Japan, Oil and the Fragility of Globalization

[GliderGuider]

Japan, Oil and the Fragility of Globalization

The Catholic theologian Ivan Illich once noted (and yes, he is the inspiration for this eclectic column) that societies that consume large amounts of energy (and especially imported energy) ultimately lose their flexibility and robustness to a web of authoritarian complexity such as the Tokyo Electricity Corporation. It is, afterall, the world's fourth largest utility and a consortium of liars to boot.

After the quake, Japan's big energy dilemma remains the same: how can a nation unsustainably fashioned by a flood of cheap oil (less than $20) 40 years ago, reboot or rebuild now that oil exceeds a $100 a barrel? Even today the oil-less country remains the world's third largest importer of petroleum at 4 million barrels a day. (That's double Canada's tar sands production.) All in all it gets nearly 50 per cent of its primary energy needs from oil, which account for nearly a third of all exports in value. About 90 per cent of these barrels hail from the Mideast, where petro states are experiencing a series of democratic tremors.

But oil's miraculous powers peaked about 15 years ago. One of the world's most energy efficient nations found it couldn't squeeze much more out of a barrel. As the population aged (a fifth of the Japanese are boomers over the age of 65) and the cost of oil imports grew dearer, the economy stagnated. In 2009 Japan GDP's shrank 15 per cent and oil consumption declined by nearly a million barrels a day.

Unlike many oil-driven cultures the Japanese will now fall back on traditions of resilience. The Zen masters knew about the impermanence of all earthly things and the inexhaustible beauty of nature. The 12th century philosopher Kamo no Chomei once advised that "If you have to go anywhere, go on your own feet. It may be trying, but not so much so as the bother of horses and carriages. Everyone with a body has two servants, his hands and feet, and they will serve his will exactly.” Japan's power elite is now staggering. Perhaps a few of its oil and nuclear members will take up walking and clear their thinking.

Add to this gloomy picture the rupture of so many of the world's supply chains that run through Japan, and it should be clear that we are all tsunami victims now.

[The2ndWheel]

1. Interesting how much

we dislike the limits of our own feet. Or, maybe not dislike. Perhaps more of a stumbling into something else that made life easier. Or, that we at least think makes life easier.

No legs good, two legs bad.

[starroute]

2. Uh ... there's no such thing as over-65 Japanese boomers

For one thing, even the oldest US boomers were born after World War II and are just starting to turn 65 this year.

But in Japan birth rates fell precipitously after the war -- especially compared to what they had been in the 1930's, when there was an official policy of encouraging large families to build up the army. That's why Japan's population today is so heavily skewed towards the elderly. It's all those babies who were supposed to feed the emperor's war-making machine.

And describing them as "boomers" seems part of a US media strategy to demonize a generation that is on the verge of retiring just as the GOP is trying to pull Social Security and Medicare out from under them. It's as if they're trying to redefine "boomer" to mean "greedy old person" -- which I find completely intolerable.

[GliderGuider]

3. The writer is a Canadian progressive

So I doubt there is a "US media strategy" in play here to demonize boomers. How about backing up a level and dealing with the point of the article?

[kristopher]

4. it is a rather pointless article IMO.

It isn't a discussion of Japan and the actual problems and possibilities that the country is looking at, it is a screed that attempts to use Japan to peddle a muddled and disjointed view of current energy realities. It wasn't worth the time it took to read it.

[GliderGuider]

5. Thanks for taking the time to reply

Even if it wasn't worth your time to read.

[kristopher]

6. What did you see as the point you invited comment on?

Maybe you could clarify for us by sharing what you got out of it.

[GliderGuider]

7. For me the point is this:

First some general observations:

1. Complex adaptive systems lose resilience as they become more efficient;
2. Failures in such systems tend to occur at their weakest points, and can cascade into the rest of the system;
3. The weakest point in such a system will probably be found where a similar situation occurs at a smaller scale;
4. The initial failure will probably occur at the weakest point of the triggering sub-system.

These lead to the following specific observations:

1. Global industrial civilization is a very efficient complex adaptive system;
2. One of the things that makes it very efficient is JIT, which requires long supply chains supported by inexpensive transportation;
3. Many of the crucial supply chains run from (or through) Japan;
4. Because Japan has no indigenous petroleum resources, they built up a large amount of nuclear power;
5. Nuclear power is also a complex, efficient system that has low inherent resilience;
6. The most vulnerable failure points in reactors are the cooling systems, that require external power to operate.

The tsunami did a number of things simultaneously:

1. It took out the power to to the reactor cooling systems, triggering a meltdown and release of radiation;
2. It wrecked a lot of infrastructure, including ports and factories.

The destroyed reactor has caused the evacuation of many people at enormous expense, and has made the Japanese public more reluctant to rely on nuclear power in the future. It will also interfere with the rebuilding of damaged infrastructure in the region.

The destroyed infrastructure will need to be rebuilt using oil that costs much more than the oil that was used to build it originally.

Japan has no indigenous petroleum resources, so the oil required to run the transportation on which its supply chains depend all has to be imported (aka purchased on the world market at marginal prices). This will now have to compete with the requirement for imported oil to rebuild damaged infrastructure.

The tsunami damaged a significant amount of Japan's industry, compromising its ability to feed the world's supply chains. This problem may be exacerbated by the redirection of imported oil from commerce to reconstruction efforts, further impeding the recovery of the supply chains.

The global oil supply is static because we have apparently reached Peak Oil. That means that any additional demand will cause price elevations. Japan will be a source of increased demand for an unknown number of years as it rebuilds.

The world's economies have not recovered from the last recession, and are vulnerable to being tipped back into a second round by any number of small effects - like industrial slowdowns caused by supply chain disruptions.

What we are looking at, in my opinion, is a perfect illustration of an interlocking failure avalanche in a brittle, complex system:

1. The most vulnerable point in a vulnerable system (the power to the cooling systems of the reactors) got knocked out. The consequences have put an enormous strain on the Japanese economy, and have interacted with the industrial damage to reduce Japan's ability to service its supply chains.

2. Japan's supply chains are vulnerable to industrial damage and the loss of transportation oil. They are especially vulnerable due to their reliance on marginally-priced imported oil.

3. The world's economy is vulnerable because of its reliance on JIT supply chains, the fact that it has not yet emerged from a major recession, and the fact that oil prices are again being pressured upwards by supply limits and possibly speculation.

It's obvious that there is a chain of vulnerabilities that leads from the backup power generators at Fukushima all the way out into the global economy. On the way the vulnerabilities pass through oil supply problems, damaged industrial infrastructure, a Japanese recovery effort that will consume a lot of time, money and effort, and the global post-recession hangover.

The point is that we are looking at the possibility that one tsunami may have started a slo-mo train wreck that could reverberate through much of the world's economy before it finally grinds to a halt.

That's what I got out of it.

[Terry in Austin]

8. A pearl indeed!

Thank you. Analysis of what's happening in the global system needs to be, well, systems-oriented, just as you've presented here and on your FB page.

Particularly notable is the systems "blindness" that prizes efficiency -- another term for "squeezing out redundance." Systems tend to be more robust and resilient the more redundance they have.

This can work distributively, as well -- having a lot of redundant smaller-scale systems tends to be more resilient than a single large-scale system. So much for the "economies of scale" fetish when it comes to resilience.

And the pearl? According to the fable of the oyster, a pearl begins with an irritant.

:toast:

[GliderGuider]

9. Thanks. There's also a good discussion of this article going on over on Economy

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=114x87195