Punchline: Fracking probably holds the global economy together long enough for cheap solar to take over by 2020.
I’ve been sold on the risk (I’d put it around 1/3) of global economic collapse leading to 1920s/1930s style living conditions for most people, with the attendant risks of fascism or other forms of political authoritarianism as a second order risk. I hung my hat on that nail around 2008/9 after living in Iceland during their crash, and it became http://collapsonomics.org and http://butteredsidedown.co.uk – and indirectly it led me to futurism.
In 2010, George Monbiot and I had a set-to about his model of the future and mine. George said, very clearly, that we’d squeeze newer, dirtier fossil fuels out of the ground, and that would allow market capitalism to continue growth or at least stability. I argued (based on http://oilendgame.org) that the military did not make that assumption, and with access to very good data.
My guess about the situation is that energy price (with oil price a major factor) is a huge driver of the global macro-economy. For example:
Clearly these factors apply to Europe and Japan as well, although I haven’t seen equivalent numbers calculated for their economies.
In the US, not-exactly-impartial sources suggest that there’s a couple of million jobs being supported by fracking.
Think of that as being 1% or 2% of the jobs in America, and a larger fraction of the economy – that’s a ton of well paid manual labour and engineering jobs, in addition to the various support roles etc. generated. Then you consider the drop in energy prices – they’re paying 20% of what we’re paying for natural gas – and it is enough to take the US from small-contraction to small-growth. Now this is very critical, because small contraction tends to turn into large contraction as capital panics and tries to find increasingly irrational ways to grow, or simply runs for safety in commodities with all kinds of horrible effects. http://www.wired.co.uk/news/
But with a little growth, everybody settles down. Business as usual is restored. The cycle of decline is interrupted. Things start to grow again.
So we wind up in a position where the US stabilizes its economy by burning more natural capital. And this is a dirty, dirty industry, make no mistake. The precise recipes for fracking fluid (the stuff pumped into the ground, with attendant groundwater contamination risks) are proprietary and confidential, but the US government enquiries into their properties are far from reassuring. (carcinogens among a ton of other weird stuff)
Head out about 10 years.
1) Global economy probably stays up for a while because of a cheap energy fracking boom.
Four subsidiary factors.
1.1) Wells may run dry far faster than expected http://www.huffingtonpost.com/
1.2) Mounting environmental costs, earthquake risks (!) and other negative factors accumulate.
1.3) US goes back to a broadly peacetime footing as Iraq and Afghanistan conclude, which also massively boosts the economy (think of the 1990s boom as largely being peace dividend driven, it’s not far off.)
1.4) Solar power is cheaper than coal either now http://www.bloomberg.com/news/
But, over-all, it seems likely that fracking holds up the US economy long enough for solar to take over as the primary source of cheap energy, which puts the world in a very, very different position from 2020 onwards. This combined with the peace dividend probably put America back in the saddle again for another decade, rather than an economic decline detonating the cultural landmine on which the current American political consensus rests at so much risk.
I’m not constitutionally given to optimism, but I think we may well discover that fracking was the band-aid we needed to buy time to let the solar panel technology mature until it’s ready to carry the weight of the global energy demand.
Now, a bonus factor.
A ticket to space costs $20,000,000 (twenty million) in 2008.
Virgin Galactic are selling tickets for $200,000 (two hundred thousand)
SpaceX expects to bring the cost to $20,000 (twenty thousand) by 2020.
There are already two prototype space hotels in orbit right now.
So what we’re talking about is space tourism for the same ballpark cost as a round-the-world cruise in an environment where solar power is going to be cheaper than coal in a lot of places.
All of a sudden, there’s a real possibility that we’re going to skip over the Grim Meathook Future where capital starvation and general chaos prevent our technological capabilities maturing into a new, sustainable equilibrium.
It might all actually just about work out, and fracking is in no small part responsible.
Ugly, but (as far as I can tell) true.
((post taken from an email I wrote))