December 12, 2012
Iceland's an interesting example in several different ways. During the collapse of 2008-2010, Iceland did something unprecedented. Saddled with supposedly safe debt that "exploded" on them, they rejected austerity, arrested and prosecuted the bankers, nationalized the banks, and repudiated their foreign debt as being unpayable. In doing so, they were forced into a situation where they could no longer get letters of credit for huge oil purchases, so they began a crash course in becoming internally sustainable. One of the first things that they did was to re-evaluate their internal energy profiles and recognized that they had a wealth of energy from geothermal and hydroelectric sources - the energy inherent in hot springs, geysers and melts from glaciers. Taking advantage of this, Iceland's renewable energy resources make up 81% of the total energy production from the island country, with the balance coming from North Sea oil.
The economic news and the energy news are not unrelated. The petro-industrial complex is intimately tied into the financial services sector globally, and indeed, many of the aspects of globalization, from outsourcing of jobs to 5,000 mile salads to the explosion of the 0.1% globally in terms of overall wealth owned, are intimately tied to the retrieval, transportation, distribution and consumption of petroleum products. Iceland chose to drop out of that web for a bit, and in the process are beginning to worry financiers in New York, London, Berlin and elsewhere.
Scotland's driver is a growing desire to separate themselves from the political control of London. They have similarly made 100% energy independence a major part of this process, because by no longer being dependent upon the North Sea oil well (which is showing signs of playing out), they end up with much greater autonomy in other matters.
Germany, ironically, is a financial powerhouse, but much of that is built primarily upon engineering services and manufacturing of precision goods. Their overriding concern is maintaining independence from Russia and its oil and natural gas production, and to achieve this they are betting heavily upon solar and hydrothermal technologies.
Moreover, they are treating such energy production in a paradigm shattering way. Their goal is not to replicate oil production, but to look at their infrastructure a piece at a time and figure out how to make each piece effectively fuel itself. Projects there include using genetically modified algaes that not only are especially good at filtering waste water, but that generate energy as a by-product of doing this. The energy produced isn't huge, but it is sufficient to generate the power to run the plant and push some back into the grid.
Similarly, solar panels are becoming so much a part of the German landscape that in many towns there are few roofs that don't have them - and this in a country that has a disproportionately high number of cloudy days. The irony is that Germany is now producing so much power that other countries that are Germany's power grids are becoming overwhelmed because Germany is producing more power than it can use and is dumping that energy downmarket on unprepared grids and bringing these down.
The thing that these countries share is that they are relatively compact, are already affluent, and have strong external (typically security) reasons for achieving such independence. For the US overall, this is generally not the case, and this is frequently an argument given on the part of the petroleum industry and their supporters about why alternative power is such a pie in the sky dream in the US. However, these arguments (when not trying to argue that global warming is only an illusion) usually assume that complete conversion of petroleum to technology X is infeasible because petroleum is far more effective and the infrastructure to upgrade the entire country would be absurdly expensive to replace.
In practice, however, this is where the paradigm of self-supporting infrastructure makes so much sense, and why, in many ways this conversion is already taking place. Forget about total conversion, finding a one-size-fits-all magic bullet (seriously mixed metaphors there) that will replace the petroleum economy overnight is simply not going to happen in the US. What can happen, however, is the notion of making infrastructure self-supporting.
Much of that technology already exists today. You can get an intelligent security monitoring plus power management system for your house for $50/month from cable companies that will let you control the outlets, air system and appliances in your house from an Android or iOS app located anywhere. Throw in the next generation LCD lighting systems, add in a solar collector for your roof, and your house becomes a net neutral environment. Put all the street lights on local solar cells, start tapping into geothermal as well as hydropower, solar PV and wind-powered systems for municipal structures such as government buildings and schools, and these too start disappearing from the grid. Malls, which have traditionally been huge energy sinks, are either being shut down or taking advantage of large expanses of parking spaces to erect solar panels to become self-supporting. Trains, especially light rail and subway, can take advantage of flywheels located in the stations themselves to extract power via induction to slow the trains down, then can then give the same trains an induction based boost to get out of the station, reducing it's overall energy footprint by 60-70%.
The same principle applies increasingly to work. One intriguing trend is the re-tollification of paid-for highways. Municipalities are assessing tools on previously free roads, which is having the unexpected side effect of encouraging telecommuting as employers are forced to question whether having employees do hour-long commutes in order to be in the same office is worth the wage increases that will be needed to cover these commute costs (in effect, most commuting to and from work as well as parking costs have been pushed onto the employees, when this is in fact a requirement imposed by the employers, and employees are pushing back on this).
Similarly, the very technologies that allowed outsourcing - including cloud computing and applications as service - are also increasingly making insourcing more attractive as the pendulum swings in the other direction, because such insourcing is still distributed, but over a more manageable geographic region. Monitoring and troubleshooting as often as not now occurs on distributed systems on the cloud, so having a lot of engineers located in the IT "server" room is now "so 90s" - the room is no longer there, the network admins all have their iPhones and iPads configured to notify them the moment an error condition gets fired, and most of those apps are increasingly running on Amazon or Google or other cloud providers. Managers work from home, marketing people produce ad copy and visuals by collaboration, and most meetings are now down through GoToMeeting or something equivalent.
Why does this matter? Every virtual meeting is five to ten less trips downtown, or perhaps five to ten airline tickets. This puts fewer cars on the road, which decreases the energy footprint. Automated toll systems can also be tied in to financial banking networks and hence audited, making it possible to determine who pays for driving. Insourcing also reduces the number of cargo ships on the seas, each burning hundreds of gallons of oil an hour, and reduces the amount of air traffic.
Yet the argument would be made at this point by those invested in the status quo that fewer shipping or aircraft trips represents that many fewer jobs - fewer airline workers, fewer stevedores, fewer truckers. They're right, of course, it does. And here is where things go all political. Ultimately, something has to give. The future has arrived - all of those labor saving devices, all of those robots, all of the efficiency generating software and infrastructure ultimately implies that the number of hours of meaningful work is in permanent decline. There will be occasional spikes and probably a floor at some point, primarily in the services sector, but even with jobs moving back home you need 1 person for what required 100 a century ago in the manufacturing sector, and increasingly even the financial sector is beginning to look anemic as trading algorithms replace the Masters of the Universe, just as large scale search databases have significantly dented the legal and medical professions.
Ultimately then, the question is how you resolve this fundamental contradiction - providing a means for the distribution of value in a capitalist society to the largest percentage of people when the most traditional mechanism - wage labor - no longer provides that capability. I'll address this issue next week.