Jeremy Rifkin on San Antonio, the European Union, and the lessons learned in our push for a planetary-scale power shift
Published: September 28, 2011
Your first chapter is incredibly helpful for the way it describes our economic situation in tandem with our energy investments. That until we switch off the fossil fuels, we're going to be, I think you said, “bouncing on the bottom” economically?
It’s a very dangerous period and we're still pretty much in denial of what happened. And this speaks to why Obama is not going to be able to create jobs at this point. ...
The real earthquake was when oil hit $147 dollars a barrel in July 2008. The entire economy shut down; the whole world shut down. Purchasing power shut down because the prices on everything was too high, from food to petrol, because everything in this civilization is reliant on fossil fuels: construction materials, pharmaceuticals, synthetic fiber, food — everything. So when prices started going over $80 a barrel in 2007, we started to see prices go up across the supply chain, and at about $120 a barrel we started to see food [prices] rise. And $147 shut it down. My position is that this was the economic earthquake, and the collapse in the financial market 60 days later was the aftershock. They’re connected, as I say in that chapter. What we have hit is peak globalization. We're at an endgame. We're at a wall. At least in the business community, we now understand the outer limits of how far we can globalize, if we acknowledge it. And more and more businesses I work with are starting to: It’s about $150 a barrel.
And peak oil?
The [International Energy Agency] really pulled everyone aback in December of last year when they put out their world energy report. In one paragraph, which really sent shudders down the spine of people, [they] said [world oil production] peaked in 2006 at 70 million barrels a day crude and we probably plateaued down to about 69 million a day but that it would cost $7 trillion to get the remaining out. I don’t know where we’ll get that. But the reason we’d hit peak globalization at $147 a barrel is because peak oil per capita which occurred over 30 years ago at the height of the Second Industrial Revolution in ’79. BP did an interesting study, which has been confirmed by all the studies since. If you had distributed all the oil we had at that point to everyone alive, that is the most each person could have. So we found more oil but population has risen much quicker so if we distribute all the oil we’ve got now, crude oil, to 6.8 billion — there's just less to go around. So what really happened is in the '90s when China and India made a bid at a 8, 9, 10, 11, 12, 13 percent growth rate to bring a third of the human race into the game, the demand pressure because of the aggregate output forced more and more oil to be used for everything. So the aggregate output went up, oil prices went up, and then all the other prices in the supply chain went up. Then we crashed at $147 a barrel. So what I am saying is, every time we try to rebuild the economy at the same growth rate … purchasing power will go down. It will shut down. And that’s exactly what just happened. In 2010, oil went way down to $30 and $40 a barrel because the economy stopped in 2009. Then in 2010, we started to replenish inventories and started developing growth, especially in India, China, and the Asian countries. Boom! Oil shot up to $94 a barrel before the Egyptian election. And now? What is it today? A couple of days ago it was $112, $115 a barrel, and what’s happening? The prices are going up for everything else. And purchasing power is starting to go down again. So this is a wild ride. Every time we try to re-grow, we collapse, re-grow, collapse. It’s a gyration. That signals to me a long, torturous, very dangerous end game and there is no way to get out of the box. And when I've raised this with the governments I advise and the companies I work with, they don’t say I’m wrong, they just — either they acknowledge it and say we need to move or they just don’t say anything. There’s no way to get through that wall. We try to imagine, it just can’t be done.
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