Is the Great Recession Only the Beginning? Economic Contraction in an Age of Fossil Fuel Depletion and Ecological Limits to Growth

Abstract

The conventional explanation for the “Great Recession” is that a pro-business administration advanced deregulatory policies in the mortgage industry and broader financial industries, leading to a predictable but temporary economic recession. In contrast, peak oil analysts find a deeper root cause of the Great Recession. Secure and reliable access to cheap fossil fuels is fundamental to our industrial and post-industrial world, and the rising costs of fossil fuels due to post-peak depletion in the face of escalating demand make difficult the realization of economic growth. However, as individuals, companies, and lawmakers insist upon continued economic growth, these actors pressure lawmakers to endorse riskier and more shortsighted techniques aimed at extending domestic and global economic growth a little bit longer. The Great Recession can be understood in part as a consequence of US consumption of massive quantities of petroleum at a moment in history during which global oil production approached and surpassed its peak.