Thursday, September 10, 2020

The Third Curve: The End Of Growth As We Know It

I found this book to be one of THE most important reads because of its relevance to ALL of us living in this modern era, irrespective of who/where/what we are. It walks the readers through the process of how our Modern Industrial World has come about; it throws light on the math behind the fast-depleting resource -- petroleum; it analyses all the existing alternative energy options and concludes with a paradigm shifting note on rebuilding a post peak oil world. 

The Third Curve is written by Mansoor Khan. He lives on his organic farm called Acres Wild, in South India. Khan says that this book "examines the stark and unbridgeable disparity between the compulsions of exponential, economic growth and the energy limits imposed on us by the laws of geology, thermodynamics and the finiteness of the Earth". He says "this book is not about morality, justice, equality and environmental consciousness. It is about what is possible and what is not". All the graphs on this post are from Khan's website.

Khan says "The Modern World is obsessed with growth. We worship growth. Growth is our religion". He clarifies what "growth" means in this context. It is "NOT any old kind of biological growth, nor it is the kind of qualitative growth that makes us love our family and friends; growth in this context is reduced to a quantitative state".

Before we get to the Third Curve, we need to understand what the first two curves are. The First Curve, concept curve, is used to illustrate the growth of a given quantity. In Financial System, the concept curve shows the growth of money. Our financial system is based on ideas like:
- money is a TRUE representation of the value of goods and services
- money must grow with time by a factor of P%
- growth of money must compound
- compounding growth must be perpetual

This is where he introduces the term "Perpetual Exponential Quantitative Growth". "PEQG is a monster, overruling all other laws. This monster is the founding principle of Modern Economics".

The Second Curve is Bell Curve. The extraction of all natural resources obeys the Bell Curve. "The reality of the Modern Industrial World is energy and 60% of it comes from fossil fuels (Coal, Natural Gas and Oil). So fossil fuels are the most important component of our natural capital, and among them Oil in particular." Thus he focuses on "Oil" whenever he refers to the energy usage and production. As the Economy of a nation or the World grows, so does its energy usage. Being a natural resource, Oil obeys natural laws, especially the ones of Geology.


In the real world, our concept is "Money Growth" and the reality that makes it possible is Oil Production. "Oil is the defining factor for Industrial Growth and therefore Money Growth". Khan uses the global money supply graph to illustrate how the Industrial growth is occurring. This is an exponential growth. And this growth is based on the "Reality" of Oil Production, which being a resource the graph is bell shaped. When these two curves are juxtaposed, we can see how impractical it is to sustain the current Industrial world in the current fashion. The juxtaposition of the curves, yields three distinct phases of our economy. 



Phase 1 (Paradise Times: 1900 - 1960's): 

Here the Money and Oil curves are running fairly parallel to each other.We were able to draw Oil from the Earth at an exponential rate; this part of the Bell curve does go up more or less exponentially. This made us believe that the sky was the limit.


Phase 2 (1970's - mid 2000): 

The curves start moving away from each other. Money keeps going up, whereas Oil, being a natural resource, starts slowing down. "This was the beginning of the Eco-Collapse. This breakdown was manifested in the first signs of species getting extinct, forests disappearing, fisheries declining, rivers drying, aquifers depleting etc." We were clearly "exceeding the carrying capacity of the Earth's ecosystems". Our financial system was being propped up, because there was a growing hollowness under its surface. This was a time to rethink Growth. But it didn't happen. Instead "every effort was made to deny reality and to perpetuate growth".


Phase 3 (mid 2000 - present): 

According to the undeniable Bell Curve graph, "the future path in Phase 3 seems steeply downhill with the current economic paradigm". This is where he introduces "Peak Oil".

"Peak means half gone". Our Modern Industrial Society is heavily dependent on this limited non-renewable resource that we have reached the peak of. From this point on, there is a more or less steep decline in the resource curve. Now the future is highly dependent on the choices we make.  Unless we make new choices a collapse is inevitable. 

What IS Oil and why is it THIS precious? 

"150 million years of the Sun's energy, half gone in 150 years. This is equivalent to spending a million times your salary every month". That clearly can't work! "The world will not disappear because of Peak Oil but we will find ourselves in a considerably different world with a new set of economic rules, in fact, an inversion of the rules of Economics, Shrinkage instead of Growth".

Our current world is built with oil, runs on oil and is maintained by oil. Let us take our food system to illustrate this. Today's mono-cropping systems use oil at each of the following step: ploughing, spraying pesticides, fertilizers, cropping, thrashing, cleaning, packing, storing, transporting, (in some cases)
refrigerating. "Remove oil from this network and the complete food system will collapse". Personally we have seen this in our village.The tragedy is multi-fold in an agrarian place like this -- the culture around food has collapsed too. Each stage of food growing called for a certain expertise and all of it was locally found. Now with the advent of industrial ways local expertise is fast disappearing and oil dependency is increasing. Professor Albert Bartlett of the University of Colorado at Boulder rightly said: "Modern agriculture is the use of land to convert petroleum into food". There is an extremely complex web of oil inter-dependencies. All the alternative energy options are themselves built using oil energy. Such is the uniqueness of oil.

Hubbert's Role:

Marion King Hubbert was a geoscientist working at the Shell research lab in Texas, in the early 1950s. He predicted that the rate of oil production resembled the Bell Curve. He did statistical analysis on data regarding Discoveries (of oil wells) Vs. Production of Oil, within the US. Based on his theory, he predicted that the US petroleum production would peak between the late 1960s and early 1970s. "Hubbert was met with scathing criticism at first. He was mocked and ridiculed". And indeed, US oil production did peak around 1971.

"This marked a new era in the US history that prompted a scramble for cheap oil outside its borders to keep the growth going". Now, let us look at the global data. We were at the peak of oil production around 2005. "The future shape is projected from past experiences, but the rate of decline obviously depends on our consumption patterns". The Oil Drum (http://theoildrum.com/node/5576) showed that 40 of the 54 oil producing nations had reached Peak Oil production. "The era of cheap oil is definitively over".

Okay, what do we do now? 

"Peak Oil is a predicament and not a problem. Problems have solutions but predicaments are a nature of reality and we have to cope with them. They do not have solutions. People have mistaken the finiteness of our planet and its resources as a problem." This is the crux of the matter.

In the next section of the book, Khan evaluates all the alternatives using five rules viz. Net Energy, Oil Dependency, Energy Density, Scalability and Oil Byproducts. He applies these rules to the entire gamut of energy options:

- Liquid fuel alternatives (bio fuel-Ethanol, tar sands, shale oil)

- Other fossil fuels (coal and natural gas)

- Electricity alternatives (solar, wind, hydro etc.)

He then presents the data to back up his case -- "alternatives can do nothing to save our paradigm of perpetual exponential economic growth".

Thus there is a pressing need to move beyond the two curves -- exponential and bell. Here he introduces the third curve which is a behavioural curve of the universe, the one that is "embedded in nature". This curve follows the rhythms of our primary energy provider, the sun. "Reliably it rises, peaks and ebbs only to rise again".  Growth in nature "was always meant to oscillate in gentle waves of highs and lows, following the sun's energy. The smaller oscillations of day and night were superimposed on larger oscillations of seasons and the even larger oscillations of solar cycles".

"Ever changing, yet ever remaining, in a narrow band of values. Nothing going to the sky and nothing going to zero".

"Return to the Third Curve is inevitable. Because that is the steady-state – the eternal rhythm of the universe. We have 2 paths to the Third Curve – denial or acceptance of peak oil". 


"The path through denial can certainly extend our moment at the top of the peak only to exacerbate our predicament leading to an eventual steep, and short chaotic collapse. Each attempt at flattening the curve to maintain status quo will result in a sudden sharp drop of collapse giving the descent a staircase shape". This is shown in the graph above in red.

"The path through acceptance can immediately start a smoother, longer and managed energy descent, which involves re-alignment of our economic paradigm, cultural beliefs, making sacrifices and bearing some degree of pain. This path will be gentler, less steep and give us time to adapt. It also entails a simultaneous understanding and movement towards the new world that is inevitable with a lower energy budget. We stand a much better chance of bypassing collapse and consciously shaping an unfamiliar but desirable future". This is shown in the graph above in green.

The last bit of the book dives in to the Transition -- "a structured and conscious way of moving safely from our present high energy-consumption state based on fossil fuels, towards a low energy-consumption state".   Tran­sition is based on principles such as rebuilding the soil, rebuilding the community and its resilience, growing local food, developing alternative and earth-friendly agriculture and encouraging local initiatives. Cuba's peak oil story at the end of the book shows that it is indeed entirely possible to make a meaningful journey, collectively as a community, to Transition down to the Third Curve.

"If Cuba could do it, so can any part of the world, provided we first recog­nize the new reality of shrinking energy and money and then adopt the principles of the Transition method".

 For further reading:

- "Collapse Now and Avoid the Rush" by John Michael Greer

- Charles Eisenstein's "Sacred Economics"