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A scenario for a high-road transition to P2P: Fracking prepares the way for Solar ???

photo of Michel Bauwens

Michel Bauwens
12th February 2013

I’m a big fan of Vinay Gupta, because he always provokes for deeper and unexpected layers of thinking.

Vinay is a born provocateur, talking about open source guns to Irish ecovillages and about Gandhian non-violence to intelligence officials, but his provocations are never gratuitous and he has an uncanny eye for the law of unintented consequences.

Here, he says:

Fracking is pushing Peak Oil and its disruptions into the future, and may well stabilize the economy until solar takes over.

Here is an excerpt from Vinay’s provocative scenario:

“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.

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 resulting in massive long term capital destruction (wells don’t pay for themselves)

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 or in 10 years depending on who you ask.

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.”


One Response to “A scenario for a high-road transition to P2P: Fracking prepares the way for Solar ???”

  1. Paul Hughes Says:

    Vinay’s a bit late on this one. People like myself, Brian Wang of Next Big Future, David Brin and others at Lifeboat Foundation came to this same conclusion last summer. Fortunately both cheap solar and 5x batteries are coming very fast -less than 10 years., 5 years at most.

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