Low Oil Prices Lead to Economic Peak Oil

We have all heard the story about oil supply supposedly rising and falling for geological reasons. But what if the story is a little different from this–oil production rises and falls for economic reasons? If this is the issue, it doesn’t really matter how much oil is in the ground. What matters is if economic conditions are “right” for continued and rising extraction. I have shown in previous posts that oil prices that are too high are a problem for oil importers while oil prices that are too low are a problem for oil exporters. As a result, oil prices need to be in a Goldilocks zone, or we have serious problems, of one sort or another.

As long as the price of oil keeps rising, there is at least some chance the amount of oil extracted each year will keep rising, because more oil resources will become economic to extract. The real problem arises when oil price falls back from a price level it has held, as it has done recently, and as it did back in July 2008. Then there is a real chance that investment will become non-economic, and because of this, oil production will fall.

Figure 1. World crude oil price and production, based on monthly EIA data.

Figure 1. World crude oil price and production, based on monthly EIA data.The corresponding price in late April is approximately $100 barrel, so is even lower yet.

Oil prices play multiple roles:

  1. High oil prices encourage extraction from more difficult locations, because the higher cost covers the additional extraction costs.
  2. High oil prices allow exporters to have adequate money to pacify their populations, even if their oil exports have been declining, as they have been for many exporters.
  3. High oil prices allow funds for investment in new oil fields, as old ones deplete.
  4. High oil prices tend to put oil importing countries into recession, because it raises the costs of goods and services produced, without raising the salaries of the workers. In fact, there is evidence that high oil prices lower wages (both directly and through lower workforce participation).
  5. High oil prices make countries that use large amounts of oil less competitive with countries that use less fuel in general, and less oil in particular.

When oil prices decline, it is evidence that Items 4 and 5 above are outweighing Items 1, 2, and 3.  This tips the scale in the direction of a fall in oil production.

Debt also affects oil prices. As long as investors have faith that businesses can make money, despite high oil prices, they will continue to borrow to expand their businesses. This additional debt helps drive up demand for goods and services of all kinds, including oil, so oil prices rise. Also, if consumers are able to borrow increasing amounts of money, this also drives up demand for goods that use oil, such as cars. But once the debt bubble bursts, it is easy for oil prices fall very far, very fast, as they did in 2008.

If we look at the 2008 situation, oil limits were very much behind the overall problem, even though most people do not recognize this connection. It was the fact that oil limits eventually led to credit limits that caused the system (including oil prices) to crash as it did. High oil prices led to debt defaults and bank write offs, and eventually led to a huge credit contraction in economies of the developed world. This credit contraction affected not just oil demand, but demand for other energy products as well.

The problems of the 2008 period were never really solved: the lack of growth in world oil supply remains, and this lack of growth in world oil supply continues to hold back world economic growth, particularly in developed countries. We recently have not been feeling the effects as much, because with deficit spending, the problems have largely moved from the private sector to the government sector.

The situation remains a tinderbox, however. The financial situation is propped up by ultra-low interest rates, continued government deficit spending, and Quantitative Easing. In a finite world, debt growth cannot continue indefinitely. But if debt growth permanently stops, and switches to contraction, we would end up in an even worse financial mess than in 2008. In fact, such a change would very likely to would lead to a contraction of “Limits to Growth” proportions.

In this post, I will explain some of these issues further.

The Rise and Fall of Oil Prices in 2008

In Figure 1 (near the top of this post), a person can see huge swings in oil prices, with virtually no change in oil production. If the scale on oil production is modified as in Figure 2 below, a person can see that indeed, oil prices and oil production do to some extent vary together.
Figure 2. World crude oil production and Brent oil prices, based on monthly EIA data, with different scale for oil production.

Figure 2. World crude oil production and Brent oil prices, based on monthly EIA data, with different scale for oil production.

If we look at world oil production and price between January 1998 and July 2008 on an X-Y graph, we see that as long as oil demand stayed below 71 million barrels a day, oil price stayed low (Figure 3, below). But once demand started to push above that level, oil price started to rise rapidly, with little increase in production. It was as if a brick wall on oil supply had been hit. No matter how much the oil price rose, virtually no more production was available.

Figure 3. X-Y graph of world of monthly world oil production and price data, based on the EIA data shown in Figures 1 and 2.

Figure 3. X-Y graph of world of monthly world oil production and price data, based on the EIA data shown in Figures 1 and 2.

If we look at an X-Y graph of the non-OPEC portion of oil supply, we see that the situation was even worse for the non-OPEC portion (Figure 4, below). The amount of oil that could be produced at a given price had actually begun to fall back. While in 2003 and 2004, non-OPEC had been able to produce 42 million barrels a day for only $30 barrel, by 2008, non-OPEC could not reach 42 million barrels a day, no matter how high the price. It looked as though non-OPEC had hit “peak oil” production. Geological limits appeared to have the upper hand.

Figure 4. X-Y graph of world of non-OPEC world oil production and price data, based on EIA data.

Figure 4. X-Y graph of world of non-OPEC world oil production and price data, based on EIA data.

Fortunately, during this period OPEC was able to raise its production somewhat, in response to higher prices, as illustrated in Figure 5, below. Between July 2007 and July 2008, it was able to raise oil production by 2.1 million barrels a day, in response to a $56 dollar a barrel increase in price in a one-year time-period. (The small increase in response to a huge price rise suggests that OPEC’s spare capacity was not nearly as great as claimed, however.)

Figure 5. X-Y Graph of OPEC oil production and price, based on EIA data.

Figure 5. X-Y Graph of OPEC oil production and price, based on EIA data.

What brought about the collapse in oil prices in July 2008? I believe it was ultimately a financial limit that was reached that eventually worked its way to the credit markets. Once the credit markets were affected, individuals and businesses were not able to borrow as much, and it was this lack of credit that cut back demand for many types of products, including oil.

The way this cutback in credit came about was as follows: Oil prices had been rising for a very long time–since about 2003, affecting the inflation rate in food and fuel prices. The Federal Reserve Open Market Committee tried (unsuccessfully) to get oil prices down by raising target interest rates. I describe this in an article published in the journal Energy called, “Oil Supply Limits and the Continuing Financial Crisis,” available here or here.  The combination of high oil prices and higher interest rates led to falling housing prices starting in 2006 (big oops for the Federal Reserve), and debt defaults, particularly among the most vulnerable (those with sub-price mortgages). As early as 2007, large banks had large debt write-offs, lowering their appetite for more debt of questionable quality. Total US household mortgage debt reached its maximum point on June 30, 2008, and began to fall the following quarter.

Figure 6. US Mortgage Debt Outstanding, based on Federal Reserve Z1 Report.

Figure 6. US Mortgage Debt Outstanding, based on Federal Reserve Z1 Report.

By July 2008, the financial problems of consumers in response to high oil prices and falling housing prices had transferred to other credit markets as well. Revolving credit outstanding (mostly credit card debt), hit a maximum in July 2008, and has not recovered (Figure 7 below). (July 2008 is exactly the same month as oil prices began to fall!) Non-revolving credit, such as auto loans, hit a maximum in the same month.

Figure 7. US Revolving Debt Outstanding (mostly credit card debt) based on monthly data of the Federal Reserve.

Figure 7. US Revolving Debt Outstanding (mostly credit card debt) based on monthly data of the Federal Reserve.

Credit issues kept getting worse. The Federal takeover of Fannie Mae and Freddie Mac took place in September 2008, as did the bankruptcy of Lehman Brothers. By late 2008, cutbacks in credit had spread to businesses including all sectors of the energy industry. I wrote an article on December 1, 2008, documenting that credit issues led to lower prices not only for oil, but for coal, natural gas, nuclear, and renewables as well.

The reason why a cutback in credit availability is a problem is because it is very difficult to buy a new car or home, or to finance a new business operation, if credit isn’t available. In fact, the amount a business or family can spend depends on the sum of their income during a period, plus the amount of additional debt they take on during that period. If the amount of debt outstanding is going down, then, for example, old credit card debt is being paid down faster than new credit card is being added, and the amount currently spent is lower.

The Federal Government tried to fix the situation by running larger deficits  (Figure 8), starting the very next quarter after oil prices hit a peak and started declining.

Figure 8. US Federal Debt, from Federal Reserve Z-1 Report. (Excludes debt owed to Social Security and other Federal programs.)

Figure 8. US Federal Debt, from Federal Reserve Z-1 Report. (Excludes debt owed to Social Security and other Federal programs.)

Oil prices rose again starting in 2009 as demand outside the US, Europe, and Japan continued to grow. By 2011, high oil prices were back. The economies of US, Europe and Japan did not bounce back to the kind of economic growth most expected, because at high oil prices, their products were not competitive in a world marketplace that relied on an energy mix that was slanted more toward coal (which is cheaper), and also offered lower wages.

In 2013, world oil supply is still constrained.

It is easy to get the idea from news reports that everything is rosy, but the story presented to us is painted to look much better than it really is. Production from existing sites is constantly depleting. In order to replace declining production, huge investment must be made in new productive capacity. It is as if oil producers must keep running, just to stay in place.

Part of the problem is that the cost of new capacity keeps escalating. I have called this the Investment Sinkhole Problem. The Financial Times describes the problem as Energy: More Buck, Less Bang.

Cash flow has historically financed much investment. Now we read, Energy Industry Struggling to Generate Free Cash Flow.

Many naive people believe Saudi Arabia’s stories about their “productive capacity” of 12.5 million barrels a day, but their maximum crude and condensate production in recent years has been only been 10,040,000, according to the EIA. Their recent production has been only a little over 9 million barrels a day in recent months, according to OPEC Monthly Oil Market Report.

Iraq is supposed to be the great hope for future oil production, yet it increasingly seems to be stumbling toward civil war.

Russia is now the largest oil producer in the world, with a little over 10.0 million barrels a day of crude and condensate production.   According to a Russian analyst,”Gas condensate production is the real driver behind the [recent] growth. Crude oil output is falling and organic growth currently is impossible.”

What we tend to hear a lot about is US tight oil possibilities (Figure 9).
Figure 9. US crude oil production, based on EIA data. 2012 data estimated based on partial year data. Tight oil split is author's estimate based on state distribution of oil supply increases.

Figure 9. US crude oil production, based on EIA data. 2012 data estimated based on partial year data. Tight oil split is author’s estimate based on state distribution of oil supply increases.

Admittedly, tight oil production has ramped up quickly. But it is an expensive technology, that requires a high oil price, and lots upfront investment. There is evidence that such oil is concentrated in “sweet spots” and these get tapped out quickly. In North Dakota, the earliest area for US tight oil extraction, rig count is down from 203 at the beginning of June, 2012, to 176 at April 19, 2013, according to Baker Hughes. Lynn Helms, Director of the North Dakota Department of Mineral Services gave this explanation, “Rapidly escalating costs have consumed capital spending budgets faster than many companies anticipated and uncertainty surrounding future federal policies on hydraulic fracturing is impacting capital investment decisions.” Meanwhile, North Dakota oil production has recently been flat–perhaps because of weather; perhaps because of other issues as well.

The ramp-up in US crude oil production amounted to 812,000 barrels a day in 2012–very small in comparison to world crude oil needs. World oil production, shown in Figures 1 and 2, is barely affected. In a world with 7 billion people, most of whom would like vehicles, the amount of oil supply being added is tiny.

In 2013, the financial problems of the United States, the Euro-zone, and Japan haven’t gone away.

Current high oil prices make the big oil-importing countries less competitive. It is hard to compete with countries with lower average fuel costs, thanks a mix that it much heavier on coal, and lighter on oil.  A graph of oil consumption shows that oil is increasingly going to the Rest of the World, rather than the US, EU, and Japan (Figure 10).

Figure 10. Oil consumption by part of the world, based on EIA data. 2012 world consumption data estimated based on world "all liquids" production amounts.

Figure 10. Oil consumption by part of the world, based on EIA data. 2012 world consumption data estimated based on world “all liquids” production amounts.

The countries that see little growth in oil consumption are the same ones struggling with low economic growth. Low economic growth makes debt very difficult to repay. Governments are tempted to add more debt, to try to fix their problems.

Tackling government debt problems in 2013 tends to bring recession back.

The big problem when oil prices rise is that workers’ discretionary income is squeezed, because their wages don’t rise at the same time. This problem can somewhat be offset by deficit spending of governments for programs to help the unemployed, and for stimulus.

Once taxes are raised, or benefits are cut, the old problem of lower discretionary income for workers reappears. Thus, the recession that governments so cleverly found a way around previously, re-emerges.

In 2005, there was a very sharp impact to oil prices when high oil prices indirectly affected the credit system.  This time, a big issue is rising government taxes and lower benefits. These are staggered in their implementation, so the effect feeds in more slowly.  Greece and Spain started their cut-backs early. The US raised Social Security taxes by 2% of wages, as of January 1, 2013. Later it added sequester cuts. All of these effects feed in slowly, and add up.

With respect to debt, in 2013  we are rapidly approaching the time when this time truly is different.

There has been a great deal in the press about a mistake Rienhart and Rogoff recently made in their book, This Time Is Different. I think Rienhart and Rogoff, as well as economists in general, have missed an issue that is much more basic: In a finite world, debt, like anything else, cannot keep growing. The economy (whether economists realize it or not) depends on physical resources, and these are in limited supply. One piece of evidence with respect to the limited supply of oil is the fact that the cost of its extraction keeps rising. This means that fewer resources are available to be used for making other goods and services.

I show in my paper, Oil Supply Limits and the Continuing Financial Crisis, that lower economic growth rates make debt harder to repay. Reinhart and Rogoff seem to confirm this relationship works in practice. In their NBER paper, “This Time is Different: A Panoramic View of Eight Centuries of Financial Crises,” they make the observation, “It is notable that the non-defaulters, by and large, are all hugely successful growth stories.”(They did not seem to understand why, though!)

The 2007-2009 recession partially brought the level of debt down, outside the government sector. Government debt has been ramping up rapidly because tax revenues are down and benefits are up (Figure 8).

Figure 11. US Debt by Sector, based on Federal Reserve Z.1 data.

Figure 11. US Debt by Sector, based on Federal Reserve Z.1 data. (Amounts shown exclude government debt that is not publicly held.)

Government debt helps take the place of “missing” debt from other sectors (at least in theory). Now government debt is above acceptable levels. US debt is around 100% of GDP, and growing each quarter.

Without rapid economic growth, only a small portion of the debt that remains can be repaid. If increases in taxes/cutback in benefits leave more without work,  a new round of debt defaults can be expected. Student loans are particularly at risk. Business loans maybe a problem as well, especially in discretionary industries. Government debt is likely to be a problem, especially for states and municipalities. Banks may again have financial problems, especially if they have exposure to debt from other countries, or student loans.

I am not certain what will happen to the huge amount of US government debt, if Quantitative Easing ever stops. The same might be said of the debt of all of the other countries doing quantitative easing. Who will buy the debt? And at what interest rate? If the interest rate rises, there will be a huge problem, because suddenly loans of all types will have higher interest rates. Governments will need higher taxes yet, to pay their debts. It will be hard to sell cars with higher interest rates on debt. Home prices will likely drop, because fewer people can afford to buy homes with higher interest rates.

I showed in Reaching Debt Limits what a big difference increases in household debt can make to per capita income (Figure 12).

Figure 12. Per capita wages (excluding government wages) similar to Figure 5. Also, the sum of per capita wages and the increase in household debt, also on a per-capita basis, and also increased to 2012$ level using the CPI-Urban. Amounts from US BEA Table 2.1 and Federal Reserve Z1 Report.

Figure 12. Per capita wages (excluding government wages) similar to Figure 5. Also, the sum of per capita wages and the increase in household debt, also on a per-capita basis, and also increased to 2012$ level using the CPI-Urban. Amounts from US BEA Table 2.1 and Federal Reserve Z1 Report.

If debt starts long-term contraction, we will truly have a mess on our hands. Businesses will have a hard time investing. Individuals will have a hard time buying big-ticket items, like cars, furniture, and houses. Demand for all types of goods and services will fall. I showed in my post Why Malthus Got His Forecast Wrong that increasing debt was what allowed rapid growth in fossil fuel use. If debt stops growing and starts shrinking, we will get to see the reverse of this phenomenon.

What is Ahead?

Lower oil prices indicate that demand is declining. (The cost of extraction is not lower!) Lower oil demand seems to be related to poorer earnings reports for the first quarter of 2013, which in turn is at least partly related to the increase in US Social Security taxes withheld, starting January 1, 2013.  Nothing will necessarily happen quickly, but by next quarter’s earnings reports, some of the “sequester” cuts will be added to the cuts. Businesses with poor earnings are likely to lay off workers, and those workers will file for unemployment benefits. Gradually, we will see increasing evidence of recession.

It is not clear that this time will necessarily lead to the “all time” switch to long-term debt contraction, but it will bring us one step closer, at least in US, and probably in Europe and Japan as well. Oil supply may not drop very much, very quickly. If we are lucky, demand will bounce back and bring prices back up, as in 2009-2010. But with all of the debt problems around the world, it is possible that a contagion will begin, and defaults in one country will spread to other countries. This is what is truly frightening.

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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225 Responses to Low Oil Prices Lead to Economic Peak Oil

  1. Scott says:

    Gail,
    Thanks for article you put up tonight,

    I was about signed off here on this blog but you got me thinking again so I will put out a short post here on this.

    What you said about finance seems very true, because the USA and Europe and all countries affected by the low interest rates that have been supporting us are now on very shaky ground because of artificially low interest rates.

    Just think if you had to roll over 20 or 30 Trillion dollars in bonds at a higher rate of 5-7 percent or something like that which would be considered an historically fair rates?

    Right now they are paying so low and almost zero on the 1 year bonds. Rolling over this debt would likely break the back of many countries that are employing this near zero interest rates that are funded with printed money.

    To roll over the trillions at a fair market rate would reveal the true problem in finance and sovereign debts. Likely, much more money than we have seen printed to date would have to be created to service the higher debt payments and then that would be paving the way to hyperinflation. And, super high inflation would lead to everyday things becoming more and more unaffordable or expensive including gas and oil and everyday things.

    In Summary:
    If we had to pay a fair market rate for all the money the USA has borrowed say 7%. I have no idea what that would do to our debt payments but they would likely go to 5 or 6 times the levels they are now which could result in an equal reaction of prices rising 5 or 6 times of their current levels especially including energy and food which supports your theory.

    Oil would be out there but it would be harder to finance operations and drilling projects with out funds. Out of desperation some work would get done but fewer and fewer will be able to afford the products and I predict that could be our future.

    • It seems like the two levers on economic growth are oil prices and interest rates. As oil prices went up, the Federal Reserve tried first to raise interest rates. That was a disaster, with the fall of house prices!

      What the US and everyone else is trying to do now is counter high oil prices with low interest rates. To do this, they need to us Quantitative Easing to buy up their own debt, because it is hard to see that there would be enough market out there for all of the debt, without much higher interest rates. If interest rates rise, everyone will need to pay a huge amount more to fund their own debt. Also, the balance-sheet value of debt that everyone (including the Federal Reserve) is holding would drop. This would create problems by itself. Insurance companies are allowed to carry such bonds at amortized cost. They still had problems in the 1970s when interest rates rose, because they could not sell their “underwater” bonds without incurring a big loss. Those that reflect the value change immediately would see a big drop in equity.

  2. ricsteinberger says:

    So where should conservative people with a few tens or hundreds of thousands of dollars sock it away for retirement? I don’t want to start farming at my age. 62. Ideas?

    • Scott says:

      On what to do at your age ready to retire.

      Get out of the city man, find a place suitable with water and close to good people.

      I would want to own something tangible. Perhaps a small place of 5 acres or something or a home on a farm that you can lease out to a younger feller to manage on your behalf.

      We are in Oregon and retired on an Acre or so and it is not enough to grow all the food we need and the community has the food. Good to have food stored, a well a place that is firewood and can stay warm without power. And you can invest in many things that can be stored and sold easily everything from food and supplies to gold and silver.

      Nothing wrong with a plan B. Like I have a chicken coup in a box that is not yet deployed. Do not want have to kill my own meat but I will if I have to, I have done it before as I was raised in the mountains.

      Just think about things that can be traded in a time of need, things that keep well but most important is a place with its own water near a place where lots of food and animals live and farms etc, we do have our own well which is nice.

    • xabier says:

      ricsteinberger

      What to do? this is what perplexes us all.

      Money in the bank – consider it as good as lost: zero-interest rates and probable stagflation will most likely see to that. Oh, and the confiscatory taxes on ‘the wealthy’ that are surely coming – it’s all being sign-posted by governments and think-tanks all over the US, the EU, Britain. The bourgeoise high-savings class is disappearing in Europe, and will in the US, too: in fact, rapidly turning into a debt-class instead, all unsustainable. Don’t even think your pension means anything: it might be a bonus, but not to be counted on.

      So what to do? I’m with Scott’s advice (my grandmother came from the Spanish mountains, tough place):-

      There’s no need to become a farmer: what you want is land that can produce at least part of your food needs, maybe from a very big kitchen garden, not a farm, and which you can get someone else to work for you as you age. Russians villagers mostly did OK when the USSR economy collapsed: produced their vegetables, fruit and meat, bought in rice, bread flour, tea, coffee, which they couldn’t produce for themselves. There will always be some trade (one hopes!)

      Self-sufficiency is probably a delusion – all food crops are far too vulnerable to bad weather, and livestock to avian/porcine ‘flu, but it’s all going to be about damage limitation over the next decade or so, reducing one’s vulnerability to the wider economy. Feeding chickens and other small livestock could be a problem – friends in Britain are already having problems with very high feed prices, so I’d go for greens and fruit, and a good water-collection system if a well isn’t practical. Plant quick-growing trees for fuel – special varieties now exist that can be harvested on a cycle and grow very rapidly – again, as a back-up if usual channels fail. And of course put a chunk of that money into canned goods for a sudden emergency, and a good stock of well-made durable country clothes that will last until you die – stuff made for rural sports is of very good quality and will easily last 20 years. Rural people – prosperous peasants – in the past always wore very heavy clothing against heat and cold, made to last. Modern fabrics are very tough and lighter.

      The problem with buying lots of land is confiscatory taxes, and it is vulnerable if the rule of law breaks down: so you need to be beneath the radar of the greedy and corrupt. A Polish friend told me that his family were able to keep their land under the Communists, because it was too small for the State to be bothered to take over, but is now big enough to be useful.

      Essentially now, the State, sunk in debt, and the markets, corrupt, are our enemies, those of us who wish to be self-supporting and avoid destitution. We should plan accordingly.

    • Unfortunately, the issues we are running into reflect the real state of the world. The amount of goods and services produced each year depends very much on the amount of fossil fuels used each year. It is only those goods and services that are produced in a given year that can be divided among the world’s inhabitants. If there is not enough to go around, those who are producing the goods and services are likely to have “first dibs” on them. Also, if there is not enough to go around, there is likely to be a lot of fighting, and quite possibly very unusual government changes. With that background, it is hard to avoid the problems.

      If you can move near children (walking distance) into a house that is paid-off, and has space for a garden, that might be a good choice. Ideally, there should be a job for you there as well, so you can continue to support yourself. Depending on Social Security and Pensions is iffy at best.

      Regarding investing the remaining proceeds, diversification is probably best. I am not sure anything works very well. Diversification is a traditional way of reducing risk. US Federal Government TIPS theoretically gives protection both upside (inflation) and downside (deflation). Physical silver coins theoretically give you something to trade. Investments in general have a problem, though because if the goods and services aren’t “there ” to buy, it creates a problems. I would caution you in thinking that any investment is whole lot better than another because it has a guarantee. Insurance companies have a risk of failure, just like anything else. We know that in other countries, banks have often failed as well, despite guarantees. It is possible that a cap could be placed on withdrawals of, say, $200 or $300 a week. If the US government unravels, all bets are off on what works.

      If you have good use for the money now, such as seeing children, or buying things that might help later, do not be afraid to spend money now. You money probably has more value now, than it will in the long term. One point that Dmitry Orlov makes is that flexibility is important too. It is really hard to plan for all contingencies. Keeping yourself in good physical condition is probably important too. Medicine may very well not be available for the long-term, so get yourself into the physical condition where you don’t need medicine.

    • schoff says:

      All the answers you got to your question are excellant from diversification to not being a farmer. I took all their advice some years ago, with the exception of taking up “farming” in my mid 40′s, but a special kind, a market gardner with lots of fruit, from wine grapes, to apple orchards, to blackberries. perennial fruit can generate a lot of kilocalories per acre once they are in place. In the 2-5 acre realm, there are three books to have: square foot gardening, mini-farming, and coleman’s four season harvest. One last thought, mentor young people, on that 2-5 acres in gardening or anything else that is practical or that you are expert on. build a little apartment onto your house. from household formation research i did some years ago, until post-ww2 US households had unrelated 20 somethings living with them. when you are hurt and tired, there is nothing like a fit 20 something to get that necessary thing done.

    • Over on the Diner we are developing a Nonprofit called SUN for Sustaining Universal Needs. It’s a means to invest in sustainable living systems in your neighborhood. I will drop on here with more information on the SUN Project as we make more of it publicly available. Meanwhile, you can find out more about it on the Diner.

      RE
      http://doomsteaddiner.org

  3. BC says:

    Excellent, Gail, as usual. Thanks.

    That is one bloody steep regression line for the price of Brent and production. A simple extrapolation implies $250 Brent to get the next 10% in OPEC production, assuming it is even possible.

    Of course, the price elasticity to demand is not linear above a certain price to wages, debt/GDP, and energy costs/GDP, and the global economy will be contracting and demand falling long before we get to $250/bbl.

    • You are right. It is too bad economists haven’t figured this out.

      Economists have put together models that assume way too many things are true–all types of goods have substitutes; the future will not deviate significantly from past patterns; it is actually possible to extract the reserves OPEC claims to have at reasonable cost, in a reasonable time-frame. I don’t think they ever looked at real data, or ever stopped to think about what the assumption of infinite growth in a finite world might imply.

  4. ricsteinberger says:

    Reblogged this on Progressive Resource Portal.

  5. BC says:

    Scott, total bank assets, including Fed securities which they technically own, are now an equivalent to 100% of GDP (30% historical avg.) and 100% of US equity market capitalization (30-50% historical avg.). IOW, the owners of the banks now have claims on effectively all US output and corporate equity in perpetuity. The more bank assets grow to GDP and market cap, the less the capacity for real GDP per capita after debt service and associated claims.

    Ric, don’t give your money to Wall St. or to the TBTE bankster syndicate. If you have children, I suggest that you be honest and break it to them that you’re going to need their assistance hereafter into the end of life. Then comes the imperative to reduce your cost of living for them as much as is practically possible and in return provide as much value added non-financial support, unpaid labor, etc., to your children and/or extended family as you can. You might be pleasantly surprised how little it costs an elder person or elder couple to live (how much it would cost children to support), less the obscene cost of “sick care”, were children to take on the task as was the norm before the 1950s-60s.

    American hyper-individualism and then relying on de facto insolvent gov’ts for transfers (relying on their children and their peers indirectly via the gov’t) is inconsistent and a form of denial. It’s time Americans look at the Asian and Latinos as exemplars and rediscover family solidarity and mutual aid and acting ASAP to reduce one’s per-capita cost of subsistence.

    I know most Americans will cringe upon reading this, but it’s going to be required, so one might as well get on with it and become an early adopter at the leading edge of a long-term trend.

    • Scott says:

      Yes, I have been watching us approach 100 percent of GDP, but if you read my earlier post on Gail’s last article it is really very amazing how long they can keep the game going, keeping the “balls in the Air” like a juggler.

      Just look at Japan. I wonder though about that since are the world’s reserve currency if we do a Japan? I think it is going to bit us soon. That would mean having to roll over our trillions in debt at higher rates. They are going to print and fight tooth and nail to prevent this as it would be a game over for them. That would mean hyperinflation.

      In summary:
      Oil and gas meanwhile will be held hostage in a false market prices for a time it seems to me.
      Eventually the true picture of scarcity will emerge but slow downs, booms and bust will lead into it.

    • xabier says:

      BC

      There’s always something for the elderly to do in rural family set-up – even just stirring the pot by the fire all day…… ( My Austrian friend’s great-uncle insisted on going out ‘hunting’ for the family once a week, when they all had to hide because he could no longer see very well and shot at everything, but at least he was trying!)

      Governments are still trying to sucker everyone into the failed system: cheap loans, lof5r5w-interest mortgages, help to buy new cars, student debt, private pensions that will be worthless, etc. We should just turn our backs on it.

      The problem is, of course, TAXES. You can set yourself up nicely in a low-cost life, but a confiscatory tax-regime, particularly targeting property in lieu of taxes, can drive you into destitution like all the rest. History shows this is what desperate governments do – it did for the small Roman farmers, who became bandits and slaves to survive. Of course, shanty towns don’t get taxed……….that’s a very Latin American solution !

      • elderly employment worked fine as long as you had one pot stirring elderly relative aged 45 and 30 relatives out hunting
        right now we have a group of elderly relatives aged 75-100 and only 3 or 4 young relatives out hunting. those elderly folks still expect to be fed.
        that in essence is a major part of our social problem
        A great deal of our high taxation goes in keeping old people alive. A “Good thing”” morally, but unsustainable in reality. And I class myself as elderly, in case anybody thinks I’m advocating bumping off granny

        • xabier says:

          End of More

          Quite true. I’m not wearing rosy spectacles. I think Orlov mentions in passing hard-pressed families in collapsing Russia just booting the elderly out on the street when they had nothing more to contribute and consumed too much? I recall Indians declaring their fathers ‘dead’ (by bribing officials) so that they could take over the land. My Spanish cousins tell me that it was not uncommon to finish off excess and ailing elderly relatives with a cup of thick hot chocolate (sounds bizarre, but an old medical book that came into my hands actually did warn of the great danger of chocolate drinks for the weak and elderly!) I’ve heard of wax up the nostrils, too, in order to get rid of that extra toothless mouth. (Incest and secret murder still figure in rural life in Mallorca…..but that’s something else!)

          However, this enormous and unprecedented current generational imbalance in the human population will probably resolve itself quite quickly and simply in a financially and food-stressed environment: most people over 60 whom I know would be dead or unable to help themselves without the full panoply of modern drugs -their vitality is an illusion: it sits in a packet on the breakfast table and comes from factory.

          We should also remember that around about 40 years old marked the onset of ‘old age’ until only the recent past – it was the time when wealthier peasant couples in Europe scaled back their work and handed over to their children and heirs who could cope better. Indeed, it used to be said that a manual labourer of the lower class (hence very badly nourished by the 19thc) was pretty done-in by 30, and the pretty village lass a ‘hag’ even earlier (excessive childbearing as well as labour.)

          I’m honing my pot-stirring skills! Not hopefully.

        • I agree. And our young people are having a tough time getting good jobs. A lot of them have educational loans to pay off, too.

    • I hadn’t looked at bank assets relative to GDP and market cap. Thanks for the perspective.

      I think that retirees living in expensive homes with big mortgages are in for a big surprise. Even if it was possible to maintain this standard of living while working, there is no way this standard of living can be maintained later. If a large number of older folks put their homes on the market at the same time, it will tend to bring prices down.

  6. Scott says:

    We could see cheaper gas and oil before a bout of reflation by the world central bankers which means more money creation in order to keep holding rates low to keep the game going. If rates rise the game is over as the trillions cannot be refinanced but they will be at higher rates which will change the whole game.

    if energy gets cheaper that just means no one has any money to buy it. Central bank response of printing will surely bring the price back up. We saw a bout if deflation in 2008 which we could see again before we really see prices rising again.

    The developing world will remain thirsty for new supplies of energy.

    The central bankers surely want inflation not deflation in prices. So if you see cheaper gas for a time enjoy! Because I think in the end they surely will inflate their way out of this which will be on our backs. Less drilling will lead to increased scarcity and the viscous cycle continues, boom to bust.

    In summary:
    A short period of deflation is possible here, before central banks react and print far more money than before which will eventually lead to unrealistic and higher market prices for things we buy everyday including energy. The prices at the pump do not always reflect the current reality. A short period of cheaper prices may be at hand first. (stock up)

    • I agree in general. At some point, it seems like the number of “arrows in the quiver” to fix current problems starts to fail. Something unexpected goes wrong.

      By the way, you can’t really stock up on gasoline (beyond a tank full). It doesn’t “keep”.

      • Scott says:

        Yes, you cannot really store Gas beyond a tankful for long – maybe a couple of years if you add a stabilizer.

        But you can store propane in tanks much longer. I have a little Honda generator that I am thinking of converting to propane, there is a kit for about $100 bucks or so. This little generator could run my well pump during a time of need. Also great for cooking with on a gas grill or gas burner, a good back up plan especially if you do not use wood. I plan to use both.

        So maybe propane is a good one if you want to stock pile some energy it is also very cheap now.
        10 gallon tanks are great, or even larger you can rent the big ones too that sit in your yard.
        Just do not store them in your house, I have a few stored out in my shed!

  7. Reblogged this on Hechos & Opiniones and commented:
    Interesante lectura…

  8. xabier says:

    Thank you, Gail, for a truly admirable and informative post. As to our real economic situation – not the false one put out by the governments and MSM – there is nothing to add: like a mountain, it’s just there. Waiting for the avalanche…………!

    • You are welcome. I was having trouble putting it all together in one place. Someone modeling oil prices asked me some questions which were way off base. It got me to thinking that maybe I needed to explain better how debt is tied in, also limited extraction ability (which is quite different from limited oil in the ground).

  9. Arthur Robey says:

    Neo capitalists were successful in their class struggle. Labour was annihilated.
    The result? The velocity of money stopped.
    What to do? Lend the peasants money that they can spend on consumerism.
    The result? massive private debt and defaults.
    What to do? I know, Make good the banks’ losses.
    The result? The stock market skyrockets because the banks use this money to gamble on the market while the economy plunges.
    What is your next trick Mr Master of the Universe?
    Use every trick in the book to distract the peasants.

    • What is next: Publish lots of MSM reports that everything is great–oil prices are down, unemployment % is fairly low (thanks to people dropping out of the workforce), lots of tight oil theoretically available, Saudis can help in a pinch.

  10. Edward Kerr says:

    Gail,
    Again and as always, your analysis of the oil price issue is spot on. There is, however, one glaring problem that you totally avoid. Regardless of the price (anywhere along the chain from extraction to consumption) or how it relates to the economy, we simply cannot continue to keep pumping massive amounts of CO2 into the atmosphere.Unless or until we can develop an economic system that utilizes a carbon neutral energy paradigm we are in serious trouble. Perhaps at the conference you can argue the point with Guy McPherson should you manage to both be there on the same day.

    From my point of view, all this talk of prices and their relationship to our economy is little more than playing musical chairs in the deck of the Titanic.

    With warm personal regards,
    Edward Kerr

    • If the whole system is collapsing, CO2 will drop much more quickly than anyone talking about the issue has hoped for. I really don’t see anything more to do. Theoretically, encouraging the collapse and killing off lots of people sooner would “help,” but does the end justify the means?

      The people who are terribly concerned about CO2 are basing their analysis upon very flawed views of the future that assume far more growth is possible than really is. The climate may indeed change, but if there are few enough of us left, we will simply have to move to places where the climate is better.

      Also, I don’t really see that we have the power to change CO2 emissions. The methods proposed so far are basically counter-productive, because they are based on a flawed view of the world economy. See my post, Climate Change: The Standard Fixes Don’t Work

      • Edward Kerr says:

        Gail,
        It’s no longer the CO2 that concerns me. It is instead the feedback loops that we have already set in motion that are my concern. The main one being Methane CH4 that is being vented from arctic stores in amounts last seen 252 million years ago. Methane, as you know, is a far more dire threat to the climate than is CO2.It will most likely send the situation non-linear.Just the small amount of planetary warming that has already taken place has been enough to start the feed-backs and destabilize the jet streams that drive the weather. Food production, in the future is likely to be as unpredictable as the weather has become.

        As to encouraging a collapse that would kill all but a few. I don’t wish for any such thing, just the opposite. But, if the extinction of humanity (along with countless other life forms) is the other option then, yes, that would be the preferable of the two options. Of course, neither option is welcomed. It’s a heart wrenching situation but I fear that it will be option one, followed by option two.
        Looking forward to the memorial day weekend.
        Ed

    • I now believe that the best way to mitigate climate change is marketing rather than regulation, carbon taxes, or fancy financial instruments.

      All fossil fuels produced are eventually burned. Therefore in order to reduce CO2 emissions, one must limit production. The most powerful method to limit production is to reduce price. What pulls the price of fossil fuels? Capital which transforms fossil fuels into useful work is what pulls the price. If we did not have so many cars, planes, and coal fired power plants, the price of fossil fuels would be much lower. Therefore, the best way to prevent global warming is to convince people and institutions not to buy capital which transforms fossil fuels into useful work. The way to do this is to tell people that fossil fuels will not be available.

      Example. Our family car is 18 years old. My wife (who is the driver) was speculating on what sort of car she would replace it with when it becomes unusable. I refuse to spend money on a new car that requires oil, because I don’t know if we will be able to afford to buy oil in 10 to 15 years. So either we buy a cheap used car or we spend a lot of money on something that doesn’t require oil to run (I would love to find an excuse to buy a twike).

      If everyone thought like I do, the market for capital changing oil into useful work would collapse and the price of oil would fall below it’s price of production reinforcing the negative feedback loop. Similarly, questioning the availability of coal in 20 years could ruin the market for coal fired power plants, thus reducing the price of coal.

      • Mel Tisdale says:

        We can’t unring the bell. Fossil fuels have been discovered and some of them, coal in particular, are extremely plentiful. As others have commented, it will be only natural to try and use them, especially if they remain affordable. Fortunately, we have also discovered nuclear power, and no matter how much it might upset the green brigade, there is no unringing that bell either.

        Deploying large numbers of small, modular, load-following, LFTR nuclear reactors, which are inherently safe, peppered here, there, and everywhere, rather than a small number of massive uranium plants that have to be near water, such as was the case at Fukushima, is a much better solution to replacing fossil fuel powered electricity generation, and, dare I say it?, a much better solution than using intermittent renewables, especially those ugly onshore wind-turbines that are currently despoiling once beatiful landscapes. Those who have bothered to study the subject will know the many advantages that LFTR technology offers above those offerered by the current generation of nuclear reactors, so I will not repeat them here, but for any who might like a primer on the subject look here.

        First, we have to shut the green brigade up. While they claim to have the environment at heart when they witter on about how awful nuclear power is, the sad fact is that their opposition has now become just a knee-jerk reaction at the very mention of the word, so they should not be taken seriously when it comes to any discussion of nuclear energy use.

        Second, we have to shut the fossil fuel industry up, and while doing so change the U.S.A.’s electoral system to one that is not up for sale to the most generous provider of campaign funds. If that does not change, the fossil fuel industry will find a ‘back door’ into the rooms of political influence, or even blatantly still use the front door, or even the revolving door between their industry and the House or the Senate (Sorry guys, but playtime is over. The situation is becoming too serious.)

        Third, we need to put the planet on a war-footing. Gail has shown us that peak oil, in whatever form one wishes to measure it, means that unless we act, and act pretty soon, we are just not going to cope with the numbers of us that will exist in a few short years. If the public can see by virtue of an international effort to provide safe electricity in sufficient quantity to meet our needs, then they will probably tolerate temporary hardships while we play catch-up.

        As mentioned in the video linked to above, it might be possible to produce diesel fuel using LFTR technology, but I doubt that we could produce enough in anything like the time needed, but I honestly don’t know. What I do think will happen is the rapid development of all kinds of electric vehicles, up to large tractor-trailor units. There is already a considerable amount of reseach into this issue today. A declared global need would almost certainly speed the development process up a considerable amount.

        Oh, and what about climate change? Well, that would be one of the many issues that simply gets fixed en route to a better future all round.

        I have made no mention of the sword of Damocles that comes in the form of the impending financial crisis. One is reminded of the words: “We’re living in a powderkeg and giving off sparks.” Perhaps an international effort to meet our global energy needs might be an excuse to hit the reset button on things financial. I don’t know, but it seems to me that with ‘just in time’ delivery of everything, including babies one suspects, then it would only take a few days for the fabric of all our various societies to collapse if people stopped believing in the little bits of paper that they currently see as somehow valuable and stopped working for what they would then see as valueless. Douglas Adams fans will be all too aware of what happened to the Golgafrinchams when they adopted the leaf as a unit of currency.

        Unless we are very careful, almost overnight we could all be forced into a hunter-gather existence, even those living off-grid and imagining that they are somehow safe. That would be a terrible end for a species that has showed so much promise up to now. One could imagine some visiting archaeologist from a distant planet discovering that in the past on planet earth the intelligent humans had mysteriously disappeared, only to be replaced by a far less intelligent breed that had red necks, dragged their knuckles on the ground and did a lot of shouting “Yi Ah!” while shooting at anything that moved.

        • The way to shut the fossil fuel industry up is to convince people it’s a lousy investment which it is rapidly becoming (see Gail’s article above).

          The EROEI of nuclear, according to John Hall, is only 10, below that of current wind turbines which average 18. I would put my money into high altitude wind and forget nuclear (theoretical EROEI of over 100). Of course the cheapest form of energy is currently the negawatt. We waste incredible amounts of energy because it’s so cheap.

          • Mel Tisdale says:

            Thorium fuelled reactors are far more efficient than any of the current uranium powered ones, so I suggest you revisit your figures (have a look at this video or <a href=" this video“> or especially this one.

            Because LFTR reactors run at far higher temperatures than water cooled ones, they are capable of bypassing electricity generation and simply use their heat to, say, desalinate sea water, or, using coal as a commodity rather than as a fuel, convert it into oil. It cannot have escaped your notice that in so doing they can provide two commodities that are already in short supply and the source of conflict. It is difficult to see how a wind turbine, no matter how high up you build the things being able to come close to doing the same.

            We are at a watershed. We can either go forward and embrace nuclear power, especially LFTR designs (the Cold War is over, so we don’t need the current uranium kind that support weapons production), or we can go backward to a bygone age with its windmills and peasant labour and other such joys. You clearly prefer the latter. I imagine that you might consider that coming down from the trees was a step too far. For my part, I cannot see any option but to go forward. That is what humans do. That is why we build such machines as the Large Hadron Collider, why we explore the unknown, why we have science departments in universities and have research departments in industry. I suppose there has to be room for the Amish and the Greens etc., but the trouble is we need a time machine to go backwards to find it. One thing we must not do is let them and their archaic ideas hinder those who want to see our species make progress.

            • Brian Carpenter says:

              Mel,
              I agree with your assessment. My concerns with these types of discussions revolve around four poles:

              1. There’s a significant cadre of what you might call “doom porn” addicts who have a huge affinity for a kind of secular, dystopic apocalypticism. This fetishism with its black mockery really hinders thoughtful discussion. Some people “like” wringing their hands (well, as much as they like anything.) I suggest we don’t listen to them much. We’re notoriously bad at predictions. In part because once we make a prediction and act on it, we often change the fundamental facts which informed the prediction.

              2. Everyone equates the end of the fossil fuel era with the end of civilization, conveniently forgetting that civilization existed (and existed more richly and powerfully, IMHO) long before the age of fossil fuels. It may well be that the end of the fossil fuel age restores something good to humanity even as it takes away other good things. Read the literature of the past. Their lives were harder. They were also in many ways simpler and richer. Maybe we can get back some of the honey of life which we’ve forsaken in embracing our modern, energy intensive lifestyle.

              3. And maybe we can get back that honey of yesteryear without quite so much of the sting. We know so much more than we used to know. We know about how to make drinking water safe, for instance. We’re not going to simply un-learn these things because the oil gets too expensive to extract. Perhaps we have a golden opportunity to create a way of dwelling in the world reminiscent of Tolkein’s Shire. Only with wi-fi and antibiotics. We’re an inventive, resilient species.

              4. So much of these discussions reflects a deep seated dislike of humanity. This “Death Porn” often goes hand in glove with the Doom Porn mentioned above. If you’re so concerned about overpopulation or climate change or fossil fuel depletion or useless eaters, then by all means dispatch with yourself immediately. If you love death so much, then go ahead and off yourself. There are many painless and quick ways of doing so. Then you’ll have my respect for being a person who abides by their convictions and you won’t be burdening the planet and wasting precious resources. One suspects that there is an unspoken part of the equation for everyone who says, “Humanity is a virus. There should only be a few million of us on earth.” The unspoken part is, “And Ted Turner and I should be among the survivors because we’re so valuable and clever and eco-virtuous.” As it is, you are acting a bit like a Sierra Club member who drives a Hummer. Forgive me if I don’t take your posturing too seriously.

          • Brian Carpenter says:

            I would also add that there’s a widespread ignorance of physics and economics which hampers us from making and implementing decisions as a society.

          • Michael Lloyd says:

            Thorium reactors are still under development and some way off large scale deployment.

            I have commented on this in previous posts. It is naive to think that this technology will be a panacea. Not only do we have to design a production scale reactor but we also have to have that design ratified. Timescales for commercial production of electricity of less than 20 years are likely to be highly optimistic.

            • Mel Tisdale says:

              It is naive to think that this technology will be a panacea. Not only do we have to design a production scale reactor but we also have to have that design ratified. Timescales for commercial production of electricity of less than 20 years are likely to be highly optimistic.

              Thorium nuclear reactor technology has been operational to some extent for decades. Yes, there are some issues that still need to be addressed, such as single or dual fluid for a start. But that is only a matter of comparing advantages and disadvantages. There is no reason why either should not work so we could have both. I know of no opinion that says that thorium reactors are not practical. Or indeed of no opinion that says that they are not orders of magnitude better than the current uranium fuelled ones.

              We know that we are running short of energy and from Gail’s analyses we know that that is going to impinge heavily upon us, even to the degree that it could result in significant loss of life. In my original post on this particular matter I suggested that we should go on a war footing as regards developing thorium reactors. You suggest that it will take twenty years to get them operational commercially. That is probably even a touch optimistic in normal circumstances with the Greens wailing and wringing their hands in despair that we will all be killed if we adopt anything nuclear. (Boy, do they have a lot to answer for.) But these are not normal circumstances when it comes to energy production and I would be very surprised if it were to take more than at most five years to have a production line producing small modular thorium reactors. Not only that, one nation, China, is known to be near having them up and running and looking to make a fortune from the intellectual property rights. Of course, they have not had the Green brigade to contend with as they worked to clean up their act.

              Imagine that an asteroid were known to be on course to impact the earth five years hence and for some fantastic reason our only chance of salvation was to have thorium fuelled reactors coming off the production line by the time of impact. Can there be any doubt that we would meet the challenge and with time to spare. How long do you think it would have taken to develop the atom bomb if it had been subject to all the usual constraints? Ten years? Even twenty? As far as we knew Germany was developing such a weapon and the lives of millions were at risk, so we had the Manhattan project with the Trinity test in about five years. (Had we suspected Germany’s atom bomb programme earlier, we would not even have take that long.) In a war footing situation the development of thorium reactors would not be subject to the usual constraints. With thorium reactors the benefits are to humanity as a whole, not just to one side in a war, so surely this would lend even more impetus to getting thorium reactors, especially small modular ones, developed rapidly. And we should not forget the contribution China is already in a position to make as far as problem solutions are concerned.

              Of course, we will get nowhere if we continue to dream that windmills, photovoltaic solar panels and their connecting grid are in any way up to the task ahead. All windmills and photovoltaic solar panels can do is provide electricity and only intermittently at that. Thorium reactors provide heat at vastly higher temperatures than the current uranium fuelled reactors can, so they are able to bypass the generation of electricity and directly produce oil from coal and desalinated water from the oceans to name but two very important chemical processes that thorium reactors facilitate directly and for which windmills and solar panels are neither use nor ornament.

            • Brian Carpenter says:

              Nobody thinks Thorium is a panacea. It is, however, an improvement that is well within our reach. We know how to pump water and transport goods and people with electricity already. We know how to take lots of heat and do really useful things with it.

              This is just the sort of deceptive nonsense that hinders discussion. First it is falsely proclaimed that Thorium advocates believe it will solve all the problems. Then it is shown how our thinking is wrong and there are some problems remaining still. Then Thorium is dismissed in favor of some other solution which is actually inferior to Thorium, like really tall windmills.

              There was a working Thorium molten salt reactor at Oak Ridge in the 1960′s and 1970′s. They shut it down in the mid 1980′s, I think.

              The Chinese are working on a commercial model right now. A pilot reactor was to be built in one of the Scandanavian countries, but Fukushima derailed it. People heard “nuclear reactor” and went bananas. It was no use explaining that if Fukushima had been a thorium reactor it wouldn’t have caused all the problems, Neither did it help to explain that a thorium reactor could have incinerated the vast majority of the spent fuel at Fukushima, which was the chief cause of all the problems.

              All of which goes to my point above (or below, or wherever my point resides). The public is woefully ignorant of science and economics. Our decision making process (in the western world in particular) is a clamor of competing self interests absent any real understanding of and pursuit of the common interest. Responding effectively to this state of affairs is probably not compatible with freedom and human rights for that reason. People must be either manipulated into doing the good by propaganda and deception (which is, I believe, the current approach in the West) or there must be an authoritarian regime which does what is necessary and silences the clamor by force of whatever passes for law in such a state. Neither is a very good option. But if I must choose, I choose open authoritarianism. Better to know oneself a slave and that it is hopefully for the common good and will have an end at the end of the emergency, than to go about as a slave unknowingly, thinking oneself free and at the mercy of the manipulations of you know not who, with no reason whatsoever to have a defined end point for the slavery.

            • Mel Tisdale says:

              I honestly have no idea whether you are objecting to my comments, or agreeing with them, or both agreeing and disagreeing.

              I think we agree on the need for action to bring thorium reactors on stream. You favour an authoritarian regime as the better of two evils, while I prefer putting the planet on a war footing regarding the energy supply problem and let that take us where it will if it means that we can save a whole raft of people from starvation and to hell with what the NIMBYs might say.

              I am not one who sees thorium as the panacea for all our energy ills, but it sure as hell has the potential to go a long way further than windmills and photovoltaic panels ever can and can even do things that they cannot. I do believe that if we could only produce enough energy in the form of cheap (probably even very cheap) electricity to meet all our energy needs regardless of application, then those responsible manufacturingring applications that are not readily electrified at present, heavy transport being perhaps the most obvious, will find a way of doing so.

              As for funding thorium reactor research, well, the u.k. manages to pay bonuses worth billions in total to a bunch of crooked bankers who launder money for drugs cartels, fraudulently rig interbank lending rates so that they can benefit personally, sell worthless insurance to people who don’t need it etc. etc. etc. (I might add that these crooks have so much power that not one of them has faced criminal proceedings for their wrong doing.) Surely society would be better served if it used their bonus money to fund research into something that is of real benefit rather rewarding criminals for their wrongdoings.

              I am well aware that the above is overly simplistic, but it does give the basis for a broad thrust at solving our energy problem and would give us time to consider what we do about over population. With any luck, small modular reactors would be able to be produced in such quantities and, seeing a they can be located anywhere, i.e. there is no need for them to be near large bodies of water as is the case with the current uranium nuclear reactors, they could be put to such widespread use that they will solve the climate change problem, or at least leave it where it has got to and stop it going any further, automatically.

              The beauty of LFTR technology is that they are ‘walk away safe’ and of absolutely no use in producing any nuclear weapons that a terrorist would be interested in. They have the added benefit of being able to consume the waste from the current nuclear reactors, for which they are worthing building regardless of their other benefits.

            • Brian Carpenter says:

              Hi Mel,

              I’m sorry, lack of clarity and the peril of pronouns. I am addressing your critics, both actual and hypothetical. You and I are in substantial agreement on the issue of LFTR’s and the harm done by the environmental movement on this issue.

              Kindest Regards,
              Brian

            • Brian Carpenter says:

              Mel,

              Putting the world on a war footing and saying to hell with the Nimbys is an authoritarian regime. Private property confiscated and used for collective purpose, political and social opposition squelched for the greater good. Hindrances removed by some sort executive order without appeal or redress, lack of transparency and accountability… all could be necessary underneath a war footing. They certainly were in the US and to a greater extent, Britain, during WW2. And just like during WW2, we would need the cooperation of the Big Men. And they would expect to be compensated. And they would get away with a lot of shenanigans that you and I would go to prison for. That is how the world works. And no, I’m not a 1%-er. I don’t defend it. but I’m not such a fool that I will deny it either. We are sheep and would probably starve if we escaped our pasture. If our political masters have any self restraint and kindness, they will merely fleece us. If not, well then, we all know the other reason for keeping sheep, don’t we?

        • Michael Lloyd says:

          We have existing commercial nuclear reactor technologies and I am of the opinion that these should be deployed first.

          There are a number of potential new reactor technologies available of which Thorium is one. Tom Blees is advocating the Integral Fast Reactor, for example. The UK is has a substantial stockpile of Plutonium. GE Hitachi have a proposal for utilising this.

          To give you an idea of the scale required. The UK has an approximate annual power utilisation of 300GW, most of which is met from fossil fuel. If we assume we can maintain current level of economic output (a huge and debatable assumption) over the next 50 years by use of energy efficiency reducing the requirement to 50% and deployment of nuclear technology, we will need to build nuclear capacity of 150GW. The proposed new EDF reactor for Hinkley C is 3.2GW. So we will need 50 of these built at the rate of one per year and that ignores all the economic costs and the additional energy input from fossil fuel at the outset.

          It is the reality of where we are now that concerns me and I don’t see that we have the luxury of waiting for some future nuclear technology before acting.

          • Mel Tisdale says:

            Of course we have existing nuclear technologies that we can employ. The problem is that they are seen as unsafe, and legitimately so if our experience of their very obvious failures is to be taken into consideration. One can have sympathy with those governments that have decided to reject the nuclear option altogether. However, that is a case of throwing the baby out with the bathwater. A face-saving route has to be found to bring them back in if they are to avoid having to rely on fossil fuels, with all the implications that that means for climate change, or alternatively, rely on intermittent renewables, with all that that means for security of supply.

            In my original post I suggested that the world needs to go on a war footing regarding how it is going to meet the energy shortfall that is, or soon will be, upon us (depending on just how much of the hype regarding new extraction techniques is to be believed. It is the same people that tell us that fracking is marvellous, who also tell us that climate change is all a hoax, has stopped, is nothing to worry about etc. etc. I.e. people who don’t care much about the future when their current profits might be at risk.) A global effort that concluded that nuclear was the only route that is anywhere near likely to meet our global energy needs would give those countries a face-saving way of reversing their original rejection of nuclear power generation.

            Clearly, any chosen solution would require that it be safe and that puts thorium fuelled reactors at or near the top of the list seeing as they are ‘walk away safe’ and are next to useless in making nuclear weapons, which is why they were not developed when they really should have been over fifty years ago. If designed in the form of small modular units, those modules could be made in factories and transported to their designated locations, a bit like the International Space Station. Because of there not being any need for them to be next to a large body of water, as is the case with the current designs, they can be put literally anywhere in the world. If thorium is chosen, we will not have a problem finding the fuel. Thorium is so plentiful in the earth’s crust, it is a nuisance when it comes to extracting rare earth minerals.

            If the U.K. chooses to do its own thing, so to speak, and why not, it usually does – look at electricity sockets, C.B. radio, vehicle number plate colouring etc. etc. – then that is o.k. as long as it contributes its fair share to the ‘war effort’. If, however, it isolates itself, as it generally seems on course to doing, then it will have to live with that decision. (I suppose there will come a day when it realises that it no longer leads an empire.) One final thought on the U.K. If it chose to adopt small modular LFTR reactors and put some gaffer tape over the green’s mouths, it could churn them out in such numbers that it would meet its energy needs easily. It is only a case of having the vision, i.e. having the ability to look to the future, not to the past and the time of the classics that most U.K. political types seem to have spent their time studying. The notion of splitting the atom was supposedly impossible as far as the Greeks were concerned, so no help to be found there.

            We, as a species, have a big problem and we need to think big. I just don’t see anyone among our current bunch of political leaders who might come even close to being up to the job. So I suppose thorium reactor development will limp along and eventually come into commercial use in small numbers. When these times are written about at some dim, distant time in the future, our attitude towards nuclear power generally and thorium reactors in particular will vie with our approach to climate change for top place on the list of ‘greatest human follies’.

            • Scott says:

              Nice post Mel, makes sense to me.

              The Thorium reactors could be viewed as green, but the greens which would really clear the way for them to be built. If they try to build more standard nuclear reactors they will be met with angry mobs at least with the Thorium everyone could be on the same page. Nuclear has been very divisive here in the USA and the not in my back yard thinking is why.

              They could be very lucrative, just think about all the power these little Thorium reactors would generate and big oil should lead the way, but will they? They have not so far perhaps there is still to much money to make in oil and gas. But I would like to see big oil and companies lead the way.

              It would take the massive financial resources of an Exxon Mobile, Chevron or other wealthy company to move ahead with it. But first we need some truth coming out of our world governments to tell the people of the problem. I see very little of this now. Our government is not yet yelling about the problem from roof tops, if they were, then work would be getting done in this direction.

      • Edward Kerr says:

        Ian,
        I don’t think that you comprehend the direness of the situation. You say, ” If we did not have so many cars, planes, and coal fired power plants, the price of fossil fuels would be much lower.” True enough but the little word IF is the fly in the ointment. We do have those things in overabundance (depending on how one looks at the situation) and trying to convince people that fossil fuels will not be available to power them {especially coal} isn’t likely to be effective. Some folks have yet to be ‘convinced’ that the world is a sphere. I also don’t think that a tax on carbon will do it either.

        It’s time for humanity to grow up or face extinction. These are the reasons that I make this contention. { http://www.youtube.com/watch?v=Ina16XSJQvM } This is a video overview of the science. To read Malcolm Light’s assessment go here:
        { http://arctic-news.blogspot.co.uk/p/global-extinction-within-one-human.html } It’s disturbing information, though he does offer a potential solution that would at least buy us some time. That of course would mean that we will need to ramp up the carbon neutral power generation and abandon ALL burning of fossil fuels. That carbon can be used for other necessities.

        It’s not a joke and the time to act was 20 years ago. On a person note I’d get solar panels and or wind generators and an electric car for the misses assuming that those are affordable to you. At the very least if you do need to continue using gasoline get an HHO Hydrogen on demand system for your car. It will increase your mileage and improve the emission profile.

        With best personal regards,
        Ed

        • I have very little faith in most plans of reducing global warming. Homer-Dixon in The Upside of Down notes that the dominant political power of a given age is the power that masters the energy of the age. The Dutch empire was based on wind, it was superseded by the coal based British empire which was in turn superseded by the oil based US and Soviet empires. Why didn’t the Dutch adopt coal when they saw they were being overrun by the British? Homer-Dixon postulates that it is because of the installed capital base, powers have a great deal of trouble switching energy sources. In a few years I see profitability falling in the major oil companies and governments will bend over backwards trying to save them to prevent layoffs.

          Kjel Aleklett sees peak coal possibly as soon as 2035. Building a coal plant that will last 50 years today is stupid. Check ASPO’s record of predictions against the EIA and the IEA. The oil and coal industries know something about marketing. They have been over estimating production for years to encourage people to continue buying oil and coal based capital. Few people bother to broadcast how poor their records have been. The way to stop the oil and coal industries is to invest in a low energy future. Insulate, commute by bicycle, and study permaculture. Tell people we’re running out of affordable oil and coal even if you don’t think it’s true.

        • Brian Carpenter says:

          Ed,
          Hydrogen generators are a boondoggle. Physics dictates that you cannot turn chemical energy (gasoline) into mechanical energy (your engine) into electrical energy + heat from friction (your alternator) into chemical energy (hydrogen electrolysis) without significant losses at each transition. For the same reason you can’t have an electric motor turning a generator which supplies the electricity to keep the electric motor going. A perpetual motion machine is an impossibility.

          • Edward Kerr says:

            Brian,
            HHO isn’t perpetual motion. All that it does is to facilitate the ICE’s burning of liquid fuel. The extra draw in the alternator is negligible. I built and utilize a primitive HHO system. (Not a lot of HHO gas). It adds about 7mpg to a base line 28mpg vehicle. It has paid for itself many times over.
            You may be slightly mistaken on the perpetual motion thing. Perhaps we should ask the universe if it plans on stopping anytime soon.
            Best regards,
            Ed

      • Maybe so, but with 7 billion people on earth, I am not entirely sure it would work that way.

        I wonder if it doesn’t depend more on people’s salaries, and whether they can afford a new (or used) car. If salaries stay level or decline, and the price of cars keeps going up (perhaps electric cars), it seems like an increasing number of people will be priced out of the market. This would help bring sales down, by itself.

  11. p01 says:

    So, if we’re “lucky” we can push this mess a few more years down the road, as usual, and give a new meaning to “truly frightening” a bit later on. Question is: Does it even matter at this point?

    • xabier says:

      po1

      Maybe, indeed, nothing matters.

      But at any point in history people could have said – ‘This is so awful, what’s the point?!’

      I mean, look at the real, unvarnished historical record, the experience of the majority of individuals and the history of families – it’s awful.

      But we can’t give up, and must go on – but without neurosis if we can.

      • Brian Carpenter says:

        Wasn’t it Boswell’s Johnson who said, “Where courage is missing, no other virtue can survive except by accident”?

    • If we are living now, and would like to live a few more years without a huge change in lifestyle, I suppose we would like the mess kicked a little farther down the road.

  12. yt75 says:

    Thanks for another great synthesis Gail, however one could say that oil supply has never been rising and falling for geological reasons, or more precisely oil extraction has always been an industrial/economic process under geological constraints, but these geological constraints never “defined” the flow rate.
    In fact this “geological” image that peak oil always had or has, is somehow covering the fact that the Hubbert curve or model is or has always been about human typical behaviour, not geology.

  13. Dan Hood says:

    Great article Gail, the pressure cooker is building everyday. Laying your cards on the table what can we look forwards to this year across the Western world? I’ve also heard estimates by Kjell Aleklett and Colin Campbell from ASPO that by 2015 or thereabouts total global liquid fuel production will start to decline off the plateau. The downwards phase of the infamous hubbert’s curve. In so far as I understand it total global liquid fuel production has remained flat since 2006? What happens when aggregate production starts to decline against the backdrop of a rapidly rising global population? How long in your honest opinion do expect this game to continue for?

    • I think it is financial considerations that determine when the current system unwinds. This is related to geological considerations, but not the same thing. The financial unraveling likely comes before the actual physical decline in oil production, and may in fact, cause the physical decline in oil production. All of the emphasis by ASPO on the physical decline is only half-way right. The decline likely comes before the physical decline normally would come. Also, the shape of the decline is much sharper than analyses based on physical declines rates would suggest.

      Regarding the timing, it really depends how the financial mess that the US, much of Europe, and Japan are in now unravels. As I say, the financial situation is now a tinderbox. It amazes me that things have stuck together this long. One scenario might be that the Eurozone starts falling apart later this year. This could lead to an increase in interest rates. Poorer second quarter earnings reported in July could also send the economy and stock market down. If interest rates rise around the world, it is probably game-over, pretty quickly. This will lead to a big cut-back in debt. Because of this, demand for energy products of all types will drop greatly. Governments may fail, making a true mess of the situation.

      • xabier says:

        Everything can unravel in many areas, very quickly.

        On the petty personal level, as my order book shrinks (alarmingly!), I am both ceasing to purchase anything except non-discretionary items, being very cautious about stock levels for my business, (when otherwise I would actually be buying in a lot, as the materials keep a lifetime) and being severely hampered in my efforts to create a viable, secure, large kitchen garden from scratch. And I am not indebted!

        Now, the ramifications of this – repeated by millions of people – on the troubled and failing economies is very evident: more and more businesses will simply become unviable, personal and business defaults will snowball, and certain classes of goods will be traded less and even not produced.

        Cheap loans promoted by governments won’t change any of this for me (nor would ‘retraining’ at a college on the back of a ruinous student loan: but this is all that is proposed (oh, and the old favourite, property speculation with a cheap mortgage.)

        • Yes, it is frustrating. And governments will find it tough to make a go of it too, raising taxes on property, and making it even harder to get along without a job. It is truly a mess!

          • xabier says:

            Gail

            Preaching ‘the Greater Good’, governments in crisis will always happily drive the struggling individual or family into the ground through taxes, if they are not in a favoured group.

      • Dan Hood says:

        Thanks Gail I’m always interested to hear your analysis and you have a gift for seeing things clearly. Trying to plan for these chaotic scenarios is a nightmare but I’m looking at industries I think will become critical over the next 20 years.

        So a rapid non-linear collapse triggered by an “unkown market event” is highly probable given the mounting pressures and instability in the system, which we now know is highly connected and contagious thanks to the disaster that is globalization. Like a grains of sand piling on top of the other until a tipping point is reached, the whole thing suddenly gives way. Reminds me of nature specifically earthquakes. I remember Nouriel Roubini explaining last year that developed economies would suffer death by a thousand cuts but he never ventured into the after effects nor speed of decline.

        One more topic of thought I would like to gain your insight on. I’m an avid follower of commodities guru & former Quantum Fund founder Jim Rogers who also predicted the mess and abandoned the US in favour of Singapore as you know. He has proclaimed time and time again that Agriculture is going to be the most important industry over the next 20yrs for anyone to get involved with and that “the best thing for people is to learn to become farmers or work for the smart farmers because they’ll be driving lamborghinis and the Wall Street brokers will be driving taxis.” He mentioned that farming has been a disaster the last 20yrs because of low commodity prices but that’s all about to change, anything to do with farming, agriculture, technology, seeds, tractors, fertilizer, water would be a great strategy to become involved with. In the US they pumped out over 200,000 MBA grads that went into “finance” related fields but they only dribbled out 5,000 farmers. The average age of a farmer is 60 as we speak. That combined with rising total global populations 8.3 billion by 2030, the collapse of the debt/based financial system and restraints on critical energy supplies. Does he have a point? Would appreciate your views as ever.

        Regards
        Dan

        • With respect to the future for farmers, clearly we are going to need food, but it is doubtful our current methods will work for long. How this will work out is unclear.

          If everything can hang together well for a while, then perhaps with some rationing of fuel, the farmers can continue as usual, and the stores will be full of food. I am doubtful this will hold together for long.

          At some point, things fall apart. There could be many different reasons: The farmer can’t get fuel for his equipment, or can’t get spare parts, or can’t buy the seed he needs. The bank won’t honor checks to pay workers. Electricity is out for refrigeration, electric lighting, pasteurization, and irrigation. Taxes are too high to make farming profitable.

          The question is how one transitions to a Plan B. If all that is available is canned and dried food, they won’t last many years.

          It is here my imagination runs short. In the past, everything we have done has been built up from simpler systems, over many generations. People learned from their parents and grandparents, and there were systems in place for everything from land ownership, to when you plant, to what you plant and how you store seeds. All people did was make small improvements.

          Now we are attempting to go the other direction. It is hard for me to see how this will actually work in practice. We have both current farmers and current gardeners. The farmers will likely continue to own most of the land. The question then becomes how we can possibly make a transition. Do farmers and gardeners work together, to try to figure out how to use this land productively? One approach would be to have many surfs (or “interns”) help with the labor, probably using very limited tools, since we don’t have large numbers of tools or draft animals. There would then still be the problem of packaging the food and getting it to market, without the food spoiling. Or do we end up moving the people to the farms, and not producing much more food than what the farmers/gardeners/interns themselves can eat? I am afraid this is the direction things will go.

          It would be very helpful if a government oversees this transition. Governments don’t know what the future will look like though, so it will be hard for them to make good decisions. They don’t have the money to buy up land, so will probably have to take it away from some current owners. This will not be popular with current owners.

          • Scott says:

            Gail,
            Yes, the cans and freeze dried stuff, I really do not think will last long, but it will buy a bit of time which maybe all we can hope for. A year or two would help.

            You know just imagine in a time of need if you had a yard full of corn and food that was nearing time to harvest, you may need to keep all night guard shifts on the garden or else you will wake up one morning with your yard already harvested. Distant unmanned vacant lots would be first to go.

            I really hate to say this – but I have some battery powered motion sensors, still new in a box, that I plan to deploy outside if needed to protect my food if it comes to getting that tough. My firewood pile could even be a target of thieves.

            Just think though, in a time like this that we are discussing, you will really not be able to leave your home to go fishing or hunting unless it is guarded, otherwise you will come home to an empty home.

            That is why you need good neighbors that can help each other in a time of need and you will most likely find them outside the city. My neighbor and I have already discussed the need to help and work together which is hard to come by in today’s America.

            Leave the city and find a place with good neighbors is your best bet and you will come to love it anyway.

            Scott

            • The “third world” has lots of big fences around houses and gardens. I am also told that there are traditional beliefs that reinforce these deterrents to theft–things like a belief that eating stolen food will make you sick. We don’t have these things. There are limits to what help neighbors can provide, if there are a lot of hungry people around.

            • Scott says:

              Thanks Gail for those wise words.

              Yes, I have traveled a little and seen such places where they have to be guarded if you have a home especially a nice one and you really cannot hold onto anything nice, better to live as a villager or face getting ripped off.

              In summary: in looking at what we should do — lets look at what we have agreed will likely happen:

              So, I think we have established that during such times of emergency, or shortages of fuel and food – we will likely see lots of people behaving very badly. It will become hard to go fishing or hunting because when you return your home will be likely ransacked or just plain dangerous out there to leave your home and run into a gang of hungry folks that fell on hard times. You will also have a hard time managing a garden because you will need a big fence or protection from having your garden harvested while you sleep.

              Since it is going to be hard to produce food and harvest food unless you have a group helping keep your home secure while you are away it will become tough to produce food, hunt and fish etc. Even your firewood and gardens likely will be looted perhaps depending on where you live.
              It will likely take a team effort of many neighbors or blocks or groups to band together, sound familiar, a brave new world, a strange version of our old wild west this time with cars here and there, boats and motor homes sometimes on the side of the road out of gas. People hanging out hoping for help.

              This makes my case for a bit of food storage, better to have some stored away so perhaps you can weather the storm. You may have to stand guard at your door and even fire a weapon if someone tries to get in your house.

              Scary times ahead indeed if this happens.

              If it is a financial collapse that sets this off, I do think that it will not take much given the weakness in Europe and the Debts of USA, a spark to perhaps cascade the house cards (likely something that will jump up interest rates on the bonds by bond vigilantes) or other black swan event somewhere could suddenly create an event like we saw in 2008 where letters of credit for bills of laden on ships are not attainable.

              Boats sit at docks even if loaded full with no gas or money to leave port.

          • xabier says:

            Gail

            On the whole, I do not expect wise pre-emptive action from governments: after all, just look at current policies and ‘solutions’ to the economic crisis!

            And if things do indeed get tough – fuel is scarce, supply-chains break, etc – government may either disappear, or make some very clumsy interventions indeed to address the crisis. These may well undermine more sensible efforts by citizens – seizure of land, crazy tax-gathering forays (maybe in kind, not cash ) spring to mind.

            Our real problem is that unlike when the complex structures and supply chains of Rome collapsed, people just fell back on a fully-functioning rural economy where most people lived anyway, our rural areas have been hollowed out and agriculture is just another advanced oil-based industry.

            • Scott says:

              Sad to say, It really sounds like our government will not be of much help and even may become our enemy in times of crisis. In looking at the way they passed out all that money to bailout the banks and print all of this money, the US Government has not been acting like much of a friend to its citizens lately.

              I agree with you that I do not think the governments of the world will solve this crisis, Things sure could better, but they are not. Greed seems to prevail out there and that is partly what brought us here to this tipping point.

            • The fact that our agricultural system is not part of the industrial system is a real problem. What do we fall back on for a Plan B?

  14. Don Stewart says:

    The world is an inherently unpredictable place and each of us starts from a myriad of places, so giving advice to anyone is, perhaps, foolish at best and dangerous at worst. But I am seldom one to heed my own warnings. So I will hazard a few opinions about preparing for the sort of world Gail leads us to believe is entirely possible.

    If you watch the few opening minutes of Seven Samurai, you see some bandits robbing a farming village. In the next valley, they see another village. One of the bandits says ‘let’s go raid them now’. The leader responds that they have plenty of food right now, so it’s best to come back when the neighboring village has a barley harvest. One of those villagers has been gathering firewood, and overhears the bandit’s conversation, which sets up the plot of the story.

    So Kurosawa, like Orlov today, leads us to contemplate that, in a world ruled by bandits, those who can actually produce something are valuable to the bandits and are likely to fare better than those who can produce nothing at all. Of course, maybe we will get lucky and law prevails over lawlessness. Either way, being able to produce something valuable increases one’s odds of survival with a modest level of comfort.

    In desperate circumstances, food and clean water are the most pressing issues. So…let’s consider a hypothetical situation. Let’s suppose that you have some paper assets and would like to convert those paper assets into assets which can produce food and clean water. Let’s assume that you are also willing and able to devote the time to learning the skills needed. I will also assume that the collapse you envisage is far enough in the future that efforts today will not be totally wasted as a tsunami of troubles overwhelms you tomorrow.

    With those assumptions, I recommend that you pay attention to Geoff Lawton’s recently released videos on the subject of buying land and making it productive. The two videos released so far center on water.

    http://www.geofflawton.com/fe/32461-surviving-the-coming-crises

    Click on the ‘acquiring land’ or the ‘five acre homestead’ bars at the top of the page. They are free, but you will have to supply your email. An urban oriented video will be released next week or so.

    You will see that both videos are primarily about managing the flow of water across the land. Very little water simply falls as rain and flows into a gully and then off these properties. Instead, a set of dams and swales and contour sub-soil plowing send the water on a controlled course across the property. The abundance of water leads to an explosion of productivity. What Geoff has done in both cases is convert paper assets into very long lasting physical assets which permanently increase the productivity of the property. You will also note that moving Earth as Geoff does is a lot easier with power equipment that it will be in the future with draft animals or human labor. So in some sense these videos are about taking paper assets which are a result of Ponzi schemes and depleting (but still cheap) petroleum resources and an imperilled industrial system which makes powered earth moving equipment and turning it into productive assets which are not dependent on paper assets or cheap petroleum or an industrial system.

    Of course, humans will not be pleased if the land simply becomes an unkempt jungle. Humans want to select and manage plants and animals for our own benefit. Geoff’s methods will involve the principles of Permaculture. Others might choose BioIntensive or other methods–but water is essential to all of them.

    Time may or may not be a show-stopper. There is no question that the ‘food forests’ that Geoff aims for get more and more productive over a period of decades. Do we have decades? Well…the OECD countries started downhill in 1970 or 2000 or 2006, depending on how you measure and what you are looking for. Even taking 2006 as the start of the crisis, if you had bought five acres and done what Geoff did to the five acres in the video, you would have a very nicely productive piece of property. It’s a cliche, but it’s true: the right time to start is Now.

    Don Stewart

    • Thanks for your ideas.

      Geoff’s ideas may work for some, but I expect the cost and scope of his plans are beyond 98% of readers. Most people aren’t in a position ($$ saved up, ability to leave job) where they can go out, evaluate a tract of land, hire someone with a grader to do extensive changes to it, and then farm the “fixed up” land for many years. Forest gardens are a great idea, but few of us have the time or know-how to implement them.

      Back when I was in graduate school, I had a poster on my wall that said, “Bloom where you are planted.” I am afraid that in real life, this is the way things will have to work. A few years ago, I suggested to my husband that we think about buying some land to farm, etc. He said something equivalent to, “No way. I have a job I like. I don’t even like yard work, so farming is not my thing. We have family responsibilities including aging parents and a handicapped adult child.” I started fixing up the lot around our home, and bought a couple of vacant lots nearby. I got one large tree taken down (expensive!!!) and started a garden. Quite a bit is wooded–partly deciduous and partly pine trees. This year, I decided to try planting a couple of pecan trees in relatively open areas in the deciduous part. There seem to be some oak trees. I expect I should learn how to prepare acorns for human use as well.

      I doubt I will ever get to Geoff’s level. But maybe a little can be done on in a scaled-back version.

      • 123goblog4me says:

        Gail,
        Acorns, from white oak (Quercus alba) make a very nutritious and tasty flour but one needs to remove the tannic acid by soaking in H2O. Grinding is the same as any other nut. Others are also edible but not as tasty. I also suppose one might salt and roast them but I’ve never personally tried that.
        Ed

        • xabier says:

          123

          Acorns were, I believe, resorted to by Germany at the end of the First World War: for a kind of ersatz ‘coffee’, too.

      • Don Stewart says:

        Gail
        Wait until next week and see what he recommends for urban people. His compatriot David Holmgren has been saying for quite a long time now that survival in the suburbs is the key to hope for the Western economies. Geoff has made videos of intensively productive yards in suburban condo type settings, as well as a hundreds of years old urban plot in Viet Nam.

        I set up some assumptions in recommending those two videos. One was that the person (or family) have paper assets that they perceive to be at risk, and would like to convert the paper assets into real assets which can be productive under quite pessimistic scenarios.

        But if a person has no paper assets, then it seems to me that they are going to have to put their efforts into acquiring skills. Many of the relatively wealthy are, like your husband, not at all interested in becoming self-sufficient gardeners or farmers. IF they manage to hang onto paper wealth, THEN they will need some skilled workers.

        If a person with paper assets today has foresight, they may wish to acquire some land with their paper and hire some bright, young, skilled, but penniless people to manage it to become as productive and resilient as possible.

        There is no guarantee that any strategy is going to work. We could all end up dead as a result of violence. So everyone needs to consider their situation, their desires, and their options.

        The thought that 98 percent are going to end up dead isn’t really the clincher you may think it is. The eminent scientist Stephen Jay Gould was fond of saying ‘don’t tell me the mean, show me the distribution’. When he was diagnosed with a terminal disease, he closely examined the tails of the mortality distribution. He did manage to maneuver himself into the tail, and survived longer than he ‘should’ have. Anyone today can be quite pessimistic about the prospects for 7 billion people, but still aspire to be in the tail of the distribution through some combination of good luck, foresight, skillful planning, and work.

        Don Stewart

        • xabier says:

          Don

          In England in the 17th and 18th centuries, every merchant who made a modest fortune bought himself a house in the market town, with a big walled garden behind to supply fruit and vegetables, as well as flowers.

          The big plots of modern suburbia could certainly fulfill the same function.

          I live most of the time in a tiny house built in 1949 in a village in England, which was given a very substantial garden by the planners as – learning from the distress and hunger of the 1930′s – it was expected that workers would want to rear rabbits, grow their own vegetables, etc. In the short-sighted insanity of the oil peak, most have been built on, made ornamental, but many could be revived. Sadly, every new ‘luxury’ house has a ‘garden’ only big enough for a table and a few chairs – this is called ‘sustainable’ development, ie maximum density on the smallest possible plot.

        • xabier says:

          Don

          I also recall reading about cereals being sown in fields within the city walls in some Italian towns in the Middle Ages. Probably elsewhere, too.

          And then every bourgeois family kept about 6 months of food stocks.

          In many ways, we just have to revive a lot of practical ideas from the past – as you rightly say, no guarantees of survival, but far better than sitting wringing one’s hands…..

          • the one big idea from the past that we can’t revive is SPACE under present conditions
            The common feature outside towns and cities was ”common” land. It was empty of habitation because the population wasn’t big enough to make demands on it.
            it was where the term ”commoner” originated, you grazed your pigs and goats on it communally, without too much pressure on the land itself
            then as population began to increase over the centuries, open common land was appropriated by the rich and powerful
            land was ‘enclosed’ to the exclusion of everyone else, by 1875 half the land of Britain was owned by 2000 people,
            Poverty was endemic. Storing 6 months supply of food was a privilege of the rich, or reasonably well off. Which is just as it is today, the vast majority seem to be living hand to mouth, the idea of buying a year’s supply of storable food is quite beyond their means

            http://www.thelandmagazine.org.uk/articles/short-history-enclosure-britain

            • There are too many of us now. I expect that those who do store up a lot of food may be targets for those who have no food. It is hard to have situation with a few haves and many have-nots.

      • Don Stewart says:

        Gail
        You might also wish to think about those two lots across the street. If you expect that there is a high probability that you can never sell them profitably due to financial collapse, then the alternative is to make them productive.

        I was talking to a small farmer friend recently who had been to the Georgia Organic Growers meeting. He said there were 7 or 8 hundred farmers there. I expressed amazement–because I stereotypically think that everyone in Georgia is engaged in a financial speculation of one type or another. My friend said that there are now quite a few intelligent young people getting into it in Georgia.

        So one alternative is to contract with someone who lives fairly near by to ‘urban farm’ those two lots. You and your husband provide the capital, the farmer provides the knowledge and labor, and you split the proceeds.

        Again, everything always depends on the details. Your vision and the farmer’s vision have to be in sync and there has to be considerable trust. But wringing one’s hands is seldom a solution.

        Don Stewart

    • while one must wish all these urban homesteaders well, they all ignore the fundamental problem of health
      there seems to be a fantasy that we can carry on digging, hoeing, watering and so on with the level of fitness we have now.
      at this moment in the uk there is a measles outbreak, caused by some idiot 12 years ago spreading the nonsense of a link between mmr injections and autism.
      this left an infected reservoir of the disease waiting to break out.
      it has.
      measles is a killer, and the only preventative measure relies on industrial scale mass production. Waffle on about downsizing and homestead gardening all you want, but as children are born into this utopia they will have no more protection against the diseases we mistakenly think of as trivial than did the did the First Nations when the colonists showed up along the American coast in the sixteenth century

      • Don Stewart says:

        See my response to Gail about the tails of distributions. I survived the measles as a child. I didn’t get polio when a lot of neighboring kids got it. Any fish you see in a stream is a one in ten thousand survivor. The point is to make it to the tail of the distribution. It is doubtful that any of us can save 7 billion people…so get over that idea.

        I hope I am not being heartless…just realistic….Don Stewart

        • not heartless at all, i wish everyone would face reality.
          7 billion simply cannot exist on a planet with the natural resources to support 1 or maybe 2 billion at most.
          wars popping off everywhere right now are driven by too many people clashing with each other over resources. If you read up on Syria, theyve had a 10 year drought. That has forced farmers off the land and into cities where different idols are worshipped.
          So the countrydwellers idols clash with city dwellers idols.
          The truth of course is theyre fighting over food and jobs.

      • xabier says:

        End of More

        Yes, it enters the realm of fantasy when the disease element is left out: when the main labourers fell ill, rural families could fall into dire poverty – starvation, flight to the city, prostitution for the girls, and so on. The basis of so many novels in the 18th century….

        I’ve just been reading a blog by a guy who’s lyrical about living in the woods with his young family, growing things, cutting his own wood, etc: it’s painful reading, the chance of the family being destroyed by accident or disease is very high, and yet he never considers it.

        Once when I had a bad ‘flu, I had to cut up a two hundred logs or so with an axe in a raw easterly: did it bit by bit, but it was not idylllic! In northern Spain, the young are still abandoning the land, and villags dying, it’s just too tough.

        Not to mention chronic malnutrition: experienced people I know who grow a lot of food for themselves saw nearly everything wiped out by the British weather last year. Relying on those crops, they’d have been dead. But it’s possible to live on not quite enough, and be swept away by the next virus. Historically, most people died in bright and sunny April in Britain, worn out by the rigours of the long winter.

        Nonetheless, making some effort to disconnect from the bigger supply chains is a worthwhile strategy, not least because it restores self-respect which the utterly dependent never know. One just goes into things with one’s eyes open….

        • Scott says:

          What you wrote about most folks perishing in April after the long winter makes sense to me.
          Nothing like a long winter to use up all the food etc.

          I have followed Nicole Foss and she echoes Gail in many ways about how finance will lead the way to collapse, the boom and bust cycle.

          On the opposite end of things I saw this article today on Yahoo Finance. This apparently what most believe and is a main stream media article, but I was wondering if the group has any comments on this type of article. Here is the link and title. I for one do not buy into this theory, unless, but it is sure hopeful and perhaps leading the “Lemmings to the cliff” They say we are all wrong and I think probably most believe this trash.

          Why the Peak Resource Crowd Is Wrong:

          http://finance.yahoo.com/blogs/daily-ticker/human-ingenuity-solve-problems-planet-ramez-naam-152907179.html

          • This stuff isn’t right, but people have heard so much nonsense from so many directions, it is hard for them to know what to believe. Wind does’t substitute for oil except in wishful thinking. We can’t create wind energy without fossil fuels. This is one of the popular denial versions of our problem. It doesn’t help that the ridiculous calculation that we are “now using up 1.5 planets worth of natural resources” is currently a published result. It is a bunch of baloney, just like so many other things we hear. Obviously, the authors didn’t consider fossil fuels. Another issue is that we can’t make wind turbines, and we can’t maintain wind turbines without fossil fuels. We also cannot completely power our grid with wind.

          • xabier says:

            Scott

            Traditionally, each month’s moon had a distinctive name: if I recall correctly, March was the ‘Hunger Moon’, leading of course to the higher mortality in April…….. I think February was the ‘Wolf Moon’, which also says a lot.

      • Some of these illnesses are quite a bit worse in adults than in children, so stopping immunizations can be a problem. There can be a group of adults who are not immunized, and get a much more severe case.

        I remember hearing that in the Former Soviet Union, immunizations dropped way back after the collapse. This is one of the reasons for their higher death rate.

  15. Steve Bean says:

    As Nicole Foss reminds us, cash is king in a deflationary period. Just make sure it’s physical cash. Then convert it into something of physical value (like fruit trees, for example) before the whole mess blows up on us.

    It’s actually good news and not a “problem”.

  16. Christopher Johnson says:

    Has anyone queried Las Vegas oddsmakers about these things?

    • Perhaps we could make some money on this. Of course, Las Vegas itself seems like one of the least sustainable places around. I remember a few years ago running into someone who told me that she and her husband had decided to retire to Las Vegas. It seemed like a strange choice.

  17. Joe Clarkson says:

    My wife and I have long prepared for the future based on asking ourselves the question “How will we survive if we cannot use money?” So we have a good start on the preparation process that many of today’s comments suggest is necessary, but we are continuing to devote considerable effort (and the money we are fortunate to have) toward ongoing preparations. (FYI, in addition to propane, diesel can be stored for many years and remain perfectly usable after filtering.)

    And although I think that there is a great likelihood that paper assets will become worthless in the not too distant future and, to paraphrase President Bush II, “This sucker does go down”, what will be likely to happen then?

    After they recover from the initial shock, the vast majority of people will be unable to do anything except stay home and “shelter in place”. They will quickly run out of food unless our extensive supply chains somehow manage to keep going. This in spite of the fact that there is no credible money to facilitate their continuation in the face of the kind of civil disorder that only millions of desperate people can create. Will it really be possible for us to keep it together?

    The only way that I can see it happening is martial law. Our government(s) will devote maximum effort to getting food from farms to cities. Farmers will be told to keep working. Fuel will be commandeered for them and for the trucks and trains required. Electrical power will be devoted to essentials, like water pumping and sewage disposal. For most people, their day will be spent waiting in line for the bare number of calories required to stay alive. In this type of emergency command economy all effort will be toward preventing mass starvation. Eventually people will be told where to go and what to do to. In a financial collapse all of our physical capital remains but the economy’s “invisible hand” is amputated. It may be some time before a new medium of exchange comes into existence to facilitate our economic transactions. A collectivized economy is the only option when money doesn’t exist.

    To me, martial law and a command economy is a best-case scenario. I can only hope that plans for this kind of eventuality are already in place at all levels of civilian and military government. Even if so, and things go much better than expected, the death rate is likely to rise dramatically in spite of everyone’s best efforts. Good luck everyone!

    • I honestly don’t know what will happen. I expect that there will be different outcomes, different places. If we want an idea, we can probably look at Greece, Syria, and Spain, and read things Dmitry Orlov has written.

      I think that there is likely to be money of some kind most of the time, but it won’t work for most reasonable purposes, and most people won’t have any. If there is no money at all, I expect that there will be no electricity, because it will not be possible to pay workers. There also will be no oil, for a similar reason. With no money, there would likely be virtually no food or water, except what you produce yourself. A lot of this would depend on what kind of government remains, and whether they can quickly come up with a new kind of currency if the old one fails.

    • Scott says:

      Good Post Joe,

      My wife and I moved to a remote part of Oregon several years ago for the just the reasons you stated. There is hunting and fishing here and locals will protect the area and I thing keep the peace to a point if needed.

      What you said that most will just shelter in place and I think that will mean death for many sadly as most do not have any supplies set aside.

      I traded most of what little cash I had left for bit of silver coins and gold.

      If you live in the country many folks can and garden and hunt and that is the group I decided to join when I left the city a several years ago, took an early retirement to do it, My home is paid for luckily which I know is hard to do, but at least I do not have a bank in my life anymore. I wanted to pay off my home because I do not fully trust my pension, but hope it holds up. But I did work a job for nearly 30 years to get here.

      I am not a Mormon but but some of my neighbors are and like them I also store food some of which I dried myself with an inexpensive dehydrator and I have plans and parts already gathered to build one from solar using some glass. We have been doing the gardening for a few years at our old home and then up here in Oregon and it is hard to grow most of your food, we still do much business with the markets like Trader Joe’s which is a good store.

      Much of your garden will come in all at once and you bombarded with so much you cannot eat it, so we dry it and put it in Mason Jars with Oxygen removers which pull out the air and keeps for years. Bell Peppers, Zucchini, corn and many other things are good to dry at harvest time.

      For the real tough times, I also have lots of freeze dried #10 cans which are about the size of a large coffee can, they have everything from meat to veggies to bacon and eggs pre made. But I just mostly bough freeze dried chicken, beef and I supplement them with my garden to a stir pot of something that will feed us, so my freeze dried veggies from my garden and a little freeze dried meat can go a long way in tough times to get through a long winter because yes April is a difficult month, if you do not have food. Also I store 5 gallon buckets of beans and rice etc. But these do not last as long as the freeze dried foods in the #10 cans, they can last more than 25 years but they do cost more. I am not looking forward to the day when I have to open my freeze dried food cans!
      Seeds are also something I have many of and I even bought some that are in sealed #10 cans too and keep in the fridge to make stay alive.

      So yes we have spent some money to prepare, but I feel a bit less dependent on the system.

      So that is my plan, good luck everyone.

    • command economies always have commanders
      they invariably serve their own best interests and that of their tribe.
      If you dont worship the same idols, you’re out. or dead
      I agree with the theory of a command economy. but it will be far from benign. Its likely to be based on religious bigotry and god-inspired unpleasantness…just like it always was.
      to end on an an attempt at black humour
      ”nobody expects the spanish inquisition”

      • xabier says:

        Valid points, but we should perhaps recall that the Church preserved the civilized arts and literacy in the Dark Ages: only later did it become a pernicious and repressive force (killing, for instance, my cousin’s great-uncle in Spain for possessing a copy of Voltaire in 1936!)

      • End,

        I think that most unlikely, and I am a bit weary of the “religion is the source of all evil” meme. Those espousing it conveniently forget that Stalin, Mao, and Pol Pot were all avowed followers of a system of thought which proclaimed that religion was the opiate of the masses and espoused a quite open hostility to the idea of God’s existence. They were quite systematic and ruthless in the elimination of those they found to be hindrances.

        Anyone who questions or undermines the dominant paradigm, especially when the powerful are heavily invested in that paradigm, is in danger of backlash. Doubly so when the society is under stress or threat. It doesn’t matter if the dominant paradigm is religious or secular. Just recently I heard a young woman express rather vehemently the idea that anyone who questions or denies the existence of anthropogenic climate change should be arrested. She was serious, and nobody else in her group sought to dissuade her from her view. As a fundamentalist myself, I recognize another fundamentalism when I see one. We’re all fundamentalists at heart. My great advantage is that I know it.

        In the meantime I can’t even get a certain percentage my congregation to show up for church each Sunday, so I’m pretty pessimistic that I’ll be able to get them to plunder and murder their irreligious neighbors.

  18. Don Stewart says:

    This isn’t a response to anyone in particular…Don Stewart

    When people say ‘nothing can be done’, I wonder if they truly understand the options we have. I’ll grant you that most people won’t take advantage of what is available. Am I supposed to try to save them anyway? At my age, with less than perfect memory, less strength than I used to have, a little hard of hearing, maybe less patience than I once had?

    Read Albert Bates blog today for two significant advances. First, someone is really giving us a pretty good definition of ‘green’. Second, Eric Toensmeier (of Paradise Lot fame) has taken on the cause of carbon sequestration with useful products (as opposed to stuffing dangerous residues in the ground). Also check out Albert’s climate farming short course.
    http://peaksurfer.blogspot.com/2013/04/multiplexing-capitalism.html

    Also check out all the courses offered at The Farm this summer:

    http://www.thefarm.org/etc/courses.html

    And finally, a wonderful quotation:

    Says Joel Salatin: “I wish–oh how I wish–I could snap my fingers and things would be different. Farms would grow soil instead of depleting it. Food would be nutrient dense instead of deficient. People would fall in love again with domestic culinary arts. Domestic larders would supplant the entertainment center as focal points for domestic tranquility and security. But it doesn’t happen when I snap my fingers. It happens when you, you, you, and you–and I–begin making different decisions. That is what I can do, and ultimately, that is all that really matters. Now let’s go change the world.”

    • albertbates says:

      Thanks for the links, Don. I suddenly started noticing a lot of people arriving at my site from Gail’s and wondered why that was, since I am not listed on her blogroll. This was why! The short lead to my post is this:

      “There is a lot of fine detail needed to separate the work of ecological repair from Ponzi-the-Clown traditional business models common to shark-tank TV shows, weekend webinars and MBA-mills. The line between monopolistic robber barons and “green business” triple-bottom-line eco-entrepreneurs has been muddied by the human profit motive and capitalism’s ROI imperative. Roland and Landua have significantly advanced the discussion by creating a bright line formula for marking the distinction: Stop buying, selling, and trading in degenerative goods and services.”

      Your mention and the track back drew me to read the wonderful discussion above and reminded me of a disagreement I have with Gail and a number of other ASPO celebrities. My work with climate sciences began in the early 1980s, with Climate in Crisis: The Greenhouse Effect and What You Can Do published in 1990, a decade before An Inconvenient Truth. At that time I had already written 2 books on energy and was well acquainted with peak oil. What scared me about climate change was what I included as a chapter in CIC called “Runaway;” the notion of tipping points. This is something many in the peak oil world still fail to grasp.

      We might well decimate emissions in the collapse that follows peak everything, and it may well by then (or even now) be too late to matter. This is Guy MacPherson’s point as well. The window for making meaningful changes is slamming shut. If you run the carbon cycle numbers, as I did in my most recent book in 2010, eliminating all fossil fuel emissions would only slow GHG concentration growth by 50%, when what is now required is negative growth, ie: net sequestration. There was a time when the oceans did that, but they are C oversaturated now and becoming net sources. There was a time when vegetation did that, but once a threshold soil temperature is reached, they too reverse and become positive C pumps. Earth meet Venus. Perhaps this is what happened long ago on Mars.

      So, while I agree with Gail and others that IPCC underestimated the effect of peak everything and attendant economic contraction, I don’t see a path out of the woods that way. My work now, and my blog posts, are focused on real paths out.

  19. Dogtrainer says:

    The Perceived Value of Goods is Starting to Fall Rapidly

    I have been noticing at garage sales recently that people are selling their property at sub-dollar prices 25 cents, 50 cents per item or just giving it away (previously such items would be price $1.00 and above). People’s psychology about the value of things is beginning to change. Things, stuff, property—tangible property seems to be valued less by people; if you can’t use it then you might as well just lose it.

    This apparent attitude shift could be a good thing since it will allow for an efficient reshuffling of property into the hands of people that can put it into productive use without having to burn expensive oil to produce and acquire the same (new) objects.

    I see something similar to the above taking place with discount retailers such as Wal-Mart and Dollar stores. Wal-Mart has become a higher end discounter that is almost unaffordable because of the pricing of their goods. Dollar stores are the newer (preferred) lower end discounter. Maybe next will be .50 Stores.

    Could deflation be the way out of this economic downward spiral?

    • Scott says:

      Well, it depends on what it is and what is valued at the time. I have had no problem selling used items at reduced prices when I moved but yeah I got less than half what I had paid, way less in most cases but that is common with used stuff.

      If the central bankers would step aside and stop their quantitative easing (bond buying) we would see a huge deflation.

      The second great depression would would have begun in 2008 which I still think is underway just forestalled. Authors have argued that the Fed is just like fighting a deflation with a garden hose and that could be true, but they really can still ramp up printing more and that could lead us into a place where we see two markets like we are already seeing, unrealistic retail prices while most folks trading goods and bartering for much less. We really see that here in Oregon.

      But it seems like they are flooding money into the system but deflation is still going on in many areas while inflation is hitting others like stocks and food prices. But lately I have noticed a softening of even those items, stocks are wavering a bit. Gold and silver coins have dropped in price. These are good values for those that want to stock up and the coins they will provide a good trading vehicle aside from real goods like food and things.

      It is a worldwide event this reflation but will it just merge into both hyperinflation in goods we need and deflation in things that are not in favor, I think so. Everywhere I look especially in Japan they are increasing the money supplies and trying to fight this and keep rates low, look for an uneven result. Inflation perhaps in some places and in many places not much much money around where folks are selling their stuff cheap.

      The government will go broke if they have to roll over the trillions in bonds at fair market price say 5-7 percent interest.

      The money finds its way unevenly into places of the economy. I have seen some new items really pricey like a $500 patio table, while my neighborhood garage sales are so cheap on items that did cost quite a bit when new. I like to shop the used stores these days even for clothes.

      • I think you are right about inflation with some things (bare necessities) and deflation in others.It seems like there are more shops selling used goods today.

    • I haven’t shopped much at either Walmart or Dollar stores, but I notice Walmart and MacDonald’s haven’t done as well recently. If people don’t have money to spend, they will spend what little they have on barest necessities, or on very cheap goods.

  20. OFWers might be interested in the Demand Destruction side of this equation, which I just published up on the Diner, titled Diners on the Spaceship Earth

    Took a page from Gail’s Modus Operandi and included some Graphs in this one. I do doubt Biz Insider will publish it though anyhow. LOL.

    http://www.doomsteaddiner.org/blog/2013/04/23/diners-on-the-spaceship-earth/

    RE

  21. Pingback: Lågt oljepris leder till ekonomisk peakoil « ASPO Sverige

  22. Mel Tisdale says:

    This morning on BBC R4 there was a programme called Stephanomics. It was a call-in show on economics and was hosted by the BBC’s economics editor, Stephanie Flanders. It included among the panelists one Janet Henry, Chief European Economist at HSBC. She made the comment that peak oil used to be thought of as a problem, but now we have shale oil that is no longer the case. I think most regular readers of this blog might feel inclined to differ.

    • Dan Hood says:

      Janet Henry is 100% correct! Peak Oil is not a problem because problems can be solved for the better. Which oddly in her case, means more exponential growth that’s good for the banks. Clearly doing the abacus was never her strong point because had she sat down and calculated the doubling time and exponential growth rates of total population, she would soon realise we’re on an unsustainable trajectory. But hey, why let some universal laws of nature and balance get in the way of an out of control virus! Peak Oil is however, a rather large predicament. It can only be managed, it certainly can’t be solved. So in addition to the Holy Shale, to counter Peak Oil they’re actually saying that Peak Demand is a great thing because it solves the problem of Peak Oil? Go figure whilst you laugh hysterically on the floor at their twirped logic. Shale Oil is akin to rearranging deck chairs and playing music on the titanic. A few seconds worth of distraction at best. In fact this whole scenario reminds me of the story of the titanic. Boy have the lessons of the titanic been ignored. The ship that not even god could sink.

      • Christopher Johnson says:

        Dan, Do you think they might not have heard the term ‘unsustainable trajectory’? I give it 9 to 1 against that no television economist could utter that phrase and discuss its arrival.

    • As long as peak oil talk people about the issue as being one simply of supply and of geological decline, it is easy for commenters to be confused. Also, economists with their stupid message is a real problem. The question is how one gets the correct message out.

      • Christopher Johnson says:

        Yes ma’am, you are spot on. How about a phone call to Daniel Yeargin? Even if he argued or rejected the idea you’d know that he understood it…

      • Mel Tisdale says:

        I imagine that the powers that be are being advised as to the urgency of the problem and what failure to resolve it could mean. That it could lead to their losing their jobs, their food supply, their freedoms etc. must surely be exercising their little grey cells. Perhaps you and the Colin Cambells of this world should form an alliance and thus present a united front on the matter. It isn’t as though your views are mutually exclusive. Yes, geology plays a very significant role in defining the shape of the oil extraction curve and the financial issues of the resulting extraction costs are where that geology impinges on society.

        • Brian Carpenter says:

          Do you have any idea how many “experts” they already see in a week, each telling them to allocate resources and power to “x” or there will be a disaster? And most of the disasters never come. And they’re almost always labeled saps and suckers (or worse) when they do capitulate. Think bank bailouts and Patriot Act. The experts told congress in the 1970′s that we were running out of natural gas in this country, and that it was a strategic resource that must be conserved. No new natural gas power plants were to be built by law. Coal was the way to go. Other experts tried to disagree, but were shut up and ignored. 35 years later…. oops! Let’s convert those coal plants to natural gas.

          The people who make the ultimate decisions are at the mercy of the experts. They’re not stupid. They know it and use the competing claims of the experts to advance their own self interest. The process itself is defective. It requires far more honesty, integrity, and self-sacrifice than we as a people possess to function correctly.

          • Mel Tisdale says:

            The people who make the ultimate decisions are at the mercy of the experts. They’re not stupid. They know it and use the competing claims of the experts to advance their own self interest. The process itself is defective. It requires far more honesty, integrity, and self-sacrifice than we as a people possess to function correctly.

            Then let’s find a way to allow the already rich and powerful to further enhance their riches and power by making these transitions. There is lots of money to be made reconfiguring the energy infrastructure of a planet. You will be amazed at how fast things get done then.

            I hope to goodness that you are not in a position of political influence. Climate change is only denied by “the already rich powerfulerul” because it might stop them making even more money. I cannot see how they can possibly be trusted to solve any problem that affects others if it is a prerequisite that it must be profitable to them, or they won’t act.

          • Brian Carpenter says:

            Mel,

            It’s denied by some. It’s embraced by others as a means of gaining further wealth and power. George Soros, Bill Gates, Warren Buffett, and Ted Turner come to mind as members of the latter class. Most of the political elites of Europe also seem to belong there. I really can’t think of examples in the former class, can you?

            • Mel Tisdale says:

              A direct answer is ‘no’, but I suspect that might be because the good guys who do whatever needs doing simply because it needs doing and they can afford it tend to keep quiet about it. I just don’t trust self-publishists.

          • Brian Carpenter says:

            They can’t be trusted to simply expend enormous time and resources to solve a problem that effects others out of the goodness of their itty bitty hearts. Neither can I. Neither can you. But rig the rules so that it is in their best interest to solve a given problem, and they will fall all over themselves to do so. Many of them live for just such a conquest. It’s the only thrill they’ve got left when every other desire is sated to the point of ennui. People can generally be counted on to pursue what they perceive to be in their own best interests. I would use the lever that generally works, and I would do so unapologetically. As you point out, the stakes are quite high.

          • Brian Carpenter says:

            So George Soros is a good guy? You’ve got a short memory for a Brit!

      • xabier says:

        Classical economics has, since the 18thc, given far too much emphasis to individual motivation – the ridiculous ‘animal spirits’ concept – and the mechanics of markets, and hardly any attention at all to more fundamental issues such as finite resources and the implications of that hard fact. Technological innovation has only contributed further to taking their eyes of the ball.

        Politicians today, and their advisors, are almost all concerned with manipulating the acquisitive instinct and keeping the ball rolling, even if it leads to a drop at the cliff-edge: hence all the talk of cheap mortgages, student loans, etc.

        It’s like Socialists and Conservatives who wrangle endlessly over how the economic cake is cut up, without pausing to consider whether that cake might be about to vanish! (If your bit of the cake vanishes, it’s because some rogue, rich or poor, has taken it from you. All a bit like looking for the witch when you cow drops dead………)

        I’m beginning to conclude that we are biologically programmed NOT to understand reality!

        • As I understand it, in the Old Testament, the belief was that the Jewish people as a group would be saved, and that a person’s influence continued through his children and grandchildren.

          In the New Testament, there is more of a belief in individual salvation.

          It seems like these religious beliefs got carried over into political thinking.

          In China and India, my understanding is that there has been much less emphasis on the individual. The way society is organized, a person doesn’t want to deviate too much from what everyone else is doing. There is a Japanese proverb, “The nail that sticks out gets hammered.

          I think the fact that Christian, Jewish, and Muslim religions chose to emphasize the difference between humans and animals also resulted in less examination of how we are similar to animals.

          Maybe we are programmed to ignore the obvious.

    • yup—I was screaming “you daft bat” at the radio too
      ive added the link to it below—everyone who can should listen to to realise how crazy economists are

  23. Christopher Johnson says:

    In the event some readers may wish to maintain contact with a normal world (you define but should be pre-apocalysm, at minimum) that may avoid falling off a petrol-inspired financial cliff for at least a few weeks, you may be interested that this week’s Economist focuses on automobiles. They run a large center spread on numerous aspects of emerging interest items related to automobile, such as powertrain systems, self-driving, China’s market, and other items. The below link takes you to the powertrain systems essay which is the most germane to our focus in this blog, I believe.
    http://www.economist.com/news/special-report/21576219-carmakers-are-hedging-their-bets-powering-cars-great-powertrain-race.

  24. anyone wanting to get a handle on the insane ignorance of ‘economy experts’, and able to tune to uk BBC radio schedules, should listen to \Stephanomics’ on
    http://www.bbc.co.uk/programmes/b01s09yv

  25. Pingback: Low Oil Prices Lead to Economic Peak Oil | Doomstead Diner

  26. Michael Lloyd says:

    I saw this article on the BBC web site and followed the link back to the originator.
    http://www.bbc.co.uk/news/business-22002530

    The Future of Humanity Project at Oxford and the paper below
    http://www.existential-risk.org/concept.pdf

    It looks like an interesting read. There seems to be an underlying assumption that energy supply is not a problem in the short term. However, I did like the following concept in the paper:

    “That is, instead of seeking to approximate a sustainable state, it should pursue a sustainable trajectory.
    The present human condition is likewise a transitional state. Like the rocket in our analogy, humanity needs to pursue a sustainable trajectory, one that will minimize the risk of existential catastrophe.”

    • the words ‘sustainable trajectory’ arouse suspicions about the author of that article, deep and interesting though it may be
      one must relate the concept to a cannonball
      immediately it leaves the gun barrel it has three theoretical possibilities.
      1 it curves upwards…unlikely
      2 it goes in a straight line forever…unlikely
      3 it starts to lose momentum and curve downwards the moment it leaves the barrel,
      that is the ‘trajectory’ following newtonian laws of motion. to maintain a ‘sustainable trajectory’ external forces must be applied to the cannonball to prevent it falling to the ground. ie–we revert to condition 2 where the cannonball goes on forever.
      right now humanity is losing access to those ‘external forces’ to maintain the sustainable trajectory,

      • “right now humanity is losing access to those ‘external forces’ to maintain the sustainable trajectory,”

        That is a good way of putting it. That is why a “Steady State” economy is an theory that can’t happen.

    • Interesting! Somehow, these folks miss the fact that prior civilizations pretty much suffered from overshoot and collapse, and that overshoot and collapse is the way animal and plant species act, if exposed to a “novel” energy source. There is very definitely a risk of extinction for humans from overshoot and collapse, although I don’t know how that would work. It might have to do with destabilizing other systems, such as fish populations of oceans, or ocean acidity, or the climate, as well as the financial problems that bring down most of current civilization. Otherwise, I suppose one gets oscillation–a huge drop, and then a rise again, before another decline. With the tendency of all species to make use of whatever energy source is around them, I find it hard to believe in a “steady state” anything. A “sustainable trajectory” to me is almost a contradiction in terms. If humans could learn to control their population (something we have never done in general, although some smaller populations have used enough birth control, abortion, infanticide, and killing of adults to reach this objective), then perhaps a small hunter-gatherer population could be sustainable.

      • Michael Lloyd says:

        Gail et al,

        Not sure whether you are familiar with the computer simulation Daisyworld.
        See http://en.wikipedia.org/wiki/Daisyworld
        This lead to the idea of the importance of biodiversity, which human activity is increasingly threatening.
        Like you I am wary of any attempt to create a “steady state”. I do however, see homeostasis as a better concept here. To me, what is important is the idea of dynamics, rates of changes, feedback mechanisms in order to avoid moving into overshoot. I would consider a “sustainable trajectory” to be one that permits us to avoid overshoot and collapse.

        • Everything I can see says we are already well into overshoot. It is hard now to fix the situation.

          • Michael Lloyd says:

            Agreed. Perhaps I should express this clearer. Collapse will lead to a new state and, provided that new state is not one where the human race does not exist, we should follow a sustainable path from there on.

            To quote Santayana: those you fail to learn the lesson of history are condemned to repeat it.

            Also, whilst we probably cannot avoid collapse now, we may well be able to influence the rate of collapse and mitigate some of its effects. This has to be worth trying.

      • Scott says:

        Those articles were very good.
        Recopied here! Thank you Michael Lloyd for those and I have shared them with my friends.
        ==================================================================
        I saw this article on the BBC web site and followed the link back to the originator. http://www.bbc.co.uk/news/business-22002530

        The Future of Humanity Project at Oxford and the paper below
        http://www.existential-risk.org/concept.pdf
        ===================================================================
        I get the point and the big question in my mind is just about time, about the timeline of how much time we really have until we see the hard times we have been discussing.

        I have said this many times and it is amazing how long things sometimes be postponed, can kicked down road. I still wonder about unknown technologies that exist with Hydrogen fuel cells. If we can make hydrogen in a way to mix it with liquid and make something to replace gas? That just may be another of my way out thoughts…?

        So is it possible we have a generation or two before the “Long Emergency” like James Howard Kunstler wrote about in his book “World made by hand”. He has some interesting podcast too which I have followed on that subject.

        So Gail I am going to press you one more time, on this time line issue… You know Fracking and all of the last great oil fields in Africa, will they buy us 20 or so years?

        Could we have another 20-40 years before we see things in crisis?
        I do not think so because the financial collapse seems imminent perhaps first in Europe some event. If things stay calm in the world and financial system holds together I could see us getting another 40 years perhaps. But you know we would be eating other things than fish by then, probably farmed land based protein as the reefs will be gone. More health challenges for many of us as this gets worse.

        • Michael Lloyd says:

          Scott, you’re welcome. You may also find the Cambridge Centre for the Study of Existential Risk of interest. http://cser.org
          It looks similar to the Oxford project. Also, I would caution that the qualifications of those involved in both projects are in, inter alia, Philosophy, Computational Science, Neuroscience and Physics. The phrase that comes to mind is: if you only have a hammer then every problem looks like a nail.

          As Gail points out, many times, it is the available net energy to the human race that is crucial. I would not expect any new energy technology to have an impact within the next 20-40 years. We are going to have to make do with what is already capable of being deployed.

          In answer to your question about hydrogen, you could look at this document:

          http://www.uni-kassel.de/upress/online/frei/978-3-89958-798-2.volltext.frei.pdf
          Specifically, look at Section 4 page 104 on Renewable Power Methane. This is a very technical document and it might be hard going if you do not have a background in chemistry and physics.

          Best of luck.

        • The issue is a financial collapse, and that seems to be coming in the next few years. How much is in the ground is more or less irrelevant, in my view. We are seeing the financial collapse coming especially in Europe, but Japan and the US too. The more a person knows about the financial situation, the shakier it looks.

          • Scott says:

            Yes, I totally agree the more we know about the state of the world finance system the shakier it looks for sure.

            And also concerns me is that so many are now dependent on the government and these programs did not exist last time when we had a great depression.

            This latest great depression appears to have begun in 2008 and have papered over with printed money but it is out there looming like a huge storm wanted to come right at us.

            Not looking forward to that day when and if folks stop getting all those entitlements.

            The question is will it be a deflationary depression or hyper-inflationary depression. Given the direction that central bankers are on, it looks like hyper-inflation to me. Japan just turned up their money printing machine trying to ramp up inflation.

            It seems we have inflation in needful things and deflation in not so needed things. As the printed money is mostly given to the banks In the USA we are seeing inflation that way and also the stocks and bonds. The new money finds its unevenly into the economy causing bubbles that will burst. Watch the Bond and stock Markets… The first sign of it will likely be a collapse in bonds and stock prices. Which is a deflationary event, but I imagine it be the reaction to that collapse with a huge QE that may well bring our hyper inflation. If it was not for the Central Bankers surely it would be a deflationary event much the 30′s. But who knows they may not be able to print enough money to stop the deflation if bond markets collapse.

          • xabier says:

            Gail

            ‘The collapse is coming’. I’d be inclined to agree there from my snail’s eye view: we can track the sales and profits of the big companies, which have generally been so bad in the last quarter of 2012, but the niche-market order books of ‘Xabier plc’ have actually followed the world economy very closely indeed in all its recent and troughs, from the steady decline 2004 to 2007, the 2008 to 2009 nightmare years, the 2010 to early 2012 ‘recovery’ period, and the stalling in late 2012. The health of my business seems to me to be very closely correlated with the economic performance of the developed countries.

            And what provokes deep misgivings for 2013? Last two quarters of 2012: down 40%. January to April orders: 60% down on 2012. April orders (for reasons of trade fairs in June normally the peak month) are 90% down, and May looks to be the same. Now, this level of performance was last seen by me in the years before 2007 when my American customer base was sliding towards insolvency, and my American trade customers found they couldn’t shift expensive inventory: first it went slowly, then they had to discount, and then it all stopped, more or less, until 2010. Trade customers in Britain have seen a 90% fall year on year for the same period: this kind of volatility is not usual for them, but it was seen back in 2007-8.

            My niche market caters to the wealthy and the upper middle-class, and my skills are rare to vanishing point: if they are spending, I get the work. Suppliers are now desperate to sell me materials at great discounts, in itself a very bad sign, although it counterbalances the quadrupling of those materials over the last decade. This is an alarming picture. I do not cater to the oligarch league, (not cultivated enough ) nor to the mass of people – maybe the non-discretionary purchases in other sectors of the lower and middle income groups will be more stable? Who can say? I would hesitate to call on the timing of a collapse, but the picture is not rosy. A renewed, broadening, deepening, wave of private and commercial defaults in 2013 to 2014 seems most likely, and we know what that can do to the ‘recovered’ financial system, tax revenue generation, and the property markets……….

      • xabier says:

        ‘Sustainable’ is the new comfort blanket for those who do not wish to face reality: entirely understandable! I suppose the difference is that our earlier unsustainable efforts, each doomed over a greater or lesser period, had little global impact before the oil bonanza made the wrecking of nearly the whole globe possible.

  27. ADI says:

    Another great post Gail. You should do a guest post on theoildrum.com. Their readers would eat this stuff up. And probably give you a lot more readers here!

    • I did submit this one at The Oil Drum. I don’t know yet whether it will run. That depends on what other editors want to publish with respect to posts–some don’t know or care about financial issues, so abstain from voting.

  28. Don Stewart says:

    George Mobus, of the Question Everything blog, and who sometimes comments here, has an interesting post which relates to some of the hot topics on this blog:

    http://questioneverything.typepad.com/question_everything/2013/04/can-we-envision-future-homo-eusapiens.html

    I’ll give my own interpretation of some of his comments–for which I am responsible, not George.
    1. We are headed for a Bottleneck in terms of human population.
    2. But perhaps out of that Bottleneck a ‘better’ Human will emerge. That is, a Human which does not destroy its own support system.
    3. Ethics suggests that we preferentially favor the ‘better’ Human against, let’s say, a Wall Street Bankster or your thoughtless neighbor who squanders resources.

    George suggests some particular traits Humans have evolved. I suggest another trait: the love of beauty.

    I recently suggested that people should pay attention to Geoff Lawton’s videos and what Geoff is doing to manage water. Now consider this passage from Paul Stamets’ book Mycelium Running: How Mushrooms Can Help Save The World. Page 64.

    ‘Because water propels fungal life cycles, droughts effectively shut down the nutrient-return pathways. When a habitat loses its mycelium due to drought or fire, soil debris crumbles and blows away….Since water doesn’t run off as quickly, the resident soil moisture seen in no-till fields is naturally higher due to the spongelike effects of the mycelium gobbling up the crop stubble and swelling with water. The coarse soil structure embedded with stalks is perfect for mycelium to run upon. Tilling breaks the stubble into finer fragments, compacts the soil, and encourages growth of anerobic organisms to the detriment of the oxygen starved mycelium. Then, the carbon cycle stalls, natural nutrients are not rereleased, and importation of fertilizer is required.’

    (Geoff Lawton is suggesting the use not only of mycelium but also trees and ground covers and earthworks to make the most of water.)

    If you read the entire passage, you will get a thorough understanding of just how important mycelium are, and just how water plays into the whole system. I submit that the system is beautiful. Anyone who can’t see anything but dirt deserves to toil in the canyons of Wall Street. And, in a just world, their habits of thought won’t make it into whatever comes after Homo Economicus.

    I frankly have little sympathy for those who insist that we have to save all 9 billion people. I just don’t think it is in the physical cards. I am a lot more interested in fostering the preservation of those ways of thinking and feeling which can restore the fecundity of Mother Nature.

    Don Stewart

    • xabier says:

      Don

      As a craftsman, I can affirm that the creation of beauty (and durable utility) is intimately linked with personal qualities such as sobriety, diligence, perseverance, imagination, objective self-assessment, honesty, generosity, and many other sterling human qualities – not excluding an understanding of one’s materials, and a wise use of them. Also, both modesty and pride.

      That might well describe Mr Mobus’s better type of human? (I make no claims to all of the above catalogue of virtues, but I appreciate them!)

      I’ve known good craftsmen who were drunken, dishonest and vain, greedy for money, but they were never the best, it showed……

      • Brian Carpenter says:

        Well said xabier! It’s high time we started talking about such ideals again!

      • Brian Carpenter says:

        BTW Xabier, I have a thought for you to ponder. It may encourage you. For centuries human labor was the most economical way of getting work done. With the advent of fossil fuels, that equation shifted radically in the direction of the machine. One bulldozer could move more dirt in a day than 20 men with shovels. The equation may be rebalancing in favor of human labor again. I doubt that will help you get through 2013 with your business intact, but craftsmanship, integrity, and dignified, productive work may win out in the end. In which case those of who create good, durable, useful things will be highly sought after. I recommend an essay by CS Lewis called “Good Work and Good Works” which can be found (horribly formatted but free of charge) here:

        http://archive.org/stream/worldslastnighta012859mbp/worldslastnighta012859mbp_djvu.txt

  29. xabier says:

    Scott

    There are more people dependent on welfare than ever before, in a way that didn’t exist in the 1930′s. And their morality is, in many cases, much worse. There were working men in Britain in those years who would have starved before stealing or using violence, their nobility was extraordinary. It will not be so again, you are right.

    • Scott says:

      Yes Xabier,
      That is very true about how people have changed. That is partly why I moved to a very rural area on the edge of the mountains, a small community where we have found much of what has been lost in America does still exist, caring folks and friendly helpful neighbors.

      I know I have been telling everyone to get out of the city be safer ,but at the same time I understand how hard it is to leave family, jobs and friends behind. Two years ago my wife and I left the city and left behind family and friends. To move away and change our lives in this way is really a personal choice. For me it was no problem to make the move, because I was raised in the mountains and never really liked town anyway.

      Not much work around here, many are dependent on unstable financial assistance which is very concerning, entitlements that did not exist in the last depression will likely be the first to go and many penny less folks will be around here too.

      But looking back two years later our life is better up here – but, I understand the message here on the blog, that really none of us are safe from this thing coming. I just feel better up here hiding in the mountains knowing what is out there and violence I left behind in my former city.

      Moving to the mountains will not really change anything we are facing, but we do enjoy the time we have left up here.

      Everyday we have left is a good day.

      • Where ever we are, we need to make every day we have left a good day. We never know how long we have left, so that is not a bad choice in general. It is a better choice now, though.

        • Scott says:

          I was wondering what is on your mind for the next article or to talk about next with the group?

          Things we should be doing to change or to prepare for the worst? It feels like we are well past the change junction in the road with several paths. Well, how should we prepare or try to fix this thing as individuals?

          We see the problem, but we do not see the solution yet.

          And, we have overshot our turn off long ago perhaps in the 60′s or 70′s which is not good news. Oops folks – we missed the turn off!!

          Subject matter on my mind just some ideas for discussion are:

          Food storage,
          Energy storage etc.
          Or, should be try to save the system?
          Is there something out there that will save us yet unknown to us?
          Time lines for crisis
          Solutions anyone?

          We can help others that are loved and maybe have not seen this coming for short time by taking emergency food and energy storage measures? Every day that this problem holds off, is a good day.

          One thing I think we have all noticed is how tough it gets around the house after a few weeks of not going to the store. The challenges of storing food can be huge, but the downside is death.

          I was just wondering where we should focus our attention next?

          Best Regards,

          Scott

      • xabier says:

        Scott

        I just take the view that to live today in a decent place, leading a sane life, making sensible preparations for any future disruptions, should more than outweigh any fears about the future – which may never arrive for one as an individual!

        Many people will not behave well. It’s a sad thing to have to say, but there’s a group of welfare-dependent no-goods in my village here in England, and all the trouble comes from them, even now. But the good thing is, they stand out and I have my eye on them, know their natures, and I’d never trust one of them in a Crisis; whereas in a big city, such people are all around you, as you know! I’ve been caught up on the edges of a riot before , and the trouble comes to find you very quickly in a big city.

        If we can see things clearly and have the time and space, and money, to make sensible preparations for breaks in the system, then we are already in a far happier position than most of our fellow men.

        On my Spanish side all my family came from the mountains, but now they’ve more or less depopulated, the old village infrastructure has gone, and I need to stay here in order to earn as well. It’s a compromise.

  30. Don Stewart says:

    Dear Gail
    This may be frivolous or profound, a waste of time or thought provoking. About a half mile from my house is a road sign marking the home of a slave poet, George Moses Horton. Horton was a rarity: a published writer while he was still a slave. Two rich and influential people tried to buy his freedom, but were rebuffed by his owner. Horton knew about money…he recited his poems for money to University of North Carolina students and he earned money from his published books. And he knew that his owner was refusing to let others buy his freedom.

    So here is a man living in medieval conditions, who thinks and writes about the fecundity of Nature versus the miserliness of Money, and about how True Friendship is the ‘balm of every ill’.

    And today…we are apparently still under the sway of Money, since we expect any drop in our standard of living to result in Economic Collapse, and we still don’t understand that part about True Friendship since we confidently expect Zombies to roam the countryside when there isn’t enough money.

    Don Stewart

    THE WOODMAN AND MONEY HUNTER

    Throughout our rambles much we find;
    The bee trees burst with honey;
    Wild birds we tame of every kind,
    At once they seem to be resign’d;
    I know but one that lags behind,
    There’s nothing lags but money.

    The woods afford us much supply,
    The opossum, coon, and coney;
    They all are tame and venture nigh,
    Regardless of the public eye,
    I know but one among them shy,
    There’s nothing shy but money.

    And she lies in the bankrupt shade;
    The cunning fox is funny;
    When thus the public debts are paid,
    Deceitful cash is not afraid,
    Where funds are hid for private trade,
    There’s nothing paid but money.

    Then let us roam the woods along,
    And drive the coon and coney;
    Our lead is good, our powder strong,
    To shoot the pigeons as they throng,
    But sing no more the idle song,
    Nor prowl the chase for money.

    TRUE FRIENDSHIP
    (excerpts)

    Friendship, thou balm for ev’ry ill,
    I must aspire to thee;
    Whose breezes bid the heart be still,
    And render sweet the patient’s pill,
    And set the pris’ner free.
    . . . .

    When the lone stranger, forced to roam,
    Comes shiv’ring to her door,
    At once he finds a welcome home,
    The torch of grace dispels his gloom,
    And bids him grope no more.
    . . . .

    Friendship is but the feeling sigh,
    The sympathizing tear,
    Constrain’d to flow till others dry,
    Nor lets the needy soul pass by,
    Nor scorns to see or hear.

    • I think the question isn’t whether there will be enough money; it is whether there will be enough food (and water, and medicine). Of course, it may be the lack of money to pay workers that will bring the end to those things.

      I wonder if some slaves didn’t live in somewhat reasonable conditions–at least enough food and water, and adequate clothing. It is hard for us to know now what it was like back then. Knowing what is ahead is harder yet.

      • xabier says:

        As Rome collapsed, slavery or some form of bondage to a big landowner offered security of food and accommodation, so many took that option.

        Household slaves lived well, in the same way that later servants in the great British country houses were able to enjoy very ample food and decent living quarters – such places were much sought-after by people from poor rural families.

        Even some knights were technically slaves of their lords in the Middle Ages, but lived well (knight meaning ‘servant’ originally), this was particularly so in Germany.

        Someone just on the edge today, trying to run a car, service a mortgage, pay food bills, and so on, may well be more miserable and stressed than many a slave of the past. Under Rome, slaves could buy their freedom, but many in debt servitude today have no hope of doing so – and even if you keep out of debt, the Government will be hugely indebted and come after you for the taxes to service it, maybe even making you sell your home…….

        • What you say makes sense to me. If a family lives well, its servants likely also lives well. Being a slave (or intern or worker) on a farm run by someone who knows what they are doing may be a sought after career solution in the future.

      • Don Stewart says:

        Gail
        All over the South, if you have a discerning eye, you can still find the remains of slave cabins. They aren’t the sorts of places you would want to live in.

        Within 100 yards of the road sign is a cemetary buried in the woods and covered with wisteria. Mary Ruffin Smith is buried in the cemetary. On her marker it says ‘she hath done what she could’. She gave money to UNC and to The Chapel of the Cross in Chapel Hill.

        In the 1850s she and her two brothers were the ‘rich people’ in this neighborhood. One brother was a lawyer, the other a doctor, both married. Mary was unmarried. All three lived close together around the place where the cemetary is now. One of Mary’s slaves married a free black man. The brothers saw that the young female slave was attractive. One of the brothers decided he wanted her for a mistress, so he simply ran her husband out of the county. At night, he would go up to her shack and bring her back to his house. One dark night, the other brother ambushed him and beat him very badly and took the slave for himself.

        Out of that union several children were born. Of course, respectable white lawyers and doctors didn’t raise their own illegitimate mixed race children, so Mary raised the children. The word is that she treated them ‘better than field slaves, but not as well as house slaves’. The young woman was the grandmother of Pauli Murray. Pauli grew up in Harlem and became the first black female graduate of Harvard Law School. Pauli was ordained as an Episcopal priest. Pauli Murray preached her first sermon in The Chapel of the Cross, the roof of which had been paid for by Mary Ruffin Smith.

        Horton made a life for himself hunting with a muzzle loading gun (keep your powder dry), writing his poetry, etc….but it took Union troops to gain him his liberty. Then he moved to Philadelphia and never wrote another line of poetry. Was the poetry a way of coping with the conditions he was living in?

        Today, almost everyone thinks that if they had to live in the conditions I have just described, they would simply die or go insane or something awful. One commenter said that he would rather die than use an outhouse. Yet these slaves lived in conditions we think would be horrific, and made the best of them. To suggest to a modern that ‘the collapse of civilization may be moderated if you observe Nature and write poetry’ is likely to bring you nothing but abuse.

        In 1932 a ‘Texas Oil Man’ named George Opdyke wrote a book called Nature Study. Oil had hit 2 dollars a barrel and he was out of work. So he took his pencil and his paper and went into the woods and began a close study of the natural world. As a trained scientist, he looked for patterns and gave some advice in his book about how to observe them and record them with pencil and paper.

        Opdyke’s strategy for dealing with adversity isn’t that different from that of the slave poet. Again, don’t think that most people will be capable of doing this. Think about the tail of the distribution…where we all should aspire to be.

        Don Stewart

        • About all we can do is take one day at a time, and do the best we can. People lived without electricity and indoor plumbing for thousands of years. We should be able to figure it out as well.

          • something we tend to forget about indoor plumbing is that we have used it to fill our homes with water while living in very cold climates. when there is no longer sufficient energy to keep the pipes from freezing, those homes are going to be virtually uninhabitable

            • The point about needing heat to keep indoor plumbing working was made by James Howard Kunstler in “The Long Emergency”. It is something we sometimes forget.

            • Brian Carpenter says:

              That sort of thing could be easily dealt with by a more intelligent layout of pipes and plumbing fixtures, concentrating them in one small space and then heating that space. Passive solar with heat absorbing materials could keep it all above freezing.

              Anyone here want to design something useful like that?

            • Scott says:

              I grew up in Santa Cruz CA, USA and my first class in college was solar in 1980,

              I never finished it all and somehow I ended up being a management analyst in a government taxing authority and I am now retired… But I never lost my interest in peak oil which I first started to worry about as a young man in the 1970′s when I studied for the first time. In 1980 I started company in Texas briefly when I lived there for just a year to match Geologist to explore fields for the right oil companies, My company failed due to mostly problems I had with a partner that wrote lots of checks, but I was working hard at night to wait tables at a restaurant to make ends meet and try to make a go of the start up business in those tough days of 1980. We were headhunters for the oil companies for geologist.

              During those times I did talk to many oil men and learned a little about the very entrenched network of “good old boys” that exists in the oil business. It just gave me a glimpse into that world, but I have kept and eye this since then and now we are some years later past peak it seems. The USA is punched full of holes like a pin cushion one old oil man told me once.
              One thing for sure they have built themselves a way of life and it is very hard to change and those goes for most of us. I have my car outside but I do drive an old honda civic that uses the last amount of gas of any gas car I can find.

              On keeping pipes warm and a house warm using solar. I am not an expert on that but – Yes, there are those systems that pipe hot water from solar panels that naturally circulate the warm water due to heat rising and cold water falling from the panels to the floor if you install such a system, which can be a bit involved and expensive and may not be practical for all. Also nothing like a good wood stove to keep a cabin or home warm. Most systems like this will cost a bunch.

              When we bought this old country home we found a well in a box inside our family room which is a good thing because the wood stove is in there and inside the house which will keep its pipes warm. The well must have been here first before they built the addition to the home. I plan to keep it running with a small generator if needed.

              Here is a good podcast I found tonight that discusses peak oil and seems to follow lots of the stuff that has been discussed recently. It is about an hour long if you have time to listen, I am about half way through it and talks many things we have looked at, have not heard Thorium come up yet but I am not finished with it yet.

              Here it is, right now they are talking about soft peddling things because perhaps the public cannot handle the truth on peak oil.

              http://www.c-realm.com/wp-content/uploads/359_Stealing_from_the_Future.mp3

            • I don’t think we have either the time or energy to rebuild our houses now, except perhaps as huts made with local materials–perhaps with one or two rooms, without amenities such as glass windows.

          • Brian Carpenter says:

            Gail,

            It could be done on many houses in less than a month. Just relocate the pipes and the fixtures they supply to one place (they all come into the house and go out of the house in one place anyhow) and keep that place above 32F.

            Whether anyone will actually do such a thing is a different question entirely. But if we don’t have a month before the end, then we are all well and truly forked. I don’t subscribe to that point of view, however.

    • xabier says:

      Don

      Not a waste of time at all, excellent!

Comments are closed.