Businessweek Gets it Wrong—Everything You Know About Peak Oil is ‘Not’ Wrong

On January 26, Bloomberg Businessweek printed an editorial by Charles Kenny titled, “Everything You Know About Peak Oil Is Wrong”. This editorial reflects several common misunderstandings.

According to Kenny:

Titled Limits to Growth, their report suggested the world was heading toward economic collapse as it exhausted the natural resources, such as oil and copper, required for economic production. The report forecast that the world would run out of new gold in 2001 and petroleum by 2022, at the latest.

Limits to Growth gives a table that might be interpreted to show that oil and gold new extraction will be exhausted by the dates indicated. The book is careful to explain that the situation is more complicated, though. The way the book summarizes the issue is as a price problem:

Given present resource consumption rates and the projected increase in these rates, the great majority of non-renewable resources will be extremely costly 100 years from now.

In fact, high cost is precisely the issue with oil right now, and we are still ten years away from 2022. A graph of recent crude oil production is shown below. The amount of production has not been able to rise above about 75 million barrels a day (MBD) since 2005. At the same time, price is very high.

World Crude Oil - Quantity Extracted and Price

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

If we look at gold production and prices, it shows pretty much the same story: stalled out production and very high prices.

Figure 2. Gold production has been flat to slightly declining as gold prices soared. Gold production from USGS; Gold Price is from World Bank Commodity Markets Pink Sheet.

The problem is a two-fold problem: it is a price problem, and a problem of not being to increase extraction as much as one would like. The issue is one of declining quality of resources, as lower grade ores are found, and more difficult to extract oil is found. There are plenty of resources available; the issue is that we cannot afford the high cost of extracting them.

Kenny says, “Far from being depleted, worldwide reserves of minerals continue to climb.” He then goes on to list a whole host of resources: natural gas liquids of 1.2 trillion barrels, shale oil of 4.8 trillion barrels, and tar sands of 6 trillion barrels.

These are lower and lower quality resources. In order to make sense for these resources to be extracted, it is important that the cost of extraction not be too high. Many of the large oil importing nations went into recession in 2008-2009 when oil prices climbed to $147 barrel, and quite a few economies are struggling now, with prices in the $100 to $110 barrel range. Unless we can get the oil out at a reasonable price, there is no point in even counting them in the base.

There is also an issue of how quickly resources can be extracted. Canada has been attempting to develop the oil sands since 1967, but even after more than 40 years of attempted development, only 2% of the world’s oil supply is from this source.

Kenny also doesn’t seem to understand that Daniel Yergin is far from an unbiased observer. He says,

And yet according to renowned oil analyst Daniel Yergen [sic], technology advances and new discoveries have allowed oil reserves worldwide to keep growing.

Daniel Yergin is chairman of IHS Cambridge Energy Research Associates and Executive Vice President of IHS. The companies he works for do consulting work for oil companies. These oil companies would like you to think that their prospects for the future are as good as possible. In many ways, Daniel Yergin’s role is not too different from that of Jack Gerard, CEO of the American Petroleum Institute. If a person checks back, one finds that many of Yergin’s rosy predictions have proven false.

Kenny has another overstatement:

New technologies suggest the dawn of U.S. energy independence.

This is flowery language, but doesn’t represent the real situation. A big part of the reason our imports are down in recent years is because US oil consumption is down. People who are laid off from work drive less, and with high oil prices, fewer people take driving vacations or go by airplane. The EIA shows this graph of net imports.

Figure 3. Net imports as percentage of petroleum products supplied--Graph created by EIA. http://www.eia.gov/totalenergy/data/monthly/pdf/sec3_6.pdf

We are still importing 45.2% of “products supplied”. This comparison is on a volume basis, not on an energy basis. If the comparison were on an energy basis, we would be importing over 50% of petroleum products. Biofuels and natural gas liquids, which are lower energy than oil, are treated if they were substituting for oil on a barrel for barrel basis, but they really are not.

We hear a lot about having very low natural gas prices right now, because of higher production of natural gas combined with a warm winter. Unfortunately, having more natural gas doesn’t fix our oil problem. Our oil problem is the fact that price is too high because of inadequate world supply and also because much of the cheap-to-extract oil is already gone. We have had to move on to more expensive-to-extract oil supplies.

Over time, natural gas may make a small dent in our oil problem, if a few vehicles can be converted to natural gas. But the large size of natural gas tanks and lack of refueling stations make them unsuitable for many uses. The amount of natural gas available for substitution also isn’t all that high, relative to the world oil deficit.

Kenny also said:

Limits to Growth suggested the world would be on the verge of complete economic collapse around about now, with industrial output falling to its level of 1900 by the end of this century, as resources vital to sustaining a modern economy dried up. However dire today’s global financial crisis, we are nowhere near such a doomsday scenario.

I would disagree with Kenny on this. He doesn’t seem to see the close connection between high oil prices and the economic problems we are seeing today. With high oil prices, people cut back on discretionary goods, resulting in layoffs among people who work in those industries. For example, fewer people have jobs in vacation industries (for example, in Greece and Spain) if oil prices are high. This leads to recession and debt defaults. If one country defaults, ripple effects can spread to banks around the world.

Our economy has a high level of debt. We need economic growth in order to repay that debt with interest. If oil supply remains flat, or worse yet, falls, it will be difficult to produce the level of economic growth needed to prevent debt defaults.

Hopefully, Kenny will be right about the issue of economic collapse, but it seems to me that the possibility should be a serious concern. Peak oil and the related issue of Limits to Growth are real issues, even if Charles Kenny doesn’t understand them.

This post was written for ASPO-USA’s February 6, 2012, Peak Oil Review. 

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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139 Responses to Businessweek Gets it Wrong—Everything You Know About Peak Oil is ‘Not’ Wrong

  1. Don Stewart says:

    It’s easy to come up with scare statistics about the power of huge tractors and how the lack of fossil fuels to power same will lead to tens of millions of dead people. However, the most recent evidence we have is from Cuba in the mid 1990’s. They lost all their oil. They used huge tractors. There was no petroleum to power the tractors. The tractors went into museums, and the people turned to small farms and urban agriculture. (The same sort of solution that is very popular with people like Joel Salatin and many Permaculture people and your favorite local farmer). Briefly, nobody starved. They did get healthier as the excessive consumption of calories was no longer possible. After a few years of learning curve, ‘we got our paunch back’. Whether getting your paunch back is a good idea or a bad idea isn’t the point.

    The point is that there are plenty of people in the US promoting this sort of behavior right at this very moment. Failure to participate is, of course, one’s right. One also has a right to starve.

    My local Botanical Garden has an upcoming class on growing hard wheat (the kind you make bread with), taught by a local baker who uses the hard wheat grown on local small farms. This has all happened in the last five years in a region where no hard wheat has been grown for at least 50 years. Gene Logsdon, the Ohio farmer who writes frequently for The Energy Bulletin, is the author of a recent book on growing grains on small farms. One of his points is that yields go UP when grains are grown on small farms. IF there is starvation, it will be the result of stupidity of one kind or another. Not that I rule out stupidity.

    One of the hurdles faced by the Cubans was the ancient distinction between ‘the Europeans’ and ‘the Africans’. (This is all second hand, so suspect.) When the oil disappeared very suddenly, the social imperative was to grow ‘European’ crops–not ‘African’ crops. But, you may remember, Cuba is a tropical country and so you might suspect that African crops would be a better fit. And so it turned out to be and so the Cubans have been learning.

    Lest you think that such distinctions are confined to Cuba, consider two of the leafy greens I have eaten in the last two days: stinging nettle and chickweed. Both these are ‘weeds’. Both are quite nutritious. Both are growing wild right at this very moment outside my door. Do yourself a favor and consult PubMed ( http://www.ncbi.nlm.nih.gov/pubmed). Search on the words ‘stinging nettle’ and just peruse the recent research on the many health benefits one can enjoy just by harvesting some of this absolutely free ‘weed’. Then think about all the people who haughtily demand lettuce grown in California, which is 95 percent water, and shipped across the country using fossil fuels. Why not eat the free weeds and cure cancer?

    We will starve if we behave stupidly. If we are able to muster as much spirit as the Cubans showed, we won’t.

    Don Stewart

    • Another option not discussed so far in this thread is Hydroponics. I have a good friend who grows 80% or so of his own food in Hydroponics tanks set up inside his own house, which granted use Electricity for the Grow Lights but that comes from a Hydro plant nearby. In the right climate though, you can do hydroponic growing outside and use sunlight.

      There is no tilling of soil involved in hydroponic gardening, no Oxen necessary. The lack of draft animals avaialble is a strawman argument for the most part. Fish farming also requires no Oxen. No-till Ag also requires no Oxen.

      I agree with you that generaly speaking mass starvation isn’t necessary, though because of the way the systems are currently set up and the fact that on the mass scale we aren’t making the changes necessary now, such starvation will occur in many if not most parts of the world.

      The main problem you face is not in the Production of food. It is in its distribution, especially once the total amount produced is less than the total population needs for survival. In fact, if it just comes close, you run into price problems similar to what you see in Peak Oil problems.

      The problem you have is not producing the food in this situation. It is protecting and defending what you produce until such time as there is enough for everyone.

      RE

    • We probably need lists/pictures for each part of the country of suitable “weeds” that we can eat. I know I have a book, but I don’t think it is for around Georgia.

  2. Don Stewart says:

    For an article by Gene Logsdon about the problems with huge machines and soil and how the old ways were better, see:
    http://thecontraryfarmer.wordpress.com/2011/11/23/harvesting-crops-in-the-mud-and-snow/

    Look at the amusing picture of the behemoth stuck in the mud. Think about soil compaction. Think about the half million dollar machines that cannot be allowed to rest, even when the land needs a rest. Scan back up in his blogroll to the article about how ‘no till’ results in soil compaction and less rain moving into the soil and think about the floods we have experienced in recent years. Are you really sure that huge machines and massive doses of Round-Up and ‘saving fossil fuels’ with no-till is a good idea? Or maybe plowing with oxen or horses on much smaller farms with higher yields per acre?

    Don Stewart

    • Well, as this article mentions, North Dakota isn’t really suitable for Agriculture in general if you take away the Roundup and the water pumped up from the aquifer. Its grazing land and never produced much Ag based food when it was farmed with animal labor.

      Far as what is responsible for the recent massive flooding, its simply that there is more water vapor up in the atmosphere. Total Heat Content in Joules in the world’s Oceans has risen by an order of magnitude over the last decade or so from around 10exp22 Joules to 10exp23 Joules. This means the Oceans evaporate more water. Such a massive increase in heat content is not the result of anthropogenic causes, it represents too much energy. The oceans are likely heating up because the core of the earth is doing that, and cooking the oceans from the bottom up. The evidence that the core of the earth is heating comes int he form of increased vulcanism and increased tectonic activity, also rappidly rising over the same time period.

      Precisely what is responsible for this isn’t clear. It could be some kind of gravitational stress, increased neutrino flux or it could be geomagnetic in nature. The Polar migration has increased from about 4 miles per year to about 40 mpy. It is definitely clear though that as a system the Earth is processing more energy than it did a decade ago.

      Anyhow, the result of this is that we see more Wild and Crazy weather all the time, more Hurricanes, more Tornadoes, more Big Snowstorms and more Floods. The snowpack in the Rockies this year I think is bigger than last, itself a record year. This means the Mighty Missippi which flows through the plains states is likely to record 500 year floods once again.

      If you are farming in the floodplain, its quite likely you’ll be farming in muck again, and horses and oxen don’t do a whole lot better pulling through muck than tractors do. A lot of this land will simply have to be taken out of production as traditional Ag land.

      When you add up reduced production levels and reduced land mass suitable for farming, you come up with lower total amounts of food production possible from these methods. There are alternative methods like Hydroponics and Aquaculture, but until we start to ramp up these methods we won’t be able to make up for the food shortfall simply by returning to traditional methods of Animal based labor farming. Well, at least not until the population numbers fall off significantly anyhow.

      Traditional Ag has its limitations. A very significant one is changing climate and rainfall patterns. We will have to adapt our methods to the New Normal and build robust systems of food production that can withstand different forms of climate change. This will happen in due time, but likely not in time to save a significant portion of the world population of Homo Sapiens from Starvation.

      RE

      • Don Stewart says:

        Dear Reverse Engineer
        My points are simply these:
        1. Low fossil fuel input agriculture is more adaptable to climate extremes than the current system of hyper industrialized farms
        2. ‘No till’ results in less storage of water in the soil. This makes droughts more damaging and makes flood more likely. Much of Permaculture revolves around storing more water (as well as carbon) in the soil.
        3. Small farms produce more food per acre than large farms.

        There are no knowledge barriers standing in our way. The barriers are cultural. For a good discussion, see the current Chris Martenson interview with Charles Eisenstein.

        I am not saying that the cultural barriers are insignificant. If our culture cannot adapt, it will die. As many others have done.

        Don Stewart

        • I do not deny any of the 3 points you raise here, All I really am saying is that traditional Ag methods are not by themselves capable of supporting anywhere near the current population of Homo Sapiens on Earth.

          In the right locations done well, traditional Ag methods might be sustainable. If you live in such a neighborhood where there is sufficeint rainfall, where you wil not be flooded out every other growing season and where you can breed up enough draft animals to replace the tractors, it could work. That is a LOT of Parameters Don, a lot of “ifs”.

          I personallly do not like traditional Ag because in general it seems to end up in desertification. The entire Middle East is resultant from 1000s of years of traditional farming practices which reulted i desertificatio of that locale.

          With better knowledge now, its possibel that Ag can be made sustainable, I am not certain of that though, and in general I do not like the pardigm because it requires Land Ownership, which i the end creates a classes of Have aqd Have Nots. I do not think ANYBODY can be an “owner” of the Earth. This is Hubris beyond belief to me. If you “own” a farm and claim its produce as your OWN, you realy are not any better than a Bankster. The earth belongs to us ALL, not any individual.

          RE

          • Don Stewart says:

            Dear Reverse Engineer
            I am not really defending ‘traditional Ag’. What I am advocating is the best that we now know how to do. For example, Joel Salatin has grown about 4 inches of topsoil and sequested a huge amount of carbon in his farm over the last 30 years using mob grazing and other practices. Albert Bates told me that two of his children have bought run down farms and are growing topsoil and sequestering carbon. There are some phenomenal demonstrations of water management in Permaculture.

            As for the question of tractors and other fossil fuel powered farm machinery versus draft animals. We have, at one extreme, Helen and Scott Nearing who lived for 50 years or more on a homestead with no draft animals and the only fossil fuel powered machine was a pick up truck that they used to haul supplies. I know a financially successful small farmer who has no tractor but does use a rototiller rather infrequently. Most farmers are going to prefer to use a (preferably old) tractor. But we need to remember that tractors are not the most energy intensive part of the food cycle. The most energy intensive part is actually distribution, including the trip to the grocery store. Which is why urban farming for vegetables makes so much sense and why we need to copy Cuba and others. And, are, indeed, well into that process now. I work at a 5 acre farm which has a tractor. I would guess that it uses about three gallons per week of biodiesel produced on the farm. That’s not much.

            And, of course, we can all hope that Wes Jackson and company at The Land Institute can give us perennial crops sooner rather than later.

            In short, I see no reason to wring our hands other than the cultural barriers. (Which, I admit, could kill us all). A little common sense and education plus what remains of our fossil fuel heritage should get us through OK. I was talking to a student at the local Sustainable Agriculture program and she told me that the core of the educational curriculum there is now the carbon cycle. That’s not ‘traditional ag’, it is the best thinking and experience we have.

            Don Stewart

            • I am a fan of what the Nearings were able to accomplish, and frankly in THEORY I think as long as decent water and sunlight are available, you can compost and recycle all the nutrients in your system virtually indefinitely.

              Let us do a thought experiment. For the most part on this board, nobody thinks 7B is a sustainable number. Don pitched out in this thread a number many think is sustainable of around 500m-1B people, including whoever authored the Georgia Guidestones. This represents approximately a 90% Die Off, which is certainly a whole lot better than a 99% Die Off. Certainly way better than the kind of ELE Owen projects with 100% Die Off.

              OK, so by some vector here we knock back the population to 500M tomorrow. Let’s do it as fairly as possible with a mutation of the Bird Flu Virus with a 95% Infection rate and 95% mortality rate with no medical interventions possible that can affect the outcome of infection.

              We are now left with a population of 500M people who obviously have a KICK ASS Immune system and in terms of Survival of the Fittest are Conquerers in the Extreme here. These folks can knock down ANY virus at all just with their Immune system! Very robust population you are left with here.

              So now, with your new population of Khans, you go and divy up the earth into 250M individual Plots of land (assuming balance of males and females remains here) which each is in theory assuming the weather and water availability remains constant are sufficient to support 6 people at any given time. This would be Farmers John and Mary, their two Kids, Zeus and Aphrodite and Grandparents Odin and Venus. LOL.

              As long as Odin, Venus, Zeus, Aphrodite and John and Mary stay on their plot of land and the climate parameters remain the same as when you divvied up the surface of the Earth to begin with here into chunks that can support 6 people. Definitely, as soon as Zeus and Aphrodite are old enough to Reproduce on this plot of land, Odin and Venus have to take the trip into the Great Beyond. You can’t support 4 generations on the same plot of land here.

              In reality of course, larger areas and political units will congregate up. If one area gets particularly good weather for a time the peoples wil produce more than 2 each as replacements. Unless you force abortion or tube tying to prevent further procreation after the first two are born, well, “accidents” happen. What happens when unfortunately Zeus loses his footing in the mud behind his Oxen Neptune and Loki and is dragged to his death in the mud? Unless John’s Vasectomy can be reversed, he can;t replace Zeus in the paradigm.

              All of this is written in an effort to show why maintaining a PERFECT Steady State balance between Births and Deaths of Homo Sapiens is extrememly difficult to accomplish, and to accomplish it in the first place takes some very extreme withdrawal of reproductive rights of the individual. To KEEP Global population of Homo Sapiens at the theoretical maxima of 500M, everybody has to agre not to produce more people than a given plot of land can suppot. In AGGREGATE people just will not do that, a least at this stage of the game they will not.

              A more likely steady state is where populations rise ad fall, with wars, famines and plagues taking down the population periodically. This is how it has gone through most of the historical record. The main issue we deal with now on the Global Level is the presence of Nukes. If we let these babies loose here, we cqan screw the whole pooch rather quickly, Left to typical checks and balances, Homo Sapiens will survive, just at much lower numbers in aggregate.

              RE

          • I agree that there is definitely an issue with any farming method, over the long term. We are basically destroying ecosystems, and setting up a situation where soil is eroded more quickly. If irrigation is used, it very often increases the salinity of the soil over time. I think what Don is thinking of is short-term, how he or anyone can succeed. In many ways, we are outside of our ecological niche. It is impossible to avoid destroying ecosystems, if we expect human population to remain high.

            • Don Stewart says:

              Gail
              I believe the key point in what you said is ‘if we expect human population to remain high’. The best estimates I have seen for best practices in agriculture imply a stable human population between 500M and 2 billion. But remember, compound interest works in reverse, also. If every male had one child and then a vasectomy (much easier than the female plumbing), then population would decline pretty rapidly. Coupled with frugal living, it is easy to construct plausible scenarios getting us to 2 billion or to 500M. The hangup, of course, is the cultural factors. Our candidates for President are not (or at least not only) idiots, they reflect back to us what our culture demands if one wants to get elected.

              I think we part company in terms of a sustainable agriculture. For example, here is a current review in Amazon of a book written one hundred years ago:
              Farmers of Forty Centuries: Organic Farming in China, Korea, and Japan (Paperback)
              This book describes in a fair amount of detail the several thousand year-old practices of several Asian cultures for successfully maintaining the health of their soil through community composting and spreading that on the fields. While these practices are culture-wide, a single farmer could do much of it on his own farm or multiple farms as a community practice in order to pool composting resources. What’s odd is that those countries in “Farmers of Forty Centuries” have been able to feed large numbers of people using the methods outlined in this book, yet they have recently been turning away from those tried and true methods in favor of European and American farming methods, both of whose methods have impoverished their soils.

              We know more now than those Asian farmers did. I see no physical reasons we can’t do it. But the cultural factors may prevent us.

              I was talking with my daughter in Portland, OR earlier today, and we were discussing the Martenson/ Eisenstein conversation. We both agreed that people will continue to demand at the top of their lungs that everything continue on as it was in 2006–but then slowly and quietly adjust to the new normal. My daughter agreed with me, and pointed out a number of things which have happened in Portland where people are adjusting to the new normal. I wonder, for example, about the plunge in US consumption of gasoline. Is it really an economic collapse? Or, as some speculate, that people have decided that they need to severely restrict optional travel? So cultural factors might possibly be a stone wall in the short term but much more pliable in the long term. Ugo Bardi’s recent history of the last Roman Empress included the fact that she was half Barbarian. Would any Roman in the time of Julius Caesar have considered the notion that a half Barbarian could ever be a Roman Empress?

              Don Stewart

            • I agree that agriculture in Asia was much better than in US. But now they are turning to US methods.

              I heard while in Spain that very old olive groves (hundreds of years old) were being cut down and replaced with ones on drip irrigation. If we have processes that pretty much work, but don’t extract the maximum amount of energy/food value, there is going to be temptation to change them for something that supposedly improves the amount of output.

              I think the issue on going to older methods is that they generally don’t produce as much food. It will be hard to get any political group to agree to produce food for 2/3 or 1/2 of the current population. So it seems like it will be hard to go to a lower level, even if we could.

              Also, our systems are set up for the current level of usage–for example, roads, electrical usage, sewer system, even the post office. If we cut back, even if it is for a good reason, it is hard to make the system work at a lower level because some costs are close to fixed. For example, the US post office is facing financial problems, related to lower usage, because of its fixed costs. As another example, we probably have to maintain the entire electrical transmission system and sewer pipeline system, even if usage decreases.

            • Don Stewart says:

              Gail
              Provided we are willing to dedicate more people to growing food, we increase yields. Now some would argue that money is what is real and having more people grow food is a step backward. Others see growing food as one of the great, rewarding occupations. At any rate, there is no necessity for anyone to starve–provided we are willing to do what we would need to do…dedicate more labor to the project.

              As for drip irrigation systems. Most Permaculture people are supremely practical. They see drip irrigation lines and plastic high tunnels as fundamentally things which are worth doing. Some of them even see jetting around the world teaching Permaculture as worthwhile. But Bill Mollison, one of the originators of Permaculture, said that fossil fuel usage could be cut by 60 percent without damage to anything actually worth doing. So I think it is more about ‘what is worth doing’ and ‘what is a frivolous waste of resources’ than drawing some line in the sand.

              Similarly, if you ask a farmer if driving a tractor with fossil fuels is a good idea while having tens of thousands of people drive two ton SUVs to a rock concert is a frivolous waste, he would probably agree. So the issue is about values which go beyond money. In short, what the Economists think about the ‘value system’ is not compatible with actual survival. Which implies that our cultural values are not compatible with survival. This distinction seems quaint now, but would have been instantly recognizable in my distant youth. All us children of the Midwestern Progressives understood these things in our bones.

              As for modern systems. The Rural Electrification System worked fine in the 30s with far less usage of electricity than we have now. If more people move to and live in the countryside, but are farming with considerably less fossil fuel energy, it is not clear to me that there is any crisis in terms of paying for the electricity system.

              As for the Post Office. I just got my Mother Earth News. They are appealing for readers to write their Congress people to object to the unfair treatment of the Postal Service. According to MEN, late in the Bush II Administration some legislation was passed requiring that the Post Office account for pensions in ways that private corporations are not required. According to MEN, the income statements you see reflect pension accruals for postal employees not yet hired. MEN says that the Post Office had an operating profit last year, despite the lower volume. In short, what MEN sees is a political effort to put the Post Office out of business and turn it over to purely private interests by ‘proving’ that the Post Office cannot run efficiently. I don’t know much about it–but would trust MEN a lot more than a Republican congressman.

              I agree that a society which is shrinking its footprint on the Earth is a challenge to our culture. Which includes the monetary system based on debt and unlimited procreation. My point is still that the culture is the real problem. We know how to do Sustainable Agriculture, pretty much. We have good prospects of doing it better than the Asians, if we can get the culture on board. We can estimate that even with zero fossil fuels we can support a significant population of humans with a thriving culture. The current Culture is the problem.

              Don Stewart

            • Justin Nigh says:

              Hi Don,

              I agree 100% that culture, which is made up of stories, is the problem. I see some promising signs that the stories are changing (eg. Eisenstein, Richard Branson’s latest book that describes future success in business being driven by purpose rather than the bottom line). Currently our cultural values and stories (meaning yours, mine, and other like minded people on this blog) are in the minority, and we know that majority rules. What I believe we’re seeing is a tipping point. I hope we can push it in our direction. I must admit I’m feeling really dark at the moment. I’m scrambling for the exit door in the dominant culture theatre, the first step of which was quitting my ‘career job’ and attempting to start my own venture, but it sure isn’t easy because I’m still restricted by the rules of the ‘game’ (primarily money required to do anything) in executing on my plan as I’d like to. We’ve really painted ourselves into a corner haven’t we (this growth/debt culture)? The system is all pervasive and any attempts to escape it seem futile. Don’t escape it then? Well it’s a catch 22 because living it seems so unnatural and against the grain of my being.

              Lets take an example. I’ve a keen interest in nature and working with it. I see permaculture as a very attractive way of living. However, it requires land. Since I rent, I’m restricted in what I can do. I don’t have the money to buy, as mentioned before property is absurdly overvalued in Australia and I’ve been praying (among thousands) for the bubble to burst. The culture of home ownership is so strong here that it seems impervious to all attempts to pop it, which is very frustrating as I’ve been waiting for 10 yrs now. The latest events in Europe and Australian banking system exposure to debt there looks like it could be the external factor to bring some relief to the market and while prices have declined, it’s still out of my reach (without taking on huge debt).

              In short, I don’t require many ‘things’ to be happy and I’d love to live a simple outdoor life, but even that seems unattainable due to my circumstances.

              Sorry about the ramble but I needed to vent my frustrations.

            • Don Stewart says:

              Dear Justin
              I hate to sound so pessimistic. But here goes:
              1. We SHOULD have had a crash in property values in the US. But the Powers That Be have decided to print money and hand it to banks to prevent land values from falling to their production value. So it is still extraordinarily difficult for a young, aspiring farmer (or a middle aged, aspiring farmer) to buy land and farm it responsibly and pay off their mortgage. Yet successful financial speculators have no trouble buying ‘horse farms’ and getting the ‘agricultural tax’ on their land and also erect a McMansion. Ben Bernanke looks with favor on this latter enterprise, while the World Bank tries diligently to exterminate any remaining examples of the first species. I don’t know what will happen when and if Australia goes through a financial crisis.
              2. 150 years ago (1862) the United States Congress passed the Homestead Act. This permitted aspiring farmers to move west, claim land, and get it for free. Why 1862? Because the South had seceded and could no longer block it. Why was the South interested in blocking it? Because then, as now, the controlling interests in the South would have wanted to give that land to the monied class and let them sell it on credit to poor farmers. Now, of course, it is considered heresy in states like Minnesota and Wisconsin to make land available to poor people. Somehow, through mysterious mechanisms, this entire country has come to have a religion of DEBT. We build altars and sacrifice our first born to Debt. And Debt drives our behavior–as you know only too well.
              3. As I listen to Eisenstein and your countryman Steve Keene, it seems to me that some ‘reset’ is required. I hate to recommend a revolution–because they usually end badly–but I don’t know how else we get out of the trap.

              All I can do is wish you luck. If I had a magic bullet, I would certainly fire it to solve the problem.

              Don Stewart

            • One of the issues is how long electricity production can be maintained. As long as it can be maintained, and major systems of all kinds kept together (water systems, sewage systems, road repairs, governments, etc). In this case, the approach of using less works–which is what most sustainability groups have focused on.

              There is a real question in my mind regarding how long the these systems can be held. Even major debt defaults could lead to overthrown governments, with an unknown follow-up–new government of totally of totally different type, breakup similar to Former Soviet Union or Yugoslavia, civil war or military takeover. With respect to the olive groves, if the old system which did not require fossil fuel inputs had been kept, the population would be better off in the case of such disruption than if it had to depend electrical supply in a world that is falling apart.

  3. This is a marvelous Blog. It has a wide range of opinions, going from Owen’s belief that we are facing an Extinction Level Event to Don’s perception that if we can just change the Culture and utilize the environment in better ways we could avoid a masive Die Off.

    For the near term, the likelihoods remain somewhere in the middle I think. A rapid extinction seems unlikely in the near term without some very powerful Death Vectors coming to bear. Asteroid Impacts, Super Volcanos, Global Thermonuclear War, that sort of thing. On the other hand, a large scale change in the behaviors of the current population toward more sustainable Ag practices with a lower energy footprint also seems unlikely.

    so the Near Term outcomes here seem to fall somewhere in the Middle of these scenarios.

    Not really discussed as an intermediary “solution” so far is what appears to me to be the most likely one, which is extreme Fascism/neo-Feudalism.

    The FSofA currently runs the largest Military Machine ever built on this planet, insofar as we know anyhow. What are our parameters for survival if this military structure is used to wipe out competing Homo Sapiens? How will we react and behave on the local level if our Military is used to confiscate and acquire more Oil fields in other parts of the world? How do you live under a vast Military Dictatorship, which in many respects is what we already have?

    Until the FSofA Military butts up Directly against the Chinese and the Ruskies and we have a ful on War conflict with them, it seems to me that this structure here in the FSofA will become ever more powerful, removing freedoms and rights of the individual willy nilly as was the case with the Patriot Act. Internally disassembling the Military Industrial Complex is extremely difficult by volition and really I think can only occur when the Military Machine is no longer able to feed itself by energy thefts.

    So for the near term, while this miltary machine exists in its current form, you mainly have to figure out how to survive uder the Fascist State. What are the best strategies for that? Do you want to be a Land Owner in the Fascist State who has his produce Taxed to support the State? Do you want to avoid Taxation by subsisting at such a low level you have nothing worthwhile left to tax? Can you Run Away to somewhere ELSE to avoid these problems or at least postpone them for a while longer?

    My choice has been to Run Away for as long as I could, as far as I could. I started out my life in the Belly of the Beast in NY Shity, I ended up some 50+ years later here on the Last Great Frontier of Alaska. There really is no further away for me to run and hide anymore, and the corruption surrounds me now on all levels. I have my plans to Bugout even from here to New Zealand or even so far as Tristan da Cunha, Edinburgh of the Seven Seas, but I know in my heart that really I can run no further away than I already have. I must find a way to SURVIVE under the Fascist State as it is, there is no real FREEDOM anywhere to be found anymore.

    Eventually I believe the Fascist State will collapse, and there will be FREEDOM to be found again, but I am not confident this will occur in my lifetime. The remainder of that is to be found in finding ways to live inside the Fascist State as best as possible with the fewest compromises possible to my ethics. To do that, I run away, I hide. But I have run OUT of places to do that now as the Big Show comes ever closer to my Theatre.

    I applaud each and every person here who is seeking alternatives, whatever they are. Most cetainly, there are better ways of doing the Bizness than what we currently are engaged in doing. Unfortunately though, until this system completely COLLAPSES, you cannot run away from the problems, nor can you solve them locally either. Survival now is all about living inside the belly of the beast until the beast itself dies.

    RE

  4. Don Stewart says:

    Response to Gail’s comments about the olive grove and drip tape.

    Dear Gail and Others interested in water
    The first question an industrial oriented person who sees drip tape in an olive grove is likely to ask is ‘where will you get the drip tape after the collapse?’ and the second is ‘how will you pump water into the drip tape after the collapse?’. But to a Permaculturist, the first question is likely to be ‘Is this farmer getting maximum benefit from gravity?’ and the second is ‘Is this farmer making maximum utilization of soil storage of water?’. Much of Permaculture teaches practical ways to accomplish those last two goals. Drip tapes may be involved (so long as they are available) and an electric water pump may be used (so long as the electricity works), but they are not the essential components. Drip tapes can be replaced by on contour channels of various kinds and draft animals can be used to turn mechanical pumps. For a kitchen garden, hand pumping may suffice. So the focal issues are effective use of rainwater in partnership with gravity and maximizing water retention in the soil.

    Here is an inspirational story about a farmer in drought stricken Africa and how he turned personal misfortune and unpromising land into a Garden of Eden. You can see similar ideas implemented in the Mediterranean using stone walls to control the flow of water through an olive grove. I, of course, have no idea what Gail saw in terms of these fundamentals.

    Don Stewart

    Zephaniah Phiri Maseko
    http://www.theecologist.org/how_to_make_a_difference/food_and_gardening/360257/case_study_drought_resistant_farming_in_africa.html

  5. Pingback: Limited resource world « Changed Times

  6. Don Stewart says:

    This is for Justin and anyone else who is feeling pressure about making the right decision in the face of uncertainty. Daniel Kahneman’s book Thinking: Fast and Slow, on page 348, explains one of the problems and offers his personal solution.

    Paul owns shares in company A. During the past year he considered switching to stock in company B, but he decided against it. He now learns that he would have been better off by 1200 dollars if he had switched to company B.

    George owned shares in company B. During the last year he switched to stock in company A. He now learns that he would have been better off by 1200 dollars if he had kept his stock in company B.

    Who feels greater regret?

    The results are clear-cut: 8 percent of respondents say Paul, 92 percent say George.

    The only difference is that George got to where he is by acting, whereas Paul got to the same place by failing to act.

    Back to me. Kahneman then goes on to discuss this phenomenon in more detail. In one version, doing what everyone else did carries the least regret–even if everyone else made a mistake. While this is a universal human attribute, we can lessen the effect if we understand what is going on. Kahneman describes the pep talk he gives himself.

    The conclusion I would draw is that many of us see that things are going to change–but we don’t know exactly how and when. The ‘safe’, regret free way is to continue to do what we have been doing and what the crowd is doing. Anyone who decides to change their life based on some intellectual fact finding and reasoning is bound to feel exposed in terms of potential regret. It may help to read Kahneman’s book. It’s a really good book, but most good libraries should have it and you can just pick it up and look at these few pages if you don’t want to buy it. It is also in bookstores at the present time in the US. So you might avail yourself of the opportunity to browse.

    Don Stewart

    • Justin Nigh says:

      Hi Don,

      Thank you for that anecdote. I suppose changing gears might involve less regret if one changes to something that is truly satisfying and rewarding on levels other than monetary.

      Last night I was watching/listening to a timeless piece of philosophy by Alan Watts called “Conversations with Myself.” You may be familiar with it; if not I recommend searching for it on YouTube. It was filmed in 1971 and he discusses having spoken to a number of thought leaders at the time about a proposal to gather great minds from all over the world and all spectrums (teachers, philosophers, religious leaders, heads of state, etc) to address the looming ecological crisis of our time. After some discussion they all came to realise they wouldn’t know what to talk about that would really do anything to change the course of events. They could scream about it and so on but what does that really do? Any action they could take would probably make things worse, since it’s action and attempts to control that caused the problem to begin with. Again it’s the recurring theme of any attempts to operate within the system to change the system will be ineffective in doing so. I thought this was relevant to your anecdote above, as well as recent discussions.

      I’m familiar with Kahneman’s book and have seen it on the Kindle store. I might just pick it up and add it to the other 4 or so I’m reading at the same time.

    • I have found that used books can be helpful, too, especially with old out of print books. I don’t have a lot of time to go searching through the library, and my library is poorly stocked to begin with.

  7. davekimble2 says:

    Good article. If I could make one point, which I’m sure you know anyway –
    every time you talk about “all the cheap oil is gone” you are really talking about “all the high ERoEI oil is gone”. In other words new oil wells are getting more and more energy-intensive to discover, turn into production wells, provide the necessary pumps and pipes and storage tanks, build new tankers and loading jetties, and build new or upgraded refineries to process the lower quality oils.

    When you say it like this, it emphasizes the fact that we have a negative feedback situation here.
    The oil price rise reflects this, it doesn’t drive it. Our fiat money system and fractional reserve banking means that money can be created out of thin air, so a high price of itself is not insurmountable. This allows Yergin et al the trick of saying “higher prices will bring more oil to market”. Whereas the energy barrier cannot be overcome due to the First Law of Thermodynamics, and if you explained things that way, Yergin would find it less easy to bamboozle the population.

    Peak Oil is nothing to do with oil price. The price affects who can afford to buy the oil, but it doesn’t affect how much of it there is.

    I’m sure you could find the words to say that concisely – better than I can.

    • Talking about the first law of thermodynamics would put the article over the head of a fairly large share of the audience. I am told that blog posts shouldn’t be written at more than a 10th grade level. I write some of my posts at different levels, but this one was intentionally “dumbed down”. When I am working within word limits (as for ASPO-USA and some other sites), I often have to choose between a long complete explanation, and a shorter, easier to understand explanation.

      Also, with the low price of natural gas, I am not sure the issue is entirely EROEI. If someone can use lots of natural gas to produce oil (oil sands, for example), the price can be acceptable, even if EROEI is low.

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