The Global Energy Crisis

Causes, Effects and Solution Pathways to the Global Energy Challenge

“The day science begins to study non-physical phenomena, it will make more progress in one decade than in all the previous centuries of its existence. If you want to find the secrets of the Universe, think in terms of energy, frequency and vibration.” - Nikola Tesla. Photo by Andre Benz

What’s in this Post?

• What’s Causing the Energy Crisis

• Virulent Human Behavior - What Causes It?

• Conclusion

• Alternative Solutions

• What We Read Last Week

What’s Causing the Energy Crisis?

According to the fount of all knowledge, Wikipedia, the world is facing shortages and increased prices in oil, gas and electricity markets. The crisis is—apparently—caused by a variety of economic factors, labor shortages, disputes, COVID and climate change. According to these experts, the shortages experienced by Ecuador, Germany, Pakistan, Panama, South Africa, Sri Lanka, UK, US, and more were compounded by the Russian invasion of Ukraine.¹

However, those who understand international markets know that the energy crisis is more about market manipulation than the factors listed by Wikipedia.² If one limits the supply of any goods or services, you can charge more for it. The same supply and demand ‘laws’ work for energy too.

Instead of unpacking how market manipulation works, today’s post is about why this kind of behavior occurs. More specifically, why we see this kind of behavior in Phase 5 and 6 of the seven phases of the Cycle of Civilization.³

For detail, see https://bit.ly/CycleCiv and https://bit.ly/7-Phases-Civ.

In last week’s post, we introduced the notion of the grab of last resources.⁴ Briefly, these are the actions that those in power take during the late stages of the collapse of any class-based civilization.⁵ As resources become scarce, those with the means to do so do everything in their power to secure access. This behavior is sometimes known as land grabbing and it refers to much more than the acquisition of land.⁶

While the global energy challenges are no laughing matter, it’s important to bear in mind that the actions that lead to the outcome of energy shortages are evolutionarily inevitable. In other words, the global energy crisis is:

• Unsurprising

• Unavoidable

• Unsolvable (if we continue to rely solely on ‘renewable energy.’)

In short, the global energy crisis is caused by economically powerful actors manipulating the system to enrich themselves. Behaviors that we see playing out on the stage of human drama are the same behaviors we see from bacteria in the petri dish. Biologists have a term for this phenomenon. It's called virulent behavior.⁷

What Creates the Conditions for Virulent Behavior in Humans?

For decades I’ve wondered what gives rise to class-based societies, the 1% phenomenon and virulent behavior in humans. What follows is my own (non-academic) summation. If you know of research that backs up (or challenges) this premise, please do post a comment.

• Division of Labor: In his 1776 book, A Wealth of Nations, Adam Smith tells the story of the humble pin and all of the different activities required to produce it. He broke it down into 18 distinctly different operations, claiming that it made economic sense for a different person to complete each of these 18 tasks. The objective is to increase output per person through efficiency. This then lowers the cost of bringing the product to market. There are many disadvantages to division of labor, yet it has become the basis of how our economy works.

• Specialization: Over time, the division of labor creates specialists. When life was simple, there was a specialist pin head creator, a pin point creator and a pin shaft creator. This tendency of specialization led to lawyers, doctors, teachers and more.

• Competition: The Western view of evolution theory created an economic system premised on competition rather than collaboration. This led specialists to constantly strive to become better than others in their field.

• Wealth Disparity: Those who best understand how the economic system works pursue competition to an extreme. They become fabulously wealthy and then use their wealth to protect their wealth. This is the thinking and behavior that culminates in the grab of last resources. Just as a child will strive to win a school race, the wealthy strive to win the resource race. This is the virulent behavior which ultimately kills the host.

• Hubris: The exceptional level of wealth creation, according to all the historical studies, leads to excessive pride, self-confidence and arrogance. Ultimately and inevitably, hubris leads to downfall. Those afflicted by hubris cannot see the error of their ways, even though others call it out.

Conclusion

‘Solutions’ to the current human condition—including energy shortages and climate change—are merely a vehicle for the immensely wealthy to protect their wealth. Nothing more, nothing less. ‘Renewable energy’ is a technocratic solution which further concentrates wealth and impoverishes nations. There are alternatives.

This entire discussion is not merely philosophical. It has real world consequences for businesses. Under the guise of ESG and climate change, the economic powerhouses of society are being asked to fund the lifestyles of those who gamed the system. We allow this virulent behavior to continue at our peril.

To reiterate, our global energy challenges cannot be adequately addressed using the same kind of thinking that created immense wealth disparity. The upcoming COP27 is a smorgasbord of technocratic ‘solutions’ designed to protect the fossil fuel industry. Companies that endorse technocratic solutions are walking the same path as the hubristic champions of renewable energy.

Alternative Solutions

Instead of centralized power production, our societies should consider decentralized, community-driven solutions to food and energy. In future posts we’ll look at ways that forward-thinking evolutionarily-adaptive companies can support this transition.

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What We Read Last Week

• 24 Oct 2022 - An important new paper argues that the failure to limit CO2 emissions is a direct result of politicians’ obsession with mandating renewables as the main policy response: It Pollutes, So Tax It (pdf)

• 20 Oct 2022 - 1 out of 3 CEOs say they are reevaluating ESG efforts ahead of a possible recession: https://www.politico.com/newsletters/the-long-game/2022/10/20/an-esg-pickle-00062696

• 20 Oct 2022 - Net Zero Nations Face Financial Meltdown: https://markets.businessinsider.com/news/bonds/europe-energy-crisis-debt-crisis-recession-risk-inflation-spending-macro-2022-10

• 19 Oct 2022 - Infographic summarizing the TCFD, the ISSB EDs, ESRS EDs, and the SECs Proposed Rule (yes, it’s messy in policy land): https://www.linkedin.com/feed/update/urn:li:activity:6985976784643084288/

• 19 Oct 2022 - An epic collection of experts through the ages who have been profoundly wrong on major topics. Important to keep in mind when ‘the experts’ try to convince you about AGW (anthropogenic global warming): https://medium.com/shortfall/6c46c71e3bf7 (behind Medium paywall).

• 18 Oct 2022 - An excellent summary of how South Africa’s most recent big energy investments (Medupi and Kusile) led to rampant corruption. South Africans should bear this in mind as the Just Energy Transition will be announced at COP27: https://www.counterpunch.org/2022/10/18/in-south-africa-resistance-rises-to-the-world-banks-climate-killing-mega-projects/

1. https://en.wikipedia.org/wiki/2022_global_energy_crisis

2. See, for example, Modern Energy Market Manipulation by Andrew Kleit: https://www.amazon.com/dp/1787433862. An extensive book review is available at https://www.cato.org/regulation/fall-2019/modern-energy-market-manipulation. Also see the twenty+ year old Enron-related hearing on traders in California power markets who manipulated markets to raise prices artificially: https://www.govinfo.gov/content/pkg/CHRG-107shrg81138/html/CHRG-107shrg81138.htm.

3. The Cycle of Civilization: https://bit.ly/CycleCiv and the Seven Phases of Civilization: https://bit.ly/7-Phases-Civ

4. https://cesg.substack.com/i/78950420/competition-for-remaining-resources

5. For an explanation of a Class-Based Society, see https://bit.ly/C-Based-Society.

6. See an introduction to “grab of last resources”: https://www.eoi.es/blogs/imsd/land-grab-a-battle-for-resources/. Also see Global Fight for Natural Resources ‘Has Only Just Begun’ (2012): https://ourworld.unu.edu/en/global-fight-for-natural-resources-has-only-just-begun

7. Virulence is a pathogen’s or microorganism’s ability to cause damage to a host, even though it may cause risk to its long-term survival. Although less widely known, it also refers to humans’ tendency to cause damage to the planet in the face of evidence: https://en.wikipedia.org/wiki/Virulence. Also see Virulence Factors that Promote Colonization: https://bio.libretexts.org/Bookshelves/Microbiology/Book%3A_Microbiology_(Kaiser)/Unit_3%3A_Bacterial_Pathogenesis/5%3A_Virulence_Factors_that_Promote_Colonization