A Doubly Providential Gift Rejected

Jason Crawford has written a perceptive series of articles on the role of technology in human progress. His latest talks about how every time humanity is about to run into a Malthusian wall some human or group of humans comes up with a way of pushing that wall into the future.

When we were running out of wood, we figured out how to economically mine coal. When we were running out a whale oil, we figured out how to pull oil out of the ground. And every time we started running out of oil, beginning very early in the 20th century, something happened, a new discovery, a jump in technology, that kicks the can further into the future. For mineral after mineral, technical progress has stayed even with depletion resulting in little or no increase in real cost despite drastic deterioration in ore quality

Jason is a self-described optimist. I think he expects this process to continue indefinitely. Maybe this will be the case. He has an awful lot of history on his side. But I'm not so sure.

Figure 1. Real Oil Price 1861 to 2023. Divide by 6.29 for $/bbl. Thanks to Our World in Data.}

Figure 1 shows the real price of oil for the last 160 years. The first 20 years of rock oil saw a sharp decline in costs thanks to rapidly developing drilling and transportation technology. For the next 80 years, real cost was over-all flat at under $30 per barrel in today's money. This was due mainly to the opening up of new provinces made economic by order of magnitude reductions in the cost of transportation. During this time, the size of the standard crude oil tanker went from 3,000 to over 250,000 tons. I would hazard a guess that the real cost per ton-mile was reduced by about the same ratio. But around 1970, we had massive jumps in price. The success of the oil cartel shifted the marginal cost of oil to non-Middle East sources. Since then that marginal cost has remained in the neighborhood of $60/barrel.

You can argue that a large part of this price jump was premature, due to the quasi-monopoly position of the still-cheap producers. I would agree. But the USA is a clear harbinger of the future. Up until World War II, the USA could easily more than meet domestic demand at less than $30 per barrel in 2023 money. The industry's problem was too much oil. Big Oil used various devices, such as the Texas Railroad Commission, to restrict production and prop prices up. Now the country struggles to meet domestic demand at $60 per barrel. This has happened despite revolutionary improvements in seismic data processing and in drilling technology including fracking and horizontal drilling. In the last 50 years, oil production technology has accomplished miracles, yet the real cost of US crude has doubled.

The rest of the planet will follow this trajectory. This does not mean that oil is dead. Oil and fossil fuel in general have a very long way to go. We will almost certainly never not use some fossil fuel. But it is strong evidence that, despite technological progress in drilling and mining, the real cost of fossil fuel is going up; and that will make humanity poorer, eventually much poorer.

Providentially, also around World War II, another miracle happened. Just when we needed it, humanity stumbled on a new fuel, a fuel whose energy density is a preposterous 100,000 times or more larger than oil. Even in its infancy, this new fuel, uranium, was competitive with oil and coal when oil and coal were as cheap as they ever were in real terms. Table 2 shows that in the 1960's we were able to build nuclear plants at less than $1000/kW in today's money. Most of those plants are still operating. Nuclear fission promised to push the Malthusian wall back by millenia.

There was a downside. Like all transformational technologies, such as electricity or high pressure steam, fission came with a novel hazard. But unlike electrocution or boiler explosions, Nature has equipped our bodies with the the ability to handle just about all the radiation dose rate profiles that even a very large nuclear power plant release is likely to produce. She had to do that to protect us from our own oxygen based metabolism, which damages our DNA at a rate that is more than 25,000 times larger than the average background radiation damage rate, Table 1.¹ Fission was an unprecedented double gift. Fission came with a protection system for its unique hazard, in the form of a DNA repair system that can cope with dose rates that are hundreds of times higher than average background.

So Jason's progression could continue: wood, coal, petroleum, uranium. Fission was the obvious follow on solution to the depletion of fossil fuels. But this time something new happened. Humanity, or at least a large part of it, rejected the follow on solution. There is no precedent for this.

Humanity may end up proving Thomas Malthus right. But it won't be because we ran up against a natural resource wall that we couldn't push back. It will be because we chose to reject this two fold blessing. If I'm God or the Great Spirit or whatever is running this show, I'd write off the human experiment.

1. The concern is Double Strand Breaks in which both sides of the DNA double helix are severed, especially closely spaced DSB's which can result in the rejoining of the wrong ends, creating a viable mutation which can lead to cancer. See Same Birthdays and Double Double Strand Breaks.