Fossil Fools

photo by imp kerr

The fossil fuel-based economy seems impossible to leave behind, but it’s only as immovable as it is profitable.

Every single year, the United States alone unearths one billion tons of fossilized carbon. Over the past century and a half, the country has dug up enough of it to fill the 39 trillion-gallon Lake Tahoe with coal, or cover all of New England with a blanket of the stuff a foot deep. Nineteenth century Americans would have seen these volumes as monuments to America’s magnificence, but twenty-first century Americans are coming to see the piles as a historical trainwreck. The billions of tons of CO2 pumped into the atmosphere, hundreds of mountaintops lopped off, and thousands of coal miners with black lung or dead underground are all, instead of majesty, signs of an awful mistake we can’t seem to stop.

This trainwreck is often referred to as the “carbon economy.” The carbon economy began when the primary motive force in human industrial production, transportation, and heat production moved away from organic sources—human and animal power or water and wood power—and substituted instead fossilized carbon—coal, oil, and other fossil fuels. Calling it an economy adds some heft to the arrangement, making it harder to imagine ever altering.

But standing wide-eyed before the carbon trainwreck doesn’t lead to a better understanding any more so than standing in awe of a real trainwreck would help understand what caused it. The carbon economy is the product of history, and history means process and contingency. It means millions of trains and oil tankers that have moved through many human societies, across many different eras and political and economic situations. Where did the carbon economy come from and how did we get here? In light of the halting effort to end the carbon economy to stave off global warming, historians are looking backward—digging through the piles of wreckage—for answers.

Historians have long written about the history of energy. The very notion of a carbon-based economy relies on a cluster of other concepts like “modernity,” “capitalism,” and “industrialization.” It is a historical truism that the switch away from wood and animal power in the 19th century underlay industrialization. But the kinship between the ways of thinking about industrial capitalism and fossil fuel extraction runs deeper than that. All of these terms fall into the category of historical concepts that are at once necessary for a correct historical understanding of where we stand, and which very easily settle into seemingly immovable facts about the geologic structure of the world. Many parties concerned with change, historians and anti-fossil fuel campaigners alike, tend to think of capitalism, modernity, and industrialization as preordained processes that emerge from some logic outside of human agency and historical contingency—that they were and are inevitable.

Inevitability has dominated the popular understanding of fossil fuels. For a long time, it has been standard in world history courses to point out that in the British Isles iron ore and coal veins occur in close proximity. In the nineteenth century, this was understood as God’s providence shining down on England by endowing her with bounteous and co-located coal and iron. In the twentieth century, the story was secularized into one about the conditions “favorable” to industrialization. Coal, the more recent historians said, could be combined with local iron ore to make robust iron machines, enabling much higher labor productivity, and to make hard iron rails, allowing faster transport in the form of railroads. Iron ore and coal veins ushered in the modern world as we know it, so the story goes, and they did so first in England because England was blessed or lucky enough to have them located together. America, the industrial johnny-come-lately of the second half of the 19th century, surpassed England and all of Europe combined by 1900, but did so because it too had co-located iron and coal in Pennsylvania.

This is the tale as it has been told, but it is too neat, and younger historians aren’t buying it. One big problem for this narrative of overlapping coal and iron is that there are many countries that have the exact same geological luck. Not many of them industrialized when England did, and some of them still have not industrialized to the point that England has. Even at its most straightforward, the fable of English coal being in the right place misses crucial points about the importance of movement to the rise of coal. Ore deposits and coal veins may have been close in England, but they were very rarely literally on top of each other.

The transport of tons of coal, even for as small a distance as a mile, required a railroad to move smoothly, and railroads are large capital investments, even over quite short distances. The Pennsylvania anthracite fields were not exploited until a century after they were discovered. For the first half century of American history, coal from England was as cheap in New York as Pennsylvania anthracite. It was only when canals were built to take the coal to market that people in New York began to regularly use the coal to heat their homes. It wasn’t geologic proximity, but rather the human ability to overcome distances, that allowed nations to power industrial life with coal.

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Routes of Power
Energy and Modern America
Christopher F. Jones
Harvard University Press
Because transportation is something that happens only if someone decides to undertake it, historians these days are trying to punch holes in the inevitability argument by looking at at the way energy was moved around in the early days of the fossil fuel economy. The Arizona State professor Christopher Jones’s new book Routes of Power is at the front of the pack. Putting transportation at the center of the story, Routes of Power makes the coming of the fossil fuel economy a more contingent story, one with human actors making decisions about how to move fuel, what sorts of social arrangements need to be in place to do so, and the efforts to bring them into being. By looking historically at the movement of energy, Jones is able to show how carbon-based economies are created by people, not simply geographical luck. In so doing, he traces the lines of escape, the moments when things might have gone differently—and, by implication, might yet go differently.

Routes of Power focuses on the development the energy transportation network of America’s industrial heartland—the mid-Atlantic states of Maryland, Pennsylvania, and New Jersey—where the early construction of a succession of coal canals, oil pipelines, and electrical wires made up an energy transportation system that was designed to shrink distances and increase the size of the market for fossil fuels. The story begins in the first half of the nineteenth century, when a group of coal boosters decided to invest in the construction of several canals in order to maintain a steady supply of anthracite coal in Eastern cities. As Jones tells it, the anthracite fields of Pennsylvania, despite their proximity to Philadelphia, had not been exploited before these canals made transportation around the several small mountain ranges much easier. Before these canals were built, coal from the anthracite fields had to be floated to the seaboard on rafts along Schuylkill River, a very difficult journey through whitewater that required expensive labor, local knowledge, and the ability to withstand heavy losses—many barges ended up depositing their coal cargo on the riverbed rather than in Philadelphia.

The coal boosters decided to trade sunk costs for sunk coal. The fixed costs of canal construction did not change much as traffic increased, meaning that any dollar of freight was very near to a dollar of profit, or, more likely, a dollar to repay the creditors who financed the canal construction. As a result, canal companies became coal marketers and regional economic developers, a process that Jones calls “supply driving demand.” They paid to develop new uses for coal, investing in ventures to use gas derived from coal in urban street lighting. And most of all, they kept the price low and the supply steady, enabling businesses in coastal, urban markets to reliably depend on their fuel for the fixtures—warm and smokeless domestic coal ovens, powerful coal-burning steamships, fast steam-powered streetcars—of a new, modern way of life. The result was ever-increasing fossil fuel consumption, all the product of the arrangement and financing of coal canals.

With a few notable exceptions, oil production and distribution followed many of the same patterns as coal. In 1859, Colonel Drake drilled the first oil well in the country in Titusville, a small town in western Pennsylvania. Oil was long known to exist in the soil under Western Pennsylvania (it seeped through the ground and was often used locally as a skin ointment), but it was not until a railroad system, and later a network of pipelines, came to be monopolized by John D. Rockefeller that the modern oil industry was born. In the two decades that followed Drake’s well, the region saw the proliferation of oil production and the development of Standard Oil, the first of the global energy giants and the target of much local business as well as labor opposition.

In the nineteenth century, John D. Rockefeller’s Standard Oil was never involved in the oil drilling business. Their monopoly was on the transportation and refining of oil. By the end of the nineteenth century, they controlled 90% of the country’s refinery capacity, and with that kind of market power, could demand much lower rates than their competitors from the railroads along which they hauled their oil. It was technically illegal for railroads to charge different rates to different customers, so the railroads used a system of secret rebates to maintain the high volume of rail traffic that Standard Oil offered. The cheap rail transport, more than any shrewd or lucky investment in plants or geography, was Standard Oil’s main advantage, and much of the antimonopoly journalism directed against Standard Oil was targeted at the secret rebate system through which they maintained their lower rail rates.

The transportation of energy, not just the fact that it was coming out of the ground, was the political, economic, and often moral question of the day. Political questions about energy were really questions about access to energy, and questions about access to energy were really about the way that energy was transported, and questions about energy transport were really about market power, political influence, and the ability to secure a supply of energy for what people considered a fair price, free from the influence of a secret railroad rebate. But neither a secret rebate or a fair price have anything to do with historical inevitability, but they have everything to do with the way that certain people were able to set the rules of economic life in their favor.

Making a decision about how to transport fuel—whether by canal, railroad, or pipeline—was no mere technical question. Each form of transportation opened up a set of possibilities for regional development and foreclosed others. Canals, because they benefited from the growth of local traffic along their lines, tended not to offer the kinds of rebates that railroads would offer to Standard Oil. They instead led to local economic development, to which the string of post-industrial towns along the Erie Canal in New York now stand as monuments. Railroads, on the other hand, only needed local trade to a point. Decoupling cars, adding in new ones, stopping locomotives, getting up a head of steam—these were the expensive parts of running a railroad. Rail operators could really make their money when a large train was formed in Chicago or another large transshipment point, all bound for New York, Philadelphia, or another large port city, and bypassed all the small locales in between. This strategy came to be called the trunk line system, and its same logic worked in Rockefeller’s favor; large oil shipments could be sent from his wells to his refineries in Cleveland, making him money and changing the pattern of development in the process.

Oil pipelines were trunk lines in distillate. There were no stations along pipelines, and so they could lead to no local economic development. When they began to replace canals and railways, people in now-bypassed towns dynamited pipelines (Rockefeller himself was rumored to have sabotaged his early competitors before deciding that buying them out was a better long term strategy). It was only in the late twentieth century that Nigerians would figure out a way to effectively steal oil from pipelines and remarket it to refineries. But in the Standard Oil-dominated world of American petroleum, no such ingenuity was forthcoming, and, as Jones points out, oil revenues tended to pool in urban financial centers rather than toward the more dispersed supply networks.

The distribution of fossil fuel had a tendency to move far too much energy to places where there is none, creating in the process a local opportunity for industrial uses of cheap energy. Jones argues that this oversupply was a deliberate outcome of the plans of transportation networks to increase consumption of goods along their lines. Oversupply lowered the price of the fossil fuels, often to the point of very low profits for producers. In the coal business, where railroads often supplied the capital to start the mining companies, this meant that the railroad would take a loss on the capital invested in mining companies in order to maintain profits on something else, like, say, the transportation of steel beams for manufacturers who benefited from cheap coal along their lines.

In the twentieth century, the cheap energy regime as a subsidy to industry was supplemented by one in which the health (defined by profit) of energy companies was seen to be indicative of the health of the economy. Part of this was simply size. The production of oil made up such a large portion of American production (and more importantly, production for export) that declining profits in the oil industry could reverberate widely. Today, weirdly enough, cascading oil prices can cause the stock market to take a hit in a way that simply would not have made sense to nineteenth-century Americans. For them, coal, oil and electricity themselves, and profit-seeking from their sale, was never the object of the development of the fossil fuel economy. The fuels were meant to be cheap substitutes, not products in and of themselves. The coal industry was always subsidiary to its users in a manner not entirely unlike a public utility.

Today, the coal industry seems to be in crisis. Environmentalists are rejoicing at the series of bankruptcies that the coal industry is suffering, though the bankruptcy proceedings seem to be a way to screw creditors pensioners (and other creditors) in order to ensure that shareholders get a share in some future coal concern. However, coal is not so much declining as being replaced by natural gas, another fossil fuel. Even if certain important companies are folding, the fossil fuel system that Jones outlines—low-cost fuel maintained through transportation networks that ensure expansive markets for energy—is not in crisis.

Jones argues that Americans created the transportation networks for fossil fuels but then were left subservient to them—that sunk costs drove ever-increasing consumption, leading inevitably to the contemporary trainwreck. Things have changed, but nineteenth century Americans understood that the fossil economy was a human creation. Jones gives us the story of how they brought it into being.

It is true that we still find ourselves in much the same structural situation, one in which low fuel costs seem to subsidize any cockamamie scheme to use fossil fuels, even burning coal and pumping the CO2 into the ground to save the atmosphere. The difference today is that the energy industry has escaped the grasp of the transportation companies that used to control it. Energy companies have managed to push up energy prices so that the energy commodity itself becomes an object of speculative investment. Railroads are no longer the most important sector of the American economy, and they are no longer the primary beneficiaries of the fossil fuel economy.

That does not mean that transportation is no longer important. As a site of potential intervention, the exact opposite is true: transportation is more important than ever. Jones’s book proves that energy is nothing without its transportation. Energy still has to be transported; today, more energy is transported over longer distances than ever before. Historical narratives are usually not the best place to look for cut-and-dry solutions to contemporary problems, but Jones’s story does make clear that the circulation of energy—not simply the energy itself—is what makes the fossil fuel economy work.

The contemporary weakness of transportation companies presents a series of political opportunities. Preventing the construction of terminals in Washington state for the export of coal to China, blocking the Keystone XL pipeline, gumming up the movement of Arctic oil exploration vessels: these are steps along the way to unshrinking the distance that the fuel has to travel to get to market. Fossil fuels are not underground everywhere. If the fuel transportation system that underlay the fossil fuel economy was a human creation, then it can be undone through human agency all the same. Distance may very well prove to be humanity’s best friend.