by John Browne
Escaping the ‘Malthusian Trap’
Writing in 1798, Thomas Malthus observed how, throughout history and across different cultures, living standards had not grown.15 Humanity existed perpetually on the threshold of basic subsistence. Agrarian societies did develop new technologies to increase food production, but this only led to an increase in the population and reversion to a level of basic subsistence. Economic resources could never outpace population growth; humanity was stuck in a ‘Malthusian Trap’. Yet as Malthus was writing, great changes were beginning to shape Great Britain around him. These changes would soon disprove his theory.
Between 1750 and 1850, Great Britain’s industrial output grew seven times, while the population grew less than threefold. Living standards rose and rose. There is no simple answer as to why this happened in Great Britain first. But just as the decline of China relative to the West was linked to its stagnating coal industry,16 the industrial rise of Great Britain was, at its core, dependent on putting to use its abundant coal reserves. Between 1700 and 1830 the production of coal increased more than tenfold. Steam engines replaced manual labour because coal in an amount equal to the weight of a man can produce the equivalent energy of the same man working for one hundred days.
Far more than fuel to create steam, coal is also vital in the production of iron and steel. It is used to smelt ore in furnaces and added to molten ore in the form of coke to remove impurities. Built with bars of iron and powered by coal fires, factories and mills sprung up across the country at an astonishing rate. The small northern town of Manchester in England quickly grew to become a symbol of Great Britain’s Industrial Revolution, stretching for miles across the English countryside. Coal smoke would greet visitors from afar, rising from the towering smokestacks of the city’s cotton mills.17 When visiting in 1835, Alexis de Tocqueville, the French historian and political thinker, summed up the ambivalence of the situation: ‘From this foul drain the greatest stream of human industry flows out to fertilize the whole world. From this filthy sewer, pure gold flows.’18 In the south, London emerged as the ‘centre of the commercial and political world’ and the economy grew at an unprecedented rate.19
Great Britain was transformed from a nation of farmers to a nation of manufacturers and factory workers. People swarmed from the countryside into towns to work in the coal-powered mills and factories. For many who arrived in the rapidly growing cities, living conditions were poor. Whole families were crammed into single squalid rooms and death and disease were far higher than in the countryside. This prompted Friedrich Engels, the German philosopher, social scientist and industrialist, to observe that workers suffered more than they gained from the Industrial Revolution.20 The urban growth continued and by 1851 there were more people living in cities than outside them, a tipping point only reached by China in 2012.
Coal output in Great Britain grew to many times more than the rest of the world, but rapidly growing manufacturing, alongside a rapidly growing population, put great pressure on the mining industry. Already by the end of the eighteenth century, most of the low-lying, easy to access coal seams had already been exploited. To increase supply, miners would have to dig deeper.
In the rush to meet and profit from demand, thousands of lives were lost.21 Deadly gases hidden in the coal seams suffocated miners or led to explosions in the mine shafts.22 Children, some as young as eight, worked as ‘trappers’, sitting for several hours at a time in the cold, dark and damp mining tunnels, periodically opening a ventilation flap to keep air moving down the shafts. They were further abused by being used to haul coal up shafts too narrow to be passed by adults. Working conditions were appalling.
Over time, regulations began to improve poor working conditions. In 1842, laws were introduced, prohibiting underground work for women and children below the age of ten.23 More laws and enforcement bodies improved mining safety. Developments in technology were equally important; the coal-powered steam engine enabled water to be drained from flooded mines and coal to be mechanically hauled to the surface, while the invention of the Davy lamp in 1815 prevented the ignition of explosive gases in the mine shafts.24
It took far longer to clear the thick Black smoke pouring from the chimneys of coal-powered factories. Coal is the most polluting of fossil fuels, burning inefficiently and producing high quantities of soot and harmful pollutants, not least carbon dioxide. During my childhood in Cambridge during the late 1950s, coal made its presence felt. When the wind blew in the right direction, the foul smell of sulphur and ammonia would blow through the open windows of our house on Chesterton Road from the nearby town gas works.25 In the 1950s, large reserves of cleaner natural gas had not yet been discovered in the North Sea, and households still depended on town gas, manufactured from coal, for cooking and heating.
Air pollution in today’s industrialising countries is still a major environmental and health problem. Nowhere can this be better seen than in China, which is now the world’s largest consumer of coal. Its coal use, once stagnant, is now growing at an unprecedented rate, fuelling the sudden growth of its economy seen over the last thirty years. The Great Divergence is rapidly closing, but as China catches up with the West it is finding that history repeats itself.
China’s dilemma
I first visited Beijing, on BP’s behalf, in 1979 shortly after Deng Xiaoping opened the door to international commerce. After the death of Mao Zedong and the arrest of the infamous Gang of Four in the autumn of 1976, Deng came to power and began a series of major economic reforms in China, leading it towards a market economy.26 In the seven years following these reforms, the number of people living in poverty halved from 250 million to 125 million. Each time I have visited the country since, the living conditions of those in the city have seemed to improve. The food gets better and the people get fatter. The change to Beijing’s skyline is even more dramatic. Skyscrapers are built three at a time in the same design; the pace of growth in the city is prodigious, pragmatic and relentless. Fuelled by hydrocarbons, China’s booming economy has taken the once poverty-stricken nation to the status of a world economic superpower in a matter of decades. In that transformation, coal is the dominant force: it generates around 80 per cent of China’s electricity and provides 70 per cent of China’s total energy demand. In 2010, China used almost as much coal as all other countries in the world combined. However, as with the Industrial Revolution in Great Britain, China’s prodigious coal use comes with consequences for both health and the environment.
I still remember the acrid, yellow air on a visit to Beijing’s Summer Palace in October 2003.I had come to China’s capital to meet Gary Dirks, then head of BP China. Taking a break from the chaos of the Central Business District, we headed out to the Summer Palace, one of the city’s many beautiful imperial gardens, to continue our discussions. Walking along the 17-Arch Bridge that connects the Palace’s Kunming Lake to a small central island, we were debating whether to sell our shares in PetroChina, which we eventually did. Halfway across, neither shoreline was visible; the thick smog had reduced our visibility to only a few metres, creating a welcome sense of privacy for our meeting. Other visitors, many wearing face masks, would appear out of nowhere before disappearing just as quickly into the mist on the other side.
In the winter and spring, certain atmospheric conditions trap pollution within the city which builds up to almost unbearable levels.27 The true extent of the city’s toxic emissions, a choking mix of sulphurous and nitrous oxides, soot and other particulate matter, are then revealed. Coal, more than any other substance, is the culprit of this pollution.
As I walked around Kunming Lake, my throat became raw and inflamed because of the air around us. Inhaling this pollution has grave consequences for health: invisible soot particles can accumulate in the respiratory system, increasing the risk of lung diseases. Over 350,000 people in China are estimated to die each year as a consequence.
The health risks are even greater for those mining China’s coal. Black lung dise
ase affects hundreds of thousands of Chinese miners. Mine collapses and explosions are common: in 2005, more than two hundred people were killed in just one gas explosion at the Sunjiawan mine in Liaoning. More than 2,500 coal-mining deaths were reported in China in 2009, and over the previous decade the number of deaths per tonne of coal mined was, on average, eighty-eight times higher than in the US.28
Damage to the environment is also severe. Toxins, such as arsenic and mercury, released in coal mining, leak into nearby rivers. Acid rain, produced from sulphurous emissions and now affecting almost a third of the land mass, damages both crops and natural ecosystems.
Perhaps the most deadly pollutant of all is colourless, odourless carbon dioxide, the chief culprit of anthropogenic climate change. Of all the fossil fuels, coal produces the greatest quantities of carbon dioxide per unit of energy it produces. China’s production of carbon dioxide per capita is less than a third of the US’s, but China’s vast and quickly growing population makes it the largest overall producer of carbon dioxide in the world.29
China’s use of coal has fuelled unparalleled growth and reductions in poverty over the last three decades. And as China continues to grow, it will need more energy. By 2035, China is projected to consume almost as much energy as Europe and the US combined. Coal is the obvious fuel choice to meet this growth since it is cheap and abundant. Its proven reserves alone are expected to last for more than seventy years at current rates of consumption.
Herein lies China’s dilemma: how can it continue its rapid economic growth and reductions in poverty, but do so sustainably? The scale of the challenge is unprecedented: China is home to one-fifth of the world’s population and in 2010 its use of energy surpassed that of the US. Zhou Shengxian, China’s Environment Minister, warned in 2011: ‘In China’s thousands of years of civilisation, the conflict between humanity and nature has never been as serious as it is today.’30
Changing China
In recent years, pollution has become a political topic in China. Internal protests against polluting industries have become more frequent, while China faces increasing international pressure to enforce environmental regulations. The 2008 Olympics made clear that China wanted to be regarded as a responsible global stakeholder. Months before the Games, many industries near Beijing were shut down in an attempt to clear its polluted skies.
However, China’s hand is not being forced. It knows that clean energy production is necessary if its social and economic growth is to become sustainable. Air pollution affects food production and the availability of clean water. The deterioration of resources and the natural environment are already bottlenecks to development. The consequences of climate change would be even more serious. China now realises that it is in its interest to take action against pollution.
And action is taking place. China’s mining operations are improving, although they remain dangerous. Industrial smokestacks are gradually clearing. Between 1995 and 2004, the air pollution emitted for each unit of GDP dropped by around 40 per cent. Coal is now banned from use in heating and cooking in Beijing and Shanghai and average levels of particulate matter across the country are falling.
In its Five-Year Plan of 2011, China’s objective changed from maximising growth to balancing growth with social harmony and environmental sustainability. Its Premier at the time, Wen Jiabao, talked of shifting its model of economic development to ‘achieve green, low-carbon and sustainable development’.31 For the first time, the performance of local officials might be judged not only by economic output, but also on environmental and social performance.
Coal has brought incredible change to China, as it did to Great Britain three centuries ago, but only now, after more than three decades of unsustainably polluting economic growth, is China beginning to manage this relationship between the beneficial and harmful consequences of its use of carbon.
OIL
From an early age, Henry Ford understood the power of carbon fuels. As a young boy, he built a steam turbine next to the fence of his school. It exploded, setting the fence on fire and slicing open the boy’s lip. ‘A piece hit Robert Blake in the stomach,’ he wrote in his notebook, ‘and put him out.’32
A constant tinkerer with an obvious aptitude for mechanics, Ford’s steam turbine was just one of his childhood inventions. On the farm where he grew up he was always finding new ways to ease the drudgery of rural life. ‘There was too much work on the place,’ he later recalled. ‘Even when very young I suspected that much might be done in a better way.’33
The realisation of just how that might be done came when he was twelve years old, while travelling by horse and cart to Detroit with his father. Ahead of them Ford saw a cart drawn very slowly by a steam engine fuelled by coal. That scene made a lasting impression on him; forty-seven years later he recalled that engine ‘as though [he] had seen it yesterday’.34 The cart showed Ford how coal could enhance human muscle and mobility. It would take almost two decades more before Ford would realise the potential that oil had as an engine fuel.
On Christmas Eve 1893, he brought his experimental engine into the kitchen of his home where his wife, Clara, was preparing dinner for the following day. His rudimentary invention did not have its own ignition system and so he wanted to create a spark using the kitchen’s electricity supply. He told Clara to feed oil slowly into the engine, while he turned the flywheel, sucking a mixture of hydrocarbons and air into the engine cylinder. He created a spark, flames appeared, the sink shook and then the engine began to turn. This instilled in him a lifelong interest in the gasoline engine and its application in the automobile.
Nowadays, we take for granted the freedom we are given by the motor car; we forget how much effort it had previously taken to travel only a few miles. The nineteenth century was a world in which pack horses would struggle along rough trails and makeshift roads, ‘where for long seasons every family was practically farm bound, and where isolation wrapped men and women in cobwebs’.35 By the time the car was developed at the end of that century, iron railroads had forged connections between America’s major towns and cities. Goods and people could move further and faster than ever before. Nonetheless, large swathes of the countryside, in which most of the population still lived, remained cut off from the centres of the US’s prodigious industrial growth.
The car became the new tool with which to conquer this ‘battle with distance’.36 And only oil, with more carbon-hydrogen bonds than coal, and so a greater energy density, could generate the force needed to power the automobile.37 The first ones were toys for the rich, custom-built by hand and very expensive, but Ford wanted the everyday person, the farmers and the mechanics, to drive. By pioneering mass production he made automobiles in such large quantities that economies of scale allowed him to make them affordable to a much wider market. The Model T, first produced in 1908, was the culmination of this plan: a lightweight and reliable, yet ultimately very cheap car to meet the growing consumer aspirations of the American public.38 Fifteen million Model Ts were manufactured and, in 1920, they constituted almost half of all the automobiles in the US.
New employment opportunities, better education and medical care were all now available to the owner of a car. As cities grew, they were shaped around the car in the formation of highways and suburbs. More than a practicality, the car quickly became a status symbol in emerging consumer society. And as a symbol of freedom and prosperity, it became an essential component of the American Dream.
Today the American Dream has gone global. In China’s cities, the once impenetrable streams of bicycles have been replaced by cars and the wide thoroughfares now struggle to cope with the ever increasing mass of vehicles. Before the city imposed restrictions in 2011, almost 1,000 cars and trucks were being added every day in Beijing alone.
This global growth drove the sharply rising demand for oil through the twentieth century. However, long before the invention of the car, oil was mostly used for much simpler ends: illumination and lubrication.
Rock oil
Petroleum, the ‘black juice’ that ‘flows from rocks’, was first documented by Georgius Agricola in the sixteenth century.39 In De re metallica, his seminal work on mining and metallurgy, he describes how liquid bitumen, found floating in springs, streams and rivers, could be collected in buckets or, when found in smaller quantities, collected with goose wings, linen strips and shreds of reeds.40 One woodcut in De re metallica illustrates a man patiently collecting his haul in a bucket.41 In Agricola’s day, oil was regarded as very inferior to the metallic ores from which iron, gold and silver were extracted. There was little demand for it, but this started to change in the middle of the nineteenth century. The Industrial Revolution created a growing and increasingly wealthy population, which wanted a bright and clean artificial light source. ‘Rock oil’, as crude oil was then known, was just that, but it was in short supply and therefore expensive. Seeing the potential for profit, wildcat explorers began to search for new and bigger sources of this oil.
In August 1859, Edwin L. Drake, known as ‘The Colonel’, struck oil 20 metres below the surface on a farm in Pennsylvania. Attaching a simple hand pump to the well, he amazed onlookers by easily pumping oil from the ground. His find sparked a rush to Oil Creek that increased oil production from practically nothing, to three million barrels a year only three years later. Today global oil production stands at thirty billion barrels a year, a ten thousand-fold increase in only 150 years.
Finding that amount of oil has been and continues to be an extraordinary challenge. Explorers need to decide where to drill and how to develop the oil if found. They must do so while making a return on their investment and satisfying the desires of a host government and the needs of affected communities. All this must also be done safely, without damage to the natural environment and with some extraordinary technology.