Stabilized World (SW).

She summarizes her analysis in the following four charts.

A typical example of the comparison of the LTG scenarios and Herrington's data on the real world is shown below. The complete set can be found in her thesis. 

I was reminded of Ms. Herrington’s work by a short conversation with a fellow church member this week. This person understood that the climate is changing (who could not given the events of recent days). He maintained that technology — in the form of windmills — could help save us. But he also realized that windmills have their limitations. For example, they are big and ugly. So, he asked, “Why don’t they make windmills with smaller blades?” In other words, this person accepted the ‘Comprehensive Technology’ approach. (I was restrained enough not to ask that person not look out of the window where he would have seen that the wind was not blowing.)

Currently, we are on the first track: Business as Usual track (BAU). In other words, in spite of the seemingly endless number of reports warning us of our predicament, society has not acted.

Since LtG was published additional resources, such as tight oil, have been made available, and technology has advanced. So BAU2 and CT need to be evaluated since they may represent our future direction.

Regarding BAU2, Herrington says,

More abundant resources do not avoid collapse in World3 scenarios; its cause merely changes from a resource scarcity crisis to a pollution one . . .  BAU2 essentially tells the story of ecosystem breakdown from accumulated pollutions, including greenhouse gases.

With respect to CT she says,

It assumes unprecedented technological innovation in a world that does not otherwise does not change priorities much. The new technologies do in fact help avoid an outright collapse. However, CT sill results in some declines because technology costs become so high that not enough resources are left for agricultural production, health, and education.

She does, however, point out that many of the assumptions that lie behind CT are highly optimistic, and are not validated by empirical data.

Humanity can innovate itself out of one limit, like to some extent it has with resource constraint. But in a system like our global society, creating a solution to one limit inevitably causes interactions with other parts of the system, sooner or later giving rise to a new limit which then becomes the new binding constraint on growth. This new constraint today is pollution from greenhouses gases.

The conclusion is straightforward. We should drive toward the Stabilized World (SW) scenario. Doing so will not only avoid collapse, it will maximize human welfare overall. In fact, we are heading toward either BAU2 or CT.

Need for Legislation

This post, like all the others in this series, repeats the conclusions that we have heard so often.

1. Climate science tells us that we are heading toward a calamity within the lifetime of most people reading this post.

2. The climate is linked with many other factors in ways that are difficult to understand or even identify. (Maybe Ms. Herrington’s most important point is that the first word in the phrase Limits to Growth is plural.)

3. Communication between the climate community and the world at large has been futile.

4. We are doing nothing effective about these looming calamities.

5. Therefore, we need to . . .

The many reports, books, web sites and blog posts to do with climate change generally stop at this point, or else they make sweeping statements about changing the structure of society.

I suggest that we actually need legislation to take us in the right direction. Voluntarily constraints have not worked — we need enforceable rules.

This is why the proposed Climate-disclosure rule from the U.S. Securities and Exchange Commission is so important. (Similar rules being promulgated in many other nations.) Rules may actually be welcomed by business and industry. They provide a badly needed framework and structure for designing and implementing climate programs. In other words, the rules are not designed to lock people up. They are are designed to help business and industry develop a path forward while still making a profit.

This conclusion is based partly on my experience with the development of process safety standards thirty years ago. The analogy between what happened then and what is (not) going on now in the climate world is striking.