Roger Baker: The fallacy of belief in “exponential growth in a finite world”


Commentary by Roger Baker

In a May 28th post, the Energy Skeptic blog highlighted with its title the fact that “Expressways & Interstates are only designed to last for 20 years”.

The article notes that U.S. highways are “falling apart and need $930 billion of work.” It quotes transportation researcher Earl Swift, who warns that “Bringing the system into full repair, and keeping it there, will cost us $225 billion a year for the next 50 years to rehabilitate surface transportation.”

Let us combine this well-documented fact that our roads are self-destructing at an appalling rate with news from a July 2nd post in Streetsblog, which further warns that “State transportation departments could see the federal funding they receive pared back as early as a few weeks from now if Congress doesn’t come up with a transportation funding solution.”

In August, the U.S. Highway Trust Fund — the major federal funding mechanism for the nation’s transportation system — will become insolvent unless Congress acts. Chart: FHWA, via Streetsblog.

In August, the U.S. Highway Trust Fund — the major federal funding mechanism for the nation’s transportation system — will become insolvent unless Congress acts. Chart: FHWA, via Streetsblog.

We should see this as dismal news for roads and transit short-run, but good long-run news for rail, which lasts much longer, and is far more energy-efficient for hauling people or freight. Politics can hold out against economic reality for only so long.

While the U.S. roads keep falling apart, due to their intrinsically high upkeep and poor economics, and with a funding gap the federal and state fuel taxes cannot now cover, we will soon be obliged to turn toward rail — assuming we even still afford rail as our Plan B in this context.

Meanwhile, we watch the Mideast, ground zero for global oil addiction, shift into something like civil war based on ancient religious animosities, as this recent article posted on the website discusses:

Is there a way out of this mess? Yes, according to the bankers, who probably never even saw an oil well, yet are bravely assuming that by fracking, the USA can even challenge Saudi Arabia in crude oil production! A July 4th article titled U.S. Seen as Biggest Oil Producer After Overtaking Saudi Arabia, posted on the Bloomberg News site, expresses this kind of assessment:

The U.S. will remain the world’s biggest oil producer this year after overtaking Saudi Arabia and Russia as extraction of energy from shale rock spurs the nation’s economic recovery, Bank of America Corp. said.

U.S. production of crude oil, along with liquids separated from natural gas, surpassed all other countries this year with daily output exceeding 11 million barrels in the first quarter, the bank said in a report today. The country became the world’s largest natural gas producer in 2010. The International Energy Agency said in June that the U.S. was the biggest producer of oil and natural gas liquids.

“The U.S. increase in supply is a very meaningful chunk of oil,” Francisco Blanch, the bank’s head of commodities research, said by phone from New York. “The shale boom is playing a key role in the U.S. recovery. If the U.S. didn’t have this energy supply, prices at the pump would be completely unaffordable.”

These bankers, who place their faith in fracking to challenge the Saudis, are oil junkies in denial, an outlook which debunks on a regular basis. To paraphrase Kenneth Boulding, the only ones who believe in exponential growth in a finite world are madmen, economists, and now, bankers. ■

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