Peak Oil: What do we do now?

Our problem now is that we have built a complex economy that depends on oil and other fuels. We can see that we will have less oil in the future. The question is, “What we should do, in planning for a change in the world?”

Our natural reaction is to try to build add-ons to our current system that we hope might make the system work longer. I am afraid these will be mostly ill-advised, because the system is more complex than we understand, and well-meant changes may have adverse impacts.

What we really need is a new system that will work for the long-term. But such a system is so far away from us now, it is hard to even think about how it would work, and how we would get from our current system to the new system.

Our Current System

Our current system is a complex one that has evolved over a period of years. It is built upon a complex financial system, international trade, and many high-tech goods. Most people in the US live in homes that are heated and cooled to comfortable temperatures year-around and have access to a private passenger automobile, things that people in years’ past would have never dreamed possible.

The problem I see with our current system is that it is not likely to be very resilient. The current system depends on huge energy inputs. We can already see stresses as these are reduced.

Changes which don’t seem too big to us, and which seem to be helpful, could very well disturb the system. For example, conserving electricity would seem like a step in the right direction, but even this little step is likely to affect the finances of utilities, and is likely to make the construction of new, more efficient electric generation less feasible. When we make one change to try to make things better, we may in fact be making changes that make the system as a whole work less well.

There may be some specific changes that can be helpful, but it is difficult to know in advance what these are. In my view, these changes are likely to be the ones that require least government intervention, because they “make sense” without subsidies. For example, adding some geothermal electric generation in a location where geothermal is available, or making some natural gas vehicles if there seems to be a temporary oversupply of natural gas may make sense.

The big problem I see with our current system is that over the long-term (and perhaps not-so-long-term), it can’t continue to work, because the fossil fuels on which it depends are being depleted. Nearly all of the things (wind-generated electricity, solar PV, electric vehicles, fuels from algae) we are thinking about now are simply add-ons to the current system. Once the current system stops working, the additions will be of little benefit. Even something that looks resilient, like solar PV, stops working once there are no more light bulbs available for it to light up, and once back-up batteries are no longer available.

What we need: A new resilient system, that doesn’t depend on fossil fuels

We clearly will eventually need a new plan, but we haven’t even given a thought to what it might be. It is relatively easy to come up with a proposed component of the plan, but even this may not work out in practice.

For example, one can develop a plan for growing crops in an area that requires soil amendments to be brought in from some distance. Even though these amendments are “organic,” the fact that they must be transported some distance is likely to make the system not sustainable, without substantial fuel inputs.

As another example, I saw a plan developed by graduate students showing how we might build sustainable 1,600 square foot homes out of local materials. I would have a number of questions: How much labor will it require to build (and frequently rebuild) such homes? Will this be too much for a new poorer society? Will it be possible to heat such a large home, or should we be aiming for smaller homes?

We do have examples of societies that “worked” in the past, with virtually no fossil fuel inputs. In fact, if we look around the globe, some of these might be quite recent. It seems to me that we need to be studying some of these in more detail, to see if we can figure out what might work going forward. For example, quite a few of these used animal power, both for plowing fields and for transporting goods. If we were to start adding more animal power, what would this imply for land use? How did past societies deal with the need for shelter for themselves and their animals? How did they handle making clothing, and manufacturing household goods?

Societies don’t just spring to life. They evolve. That is a big reason our current situation is so difficult. We are trying to model the future based what we have now, but our current model is very much tied to our current fossil fuel use. It is hard to imagine that our system will work for the long term.

Instead, it seems to me we would do better to model the future on what we had at some time in the past, because at least this would give us an idea of what combination of home sizes, use of animals, size of farms, and even political structure worked in the past. I doubt people today would find this approach very acceptable, though, since so many things have changed–for example, modern medicine and the Internet, and it will be hard to give these up.

Our predicament

So what do we do? Just keep adding on to our current system, and hope that somehow we can keep it together a while longer? Or start working on a new, sustainable system for the long term?

If we do work on a new, sustainable system, how can we get our minds to even think in terms of what life might be like, essentially without fossil fuels? Is modeling based on the past (with perhaps a few additions to reflect the current situation) really our only alternative? Or is it possible to build a ” higher” sustainable system, using mostly local inputs, even though at this point, we don’t have a good model of what this might be?

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 financial problems for oil producers and for oil exporting countries. We are really dealing with a physics problem that affects many parts of the economy at once, including wages and the financial system. I try to look at the overall problem.
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55 Responses to Peak Oil: What do we do now?

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  2. Avis Maxwell says:

    I don’t think much can be done to transition society to another system. There is no other system, anyway, that can sustain 9 billion people as we have overshot the carrying capacity of the earth at about 3 billion people in the ’60,s. We all know,don’t we, that an ideal socialist utopian society cannot work without totalitarian force applied to the minions. Unless there is a fundamental change of consciousness to do it without the despots trying to control everything. Well, the human condition has us freaking out about the prospect; intellectualizing about it aside. After a die off of about 8 billion people by 2100 those left will possibly be able to pick up the pieces and use what is left of the remaining resources to continue on. Only then will the earth be able to support the remaining 1 billion or so people again in some fashion.

  3. Sylvia says:

    Here are my two cents

    1) the decline may not go with an abrupt crash and hard landing where> 90% of us suddenly starve to death. No – it will be a slow but steady decline with lots of crashes along the way. But – we as a society will have time to adjust. Our (in the western world) resources are immense, not just availability of energy but also energy and materials savings potential, education, infrastructure etc. Gaining time is the important piece here so we can implement workarounds and evolve new ways to live, to do business.

    2) It is not the 1900s any more, we do know very well how to generate electricity from various energy sources, we harnessed quite amazing powers, we have technology and expertise which will help us to create a constant and increasing flow of power, electric power that is – over time – energy which after all (very long term view) will not have to rely on fossil fuels.

    3.) Give a chemist and biologist electricity and biomass and they will create materials. Also here we are better off than just 100 years ago.

    4) our society on the mid term and longer term scale will most likely become more and more de-centralized. Technology allows that. No more central HQs/office people commute to, you can work from anywhere (home for example or a local mega office). People will generate power in their own dwellings, not just using solar but mini waste burning power plants and technologies which still will be invented. Trust our tech-kids, they are good! People also will grow their food more locally, no transportation of food from around the world.

    5.) I think we can easily survive and live comfortably of half of the energy we are using today – or less even. And I say that because a) when I grew up 40 something years ago we used certainly much less than half of the energy in our family than we do now. No jacuzzi, only one family car, longer distances were either gone via bicycle or public transportation, no air conditioning and food came from within the country, etc. etc. and b) today – in our household we just 2 years ago reduced our fossil fuel energy consummation by about 50% or more and we barely notice the difference (big savers are: burning renewable wood for heating, no more commuting but working from home resp. locally; home grown food = less driving for shopping, less packaging, less exotic items). and c) a lot of people right now do live on that much less – and in the past did (think Eastern European countries) survived and lived quite ok and used perhaps 20% of the energy we are using right now. While going back sounds awful – once you are doing it you may not even notice – the human mind is flexible like rubber and adjusts to many situations.

    In a nutshell – I think we are headed into a future which is a) decentralized and b) powered electrically (from varieties of sources)

    At least this is what I can hope for us Westerners, not sure how this may unfold for people who in many countries around the world right now live on the edge. Obviously reduction there is not an option.

    – SE

    • Joe Clarkson says:

      Aloha Sylvia,

      I have a great deal of sympathy for your view, as I have been a renewable energy researcher and developer for most of my adult life. I have built my own houses and powered them mostly with renewables from micro hydro to PV. My family grew up using about 1/10 the electricity of a typical family. We did however use as much gasoline as everyone else to operate the family vehicles.

      There is indeed a huge amount of waste that can be saved, which can make the decline in petroleum energy resources less abrupt. There are many cost effective ways to make electricity sustainably. But, the amount of time available to make a grand transition is too short.

      The world now uses about 88 million barrels of oil a day. Once a serious decline in oil production sets in, say 4.5% per year, we will need to find a replacement for about 4 million barrels per day capacity every year. That amount of fuel can supply energy that is roughly equal to 90 gigawatts of electrical generation (at 33% conversion efficiency). To get that amount of power out of concentrating solar power plants (with a capacity factor of 20%) would require an investment of about 2 trillion dollars per year. The technology is available, but where is the political will to spend that kind of money?

      In addition, to make electricity substitute for liquid fuels will require the conversion of much of the world’s transportation to electrically driven vehicles, not to mention the grid investment that will be required to get the additional electrical power to users. These are also huge capital commitments.

      Even before the decline in oil production really starts, we will find that the adverse economic effects of the “undulating plateau” will inhibit large scale capital formation. Although I would not be against the attempt, I just don’t think we can marshal the resources required.

      Individuals and small communities still have time to create little “islands” of sustainability, but the time for gradual conversion of the whole world economy to non-fossil power is long past.

  4. XRM says:

    What will survive and evolve on a barren planet? This is the question you all should be asking. It’s not in the nature of our species to voluntarily revert to a 1700’s lifestyle, no matter how quaint the idea. The human species will continue to wring out every last drop of high density energy it can get its hands on. It will continue to seek out ways to prop up and perpetuate current creature comforts (look at geo-engineering). It will continue to believe that such behavior is morally correct and admirable and worth pursuing.

    How brief their flame, but how bright they burn…..

  5. It took some 250 million years of sunlight sequestration in fossil fuels. We are depleting these solar energy stocks in a time span of some 250 years.

    1. I’m still quizzing whether it’s therefore correct to say that

    (a) We’re presently consuming a daily amount of fossil sun energy at a speed that is one million times higher than the sun’s daily energy falling on the earth.

    (b) It will be impossible to increase our share of daily sunlight energy by means of technology to offset the loss of fossil sun energy.

    (c) Even a small increase of our share of daily sun energy “income” would be detrimental to the energy available to the rest of nature and thus create again more imbalances.

    (d) So we have no choice but to return to pre-1700 lifestyles and structures.

    2. If 1 is valid then it folloows that
    (e) The remaining fossil energy should not be used to try and maintain our modern societies but to adapt structures and industries basically to ways of life as we had before 1700, trying to keep some of the useful achievements such as predominently preventive health maintenance.
    (f) We need to relocalise, i.e. work where we live. Abolish mechanised transportation. Democratically ban a host of products and activities that are either harmful or that we cannot environmentally afford. We will again have to run the factories when the wind, solar and water energy is available, read when the sun provides the light, sleep when it’s dark. Indeed the manual trades as mentioned by Engineer Earl (December 17, 2010 at 5:29 pm) will have to be relearned. And most people now working the white collar and engineering sectors will find work in the primary production sector of agriculture.
    (g) Cities will also belong to the past. No city is sustainable because all depends on the availability of resources from the land, for which transportation will no longer be available.
    (h) We’ll be extremely frugal, use products that last centuries instead of today’s planned obsolence culture.
    Most of modernity’s industry will have to become obsolete because we can’t ecologically afford its products.

    3. The financial system – I believe – can and must be scaled down to those parts that directly concern commercial banking, lending, borrowing and risk taking. The stock echanges can be closed down, first of all the parasitical funds “industry”. Investments will have to be in the restructuring and retraining sectors, investment decisions taken by politicians according to ecological needs and options that remain.

    4. All of the above are nothing but intellectual exercises with no real effect as long as the People In Power believe that we (1) must continue to grow, (2) present problems can be solved with yet-to-be invented technologies, and (3) population growth needs no attention.
    The PIP are factually irresponsible dreamers and religious believers in technology and miracles.

    5. My biggest question is how the PIP can access this sort of refelctions and then maybe decide it makes sense and change their minds.

    Helmut Lubbers, Geneva/Switzerland

    • Bicycle Dave says:

      Hi Helmut,

      I suggest that it is more than just the PIP. Just as a little experiment: suggest a national motor vehicle maximum speed limit of 35mph (or equivalent kilometers in your case). Even though this limit is totally rational, for a wide number of reasons, I suspect the average person will consider you to be a total fool. In this age of opinion pools, expecting any “leadership” to support your suggestion is highly unrealistic.

    • Joe Clarkson says:

      Aloha Helmut,

      I think your analysis is generally correct, especially at this late date in the fossil era. It might have been possible at one time to convert our fossil fuel patrimony into the capital investments that would have allowed sustainable concentration of solar energy, but I fear we are much too late.

      We probably would have had to start at least as early as 1931, the year of Edison’s famous “We are like tenant farmers chopping down the fence around our house for fuel when we should be using Natures inexhaustible sources of energy — sun, wind and tide. … I’d put my money on the sun and solar energy. What a source of power! I hope we don’t have to wait until oil and coal run out before we tackle that.”

      Even if we had taken Edison’s prescient statement seriously, it still wouldn’t have been enough without strict control of population growth. And now, since we took neither the finite nature of fossil fuels nor the detrimental effects of unchecked population growth seriously, we are stuck with fending for ourselves (individually) while we watch the societies we grew up in crumble around us.

  6. Joe Clarkson says:

    I don’t worry so much about a big die-off; after all, everyone alive today will be dead in 100 years no matter what happens. Even if the vast majority of people now alive do die without producing offspring and world population shrinks to a fraction of its current level, there will always be tribes and villages left somewhere to continue the human species.

    But there are a few bad things that could happen that would make even that prospect problematic. Large scale nuclear war is one. I doubt if bio-war could wipe out everyone, but it might come close. I sometimes wonder about the long term consequences if we simply abandoned our nuclear facilities, including waste in cooling pools and dry cask storage, reactors, or even weapons and weapons waste. Would lethal amounts of radioactive materials gradually migrate down rivers and end up in the ocean?

    I once read that at one time there was enough radioactive iodine in waste tanks near the Columbia River at Hanford to kill all life in the oceans. I think they have reinforced those tanks, but I am sure the waste is still not in secure multi-thousand-year storage.

    Climate change; massive human die-off; the end of industrial civilization: these are all small change compared with lethal worldwide radioactive pollution. Not only would we be gone, but so would much of the other life on earth. I know that this planet doesn’t mean all that much in a universal context, but it would be a real shame to see this little oasis come to a bad end. The least we can do is clean up our mess before we go.

  7. Auntiegrav says:

    The fundamental change that needs to occur is to drop the pretense that human beings are more important than any other species. This false morality is only a tool used to convince ourselves that we are being ‘noble’ when we consume things that we shouldn’t consume. The human modus operandi of late is a form of Manifest Destiny toward self destruction. It is the mindset of consumption for the sake of humans, rather than humans for the sake of being useful to the universe. In other words, humans will have to either learn to give back more to the planet than they take, or they will go extinct as fast as they humanly can (which is actually pretty fast).
    The here and now data of what we do (consume) vs. what we give back (little) is not looking good. Regardless of whether we have oil to burn or cold fusion or zero point energy, humans will either have to reverse their selfish attitude as a species or just simply fail to do so. What we imagine we are doing doesn’t matter. What we imagine the future will be doesn’t matter if our actions right now are designed and marketed to consume the future (create debts, both monetary and physical).
    What are people FOR? Who cares how much oil they have if they are simply doing stupid stuff with it?
    Human choices are not so intentional as we think they are. Most are made in a moment of emotion. That means at the cash register. That’s where influence should be wielded to change direction, and that means a consumption tax which reflects the true costs, as well as elimination of all income taxes, which hide the costs before the individual can do anything about it.
    Gail’s example of reducing energy use reducing the demand for newer, efficient power plants is then avoided, because the high environmental AND government costs would be reflected at the purchase point, pushing the reduction in energy use away from those places that require tax money to support them. Localized, human energy would become more valuable, as would the individual.
    The bottom line is that cheap energy(and cheap food) leads to cheap people. Cheap people are dysfunctional and powerless.
    One dollar, one vote: this is democracy as we know it.

  8. D Wright says:

    What it looks like to me is that we are all in agreement. Nothing we know of will work for the entire world population. There are no changes that can be made that will accommodate everyone. It is simply too late.
    While I might admit that under some perfect setting where our leaders are all wondrously informed that some mitigation might be possible. As it stands it is hopeless. Why pretend.
    Global warming can not be stopped (even Tom Friedman agreed) because of too many feed backs, world population growth can not be arrested (we might be a plague species), resources depletion, while recognized as an issue, can not be addressed due to exponential population growth and greed, and the present economies can not be adjusted because Milton Friedman still rules the day–as well as greed (which is good!) So there you go, toast.
    However, I believe adaptation may be the rule of the day. Anticipate the changes and make adjustments to meet the changes. This can be done on an individual level, family group and as a community (small). It is all about positioning. If we know certain events are going to occur, then take care of those closest. Forget the others.
    While it is unsaid in many circles, I believe this is what is being proposed by many writers and advocates from the transition movement to J Kunstler. There will be no master plan to bail the entire world out. As an earlier poster mentioned, we must evolve with the changes. The Arch Druid, Carolyn Baker, Sharon S., N Hagens, Gail & a multitude more are all seeming to move in this direction even though they are still actively working for a big answer.
    What do we do now? Position ourselves.

    • I am afraid you are right about adaptation. It is nice to think that humans collectively can change how things will turn out, but I think that the “cake is already baked”. There are also too many forces we don’t fully understand, from how all the parts of the economy function together to all of the influences on the climate, for us to be able to truly make the changes we think we can. Humans have adapted to ice ages in the past. Whether we like it our not, we pretty much are going to be forced to adapt to the future. It seems like there are at least some things we can do, in terms or leaning how to do things as they have been done in the past–growing food locally, for example–but I expect we are kidding ourselves if we think we can be “saved” by the next gee whiz invention, or even the next plan to reduced CO2 emissions.

    • Bicycle Dave says:

      Hi D Wright,

      For a few years, I’ve been fretting about FF depletion, GW, species extinction, biosphere degradation and all that combined with escalating human population growth and increasing monetary issues. I’ve often suggested some human behaviors that might help mitigate the worst consequences – especially for future generations of humans.

      My life experience informs me that problems are rarely solved without a good understanding of the actual problem – the observable symptoms and the true underlying causes. I find the next step should be the setting of realistic goals and objectives. Only then can alternative solutions be debated, implemented, measured and modified/refined by feedback loops.

      I now think more about “tilting at windmills” as analogous to my own behavior. I see scant evidence that any critical mass of opinion makers even begins to understand the problems facing humanity and the planet at large. The incessant media/political drumbeat is the need to stimulate “growth” – any and all growth. The US media is flooded with incantations to consume ever more obscene quantities of the planet’s resources. Energy companies spew disinformation that would probably make the architects of the Tiananmen Square “big lie” blush with embarrassment. Most proffered “solutions” are either blatant attempts at self-serving profiteering or well intended, but hopelessly naïve, schemes that fall on deaf ears.

      How can we expect the average person to have sufficient critical thinking skills when 80% of them think there is a supernatural dimension to their world where the problems they face in this lifetime will become insignificant compared to their afterlife eternal reward in the spirit world? Where is the capacity to understand the simple concept of “truth” as defined in the scientific method?

      I wonder if it is inevitable that humans will simply do the same thing most other species do: exploit their environment for their immediate benefit with no concern for the future? Certainly, we have the capacity to understand our problems, set realistic goals, and implement solutions that could benefit not only future generations of humans but the balance of life on the planet itself. However, I see little evidence that we will utilize that capacity beyond a kind of “muddling through” paradigm. If that is actually the case, how important is our fretting about “what we should do”?

      Perhaps D Wright is right: “Anticipate the changes and make adjustments to meet the changes.” Maybe the best reason to follow a blog like this is to simply increase our personal awareness and maintain an attitude of flexibility as events unfold. Perhaps we can’t persuade the world at large to be more aware – maybe we are just tilting at windmills.

    • marty schoffstall says:

      When I think about adaption of any sort, I think about having personal or community reserves of a resource to deal with the coming situation. The black bears around my cabin go on a Fall eating binge to get through the winter “hibernation”, the Amish “put up” canned food in the Summer and early Fall till their gardens start producing in the late Spring etc. Through the 1930’s the Society of Oddfellows local chapters, and many other groups would contract with a local physician to provide “free” healthcare (paid for by their dues) to their members. One could go on..

      Our (north american) society has decided to create very complex resevoirs of resources that are at quite a distance whether geographically or through other means (administratively might be an example). Social Security, Medicaire, Medicaid, interstate distribution of electricity, NG, and many many more seem like examples of this situation.

      I am pessimistic about expectations of delivery or further investment in anything that does not appear to have an easy local adaption, or are by
      design local.

      Design local Examples Might Be: home garden, community garden, a wood stove and means to obtain firewood, PV with batteries, Trombe wall, participation in a herbal remedy network, a well, a cargo bike.

      I would be skeptical of depending on interstate importation of electricty, which means that almost all of NYS (Quebec Hydro sourced), and NewEngland (fed by WVA and PA I believe) are a writeoff. I do think it
      is in the realm of possability that a local/regional/mult-county grid could
      be kept going around a nuclear plant or hydro for a quite a long time. Albany’s coal plant won’t, but possibly some of the coal plants could continue that are co-located with the fuel.

      Given what I’ve seen over the past decades, electricity is required to keep anarchy at bay in the US. There is simply not enough National Guard to maintain order, in parallel there is simply not enough reserves of fuels in and around any city or town for it to migrate out on its own, with three days of food deployed in most urban situations (it is better with the Amish!), these three horseman and water are where the initial dieoff happens.

      It is not a pretty picture.

  9. majorian says:

    The solution for US/Canada as far as liquid fuels goes is to make all cars, LT flexfuel (aka E85/M85) and increase CAFE to 35 mpge. Both of these are current technology, if the average car life is 15 years then mandating these requirements now will be fully implemented in about 25 years.
    About 60% of our 7.2 Gboe oil use goes to personal transport or 4.32 Gboe at an average mpg of 22 mpg so a 33 mpg average would reduce that to 2.85 Gboe.
    Minimizing oil use would mean replacing 2.43 Gboe with ethanol and methanol.
    The US government estimates that cellulosic technology can produce 1 Gboe of ethanol from a 1.3 billion ton renewable biomass resource.
    That leaves 1.42 Gboe of methanol to be produced from natural gas or coal.
    The efficiency of producing methanol liquid fuel is much higher than F+T gasoline.
    If 1 ton of coal = 4.6 barrels of methanol=2.3 boe then it would take 617 million tons of coal per year(57% more coal than US current production) to produce the necessary methanol.
    The alternative without all this additional coal mining is to simply reduce personal driving by 50% to be accomplished by mass transit, carpooling, car share, telecommuting, etc. which I believe is an achievable goal.
    If we adopted full E85/M85 conversion(no more drastic than installing seat belts) and 33 mpge minimum CAFE personal transport with a mandated 50% driving reduction we reduce our petroleum consumption to 331 Gboe between now and the year 2100 which could be handled by Alberta tar sands and Colorado oil shale with NO imports after 2040. Yes, fully tapping these unconventional resources will require a moonshot effort but growth from 1.3 mbpd to 9 mbpd over 30 years is a straight line increase of 20% per year, hardly a record and there will still be considerable resources beyond that.

    • Owen says:

      Suncor released its 10 year plan this week.

      They plan to go from 300K bpd to 1 mbpd over that time. They also accepted a $1 billion investment from Total for joint production of various Athabasca sites towards that goal.

      I would be surprised if all sources of oil sand production can get to 5 mbpd in 10 years. I would expect a major effort by China to destroy them long before then.

    • Todd says:


      You don’t get it. The future is a “package deal” where things are not done in parallel as you suggest v. transportation but rather in concert from a coherent plan. It’s late for me so I won’t expand my comments at this time.


  10. Todd says:

    Imperial College, London, had an interesting press release yesterday (Dec 17), “You Only Live Once: our flawed understanding of risk helps drive financial market instability.” Darn, the link won’t paste (and it’s long). You can get the article and link at in the breaking news section.

    Anyway, the thrust is that scenarios can be run in parallel and an average taken (ensemble averaging) or run in sequence (time averaging). They find that ensemble averages hide risk. This is typically how people consider future societal scenarios; they “do/mitigate” things in parallel. One point the the article makes is that past decisions cannot be undone.

    This merely deepens my belief that no rabbit will be pulled out of the hat for any of the crises we face. And, in fact, things will be worse.


  11. Luis Carlos Zardo says:

    What we have in the past that worked was…LESS PEOPLE

    Our system would have no problem at all if we were a few hundred millions, on the otherhand with 7 billions we are about to collapse and take the whole world with us.

    If we try to act like we did a few hundred years ago, returning to small farms and producing locally we´ll destroy this planet in a few days

    • This is a major issue. Even a one-child policy doesn’t fix it very well. I wish I had a solution.

      The world can support some people, if not as many as today. The understanding that this can happen, and the hope that the downslope will be slow, offer at least a somewhat positive view.

  12. David Seattle says:

    I think another issue that will hit at the same time as peak oil, is a collapsing currency. Every thing the US government and federal reserve do, show a complete disregard to fiscal restraint. No one has really predicted what happens when the world’s reserve currency is in hyperinflation and all the major banks are functionally insolvent.
    It will be very difficult to impossible to finance any kind of multi-year project without a stable currency. Whether its new power plants, off-shore oil platforms, geo-thermal, efficient buildings, electric railroads, electric cars, or government dormitories for the unemployed. None of this stuff is going to be built with an unstable currency and non-functioning banks.

    • About the only solution I could figure out for this is if governments use their taxing power to build multi-year projects. This would seem to work.

      I suppose there might also be a possibility of people pooling savings, and using these for investments (like Lloyd’s of London), but in a declining economy, the chance of getting the investment back would be less, so it would seem to be less likely. Also, it would be more difficult to accumulate funds for investment.

  13. D Wright says:

    In the last half dozen years we have worked hard at “adjusting” to what is obvious. Life is going to change. I am not sure if it is a Richard Duncan change but it is changing. While I believe we have done well by plopping down in a small upper Midwest village replete with PVs, wood, local food, etc, and a visit to a few Amish communities, the idea of the 6 or so million folks that live from Milwaukee to Gary doing a similar thing does not equate.
    While it is easily possible for small groups in agriculture areas to modify behavior in the direction of the Amish, it is not possible for large populations. That is one dilemma.
    I am also doubtful that the “depleting” economy will be able to modify the chaos from depleting energy. The economy will follow the downward spiral of oil and in doing so will eliminate the ability of societies from developing the expensive alternatives. This is already happening with nuke development. No private corporation can now build them and Boone Pickens has stopped his wind project for lack of funds. I don’t see how in a declining economy (and this may be a radical decline) capitol needs can be met to make the sophisticated changes that will be needed.
    If the “Amish option” is not realistic and high-tech wizardry will not fly, what is left?

    • Dennis Meadows of “Limits to Growth” fame says that lack of capital is the what is likely to be the limiting item, causing the world economy to hit limits and start its rapid decline. I think that is what we are experiencing now. Quite a few people think that we can “hoard” the energy we have now by building wind turbines and solar PV, but I doubt that it will work for very long, after other things collapse. Instead, it will use us scarce capital, that could better be used for trying to adapt to a world that is rapidly changing.

  14. energy investor says:

    Hi Gail,

    Thanks for your thought provoking article. One among many, in your case.

    Some years ago, as a convert to the “peak oil possibilities” I started researching all the avenues of renewable alternatives and by about mid 2006 I could only find one small ray of light gleaming under the closed door of reality.

    So I looked more and more closely and realised that while many were ridiculing the efforts of this stealth developer (one among many different efforts being ridiculed, I might add), the more convinced I became that a number of major institutions had gotten on the same bandwaggon.

    Some were involved with access to what is happening and some became sufficiently convinced the science holds the key to energy storage to start working out how they may compete.

    Of course the product and its developers have been rubbished on TOD and in many forums. Yet the company in question, EEStor continue to work under the radar, popping up every now and then with a patent that gets the knowledgable bloggers in a tizzy. Perhaps if people knew the pedigree of those involved they may not be so scornful. Perhaps if people were to also read the patents they would realise that this appears to be an avenue of serious scientific endeavour.

    The link to the patent documents is shown herewith:

    Frankly, I have no idea whether the EESU will ever materialise as a viable commercial product. If it does not do so, I have no idea how we may forestall the worst effects of post peak energy shortages…. touted by the so-called “doomers”.

    But there was a time of great hope when we were able to locate Polarity as the electronics company working with EEStor and Sachem, the potential supplier of pure BaTi O3 powder…and a barite mine. Of late, apart from patent reveallations the only encouragement that has come for the cadre of “fanboyz” has been the news of the efforts of other well funded, substantial research organisations trying to move along the same track.

    More recently we have people like John Doerr making pronouncements about the coming era of ultracapacitor energy storage.

    Most of us investors regard Zenn Motor Co (the only possible avenue of investment in EEStor) as a bit of a long shot. But we know the odds of solving our futue energy needs without such a breakthrough. So we sit tight and wait, with some more patient than others.

    But if anyone knows of a different solution to our post peak blues, I would love to hear of it.

    Kind regards

    • It would be good if something would work, but we have been trying for a long time without coming up with much. I suppose we can keep our fingers crossed, but it might be good to make some backup plans as well.

  15. Blunder Dog says:

    Gail wrote: “Even something that looks resilient, like solar PV, stops working once there are no more light bulbs available for it to light up, and once back-up batteries are no longer available.”

    Along those lines, any source of electricity will eventually become obsolete. Electricity, producing it and its many uses are genies out of the bottle. We will have fallen far indeed when we can no longer imagine and implement uses for the energy produced by PV.

  16. Engineer Earl says:

    I do not think our great-grandparents saw themselves as poor, even if they used only a small fraction of the energy that we do. For that matter, today’s Amish population is growing, and they have chosen to live a simpler live. Even without fossil fuels we would still have hydroelectric, solar, and wind energy, and there would be some energy available from wood, too. Compared to our great-grandparents, we will still have much better telecommunications, medical knowledge, and entertainment opportunities.

    A couple of the biggest problems may be the break-up of mega-cities and the need to once again acquire manual skills, such as farming and gardening, canning, carpentry, brick-laying, sewing, metal-working, and hundreds of others. These are skills that will be needed in each locality; their current deficit is appreciated by anyone who has tried to hire a repairman to do anything other than the simplest repair work.

    The current financial crisis is having the effect of opening up land within my city again, land that maybe could be used for large gardens. Whether it was planned that way or not, it may prove to be beneficial. As gas and oil prices climb, people will on their own move closer to employment. Corporations will no longer find it advantageous to outsource manufacturing overseas. I am hopeful that these jobs will come back closer to where the products will be used.

    Government could help by encouraging super-efficient housing design, such as the German “Passivhaus.” Schools could help by once again teaching the trades. Now schools are based the fiction that we will all be either office workers or unskilled laborers. Our children need the chance to see that self-satisfaction can come by productive use of one’s own skills, and not merely by the consumption of the products of the skills of others.

    I think that maybe the best we can do is to nudge/push government where we can. Where the politicos resist, reality will kick them until they get it. We can also set examples for others. Happiness does not depend on how much one consumes. We can also show that by reducing consumption (fossil fuel and otherwise) in our own lives that we still are just as happy – if not more so, because we don’t have the huge credit card and energy bills the rest do.

    • Without oil, it is not clear to me how many other modern energy sources would continue to work–everything is so interconnected. For example, if the financial system collapses, it may bring down other industries (like electric). Or the railroad system, that carries coal for the electric system, may cease to be operational.

      We will still of course have traditional sources of energy, including wind and water and sun, in their original form. Wind will still be good for pumping water, and running sail boats, and even for operating factories, and the sun will shine to heat water thermally. What we can’t count for the long term on is our electrical system.

      • Engineer Earl says:

        A collapse of the financial system would be a massive disruption on top of peak oil, but I think that a working electrical system, much reduced, could still be cobbled together. Energy-intensive processes may have to be performed only when there is enough wind for the generators, but that is not an insurmountable problem. Usage would have to be cut way back, but there would still be electricity for critical needs and for some non-essentials. We won’t be able to air-condition the whole house anymore, but maybe one could still use an air conditioner in a well-insulated bedroom at night and fans elsewhere. It would be much better than no electricity at all.

        I like The articles propose many low-energy solutions based on historical examples, such as “electric mules” towing barges. In the future, these may be more commonly used than railroads to haul commodities where the terrain is favorable.

        As to overcoming a financial system collapse, I think that is a subject that could be explored further. I would like to know more how other countries have handled this. The countries of the former Soviet Union should be provide some good examples. I’m sure there are others.

        • I like Low Tech Magazine very much, too. It would be good if more people were aware of solutions that worked in the past, and could perhaps be used again.

          I am wondering if what we will end up with for electricity is a patchwork system. Areas that have their own river nearby may have hydroelectric power. Some places may have coal or natural gas as a source. Long-distance transport of electricity may become much less common. I am not sure wind will play a major role, unless a particular area can provide balancing power for the wind. It seems like if wind is used, it would make more sense for processes that can easily be made intermittent–creating ammonia, or pumping water, or milling grain, for example.

  17. Don in Maine says:

    “What do we do now?” Well Gail, Like Todd I’ve been at this a long time, it was the 80’s
    recession that got me started with a touch of “limits to Growth”. I won’t go into all the things I’ve done but suffice to say I’m where many people wish they could be. The “cat birds seat” so to speak.
    What I worry about are the things I’ve missed and I know there are probably many. All I can do is be as flexible as possible and keep an open mind and sometimes that is the hardest thing of all.
    Resiliency as an art.

    Don in Maine

  18. Pingback: Interview: Gail Tverberg of the Oil Drum — Transition Voice

  19. Pops says:

    The next society, just like the current one, will evolve rather than be designed, but don’t worry, last week’s 99ers are working on it as we speak! When week 100 comes and the safety net gives way, people will evolve, they will have no other choice. That is how we’ll evolve, one pink slip at a time.

    I’m not trying to be callus or flippant, in fact, if I had my druthers, I’d rather be a “99-Pluser” today than say, 10 years from now, simply because there is more surplus everything (and therefore opportunity) sloshing around now than I imagine there will be after energy supply constrains really start to bite. I downsized myself several years ago for just that very reason.

    Every dip on the plateau will have it’s own 99-Plusers, this time it’s construction/real estate workers and middle managers. Next time who knows, maybe government bureaucrats and insurance salesmen? Whoever it is, they’ll be forced to adjust their expectations to come into line with the economic reality of an increasingly two-tier society propelled along for quite a while yet by labor cost arbitrage and techno-productivity.

    Sorry to be long winded and I don’t want to sound the Doomer but I think this is an important point – the cavalry is not coming. There will be no bail out for the 99-Plusers and certainly no grand energy descent plan embraced, the IEA made it clear, peak oil is past and we feel fine. We each are on our own to find a way forward, we can wait for week 100 or we can start today.

  20. Joe Clarkson says:

    Virtually every form of human society, each type using per capita energy intensity within a wide range of possibilities, has existed somewhere on earth in the last 200 years. Most of them exist even now. This great variety is our strength as a species. Dwindling energy supply will produce selective forces in favor of those cultures that need less energy per capita.

    When I was in Fiji in the 90’s to work on a hybrid village power system, a co-worker and I went to celebration at a local worker’s home a few miles up the coast from our project. This village had no electrical power. Almost all of the food was locally produced. Half the houses were of traditional, pre-contact construction. I remarked to my co-worker that if all the people in the rest of the world just vanished, this village would be able to carry on without any trouble at all.

    Even with all the “transition-towns” one could desire, I doubt that a high-energy society can transform itself into a low-energy society like that one in Fiji and keep the same population. I think that high energy societies will simply wither away and many people in them will die. It remains to be seen which of the four horsemen strike them down.

    • It seems like it is a lot easier to have a low energy society in a warm part of the world than a cold part of the world. You can have multiple crops per year (less food storage) as well as less need to heat homes. There are offsets of course – tropical diseases, especially. But it seems like people will look for more temperate areas to live.

      • Owen says:

        I have for some time felt that Brazil has the fast track to global domination in this century, but they are vulnerable to one overwhelming danger.

        Spare parts.

        They can get multiple crops per year as long as their tractors run. They can get air conditioning for the populace as long as the compressors run.

        They don’t build tractors or compressors there. The parts have to come in from elsewhere. This, btw, also applies to the machinery in the off shore production platforms.

        Brazil’s future is bright as long as American spare parts for their John Deere’s flow.

      • Don in Maine says:

        Chuckle, well the Maine winters (3 degrees this morning with -10 wind chill) keeps the weenies out !! More resources to go around !

  21. majorian says:

    First we need to take stock of what we(the world) have.
    We have 1 trillion barrels of oil, 1.5 trillion if you throw in unconventional oil.
    We use 30 billion barrels per year today.
    We have about 820 billion tons of coal.
    We use 7 billion tons per year today.
    We have about 6600 Tcf of natural gas.
    We use 106 Tcf per year today.

    There may be a bit more or less but that’s pretty much what’s left and today it provides 83% of world energy.
    The prudent course is to spread fossil fuel use out over the next century.
    Additional energy would have to come from nuclear or renewables.
    Renewables with fossil backup such as wind/solar-CAES and home battery storage with rooftop PV can lower consumption especially of electricity. Biofuels mixed with
    dwindling petroleum can stretch out depleting stocks and EVs can provide convenient
    personal transport as a shadow of the glorious auto age(50 mile range). Single family homes will be of the Passive House variety using <15% of the annual energy and superinsulated apartment buildings will be more the norm. Sensible transition measures will cushion the fall considerably.

    Let's say we agree to reduce consumption as mitigation.
    That means we use less oil and natural gas and more abundant coal.
    If we reduce annual consumption of fossil oil by 1% per year it should last 100 years(straight line).
    If we reduce natural gas consumption by 1% per year for the next 100 years our reserves should last 100 years.
    If we increase coal consumption by 0.25% per year for the next 100 years our coal reserves will last for the next 100 years. Lets assume the world ends in 2110.

    The effect of these measures will be that world primary fossil energy use will fall by
    30% by 2055 and 60% by 2110. This amounts to a 1.8% straight line annual reduction
    fossil fuel consumption over the next 100 years.

    The effect in terms of CO2 would be that by 2055 CO2 fuel burn emissions would fall to 1990 levels and by 2110 emission would reach 1970 fuel burn levels. In 2055 CO2 levels would be about 490 ppm and by 2110 atmospheric CO2 would be around 550 ppm, which is about equal to the IPCC A1B2 scenario with 2 degrees C rise by 2055 and 3 degrees C of warming in 2110(increase of 5.4 degree F). Personally I think future generations would gladly trade a 25% CCS coal energy penalty for reducing the increased temperatures we will cause without it. I would guess that CCS (implemented within 40 years) would keep the world closer to the 450ppm redline.

    A major challenge will be transfering energy from energy rich countries(US, OPEC, Russia,China) to the rest of the world. Of course a rational program of energy conservation will make that easier.

    After 2110 I assume (hybrid) fusion technology along with renewables will provide energy but by then we will be trained to use far, far less energy per capita.

    I could provide such as transition plan for the US/NA but the people there are completely delusional and will probably choose war or mass suicide over rational mitigation.

    • majorian says:

      Thats a 0.6% annual reduction in world fossil fuel use; ~350 FF quads in 2010 to 150 mainly coal quads in 2110/350×100 = 0.571% per year.

      • Owen says:

        This is not the nature of mankind. People seek to win. They always have. They always will. This will never change. It is the starting presumption for all analyses.

        In that context, lowering consumption is an easy thing to achieve. Military elimination of competing consumption is clearly the easiest, least energy demanding, methodology for maintaining US dominance. China’s oil imports largely arrive via tanker. US imports from Canada . . . .

        Which is more vulnerable?

        • Of course, Canada depends on imported oil, across the Atlantic, coming to the Eastern part of Canada. Oil from the oil sands (in the Western part of Canada) is set up to go to the US. But an interesting situation is going to arise if Canada starts having trouble with imports, since then they will not have enough oil for themselves. Canada can’t refine oil from the oil sands themselves, without setting up refineries to handle it. There might be refineries they could modify, if they shipped the bitumen east by rail car. We will probably have to agree to give them some of the oil back, if we refine it for them.

    • Bicycle Dave says:

      Hi Majorian,
      I always enjoy your mastery of the numbers – but, it seems that the stars would have to align perfectly to realize your vision.

      You mentioned “people there are completely delusional “. I suggest you could drop “there” as I see little evidence that people, collectively, can overcome their delusions in time to implement your transition plans.

      You mentioned 450ppm as a redline – however, in “Storms of My Grandchildren”, Dr.James Hansen says:
      “we must reduce the CO2 in the atmosphere to 350 ppm in order to avoid disaster for coming generations. “

  22. Shunyata says:

    Human beings tend to employ anything that is readily available to satisfy perceived needs. Today “needs” include cell phones, MP3 players, and high-speed internet because the resources are readily available to satisfy this needs. These things weren’t needs at all 25 years ago, however, nor are they really needs today. We have considerable ability to scale back without substantially altering our quality of life.

    Even after you have scaled back and start cutting basic necessities like healthcare and private-owned housing, it’s not clear that you have materially altered quality of life. Your great-grandparents didn’t have access to health care anything like today and life expectancy was less. Are you dramatically happier or more satisfied with your life than your great-grandparents? By many measures, we are LESS happy today.

    My point isn’t that we should wish for massive change, change is always traumatic and painful. Rather my point is everything is going to be OK. We simply have to surrender our expectation of what life should be.

    Our present expectations are based upon a socio-economic system that is contrary to reality. We cannot provide everything that every individual deserves. Our resources physically cannot provide energy and materials to satisfy every desire. Our financial system helps free resources to satisfy desires but concentrates the resulting wealth, so all individuals will never be able to satisfy desires even if the materials exists. We will be forced to surrender the idea that we SHOULD provide everything that every individual desires.

    • Wildcatter says:

      I hear this argument all the time from individuals who think we can lower our standard of living and somehow do it responsibly and carefully. This cannot be the case, cutting back on perceived needs like your iphone, cars, sushi on Thursdays, using electricity less etc. has huge implications for the people employed providing these things.

      What you are suggesting is happening now through recession and not by choice but by economic necessity, this is in turn increasing unemployment and driving down demand for many areas of the economy including oil and gas consumption here in the U.S. This means that ultimately one day the lights go off simply because there isn’t enough demand to maintain expensive existing infrustructure required for operations such as utilities and oil companies.

      Changing societies to embrace having less “stuff” is an economically painful process for all. This means we need to change our complex financial and economic systems to become somehow less complex and at the same time not displace all those workers even though their services will no longer be needed.

  23. Todd says:

    I believe one major change that will, ultimately, impact our predicament will be moving from individual/stand alone families to group living arrangements whether by genetics or affinity. To me, it is the only thing that makes sense in a resource poor world. Further, it is far more energy and resource efficient.

    Although all the communes in my area went bust a long time ago, it was more because there were other options so rather than making the effort to make it work, they split up. One that did work was three families who built a house with a wing for each family and a common area in the center for cooking, eating and relaxing. And, there are certainly examples of co-housing that work today.


    • I think you are right. We probably have far more housing than we will ever need. It may be that we will need more housing, but it will be near farming areas.

      But moving back together will be an adjustment. An elderly relative in a wheelchair is not always easy to accommodate, and that is especially the case if that relative has other special needs as well.

    • marty schoffstall says:

      There is a certain stigma in non-nuclear families occupying housing. There is a sense of failure that is imputed there. I’ve been talking to the leadership of my community about this, and about the power of “giving permission”. This needs to be done in peer group environments and slightly stratified ones like churches, vfw’s, elks clubs, etc…..

      Thankfully (for other reasons) my 40k+ community decided a number of years ago to allow a “second household” per building lot for attached or detached buildings. This allows (at least) for the classical “mother-in-law” addition etc.

      Living near the Amish you see different “residential” constructions with 2nd or 3rd entrances, separate suites, small house outbuildings etc. I fear that our “self centered” mansion-ettes will not be easy to restructure into multiple households even related by blood/marriage.

  24. Fred Magyar says:

    This comment may appear to be a bit out in left field, but this excerpt from:
    The Mind’s I
    by Douglas R. Hofstadter and Daniel C. Dennett

    Chapter 11: Prelude . . . Ant Fugue

    Whatever kind of society evolves from the remains of the current one it will be a completely different one than what we have now, even if many of the parts and participants remain the same. The sum of the parts of a broken vessel can very rarely be reassembled into its original parts and again serve its original purpose…

    TORTOISE: There, there, Achilles-don’t feel bad. I’m sure you won t miss Fugue’s Last Fermata (which is coming up quite soon). But, to return to our previous topic, Dr. Anteater, what is the very sad story which you alluded to, concerning the former owner of Aunt Hillary’s

    ANTEATER: The former owner was an extraordinary individual, one of the most creative ant colonies who ever lived. His name was Johant Sebastiant Fermant, and he was a mathematiciant by vocation, but a musiciant by avocation.

    ACHILLES: How very versatile of him!

    ANTEATER: At the height of his creative powers, he met with a most untimely demise. One day, a very hot summer day, he was out soaking up the warmth, when a freak thundershower-the kind that hits only once every hundred years or so-appeared from out of the blue and thoroughly drenched J. S. F. Since the storm came utterly without warning, the ants got completely disoriented and confused. The

    intricate organization that had been so finely built up over decades all went down the drain in a matter of minutes. It was tragic.

    ACHILLES: Do you mean that all the ants drowned, which obvious would spell the end of poor J. S. F.?

    ANTEATER. Actually, no. The ants managed to survive, every last one them, by crawling onto various sticks and logs that floated above tl raging torrents. But when the waters receded and left the ants back on their home grounds, there was no organization left. The cas distribution was utterly destroyed, and the ants themselves had r ability to reconstruct what had once before been such a finely tune organization. They were as helpless as the pieces of Humpty Dump in putting themselves back together again. I myself tried, like all ti king’s horses and all the king’s men, to put poor Fermant together again. I faithfully put out sugar and cheese, hoping against hope that somehow Fermant would reappear . . . (Pulls out a handkerchief and wipes his eyes.)

    ACHILLES: How valiant of you! I never knew Anteaters had such bi hearts.

    ANTEATER: But it was all to no avail. He was gone, beyond reconstitution. However, something very strange then began to take place, over the next few months, the ants that had been components of, S. F. slowly regrouped, and built up a new organization. And thus was Aunt Hillary born.

    CRAB: Remarkable! Aunt Hillary is composed of the very same ants Fermant was?

    ANTEATER: Well, originally she was, yes. By now, some of the older an have died, and been replaced. But there are still many holdover from the J. S. F.-days.

    CRAB: And can’t you recognize some of J. S. F.’s old traits coming to the fore, from time to time, in Aunt Hillary?

    ANTEATER: Not a one. They have nothing in common. And there is n reason they should, as I see it. There are, after all, often sever distinct ways to rearrange a group of parts to form a “sum.” An Aunt Hillary was just a new “sum” of the old parts. Not more than the sum, mind you just that particular kind of sum.

    Best hopes that a new and fully function analog to Aunt Hillary should arise from the demise of dear BAU uncle Johant Sebastiant Fermant.

    • It always strikes me as miraculous the way birds seems to have instincts to build their nests in a certain way, and other animals search for food of a particular type. There must be some in-born systems that we don’t fully understand that operate as well.

      I agree that re-organization would be much different, but we see examples every day where different organization works, too.

  25. Owen says:

    In the overall context of that which is finite, one of the more ominous ramifications of fiscal devastation derived from increasing oil (not energy) scarcity would be the more or less inevitable eradication of research grants for improved spacecraft propulsion.

    That which is finite has no solution other than to become less finite.

    • Jerry says:

      I don’t think much can be done to transition society to another system. There is no other system, anyway, that can sustain 9 billion people as we have overshot the carrying capacity of the earth at about 3 billion people in the ’60,s. We all know,don’t we, that an ideal socialist utopian society cannot work without totalitarian force applied to the minions. Unless there is a fundamental change of consciousness to do it without the despots trying to control everything. Well, the human condition has us freaking out about the prospect; intellectualizing about it aside. After a die off of about 8 billion people by 2100 those left will possibly be able to pick up the pieces and use what is left of the remaining resources to continue on. Only then will the earth be able to support the remaining 1 billion or so people again in some fashion.

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