Just Stop Oil!?: The Economic Foundation We Ignore | Frankly Archives 39 (2023)

**Nate Hagens** (0:00)
Greetings. Today we are re-releasing a previous, frankly, from July 2023, over three years ago, on a topic which is just as relevant in 2026 as it was then. Why oil is the economy?
In this fundamental video, I unpack concepts that are critical, in my opinion, for understanding the role of oil in our modern global economy, including the maximum power principle, Kleiber's Law, Jevons Paradox, as well as historical patterns of what happens to powerful nations who lose access to cheap and abundant energy. I recorded and aired this well before the Strait of Hormuz situation, but that situation is now accelerating the key points made in this video, especially as existing oil stockpiles in storage continue to make new lows with no end in sight for this war.
I hope this re-release will present some helpful reminders for those of you who watched it three years ago, and for those of you who have not, I hope you'll find some novel insights for this unfolding moment, which I think is a phase shift for our civilization. Lots of new Frankleys and podcasts coming this fall, including Charles Eisenstein next week. With that, let's get into it. Okay, it is with some trepidation that I arrive at part two in this Just Stop Oil! series. After these next two videos, you may subscribe and then hit unsubscribe.
A word of caution or a word of authenticity. I am not in these next two videos advocating for what we should do. I am trying to observe and describe our situation. It is my deep belief that describing the constraints of our situation eventually will inform better decisions, better plans, better preparation. And I don't know if Nora would chastise me for saying this, but better emergence.
Okay, so last week, briefly, we looked at the systemic implications of the serial refining of oil, and that if we suddenly didn't need gasoline, we would still need roughly the same amount of oil because of the power and relevance of the middle distillates and the asphalt, bunker fuel, plastic precursors, etc.
Today, I'm going to explain why, at least for now, oil is the economy. And what I'm going to talk about next week is 10 pathways to post-growth economies, which would use less oil and fossil fuels. So today is going to be a little bit of a long reflection. I hope I can remember everything.
I'm going to start by doing a whirlwind recap of the importance of energy, and particularly oil, to our societies. And then I'm going to talk about 10 systemic inferences.
Okay, here we go. Energy is incredibly important in nature. Those organisms that have an energy surplus of their expense versus the income have evolutionary advantages. This is throughout the animal kingdom and it also applies to human systems. There's something called the Maximum Power Principle, which Howard Odom, the Ph.D. advisor of some of my Ph.D. advisors, called the Fourth Law of Thermodynamics, which is that organisms and ecosystems in nature self-organize around the ability to degrade an incoming energy gradient. For instance, trees will grow the correct amount of leaves to maximize the energy degradation of the sun. One leaf wouldn't be enough and a billion leaves would be too many because they would shade, so the maximum power is in between, and this happens throughout the natural world. What ends up happening is there is a biological relationship between the mass or size of an organism or an ecosystem and its energy throughput or its metabolism. This is called Kleber's Law, and the metabolism is roughly the mass to the three-quarter power. Doesn't matter if you're an insect or a mouse or a blue whale, this rough biological scaling law applies at all scales.
Lo and behold, the same scaling law applies to the total human system, the global human economy en masse together, where all countries grow their energy consumption about to the three-quarter power of their size. Okay, energy and humans. We need energy for absolutely everything in our economies, to move, to create, to invent, to refine, to deliver, to maintain, to repair, to dispose of. Energy is required for everything. There is, in fact, a 99% correlation between energy and GDP, and around 100% correlation between materials and GDP. So our material, our GDP footprint is very, very tightly linked with more energy and more material use. If we consider electricity, those places in the world that have no blackouts or brownouts, but 100% connectivity or very close to it, have the highest GDP per capita. Once you just have even one or two percent of brownouts or blackouts, your GDP per capita drops substantially. Access to available energy, 24-7, has so far in our society been incredibly correlated with economic success. So many listeners of this program know that we are living in this couple 300 special period where humans are drawing down ancient carbon, some might say from the maximum power standpoint, we are liberating ancient carbon productivity from the earth, tens of millions of times faster than it was sequestered.