Price-less Energy - Part 2

"Sometimes you get the best light from a burning bridge."

Don Henley

Escaping the core Skandalon

In 1981, Marion K. Hubbert put the chief obstacle to addressing the determining challenges of our time concisely, with dead accuracy: “The world’s present industrial civilisation is handicapped by the coexistence of two universal, overlapping, and incompatible intellectual systems: the accumulated knowledge of the last four centuries of the properties and interrelationships of matter and energy; and the associated monetary culture which has evolved from folkways of prehistoric origin.” [1]

The word scandal derives from the Greek skandalon, the snare or stumbling block. Economics and the use of money, aka “money-making”, are literally scandalous. Over 300 years of development, they have precipitated humankind towards Dead State. From few, very tentative considerations in the 1880s, the evidence for this has grown steadily, then exponentially and is now massive. Yet, that this may actually be the case remains unthinkable for most people, regardless of their background, even for most seasoned scientists.

However, the core matter of the scandal stems directly from basic thermodynamics and is actually very simple and easy to understand by non-specialists. The following points present what fundamentally invalidates the whole of economics and money-making thinking as well as the whole of the amazingly complex global monetary technological system ever built, all fiat and crypto currencies included, and with it the global obsession with “growth”:

1. Energy is not a (magical) substance. E.g., coal is not energy. It is a rock that can be used as a store of energy in chemical form so long as one has the scientific and engineering knowledge to do so. Energy is nothing but a gradient between a high and a low point along a dimension (temperature, pressure, altitude, etc.). We produce work by converting gradients from one dimension into others (e.g., temperature to pressure, to kinetic to voltage). It is in this sense that energy is neither created or destroyed (first principle of thermodynamics). The conversion between gradients must always balance out. When we carry out such conversions, some energy becomes inaccessible to us (second principle of thermodynamics), aka waste energy or entropy. While the processes involve a large amount of materials, at no point do we have a substance called energy.

2. Energy cannot be replaced or exchanged with anything else. Without it, i.e., without energy flows passing through systems, no life, no industrial world, Dead State. This is the core, basic fact that invalidates the whole of economics, use of money and money-making. It is inescapable. It has been known ever since the clear establishment of thermodynamics principles some 200 years ago and yet remains ignored by 100% of decision-making. Let me stress this further. The irreplaceable character of energy is radically challenging. It has the effect of a Zen koan in that it pulls the rug under the feet of the whole "imaginary institution of society” (to use sociologist, Cornelius Castoriadis' phrase), meaning the globalised industrial world (GIW). The matter is not merely that energy is necessary for any "economic production". The fundamental matter is the undoing of all the preconceptions people have about the world they live in. As many other scientists keep pointing out, humans do not see "reality"; they relentlessly construct it according to their beliefs. The way it's done in the GIW has become lethal. The point here in the irreplaceable character of energy is that it challenges everyone to radically reconsider critically all they take as “real”, as we shall now see.

3. Through the monetary process, economics and money-making treat energy as a commodity like any other, exchangeable with any of the other commodities and with labour and capital. To see the inanity of this thinking let’s focus on the simplest analysis of the globalised industrial world (GIW) as comprising two subsystems: the global energy supply and use system (GESUS) that encompasses the whole set of energy sources, including “renewables” and the non-energy side of the globalised industrial world (NEGIW). Together, GESUS and NEGIW form the GIW.

4. The GESUS delivers energy to the NEGIW. That is, it’s the sole source of energy for the non-energy side of the globalised industrial world. Presently, there is no replacement for the GESUS (i.e., recent research shows that renewables are a mere addition to the existing GESUS and cannot replace its fossil fuels based components before the full breakdown of the whole industrial system). Without ongoing energy supply the NEGIW dies, and thus the GESUS dies also.

5. Accelerated plunge towards Dead State. Due to the unavoidable depletion of the energy and materials sources it exploits, the total energy cost of accessing energy (expressed in Joules) is known to increase inexorably and faster than the total energy obtained. Thus the GESUS is less and less able to deliver an energy surplus (aka net energy) to the NEGIW (this includes so-called renewables since they do not enable building an alternative GESUS). No amount of money printing can change this. This is pure thermodynamics. That is, the growth in size and complexity of the GESUS inexorably and exponentially leads to the breakdown of the GESUS–NEGIW system in the near future, aka Dead State. 

6. From the above it ensues that energy is price-less, which is what 100% of economists and money-makers miss. Consider: if decision-making in the GESUS was to increase the price of energy, say, in order to reduce NEGIW’s so-called “energy demand”, part of NEGIW’s businesses and people would die (this is already happening in parts of the world). This strategy would merely prolongate the agony of the GESUS–NEGIW system. If instead, GESUS decision-making was to lower and keep energy prices low, energy use would stay high. This would only shorten the agony. In the end, in both cases all die. That is, there is no viable “energy price” that can be found. This is what nearly everyone misses. For example, Dr Tim Morgan, one of the very few economists to recognise the centrality of energy matters, defines money as a “claim” on energy. This is false. Energy, being irreplaceable, functions at best as a referent for what people (magically) call “value”. In other words, considering critically the present extreme situation reveals the absurdity of economic thinking (it does so along the lines of reasoning ad absurdum that Nagarjuna pursued ~200 CE to invalidate all theisms, and used by many others since). As Jean Baudrillard, perhaps the most critical social scientist of the 20th century, used to point out, the whole of economics boils down to saying "a dollar is a dollar", i.e., imposing total power and falling into total ridicule all at once. He used to talk of the “impossible exchange”. The thermodynamics of the GESUS–NEGIW system presents this impossible exchange in the crudest and most inescapable way.

   
   

In the third and final instalment of this post series we will further explore the implications of price-less energy on the whole of economics and what this means for the future of humans and their globalised technology based world.

1. Marion K. Hubbert, 1981, Two Intellectual Systems: Matter-energy and the Monetary Culture, MIT Energy Laboratory. Hubbert had famously anticipated the 1st peaking of global conventional oil production around 2000. He then pointed out that merely counting barrels was not good enough. One had to think in thermodynamic terms of net energy from oil.

2. Marion K. Hubbert, 1981, Two Intellectual Systems: Matter-energy and the Monetary Culture, MIT Energy Laboratory. Hubbert had famously anticipated the 1st peaking of global conventional oil production around 2000. He then pointed out that merely counting barrels was not good enough. One had to think in thermodynamic terms of net energy from oil.