The Most Important Resource for Our Future: Inexpensive Oil (but its not really available)

Our economy runs on oil. Most of the tractors used for growing food run on oil. Nearly all of today’s cars and trucks run on oil. It is popular to talk about changing to some other fuel, but the practicalities are that any such change will be very slow. There is a huge cost associated with replacing cars and trucks with vehicles using other fuels, assuming we could figure out the technology to do this.

Since 2005, world crude oil supply has bumped up against what seems to be a limit of 75 million barrels of oil a day. No matter how hard companies try to extract more crude oil, and no matter how high world oil prices rise, they seem unable to extract more than 75 million barrels a day (MBD).

World Crude Oil - Quantity Extracted and Price

Figure 1. World crude oil production has been bumping up against a limit of about 75 million barrels a day (MBD) since 2005, as oil prices have gyrated wildly. (EIA data)

The US Government is aware of this issue, and now issues data for Total Oil Supply. Total oil supply includes various other liquids that are somewhat like crude oil, including biofuels, natural gas liquids, and “refinery gain”. But even including the additional categories, growth in supply has been anemic. Oil prices started rising as early as 2004 because supply (whether defined as crude oil or more broadly) was not rising fast enough to meet increased demand around the world.

With world oil supply virtually flat, countries have had to share what oil is available. Since 1985, there has been a big shift in which countries are the “winners” in the way the world’s limited oil supply is divided (Figure 2).

Line graph of oil consumption by area, based on EIA data.

Figure 2. Growth in oil consumption has varied greatly in recent years. The Former Soviet Union’s oil use dropped off after its break up in 1991. Europe, US, Japan, and Australia showed modest growth until 2005, followed by a drop off. Consumption of countries in “Remainder” (which includes China, India, and oil exporting countries) has risen rapidly since 1985. (Based on EIA data)

Clearly the “winners” in the contest for who is able to buy the oil are the “Remainder” countries—countries like China and India and Korea, and the oil exporting nations.

Over the period 1985 – 2010, the grouping “Europe, US, Japan, Australia” experienced an average real GDP growth rate of 2.4%; the Remainder group experienced an average growth rate of 4.7%. The Former Soviet Union experienced a peak to trough drop in real GDP of 41% after its breakup in 1991. The grouping Europe, US, Japan, and Australia experienced a major dip in oil consumption and a serious recession in 2008-2009, while the Remainder countries continued to grow.

High oil prices are clearly a problem for oil importing countries, because funds that would have been used for discretionary spending suddenly need to be used for necessities—food that is grown and transported using oil, and gasoline used for commuting to work. It is precisely the big oil importing countries that have tended to have a problem with reduced economic growth when oil prices are high.

In my view, what the world needs now is inexpensive oil, and lots of it. What we need is enough inexpensive oil to bring oil prices back down to $20 to $30 dollars a barrel, like it was in the 2001 to 2003 period. If we had inexpensive oil in this large quantity, there would be plenty of oil to go around. It wouldn’t be only the oil exporters and the countries with large coal-based manufacturing industries that would be able to consume as much oil as they need for economic growth. Countries like Greece and Spain, which need low oil prices to stoke world tourism, would be able to consume their share of the oil as well.

One issue is of concern is the connection between economic growth and debt.

What happens if economy stops growing

Figure 2. Two views of future economic growth

If an economy is growing, as in Scenario 1, it makes financial sense to borrow money, even if it is necessary to pay it back with interest. Borrowing makes it possible to “pre-spend” a little of the economic growth that will be available in the future. This relationship is especially important for governmental borrowing, but it also plays a role for private borrowing.

If an economy is shrinking, it is hard to make a case for borrowing. In such a case, the future is likely to have less to offer than what we have today. This might happen if there is not enough oil to go around, and oil prices are very high (at least until recession hits).

A great deal has been said about decoupling economic growth from natural resource use. It is not clear to what extent this really is possible. We can move manufacturing to the Far East, and pretend that the resource use isn’t ours, but on a world basis, during the past decade, energy use has been rising as fast as world real GDP. This has happened largely because Asian growth in energy use has offset savings elsewhere.

Theoretically, if world oil supply is inadequate, we should be able to make substitutions that would work—either find a different liquid fuel to substitute for oil, or create new vehicles or machines that use a different source of energy than petroleum products. The problem is that making these substitutions is a slow, expensive process.

We are currently using millions of cars, trucks, trains, airplanes, boats, and machines that require petroleum products to operate. Most of them are nowhere near the ends of their normal lives, so replacing them would be expensive.

Liquid biofuels we have developed are expensive. To solve our problem, they really need to cost $20 or $30 dollars a barrel to make.

What the world really needs now is a huge supply of inexpensive oil. It is not clear where we will find it, however.

(Note: This post was written in response to a request by Business Insider that I write a short editorial in response to the question, “What is the most important resource for our future?” It covers some of the main points in my new academic article in the journal Energy, “Oil Supply Limits and the Continuing Financial Crisis.” That article is temporarily available free at this link, or this one.)

About Gail Tverberg

My name is Gail Tverberg. I am an actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change. Oil limits look very different from what most expect, with high prices leading to recession, and low prices leading to inadequate supply.
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64 Responses to The Most Important Resource for Our Future: Inexpensive Oil (but its not really available)

  1. Certainly inexpensive oil, but as far back as 1956 I encountered the claim – expressed by the McGill biologist N.J. Berrill – that the availability of phosphorus might place a limit on the ultimate human population.

    • There are actually any number of limits to human population, besides phosphorous–clean water, and too much pollution are high up there. Even if oil were free, we would quickly reach limits to growth. The point of this post is to get people who have not been thinking about the issue, thinking. In 1,000 words, a person can’t do much.

  2. There is an article in Onion today that is more than a little ironic: Scientists: ‘Look, One-Third Of The Human Race Has To Die For Civilization To Be Sustainable, So How Do We Want To Do This?’

    Saying there’s no way around it at this point, a coalition of scientists announced Thursday that one-third of the world population must die to prevent wide-scale depletion of the planet’s resources—and that humankind needs to figure out immediately how it wants to go about killing off more than 2 billion members of its species.

    Representing multiple fields of study, including ecology, agriculture, biology, and economics, the researchers told reporters that facts are facts: Humanity has far exceeded its sustainable population size, so either one in three humans can choose how they want to die themselves, or there can be some sort of government-mandated liquidation program—but either way, people have to start dying.

    • The Georgia Guidestones put it closer to 19 out of 20 people going out in the Big Liquidation.

      RE

    • one more thing pour Africans, they are not the ones putting all the stress on the planet

    • Is this article serious? I had never read the onion before. I think no matter what we do now population will decline, I don’t think it’s going to reach 9 billion by 2050. Life expectancy will probably be shorter due to lack of service and higher costs in hospitals and medicine, they are both energy intensive. Famine, riots in highly and densely populated areas where people depend 100% on the system to have their food, water and other basic needs. The task now is to manage a softer degrowth, but it won’t be accepted until reality kicks in. Meanwhile I would recommend only having one child if really desirable, adopting, or not having any. If I could apply a policy on this definitely would be only child and something like not prolonging life in serious chronic diseases after 70. I would be damn unpopular, but they will probably be there when reality kicks in.

      • No, the Onion does not write serious articles. I should have made that clearer for those who do not live in the United States. It writes what are intended to be humorous articles, but sometimes the articles have truths embedded in them that no one else would dare talk about.

    • sponia says:

      The really funny part is, they guessed too low. Actually, it’s closer to two out of every three people that have to die. Look at the guy on your left. Now look at the guy on your right. Both of them have to go, if you want to live.

      Not a very comfortable position to be in, for sure!

      But don’t get carried away by romance. You’re not going to see people dropping dead all of sudden, any more than they already are.

      What you will see is a drop in birth rates, instead.

      Anything less than replacement population means a drop in the number of living. A drop to zero birth rate will make the population fall pretty quickly. This is, I think I remember, what was observed in Russia after the economic troubles there last century.

      • sponia says:

        On Second (and third) consideration, I have to admit you’re going to see a lot more infant mortality, too.

      • I am guessing that deaths from epidemics will rise greatly. We won’t be able to keep spraying for mosquitos, so mosquito-borne illnesses will rise, for example. More and more people will drop out of the health care system. Dmitry Orlov has talked about how people just sort of disappeared in Russia after the collapse of the USSR, dying of various illnesses. I think some of this will happen elsewhere as well.

  3. We might need inexpensive liquid fuels to continue pursuing the industrial paradigm, but most of the stuff which came cheap and easily bubbling up in Jed Clampett’s back yard has already been burned up. Unconventional sources are expensive, as are synthetic alternatives which might be produced by algae or from sedge grasses.

    So since such inexpensive fuels do not currently exist and are constrained in production by EROEI, they aren’t going to appear out of thin air. Thus one can conclude that the industrial paradigm based on such liquid fuels will not be sustained, and an alternative paradigm which does not require such Inexpensive Oil will be pursued.

    Thus, Inexpensive Oil is not Important for our future, since our future won’t be using it.

    RE

  4. Brian Cohen says:

    I agree that to grow, the economy needs inexpensive energy. I believe that is your point. However, since this seems unrealistic given that the peak seems to have past, doesn’t it make more sense to suggest that to accelerate investment in alternatives, what we really need is “expensive” oil? Yes this could mean a painful transition period but wouldn’t this benefit the long term? More expensive oil can be achieved through higher carbon taxes (in exchange for reductions in other taxes such as income taxes)? I would then suggest that subsidies for renewables be removed. If the carbon taxes are high enough, renewables could compete on more equal footing and it will incent both people to conserve energy as well as the private market to invest in renewables without conflict from government.

    • I think that expensive alternatives have been vastly over-sold. They may be helpful in some instances to individual homeowners (for example, for use pumping water), but in terms of helping society as a whole, they don’t do much. They aren’t really renewable–they just last until they wear out, and you have to replace them using fossil fuels. They can somewhat replace electricity (until they break), but they don’t do anything to replace oil. The cost/benefit for society as a whole does not seem to be there.

      We need to start adapting to the conditions we will have in the future, not to some little add-on to today’s economy that calls itself renewable, but isn’t really. In my view, we would be better off figuring out where we need to be without oil, and working to deal with that, than kidding ourselves that some adjustments to our electric system will make a difference. (In the case of pumping water, we would be better off with a device that is sustainable with local materials–perhaps a small windmill.) The electric system will fail fairly quickly, in my view. Adding so-called renewables will do nothing to delay this failure, because they are only one part of this system, and are themselves subject to failure.

  5. Jan Steinman says:

    I’m glad you explained the intended audience. I was a bit incredulous, thinking someone needed to rebut your “what we need” assertion. :-)

    Think they will “get it,” or will they simply start calling for oil to be cheap again?

    We are currently financially entangled with someone who thinks that if he repeats a falsehood enough, it will somehow magically become true. I generally think of him as abnormal and deranged. But what if such behaviour is the “new normal?”

    • Shawn says:

      Hopefully people will “get it” but sadly most don’t. Gas and oil prices will rise.

      If they’re on the left, they’ll blame the “speculators.”

      If they’re on the right they’ll blame “regulations” and lack of drilling permits.

  6. Cheap oil, of course. And we also need another planet with lots of natural resources (perhaps two or three of them) or a mass suicide (Any volunteer?).

    Nice post. Again.

  7. Bob Carver says:

    Do we really want history to repeat, just like the dip in oil prices to $10/bbl in 1998 after the spike to $40/bbl in 1980? If we get a drop in oil prices which is not caused by viable alternative energy competitors, those alternatives will simply cease to exist, just as happened following the original Arab embargo. No, what we don’t need is inexpensive oil. We need to be forced by economic necessity to create the alternatives that will free us from our bondage to unstable and unfriendly sources of energy. Only expensive oil prices seem to be the right incentive to do this. Otherwise, we simply become lazy grasshoppers, unprepared for the next winter.

    • Actually, the alternatives that have worked through the ages are manual labor, with a little animal labor, water wheels, and small wind turbines mixed in. It doesn’t take terribly high oil prices to figure those out. We can aim to keep our current system going forever, but I don’t think we can do it.

  8. kiwichick says:

    cr#p

    what we need is to start facing reality

    that is that we live on a planet with limited resources and therefore limited capacity to sustain life, including human life

    we need to move towards stabilizing human population and then managing a controlled decline to a sustainable level of population which is probably less than 1 billion

  9. Bicycle Dave says:

    I finally finished “The Humans who went extinct – why Neanderthals died out and we survived” by Clive Finlayson who is an evolutionary ecologist with a Dr. of Phil. from Oxford and an expert on Pleistocene caves in Gibraltar. I highly recommend the book – here are a couple of snippets from the last two pages that should provide a little ammunition (and probably some annoyance) for several disparate POVs in recent discussions here:

    That very self-awareness gave humans their capacity for rational thought, to be conscious of the consequences of their actions, and the ability to remedy those that were detrimental in some way………………..If one thing makes us unique it is our awareness of our actions and our ability to change things if we choose to, but more often than not – we do not. Having spent our evolutionary lives trying to cope with change and finding ways of handling and cheating the unpredictable future, now that we have it in our hands to change the future we procrastinate or choose not. The reason lines in that internal tension in all of us that wrestles between self and our neighbour, between individual gain and the higher gains to be had from working in a team.
    ……..
    We have also seen throughout this book how we owe our existence to chance. From asteroid impacts to volcanic eruptions to simply being in the right place at the right time, we are here because of luck. It is easy to fall into the circular reasoning that we are here and therefore we are the product of successful genes. We should not delude ourselves. Our genes are successful, like those of other species that exist today, only to the extent that they have made it to this point………….And when it all comes tumbling down who will survive? There is enough in our story to suggest that it will not be those of us in the comfort zone, the auto-domesticated slaves of electricity, motor cars, and cyberspace, who would not last more than a few days without supporting technology. The tradition that produced the bureaucrat, the priest, and the king, generated communities of specialists, which was fine as long as the conditions were favourable. But when things get bad these societies of experts will become strained to their limits. The children of chance, those poor people who today must scrap for morsels each day without knowing when and where the next meal will come from, will once again be the most capable at survival. The innovators will once again win when the rapid and powerful perturbation that will be economic and social collapse, generated by the conservatives themselves, will ironically mark their own downfall. And evolution will take another step in some as yet unknown direction.

    • Bicycle Dave says:

      I should have noted: when the author says “conservatives” it is not in the conventional political sense – he means those people who are content with the established order and wish to preserve that way of life. As opposed to those people (who he calls innovators) that leave the relative comfort of a familiar habitat and venture into new territory that has unforeseen risks. And, only a few of these innovators tend to survive in their early stages – until they too become successful and conservative once again.

    • Thanks! There are a lot of interesting things out there to read!

    • Justin Nigh says:

      Hi, my name is Justin. I’ve been following this fantastic blog for awhile and would like to thank Gail for the work she’s doing and the stimulating conversation that gathers around it.

      Dave, your quote brings up an interesting point. Specifically this sentence, “The reason lies in that internal tension in all of us that wrestles between self and our neighbour, between individual gain and the higher gains to be had from working in a team.”

      While I wholly appreciate the affect on growth that fossil fuels have had, I’d argue the actual catalyst to growth goes much deeper and fossil fuels have simply accellerated this process. Through my years of studying eastern philosophy, particularly Advaita Vedanta (non-dualism), which in a nutshell proposes that all separation or differentation is illusion and the sense of a self separate from the objective universe is a cultural artifact, I’ve realised this to be the deeper source of our drive to grow and causes us to damage that which is perceived not to be part of our ‘self’ (ecosystem). While this has been a useful source of competition that has created many great ideas and technologies, it fails to recognise the connectedness of all things that is required to live a sustainable existence. When we fail to recognise this connectedness and create endless separation, we end up with the situation we have today where we’ve detached ourselves from nature and are living outside the system that sustains us. I believe most of us here agree this cannot continue.

      Modern physics appears to back up the connectedness of all things, where phenomenon is influened by the observer. We live in a participatory universe where relationship isn’t just a critical element, it’s all that there is. Without relationship, without an observer, it becomes apparent that only potential exists. It’s well understood that revolutionary scientific findings take time to filter into mainstream understanding and application. We can only hope this happens sooner than later. Dave, while your quote references the tension within us caused by the current worldview of the separate self, I don’t believe it is something that is hardwired into human nature. In large part it is a story we’ve told ourselves and the story is reinforced in many ways. If we want to change our world we need to change the story. If you’re familiar with Joseph Campbell’s work you’ll know the power that story can exert on the human psyche.

      So while I’ve understood the separate self to be at the root of many, if not all, of our big problems as a species for some time, I haven’t understood the role money plays in all this. That is, not until I came across Charles Eisenstein’s work, and I have to thank Sandy Steubing for bring my attention to it in the previous post “More Reasons Why we are Reaching the Limits to Growth.” Eisenstein recognises the important role money plays in organising and focussing attention into activity and as a medium for exchanging goods and gratitude. However, we have fashioned money in a way that it reflects our misunderstanding that is the separate self. Our exchanges of money for goods and services lacks any lasting connection with the people involved. I pay for something you give me and the relationship ends there. He suggests there are alternatives that allow for greater connectedness, such as gift economies, which are beyond the scope of this post but you can find out more by looking up his work. He also goes into the issue of Usury and it’s ability to further concentrate wealth into the hands of the few who have money simply by virtue of having it while also driving infinite growth due to the fact that debt is always greater than money generated through effort and must be repaid with future activity.

      The point I hope I’m making is, regardless of fossil fuels or some other form of abundant, or even infinite, energy, the growth system will continue unless we address the fundamental error of believing the separate self is the nature of our existence while failing to recognise the connectedness and interdependance of all things.

      A few here have made the point, be the change you wish to see in the world. In light of the above, I couldn’t agree more. If we can rethink our use of money into a mechanism that reflects the truly connected universe, given the pervasiveness of money in all that we do, it will be a powerful catalyst for change. If we can understand the limitations of the story of the separate self we may be able to tell a new story that is more useful for us and the species we share the Earth with and are dependent upon for our survival. If the story is followed by action, others will see it and begin to tell the story to those around them and this is how we will repair the wound. Whether this can happen before we experience a painful die off or not only time will tell.

      • Bicycle Dave says:

        Hi Justin,

        I’m sure Gail would not object to welcoming you to her blog; and thanks for the thoughtful comment. Just as a little anecdote to your:

        When we fail to recognise this connectedness and create endless separation, we end up with the situation we have today where we’ve detached ourselves from nature and are living outside the system that sustains us.

        Before I stopped taking vacations abroad, I bicycle toured many times in Ireland and France either alone or with a small group of friends (wife included). The difference between such touring by bicycle versus motor vehicle is quite remarkable. Besides the environmental intimacy associated with traveling the back roads in all weather; there is the cultural ease of connecting with people along the way. There is something about touring on a bike that seems to give the local folks complete license to immediately engage you in conversation. A person touring by car or bus seldom experiences this.

        My bicycle touring experience has been a major factor in my dislike for cars. Cars isolate people and contribute greatly to the “endless separation” you mention. IMO, our car culture is a symbol of the incompatibility of our economic systems with realities of our earth’s biosphere.

      • Thanks for your comments!

        Each religious group has its own view of people’s relationship to each other and the world. Capitalism is in a sense a form of religion, and it reinforces the religious views of the self being all-important. Investment in education seems to act to differentiate among people.

        Ancient Jewish teachings seem to put less stress on the individual. For example, the Old Testament does not seem to talk about individual salvation–instead salvation for the people of Israel as a whole.

        I ran across Gift economies quite a while ago, and wrote a post about them. I think they will be increasingly important.

        • Justin Nigh says:

          Thank you for the anecdote Dave. I too enjoy biking for the same reasons; open connection with the natural surroundings and people. Further to your point, one only has to look to ‘road rage’ as an effect of the isolation created by car driving to understand it’s deteriorating effect on the social environment.

          Gail, I look forward to reading your post about Gift economies. I just want to add the following, for the atheist readers. While it’s true many religions contain concepts of non-dualism, the discovery is not isolated only to spiritual understanding, but also through ecology, physics, and even organic gardening. In the latter, the organic practicioner views the garden as the sum of it’s parts and must welcome diversity and connected processes to ensure success. For example, flowers must be grown alongside produce in order to attract predator insects and pollinators, and soil health must be maintained through nourishment by the plants grown in it (growing green manure crops that are turned into the soil) and in turn the plants are nourished by the soil. Connectedness of all things is not just a belief system but an observable phenomenon and the inherent nature of things.

          You are absolutely correct about Capitalism; it is just another expression of the existing predominant belief in the dualism worldview. If we can instead model our institutions and economies on the connectedness of natural systems we will have a much more resilient and sustainable system. Fortunately, I see the connected worldview being expressed more frequently. One example of this (see http://www.getstoried.com) is the conscious use of narrative or story in marketing which emphasises the involvement of the reader, not just the storyteller, as crucial to customer engagement. This type of communication will only increase in relevance as our language in it’s current use continues to lose relevance.

  10. More on phosphorus (and other resources) – including Aldous Huxley 1928. I has the pleasure of meeting Julian Huxley at McGill mid 50′s and Aldous late 50′s at a weekend symposium led by Robert C. Cook of the Population Reference Bureau. Population has roughly doubled since that time

    http://energybulletin.net/node/52550

  11. Jean-Luc says:

    A “short term” fix could be to use natural gas (especially in the US). In Thailand, they have started to build CNG stations in 2007, and I now see many vehicles using CNG, mainly tricks but also cars. You don’t need to change the vehicle, but just buy a 2000 to 3000 USD conversion kit (for cars). The largest cost is the infrastructure.

  12. Perhaps very short term?? Marketed production of natural gas in the US is only slightly greater than in 1973. The US is not currently self sufficient but is a net importer of natural gas from Canada. Production might be insufficient to fuel more than a small fraction of North American vehicles See:

    http://www.theoildrum.com/node/8859#more

    especially the posts near the end of the discussion

    • Jean-Luc says:

      I had not seen a long term chart of US production. That’s interesting. I had only seen a 10-year chart previously, and I keep reading there is so much supply (and reserves) of natural gas (that’s to shale gas) in the news, explaining that’s why the NatGas price is depressed.

      My brother (who works for GDF in France) told me that fracked natural gas is of low quality and cannot be used in power plants. I’m not sure if it could be used for transportation.

      Nevertheless, proven natural gas reserves appear to have nearly doubled since 1995 (http://energyforumonline.com/3341/proved-u-s-dry-natural-gas-reserves-1925-2009/), so increased production would most likely be a case of adding more rigs and higher price, as Natgas would have to be more expensive for shale gas to be profitable, but even if the price doubled or tripled that would be cheaper than oil per btu (assuming $0.79 per term – http://pelletheat.org/pellets/compare-fuel-costs/)

      • There is a lot of controversy about how much it really costs to extract natural gas using fracking. Part of the controversy relates to how long the benefit of fracking can be expected to last–will it need to be redone for the well to continue to produce for 30 or 40 years, or can it be done once. Also, how long will these wells produce profitably–5 years or 40 years or something in between? And part of the controversy relates to whether later drilled sites will be as productive as current sites. In other words, “Does current technology allow operators to pick out the best sites, and drill on them first?” I don’t think anyone thinks shale natural gas is profitable at US current prices.

        The question is how high prices would need to be, to be profitable. A recent price comparison shows that for the month of December, the average natural gas price per million Btus varied greatly around the world, with the US at $3.16; Europe at $11.53; and Japan at $16.50. If US natural gas prices were as high as those in Japan and Europe, shale gas likely would be profitable, even with Art Berman’s assumptions. The big increase in cost would present a price shock for US consumers, though.

      • Shawn says:

        And the previous reserve estimates in the US were inflated quite a bit…

        http://bit.ly/A0cYjG

    • A big reason for the current glut is the unusually warm US winter. We can’t count on that for long!

  13. (Note: This post was written in response to a request by Business Insider that I write a short editorial in response to the question, “What is the most important resource for our future?”-Gail

    Given that you understand the nature of the problem as well as you do, I was a bit surprised after reading both the “short form” response to BI as well as the full article with all the appropriate Charts and Graphs.

    Its pretty clear from your own analysis that accessing cheap fossil fuel energy is not possible without some major technological improvements nowhere on the Event Horizon here for the credit problems that decreasing cheap Oil reserves manifest.

    That being the case, Oil cannot be seen as the “most important resource for our future” since in all likelihood and with the best available analysis to date (your own included) cheap Oil or synthetic liquid fuel substitutes simply will not be available. Given that knowledge, what ARE the most important resources?

    The most important Resources is seems to me are Low Population Land Masses with good Arable land and Water Resource first. After that, the presence and ability to breed up appropriate Animal Labor to replace the Tractors and the the Truck in production and local distribution of the Food resource. After that, the Human Labor and Ingenuity to build and develop more small scale Energy Harvesting through such applications as Stirling Engines, Micro-Hydro, Wind Pumping of water, etc.

    The Oil economy is clearly reaching its Limit to Growth, and it must be substituted for with what available technologies we do have which are already PROVEN to work. If some new ones come online, all to the good there, but you canot COUNT on the Techno-Cavalry riding to the rescue here in the Nick of Time. So the Resources MOST important for our Future are NOT Oil or Fossil Fuel related, they are the resources which do not need or use those technologies. Until people understand they have to be abandoned, we cannot overcome this problem. It is a false hope to put cheap Oil forth as the most Important Resource. Its not important at all, because it simply will not be available under almost any scenario you can conjure up here, and your own research SHOWS that.

    RE

    • I am sorry if my article was confusing. I meant to make it clear that we really don’t have a solution for the future of 7 billion people.

      If we had many fewer people, then fresh water and forests and soil would be what would sustain us, as they have for the last 200,000 years.

      • Its confusing because the thesis is contrapositive to the title. The Title indicates Inexpensive Oil is the most Important Resource for the Future, the body of the article (the long one in particular) establishes the opposite fact, that Inexpensive Oil is unlikely to be accessed.

        If you had had simply titled the article soemthing like “The Absence of Inexpensive OIl is the most Important Resource Constraint for the the Future”, you would have had a congruence between the Title and the Thesis.

        Anyhow, I am nitpicking here I guess. I just think it is unfortunate because many people will read this and conclude that if we just “Drill Baby Drill” we can make Oil Cheap again and thus afford an unaffordable future.

        Far as no Solution, you state the solution in the passive voice. The solution is massive population reduction. The real issue here is confronting how you reduce a population of 7B to a sustainable level over the time frame that cheap Oil dissapearance will occur. Confronting that question has so many morally repugnant pitfalls nobody want to really address it. That is why you get your Extend and Pretend.

        RE

        • There really is no acceptable solution is the problem.

          • Owen says:

            One third is too few. 6 billion have to die.

            This will be deemed acceptable by the 1 billion remaining.

            If you’re an American, the best way to achieve this is via military force, with “best” being defined as yielding the highest probability of the American 300 million disproportionally avoiding the 6 billion deaths soon upcoming.

        • A Morton’s Fork. However, the fact that the solutions are all unpleasant does not mean you throw up your hands and give up. You simply have to choose the least unpleasant among bad alternatives. Just people do not want to face down the ethical questions, and won’t until they are forced into it. By that time, its too late to choose the alternative, it chooses you.

          RE

  14. Peter Staudt-Fischbach says:
  15. Shawn says:

    I’m curious about what you think of the latest IEA numbers which indicate we’re now producing over 80 mb/d.

    http://omrpublic.iea.org/currentissues/full.pdf

    • The IEA numbers are not comparable to the 75 million barrel a day figure because they relate to a different grouping of products, so the 75 million barrel a day limit for crude oil number still holds. (There are several different ways of counting “oil” or “liquids”. Depending on what all is included in the definition, you get very different numbers.) The point is the same, regardless of which way oil is counted. Oil price is very high, in part because we are not extracting enough and in part because much of the easy to extract oil is already gone, so we have had to move on to the expensive-to-extract oil.

      Even if crude oil should go above 75 million barrels a day, say to 76 or 77 million barrels a day, the likelihood is that oil prices would remain very high–a serious threat to the economy.

  16. If we cant see other way for our civilization then plenty cheap oil, it does not mean thath there is one.

    Imagine that in 10 years humans discover teleportation machine which use very little energy. Then the current transportation system dissapears except getting to closest teleporter.
    Heating could be realised by sending water to remote desert, and gettig heat from it.
    So we would need a small fraction of oil/coal/etc.
    Bussiness as usual could go almost forever after conquest of the galaxy:)
    I know that this is Science Fiction but there can be other revolutionizing things discovered.

    The thing is if we will have no such revolution before crushing on energy deficit(or other limit) then the Maya scenario seems probable.

    • I think what happens is that we are reaching Limits to Growth in many ways. If we manage to bypass one limit, then another limit will hit us much more quickly. More cheap oil is likely to mean more climate change issues and more pollution issues, for example. The amount of soil for food does not go up either, so that is another limit, if population continues to rise. All of irrigation we do leads to greater soil salinity, and less productivity.

  17. John Griscavage says:

    Gail, how does this issue dovetail with the reality that the U.S. has been subsidizing the growth rate of the least educated and least valuable members of society (welfare) for what, seven decades now? Or is it longer?

    Seems to me that a realistic conversation needs to be had about why the heck supporting the growth rates of the lower and skill-less, value-less class is good policy. Doesn’t seem like it’s helped many get out of poverty…no, it seems like it’s just created MORE poor. Come see Oakland or go to North St. Louis if you want examples.

    Of course, the extremely religious on the right and the “social justice” on the left will both scream bloody murder. Neither of them really live in the real world though and are both equally unrealistic and ignorant. Oh, I know, I’m racist. That’s the popular, rhetorical and emotional claim, right?

    • Our medical system has definitely done its best to put an end to “survival of the fittest,” and I think that this may be a problem. I am not sure least educated is necessarily a problem, in and of itself. This may simply reflect a problem of circumstance. Furthermore, today’s education may be close to worthless in some respects.

      It would be a lot easier to have enough resources for everyone if there were fewer people. I don’t have a good solution for the general overpopulation issue, though. Our parents thought they were doing the right thing, having as many children as they did.

  18. “It would be a lot easier to have enough resources for everyone if there were fewer people. I don’t have a good solution for the general overpopulation issue, though. Our parents thought they were doing the right thing, having as many children as they did.”-Gail

    Agreed, solutions become more possible the fewer the people you deal with in the total system.

    I do realize I am pretty much the only person here at the moment who is taking the Morton’s Fork at its face value and presents this problem not as an Energy Resource problem, but rather a Population Reduction problem. I myself am Tiptoeing around the problem because of all the “Monster” issues you get when you try to conjure up ways to do efgfective population reduction over fairly short timespans.

    This is not my Blog and I will not examine this issue unless its the direct Topic of a post here, rather than just a tangential issue. There are however choices that can be made which are fair and equitable. Unpleasant choices to be sure, but less unpleasant than some other choices in the Morton;s Fork. If you cannot discuss them, you cannot examine the whys and wherefores of why these choices might be better or worse.

    There are solutions. Just not solutions people are comfortable talking about.

    RE

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  20. Don Stewart says:

    It seems to me that there are some underlying assumptions that most people make that are questionable:
    (1) It takes a lot of non-human energy to grow the food to feed ourselves. Not true. Read Living The Good Life by Helen and Scott Nearing. Pay particular attention to their reasons for not using draft animals.
    (2) We have to have jobs. Forget it. There won’t be many paying jobs.
    (3) We have to be self-sufficient. Forget it. Humans are social animals and are designed to cooperate with others in small groups (e.g., tribes, extended families).
    (4) We have to pay back our debts. Forget it. The Revolution will happen one way or another.
    (5) We can live off our savings. Forget it. See number 4.
    (6) Our greatest assets are things we can count. Nope. Greatest assets are good health, willingness to work, ability to find pleasure in meaningful work, ability to produce the necessities of life, and a wide comfort zone (as opposed to a thermostat controlled environment).
    (7) Technology will save us. Nope. Technology has not made us any happier. Just more distracted. The Sermon on the Mount or Buddha’s great insights are just as valid as they ever were.

    I will admit that the transition period is going to be quite stressful. The French Revolution wasn’t fun after the first few days. You may be lucky or you may be unlucky. That’s just the way it is.

    Don Stewart

    • Thanks! I am afraid I am not going to have time to read all of the books people recommend, but I did read some of the reviews of the Helen and Scott Nearing books. They sound like interesting folks, with some interesting views.

      • Don Stewart says:

        Gail
        I will tell you briefly about the Nearings. They started to subsistence farm during the Depression. First in Vermont, then in Maine. They developed a system which allowed them to work around 24 hours per week, with considerable travel in the winter months. They built buildings of stone because stone was maintenance free. They did not use draft animals because draft animals required food and human care (about a third of farmland was used to feed draft animals, at that time). They mostly ate what they grew. They did have a pickup truck, which they used to haul supplies from town. Their cash crop was maple sugar (boiled down maple syrup). Sugar, of course, is easily transported and easily stored. They believed that a communist community would be able to live more easily, but were never able to actually convince their Yankee neighbors to go along. So they were fundamentally self-sufficient while devoting a great deal of time to artistic and social pursuits. Both were in excellent health until they were over 90. Scott began to feel useless when he was over 95, and essentially starved himself to death.

        The Nearings became briefly famous in the 1970s when ‘back to the land’ people sought them out. Their books are out of print, but you can find used copies. They paid a great deal of attention to conservation of resources and maximizing the effectiveness of human labor.

        Don Stewart

        • Owen says:

          Factoid re: draft animals.

          A team of oxen can plow one acre of land in 8 hours. Oxford University was named because it was at an oxen ford. Ox owners rented out the animals to local farmers and then did upkeep of the asset in winter in order to again generate rental revenue with them in spring planting and fall harvests. They were very expensive and farmers usually didn’t own them. They rented.

          In contrast, a 400 horsepower John Deere can plow that acre in 2.3 minutes. This is required for 7 billion people.

  21. Arthur Robey says:

    The underlying assumption of the Limits to Growth is that we are limited to this planet.

    If we assume that we are limited to this planet then we will have to reverse all our moral principles. We must make death a sport, sexual perversion a virtue. We will have to make life a privilege not a right. Every infant must have be screened for defects. Only the perfect will be allowed to survive infancy. And then only on sufferance. Infanticide will become an art form.
    War has to be encouraged. Females have to be put on the front line as it is wombs that make babies. The more wombs we destroy the better.

    Faced with these realities, wouldn’t it be a good idea to re-investigate Dr Gerard O’Niell’s business plan to settle the Legrange Points 4 and 5?
    Or am I the only sane person on the entire planet? This is a moral imperative. To fail to embrace it is immoral. Please don’t whimper that it is all too hard. Such self-pitying writhings fill me with loathing.

    Perhaps the gulf that separates me from the rest is a species barrier. We will see you extinct.

    • Colin McKiernan says:

      Arthur, you have succumbed to a tyrannical poverty of imagination that seems to be epidemic. Not least your locus on the other side of a “species barrier”? What? And, I’ll say, you seem to approach with relish and facility a ghoulish math dubbed “reality”. Bracing stuff. If this is what passes for Thinking, then there will be a fight, no doubt.

      Sending people into space is not a grand solution because it is not possible for any but a tiny number nor is it viable for any duration or for a price that may be paid; it will not relieve but exacerbate resource depletion and habitat destruction here, on our real home. It is in fact escapism and fantasy, an abrogation of genuine responsibility. Nuces relinquere…On second thought, let’s send any who wish to into the final frontier–you first.

      What’s hard is to think and act with modesty and restraint: use less, breed less and attempt a softer landing. It may not happen. But a worst-case scenario involves destroying utterly the conditions for life on this planet for us and every other species in service of dubious and plainly unattainable ends. I choose humanity, humans and Earth.

      • Bicycle Dave says:

        Hi Colin,

        I agree with you. The planet that has the most potential for supporting homo sapiens is called “Earth”. As much as I admire the work of Stephen Hawking, this idea that he supports space colonization is very ironic – what his is really saying is that humans on this planet are toast because of our stupidity – he is the ultimate defeatist in this regard. Truly ironic for a guy who has personally never accepted defeat from his afflictions.

        What else is ironic about the space colonization idea is the fact that any effort with even an infinitesimally small chance of working would require (at least) three things: 1- a recognition that humans are rapidly destroying planet earth. 2 – that preserving a tiny remnant of the human species on some distant planet was our best plan. 3 – that we would be willing to further destroy our resources here on earth to fund/enable this plan – a kind of last-ditch, hail-Mary sort of thing. I would think that if we collectively came to this sort of thinking we might also come up with plans to save planet earth instead of supporting the extraterrestrial crapshoot.

        I guess Arthur’s line of thinking says a lot about reason we are in this predicament.

        • David F Collins says:

          Valid points, well expressed, Dave!

          Anybody want to figure out the energy requirements of getting humans, plus the resources sufficient to support them in a style they would like to get accustomed to, to slip the surly bonds of Earth? All things considered, or at least all that can fit into my limited intellect, I find the bonds of earth to be a warm, loving embrace, not surly arrogance.

          • Justin Nigh says:

            Perhaps Arthur’s comment was intended as sarcasm, in which case what I’m about to say can be ignored.

            Both Dave’s have correctly expressed the flaw in any plan to save ourselves through escaping the Earth. The underlying principle of this plan is the same that requires such a plan in the first place, which goes something like this. “Oh well, we’ve buggered the planet so we’ll just throw it away and get another one.” Where does this story end? Do we ‘use up’ the next planet too and keep moving along, leaving a wake of destruction behind? Is that really the legacy we want to leave? If so, there’s not much point in existing at all.

            Sorry Arthur, I’ve seen our potential and having seen it, can’t be convinced otherwise. Human’s are not by nature as you’ve described. We’re just acting out a story that has exceeded it’s best before date. All stories have a beginning, middle and end. We’re seeing the end of this story and I plan to be involved in creating the new story of humanity, right here on Earth.

    • Cue Margaret Sanger, cue the Eugenicists here.

      Population Reduction along Eugenics lines has untold political consequences to it, and its not even all that clear what you would want to select for either.

      In the near term, the economic drivers will determine the population reduction. Access to Medical Care will become restricted to only those with economic wherewithal to afford it, and ost Old folks will die earlier than they currently do in Industrialized countries. Similar Triage will occur amongst Infants, as those with extreme brith defects will not be supported.

      Both phenomena will make a dent in the current Birth-Death equation, but unlikely to be sufficient overall to reduce Global Population “naturally”. The next most logical reduction mechanism and that which is pursued by all cultures facing resource constraints is abandonign the Old People. Inuit up here in Alaska historically speaking would leave old folks to die by packing up and moving on while leaving them sleeping in their Igloos. A progressive age restriciton on medical care seems likely here which will reduce the burden of ageing people reuqiring extreme medical supports to stay alive. here in the FSofA, you probably could make the Medicare system solvent at the moment is you simply withdrew all Medical treatment for anyone 70 and older, and that is likely to occur down the line.

      In fact, getting any Medical treatment at all for anybody is going to become increasingly restricted. Just getting Insulin for diabetes problems will be hard. A diabetic with no access to Insulin dies fast.

      Most of the initial Die Off is liekly to come from the Oldest members of the society. As deprivation becomes more extreme, Infanticide will be the next method or population reduction. On both ends, you contract until you can reach a sustainable level. Its overall pretty fair, although those with more economic resources at the far end tend to live longer. Stil the collapse of complex medical interventions will make it ever more difficult for even the wealthy to buy the medical care nedcessary to live a life into the 80s and 90s.

      Unless there is a major Death Vector such as a massive Epidemic with high infection and mortality rates which intervenes, the population reduction will come mostly at the top end as old people are not supported, and some at the low end as infants are aborted or exposed as necessary. The Population will contract in this way until it can achieve a balance with the available resources. Its likely to take a while to play out in totality, and the absolute number at which it drops to is not determinable at this point. The progress though is..

      RE

      • Owen says:

        As I say above, population reduction is best done via military force. This ensures the military winner is among the remaining 1 billion.

        A uniform die off of 6 billion people would be 263 million Americans dead, over a decade or two. This would put the US population at 53 million, about 1890′s level.

        There is no way in hell that any US politician of any party is going to tolerate this when he knows that he can achieve disproportionate American survival by simply suppressing competing oil consumption via military force.

        • Die off is not likely to be uniform in any case. Its likely to hit the highest population zones with the least resources hardest. Japan, China and India are the most likely to take disproportionate amount die off.

          Utilizing military force doesn’t change the outcomes at all really, just changes the vector. In any case, the Ruskies and the Chinese will get in the act also and most of the big hardware will be down the bottom of Davey Jones Locker before the die off is even 1/2 complete.

          RE

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