In the past month, three major peer-reviewed journals have published articles relating to limited world oil supply:
- In Science, Technology is Turning U. S. Oil Around But Not the World’s, by Richard A. Kerr;
- In Nature, Climate Policy: Oil’s Tipping Point has Passed, by James Murray and David King; and
- In Energy, Oil Supply Limits and the Continuing Financial Crisis, by Gail Tverberg.
The fact that these articles have been published is significant, because articles in the mainstream press, such as Bloomberg’s recent article, Peak Oil Scare Fades as Shale Deepwater Wells Gush Crude, seem to suggest that our oil problems are past. While the US oil supply situation may be a little better, the world supply situation is still very bad, and oil prices are still very high around the world.
Furthermore, high oil prices tend to have a recessionary effect, and can lead to debt defaults. These issues are described in both the second and third articles above. Thus, there is a substantial chance that high oil prices are contributing to the debt default problem in Europe, and to forecast low world economic growth.
In this post, I briefly describe these articles.
In Science, Technology is Turning U. S. Oil Around But Not the World’s, by Richard A. Kerr
This article points out that even the optimistic estimates, such as BP’s recent Energy Outlook to 2030, see little growth in non-OPEC conventional oil production between now and 2030 (Figure 1).
We are thus dependent on growth in OPEC crude oil and in OPEC natural gas liquids, neither of which is assured, given political uncertainties in the Middle East. While technology advances are making possible some new US oil production, this growth is needed to offset declines in existing fields around the world. There is a great temptation by those using new technology to make forecasts using an “overabundance of optimism.” History shows that US oil production has mostly fallen since 1970 (Figure 2).
In Nature, Climate Policy: Oil’s Tipping Point has Passed, by James Murray and David King
According to the authors:
There is less fossil-fuel production available to us than many people believe. From 2005 onwards, conventional crude-oil production has not risen to match increasing demand. We argue that the oil market has tipped into a new state, similar to a phase transition in physics: production is now ‘inelastic’, unable to respond to rising demand, and this is leading to wild price swings. Other fossil-fuel resources don’t seem capable of making up the difference.
Such major spikes in fuel price can cause economic crises, and contributed to the one the world is recovering from now. The future economy is unlikely to be able to bear what oil prices have in store. Only by moving away from fossil fuels can we both ensure a more robust economic outlook and address the challenges of climate change. This will be a decades-long transformation that needs to start immediately.
The article talks about how high oil prices erode family budgets, and points out that it seems likely that it wasn’t just the ‘credit crunch’ that triggered the 2008 recession. The oil price crunch was also involved.
A call-out from the article summarizes a current problem:
The price of oil is likely to have been a contributor to the euro crisis in southern Europe.
In Energy, Oil Supply Limits and the Continuing Financial Crisis, by Gail Tverberg
This is an article I wrote in early 2011, that wasn’t officially published until January 2012. The article can temporarily be downloaded free, as the fifth item down on this list of articles from the January issue.
In this article, I explain why one would expect high oil prices to cause economic disruptions of many types. If consumers are spending more on high-priced oil (and high-priced food, because both costs tend to rise together), they will cut back on discretionary expenditures, such as going out to restaurants and taking vacations and buying new cars. Workers in affected industries will be laid off.
There will also be indirect impacts. People who have been laid off from work will tend to default on their loans, as will people who are living paycheck to paycheck and find that the cost of commuting has rising, and the cost of food has also risen. Holders of sub-prime mortgages will be disproportionately represented in the group of those with defaults, since they were among the least qualified loan applicants.
High oil prices can also be expect to affect housing prices. In part, this occurs because people who spend more on necessities (commuting and food) are less likely to want to buy a move-up home. As a result, there will be a cut-back in demand for homes, and thus in resale prices. Also, at the time that oil prices rose in the 2004-2006 period, the Federal Reserve raised interest rates in an attempt to try to bring oil prices back down. These higher interest rates also tended to reduce demand for move-up homes. I also show that the timing in the drop in US home values matches with what a person would expect, if it were high oil prices, and actions taken by the Federal Reserve in response to high oil prices, that were really behind the drop in home prices.
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Hi, Gail. Don’t forget our paper, which appeared in Energy Policy late last year.
Global Oil Risks in the Early 21st Century
That is a good point! I see that this is a link to the Elsevier site. They are willing to rent the article for 99 cents for 24 hours–no copies. I hadn’t run into that before.
Critical Thresholds in Thinking
It’s great that the mainstream scientific press is taking seriously some of the “the impossible facts” the alternative research community brought up. There’s still a long list of these critical thresholds in thinking to be crossed, though. Some of the biggest are still seriously holding back both the alternative and mainstream research communities, is what I hope many quietly realize.
One that the alternative research community has taken a lead on is the likely necessity of downsizing the economies, as a survival strategy. Simply said, we apparently don’t know how to run economies except on fossil fuels. For understanding that, though, the alternative community is being hampered by one of the big problems the mainstream community has had all along. Data organized into deterministic models doesn’t represent how economies work.
The data we encode and use in models is missing all information on how the living parts of economic systems work. So they have no way to anticipate what new group behaviors will develop as new situations develop. The data that can be collected leaves us with remarkably narrow views. It’s an inherent problem with models, partly explaining why our self-interest economic system is now so profoundly acting against its own self-interest, for example.
Generally, the data we can collect on ANY natural system is NOT adequate for describing it. If you’re a thinking reader you might notice that conflicts with the assumptions of much of environmental science. The heart of the problem is that natural systems develop by growth to work by themselves, from the inside. They develop around networks of learning parts and their direct inter-relationships. It’s their “internal organization and original behavior” that cannot be recorded in ”external data”. So our models are:
a) missing the hidden information on how systems work from the inside, and
b) stuck representing them as being controlled by our data from the outside.
Using mathematical models to predict the economy has already proven itself to be a terrible way to run a planet. The basic problem is that models don’t even really help you discuss the internally animated behaviors of the system.
It directly hampers the discussion of “peak-everything”, for example, keeping us from discussing the critical question of how the economies will respond to decreasing rather than ever increasing energy to use. Will the ever rising energy and resource prices we can generally expect shrink or collapse them?
I’ve written some on that particular subject, and lots on the general subject. Basically we need to expand our thinking to begin using a “whole system” paradigm for discussing any environmental system problem. Without it, I think our society won’t make any practical headway at all with our environmental crisis.
A short good example is: http://www.synapse9.com/pub/ASustInvestMoment-PH.pdf
Other short discussions: http://www.synapse9.com/signals
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Energy-Money Equilibrium: The Value of Money in the Age of Oil Part I
Trying to figure out exactly how any Money achieves and holds its value is very
difficult. In all but the most simple systems which are little more than
Barter, you quickly develop a level of complexity that is confounding, mainly
because it is always so self-referential. In this exercise, I’m going to try to
elucidate the process used over the centuries to not just Create Money, which is
primary, but also to Control Money once created. I have some basic ideas here,
but I have no idea how this post will come out in the end. It’s a very
Starting Point: You can’t have Money without Surplus in Basic Needs, but
neither is Surplus by itself sufficient. You also have to have control over at
least One basic conduit of Wealth, which is in the Begining Food. Why is this
First look at a pre-Agricultural Hunter-Gatherer Society. Said society can be
in Surplus, but they don’t need or use money, because each member of the society
can take from the surplus as much as he or she needs. You may Barter things,
but you do not need an intermediary of money to do that. Its a very simple
system, but allows for virtually no Savings, and none are necessary as long as
you always have and expect surplus. A small group of H-Gs in a large territory
not competing with others are always in surplus. So no Money develops in such a
The Ag society though as soon as it develops REQUIRES money. First thing is,
the Ag Society develops a Surplus even beyond that of the H-G society, so much
so that the population begins to expand rapidly. The Ag system also works on a
seasonal level where large amounts of Grain are collected up at harvest time and
must be stored in Warehouses. Such intitial efforts are Communal, with a Tribe
all working together on a Patch of land to farm it. To do so though, they must
Claim Ownership over that land. This requires then the next level, a Military
to protect and defend that land.
Its at this point you have the 3 most necessary elements involved for the
beginning of a Monetary system. One is Ownership of the Land, at first Communal
by the Tribe as a whole. Second is Storage of large quantities of Food in a
Warehouse. 3rd is developing a Military group responsible for protecting both
your land you grow on and the goods stored in the warehouse.
The Military component quckly becomes the most Dominant one, in the early stages
led by the most powerful Warrior who all in the tribe respect and fear. This
person become “King”. Call him Nimrod. The King then becomes the Symbol of the
State, and all it “owns” and “produces” (really “controls” and “extracts”)
belongs to him. The monetary system develops as a means for the King to
distribute out surplus to his Loyal Subjects.
The money develops when the Counting begins in the Warehouse of Grain. Whatever
is in there is represented in the Count by Credits, which can then be symbolized
in a token. Only as many Tokens are produced as there is grain to cover them in
redemption. Precious metal coinage works well for this in the beginning. All
the precious metals the King has acquired by whatever means care coined up, and
appropriately valued so that there are not more coins than Grian that can be
redeemed. This is Hard Money in extremis. It has an absolute value measured in
the Food it represents.
The King can now hand out the Tokens to his Military protectors and also pay the
oversears of slaves or serfs who work the land and grow the food. These folks
are not paid in coinage, they merely get a small portion of the food they
produce for subsistence living.
Problems arise as the society grows. In the beginning, the surplus of food being
produced exceeds the amount of precious metals available for coinage, so the
food drops in price. A few things can happen here, one is that the King can
stop paying out so much coinage to his Military and Overseer classes, raising
the price of the food up again, allowing the King to keep more Precious metal in
the treasury and more food in the warehouse. Everybody is still beign fed here,
King has more in the Treasury, and besides that surplus in the grain warehouse
grows. It keeps a pretty long while, but eventually will rot or simply become
ridiculous to save any more of. Like putting up more than a few years of Preps,
it gets ridiculous.
So you start to Trade the surplus with others who don’t produce so much food and
expansion begins of the system. Peripheral areas pay in more Gold and Silver
and also begin to produce other things besides food which the Money becomes
useful for paying for.
At this point the system has become vastly more complex. The Tokens no longer
represent an absolute amount of Grain in a warehouse, but rather the value of
all Goods and Services being produced in this ever growing system. Bourses or
Trading Markets develop which set relative values for everything being done in
the society, which as it increases in size and velocity needs a rapidly
increasing Money supply to handle. The Precious metal coinage does not increase
at the same rate in most circumstances, so in order to have more “money”
available, base metals are used to produce some coins, which pretty much can be
produced at will. Money is getting softer during this period, but so long as Da
Goobermint doesn’t go wild coining up the base metals, it doesn’t devalue while
the system is expanding.
The trading system begins to undergo many stressors at this point. Regardless
of whether there is some whether or plague related Famine or not, at times some
folks in control of large swaths of land simply take them out of production,
locally raising the cost of grain. This allows them to extract out more
precious metals from the buyers, and this money goes into their Basement Safes.
I’m sure you can see the analogue here with how Oil prices get manipulated by
creating periodic “shortages”, even if there is plenty of Oil in the ground.
The “successful’ society utilizing Money has now reached the point where there
is just a ton of Surplus in the society, so much so that there isn’t a whole lot
of need for Workers or paying people much coinage and most of the PMs are
sequestered away inthe Basement Safes of a few Pigmen. At this point though,
some folks cannot even get hold of the few base metal coins to buy any food,
though there is plenty in the warehouse. The society needs no more Serfs, nor
does it even need more Artisans and Toolmakers. Only a few of the most
successful of these are necessary for the King and his Oligarchy, so these New
Professions start to see Unemployment also, along with Serfs. The economy slows
to a crawl, basically because it produced too much surplus too quickly, and then
developed an overburden of a population with no remunerative work available.
Social Discontent rises here amongst the Poor, at which point it becomes
necessary to “Give Away” the surplus to these folks or face a Revolution.
Except soon as you do start “giving it away”, the Money loses further meaning.
Why work as a Soldier and put your life onthe line for a few coins when Bread
and Circuses are beign provided to the masses to keep them quiet and
entertained? The Roman period of Bread & Circuses has the direct analogue of
the Great Society program through to just recently.
Eventually, regardless of actual production or extraction ability of food outta
da ground or Oil under da ground, production of both begins to fall because
there is no money flowing around the market which will buy it. Now you really
DO get your Revolts, which really do require you to start increasing the size of
the Army and handing out money from the Treasury, until the Treasury is bankrupt
of PMs. Now, there are Gold coins inthe hands of the Soldiers, but there is
little being produced to buy with those Gold coins. At this point, you reach
the end of the line for this iteration of a cycle, and not until the Wars and
internal conflicts get resolved can you begin a rebuilding process to do the
same thing over again.
The whole process here has occurred countless number of times since Nimrod, and
for so long as there always was a real Surplus in the environment, the only
thing that caused the famine and scarcity problem was the collapse of the
This iteration is different than those were. The repeated expansions and
collapses culminated with the discovery and exploitation of fossil fuel
resource, which put the entire globe into such great Surplus that it rapidly
expanded in population numbers consuming this last great resource base. Upon
its collapse, what is left out there isn’t enough to expand on again after just
the typical wars knocking down Biblical numbers of around 25% of the population.
The monetary system doesn’t really collapse from Scarcity normally, it collapses
from too much Surplus and hoarding of currency. Periodically though due to
overextension and resource depletion in specific locations along with the
vicissitudes of Nature, real scarcity does rear its head, which causes a
collapse from the opposite direction. In this case, money may be circulating in
the economic system, but it is a shortage of goods rather than a shortage of
money which produces the disruption. The end result isn’t much different since
you still end up with a situation where extant money won’t buy goods, but the
causative factors are different.
The Period we are working into now is a synergy of both problems, on the Global
Scale. On the one hand, there is a consolidation of Money going on removing
much of it from real circulation through the Banking System; while at the SAME
time resources are depleting on a global level. As long as these two parameters
move in tandem, you get a shrinkage, but not a collapse. You only get a
collapse when on the gross level BOTH fail, and that has yet to occur. When it
does occur though, its a lot worse than one or the other of the other types of
In this last iteration of the cycle, rather than Food in Warehouses serving as
the underlying basis of Money, the Thermodynamic Energy of Fossil Fuels
underpinned the money. This by extension through the Industrial Food Apparatus
includes Food, but food is only part of the total production of the society.
Over time, food becomes arbitraged out of value, since all it does is support
“Useless Eaters”. Rather than produce more food, the monetary system serves to
encourage the production of more Fuel, to perpetuate itself. Thus you get your
Ethanol production for Carz reather than Corn for Peoples.
This is a Dynamic Shrinkage Model, basically serving to reduce population while
at the same time conserving resource, which very well might be a planned
methodology and could work assuming the circulating money and available energy
resource decline in near parallel terms. The problem it suffers is one of
instability all along the way. Because the monetary system serves as a proxy
for value for many OTHER things besides just fossil fuel energy, malinvestment
through the system can collapse the monetary system too fast to maintain a
stable equilibrium with the collapsing energy supplies. Obvious example for
this problem is the collapsing McMansion Market, but it extends into Carz,
Factories and many other “Assets”. Unless those assets can be halted from
complete collapse in value, the money supply can’t be shrunk at the steady rate
necessary to pace out to energy supply shrinkage. You then run into the old
problem of plenty of resource available relative to the population, but
insufficeint working money to distribute said resource.
This of course is why we see the process occuring of the CBs pushing out Credit
to keep the energy market from locking up completely. They are just trying to
keep pace with the real shrinkage, but not issue so much credit as to render the
currencies dependent on the credit markets to completely lose value either. Its
a system under great stress here on a daily basis.
As long as linearity can be maintained between the energy markets and the money
supply, the system can continue to function, albeit in ever smaller “boutique”
economies all the time. The linearity gets disrupted either by a local implison
of a given credit market or by a local disruption of Oil supply of a threshold
level magnitude. Uncelar how large that disruption has to be on an absolute
value level to reach the threshold, but one suspects that either a Blockade of
the Straights of Hormuz on the Energy Level or the credit collapse of a country
the size of say Italy would be sufficient here to disturb the equilibrium too
much and send the relative economics into a tailspin.
Money and Oil are EQUIVALENTS in the current society, mainly as defined by the
Dollar as the most popularly accepted Proxy for Oil. To keep the overall system
running at any level, even a small Boutique level, a parity must be maintained
between the currency and the available energy. To do that, a vast portion of
the population has to be cut off from Credit to buy the Oil, but not so fast
that the money loses its value or so fast as the Oil depletes in its availabilty
at reasonable EROEI. its a Tightrope that has to be walked very carefully.
So far, our Illuminati Masters have walked the Wire very well. I do not discount
the possibility they can walk the wire to the Other Side and maintain the
equilibrium all the way through the spin down. This is POSSIBLE. IMHO though,
it is Unlikely. Much like catching a Raindrop on a Knife Edge and controlling
how the water splits up, the level of instability here is simply too great. One
side or the other of the Energy-Money Equation will exceed controllable
parameters, and then you get a Cascade Failure. Whe that occurs, all Bets are
OFF. There is no maintaining a Core in such a situation, there IS no “core”.
I cannot say this one is “Coming Soon to a Theatre Near You.” I can only say to
you IMHO that it IS Coming and will come inevitably, just as even the biggest
Mountains inexorably are washed into the Sea. You must not despair here and
think all is lost, with the outcomes Inevitable and Written in Stone. They are
not. You just have to be patient and WAIT for the Failure of the Conduits, for
when they do fail in earnest, it will be a different ballgame altogether. Fail
they will. I GUARANTEE it.
Interesting! I am not sure I followed 100% of it, but I agree that money and the things money buys need to match pretty closely, or prices start to run up (or down). Right now, the government would like to keep money very easy, and this has a tendency to run up the stock market, and perhaps the price of commodities (depending on how much speculation affects real resources).
We have been used to ever-rising resources, so all of our models are based on this. If there is a sudden drop in resources, then all bets are off. There is a huge amount of debt to be repaid, and it won’t be repaid. This will cause huge disruption–perhaps political upheavals.
You probably have read David Graeber’s The First 5,000 Years of Debt. I will have to admit I haven’t gotten all of the way through it. It sounds as though credit was used very early on, in the systems he describes–but that would make your model more complicated.
No, I haven’t read David Graeber’s book, but I will put it on my reading list. I’ve just been investigating credit history like any typical internet junkie does, following links and reading digests of what other people have researched before me.
Resource constraints are a problem as a society grows, but generally have not been the main problem, the monetary system gives out before the resources do. This is true in the current situation also.
A monetary system past true “hard money” which just accounts for production has many other facets to it which give the money “value”, primarily Interest and Scarcity and Distribution parameters. Many different distribution parameters have been tried in different combinations, but mainly the idea is to tie Money to Work in order to use it to access Labor. Monetary systems fail when the distribution system fails and you can’t value labor against resource availability. Oil and Industrializatoin changed these parameters significantly and led to both overshoot on an incredible scale as well as the devaluation of labor and the enhancement of the finance economy.
In any event, so far as I can figure all the connections, you can’t really have any functioning money in a contracting system. The valuations of assets are too unstable. You have to use other means to maintian social stability, which generally seem to involve a kind of triage through the population. Based on biblical narratives, this seems to work with about a 25% triage of the population base; I am just not sure this can work in the conditions we have achieved as a result of the overshoot of a century of accessing the thermodynamic energy of fossil fuels.
I pretty much agree with you.
In a contracting system, the idea of money as a store of value has to disappear. It is hard to see how this can work. People can pretend for a short time that a little inflation is not too big a problem, but if there are fewer and fewer resources/goods over time, at some point people have to figure out that the money they hold will be worth less and less. So I think you are right about the monetary system giving out before the resources.
The fact that our economy is self-organized around the system we have now seems to me to be a real problem. It looks to me as if the system will “break,” if there are widespread debt defaults. Theoretically, the system could self-organize around a different set of rules (taxes, ownership rules, etc) and different financial system (with shrinking money availability, perhaps through a monthly value reduction), but it is hard to see how investment would work in such a system. It is also hard to see how we would get from our current system to a new system, quickly. If there were a “safety net” under our current system, or some system that worked in the past that could work again in the future, I would be more sanguine about the situation. But in the end, I find myself with pretty much the same beliefs that you have stated–we are so far into overshoot that the situation looks unfixable.
OK, this is probably a good thread to drop on an article I wrote back in January examining Energy-Money Equilibria issues. Its a very long article which comes in 3 parts. I’ll publish Part I here now and see if it posts up right after this post. If it doesn’t, until Gail gets to it Bicycle Dave and others who are members of Reverse Engineering can find the articles at:
Part III examines one scenario I think likely of Extreme Fascism which most people will find pretty unpleasant. Not sure I’ll publish Part III here.
You need to explain why my comment is offensive to you. If a car crash simulation expert explained (in clinical language) how they modelled and tested passenger injury in crashes it might sound like a similarly cold and macarbe intellectual exercise. Yet I am sure you accept that crash simulation work has a purpose and good applications in improving car safety.
In the some way, cold intellectual appraisals, like the one I suggest, which treat humans and human phenomena as just another set of natural events, are the first steps in objectively working out the parameters of our global dilemma. You cannot assume, ahead of time, that this coldly intellectual stage of speculation, modelling and appraisal cannot produce any practically useful information which might enable us to ameliorate the suffering in some quarters and reduce the overall magnitude of the disaster. However, we can be certain that blind emotional denial will have zero results.
Frankly, your claim to be offended is an example of anti-intellectual, anti-empirical, anti-scientific emotionalism; the exact kind of denial response which leaves us open to even bigger disasters and even more human suffering.
I didn’t get the “offensive” thing either – I found your comment to be good “food for thought”. Thanks for taking the time to write it.
Your comment is offensive to me.
In some ways, what actuaries do is not all that different. Insurance companies always want to know if a hurricane hits, where the damage will be. Or they want to know what the expected impact will be on their policies of some event–a communicable disease that is passed around, or hail storms because of global warming.
I agree that collapse isn’t a very nice subject, but sometimes if you are trying to figure out how to mitigate a problem, it is helpful to have an idea of which areas are likely to be hardest hit. Your modeling may also help suggest which strategies for mitigation might be helpful.
This story has a point so please stay with me. Recently I saw a particular youtube video of the Japanese tsunami which I had not seen before. What was remarkable about it was the way the tsunami flood (progressing up a large river or inlet) just rose and rose implacably for something like 10 minutes, all the while pouring more and more destructive waters inland. It probably rose inexorably to 15 to 25 meters at least, over a timespan of 8 to 10 minutes, judging by the way it rose over the inlet sea walls.
Initially, in describing this to someone, I said it wasn’t a wave just a rising flood. Then I thought about it and corrected myself from my basic knoweledge of physics. I said actually it was still a wave, but the wave was on such a big scale (say 20 meters from normal river level to peak and with a wavelength of probably several kilometers) that I could not perceive it as a wave.
This brings up the more general point (using waves as an example) that with phenomena that are too small or too large to observe (like quantum waves which are too small and we don’t have the right sensory equipment) we don’t see what’s really there. The same point point holds true with phenomena that are too big to observe at least from our current vantage point. We don’t see what’s really there. For example, standing on the earth we cannot observe that it is a large, slightly oblate sphere. It is too large and we are too close ot it.
I think this applies to the beginning of the collapse (which after all will progress through time and space on earth as a complex wave phenomenon.) We are standing at the beginning of the collapse but we are too close to it and it is too large for us to either (a) perceive it at all (still the case for most people) (b) to perceive it accurately even if we are aware of it. Only by the use of special tools and techniques can we begin to percieve the size of this wave of destruction and its particular power.
I think the wave has begun. It can be visualized in topographical terms. One way to get an idea of how this “wave” event might propogate around the world might be this. Make a demographic map of the world which indicates by colours within contours how many calories the current regional population survives on, on average. Each contour line would be a calorie count. Create a calculator which relates the world food price index to regional average incomes and calculates how many calories can be be purchased per person. Assume that a maximum of 50% (or some other percentage found to be empirically correct) of income can be spent on food by the poorest people.
Take projections (and possibilites) for the direction of the world food price index, feed these into the calculator, then feed these results into the calorie contour map. You will be able to visually depict the rising “flood” of starvation as it inundates the world. You will be able to predict the turmoil (riots, civil wars, wars etc.) that will “foam ahead” (as it were) of the flood front. By claibrating the model with real world riots, civil wars and war clusters you will be able to assign probabilities for the next regions to be engulfed by such disturbances.
Eventually you will be able to develop a kind of “wave propagation” model of how the collapse will overtake earth. Just as we do climate modelling, we could do collapse modelling.
Although it might be cool to watch all the colors change or bubbles expand on an interactive, the problem isn’t all that complex in terms of picking out the falling dominoes. Like climate models or a model of a thermonuclear explosion, if you can’t stop the progress, it doesn’t do you much good to know “everything in a 2 mile radius will be Vaporized. Everything in a 30 mile radius will be levelled by the Blast Wave…” yadda yadda.
I am afraid you are probably right–it would be possible to model something like that.
I don’t think we know, though, quite how things would work out (which is probably for the best). A person would probably have to model several different alternatives.
One possibility is that it would be people with very low incomes around the world that would be affected. Another possibility is that governments will not be able to keep up food stamp and unemployment insurance programs, so that people who now have adequate incomes when these are included would drop down another step.
Only if Iraq can achieve their stated goal of producing as much oil as Saudi Arabia, can the peak be delayed beyond the end of this decade. Horizontal drilling will also delay the decline for a few years beyond what would have occurred, had that technology not been invented. It is important to remember that the more small oil fields are found and efficiently depleted using advanced methods now, the faster the oil supply will decline in the future. Once all the little oil fields are found, drilled, and water flooded, there won’t be much oil left on the planet. That will give us less time to adjust to fuel shortages.
I still think that the economic collapse will occur before the physical oil shortage becomes life threatening. It will be interesting to see if heavy oil and oil shale can be developed at a price that doesn’t wreck the economy. The fastest possible conversion to electric hybrids, pure electrics, and natural gas powered vehicles should begin immediately, so as to conserve petroleum as much as possible for uses for which there is no substitute, like aviation.
You are right about small oil fields being depleted faster. The other issue I hadn’t thought about until I read about Bakken (which is small in many respects) is that it is hard to get enough economies of scale to bother building the infrastructure that we have traditionally had–both oil and gas pipelines, to carry oil and gas away, and refineries to process the oil. No one wants to build a refinery nearby if the filed will be depleted in 10 or 15 years; it is not clear that they want to build natural gas gathering lines where individual wells are small. (Much of Bakken natural gas is “flared”.) It is even difficult to get enough oil pipelines built to the Bakken. Who wants to build capacity that may not be used in 10 or 15 years?
The part of the equation I have the most problems with in terms of Oil Pricing is at the Demand Destruction end, which never seems to be adequately modelled.
Accessing Oil is part of a Credit Scheme which the Dollar plays the most major role in as World Reserve Currency. Steve on Economic Undertow has done some good modelling to show the “Hard Dollar” relationship between Crude and the Dollar. For the Collar as a Credit Instrument goes though, the problem is not so much in its Creation, which can be done virtually instantaneously and infinitely at the click of a mouse button, but rather in its Distribution which comes through various levels of the credit distribution system below the wholesalers of debt, the TBTF Banks/Primary Dealers.
In a world where “Good Credit Risks” shrinks, the TBTF don’t distribute out the Dollars, and at least presently it appears contraction of Credit is proceeding along faster than contraction of supplies of cheap Oil.
The highest priced Oil at low EROEI will get shut in first with credit contraction, but if credit contraction proceeds at a fast enough pace, then there actually is still quite a bit of still cheap oil out there. Put it this way, if the Greeks, Italians and Spaniards lose access to credit in the form of Dollars, they wil pretty much drop off the map in terms of Oil Consumption. Similarly, once the Chinese lose those markets to sell to, much of their Oil consumption also drops off the map.
Obviously, there is a whole lot of Waste going on in the system right now which may be purged as the result of Demand Destruction. Simple idea is obviously Carpooling and taking half the cars off the road from the get go. That could be done without that much dislocation to the overall society, although the reduction in consumption there kills a lot of jobs in the aftermarket Auto industry. Assuming however you did purge a significant percentage of wastage, how long does remaining cheap Oil last here?
For argument’s purposes, say you got a 50% decrease in Oil Consumption as a result of credit contraction? At this point, you probably could fulfill Global Oil requirements with just Legacy Oil fields still producing Oil at $20/bl or so. Yu could then have enough Cheap Gasd to keep running a shrunken form of the same economy a while longer.
The problem of course is that shrinking the economy in this way puts more people out of work, reducing credit avbailability and depressing aset prices still further in a deflationary spiral. That might be balanced out though therough Goobermint Intervention with the creation of Jobs in various sectors involved in building a more sustainable economy based on renewable resources.
As I see it right now, Demand Destruction leads Oil Resource Depletion. Collapsing Oil based economies are going to put a negative price pressure on Oil production, resultant in an overall shrinkage, but not an immediate collapse of this type of economy. The key in keeping the system running at reduced levels is in making enough Credit avbailable that still some Oil can be moved through the economy. The other key is in maintaining enough FAITH in the Credit system to do that, which rapidly is disappearing here so does not seem too likely to last more than another couple of years, but ya never know. Its already lasted a good 4 years longer than I thought it would initially. Faith dies hard when it comes to Money everyone depends on.
How easily demand is destroyed or rebounds depends on the elasticity of demand. A demand for movie tickets can go down and up relatively easily compared to food. The demand for food does not really go down until the “consumers” die of starvation. Then it may take a generation to rebound. Curtailing driving habits or business activities can bring down gasoline demand in a flexible manner, but shuttering a business or trading in for a smaller car may bring down demand in a manner that does not allow for a prompt rebound. The deeper and longer the demand destruction, the less and slower the rebound.
That is a good point.
“The demand for food does not really go down until the “consumers” die of starvation.”
I don’t really agree with this. There is a lot of hidden “fat” in the system that can be cut, and it can be vastly more oil-efficient. I think the food situation is closer to the driving situation you cite.
It’s not a binary situation, in which one only “eats petroleum” or dies of starvation. When petro-food becomes too expensive, more people will turn to gardens and local farmers.
We have been taking ourselves out of the industrial food system for several years. We now produce more than we consume. Granted, not everyone can be in this situation, but most office workers have seen the basket of zucchinis in the lunch room with the “FREE” sign on them. There is a lot of under-utilized local food production capacity out there.
Life will become more local in general. Along with driving less, demand destruction will occur as people eat closer to home, rather than enjoying 1,500-mile salads, as they do today.
There is a lot of hidden “fat” in the system that can be cut, and it can be vastly more oil-efficient.
That type of demand is elastic demand.
In countries where people live on $2/day, food demand is inelastic. In a country where the average person spends $50/week on premium foods, the demand is VERY elastic. You can drop from Steak to Chicken to Rice and Beans. You can start to supplement your diet with off the grid foodstuffs like fishing.
Oil demand is very elastic in the industrialized countries, just the collapse of the economy based on it loses a lot of jobs. You have to intentionally replace one type of economy with another. Only Da Goobermint can do that.
“In countries where people live on $2/day, food demand is inelastic.”
I think this is based on a North American bias.
I’d invite you check out the film, Schooling the World, The White Man’s Last Burden, in which the film makers describe how self-sustaining third-world people have been “educated” into the cities and off their subsistence farms.
Granted, fossil sunlight has allowed human biomass to expand into overshoot in all countries, I still think that those in the third world may have an easier time of it, because they are not as far from the land as we in the west are. Going from $2 a day for food to $0 a day for food might be easier for many in the third world to accomplish than going from $20/day to $4/day will be for most of us in industrialized nations.
We are a hundred years removed from $0/day living, versus the single generation that divides most third-worlders from the land. I can’t put my fingers on a reference, but I recall a study in which 90% of Us school children could come up with no better answer than “the supermarket” when asked, “Where does food come from?” They have a lot more learning to do than the third-worlder whose parents were subsistence farmers.
I’m not arguing that people who live close to subsistence lives might be able to return to this type of life quicker. They probably can, assuming they are not living in Calcutta and actually have land they could return to.
The argument is about the easticity of food demand, which is much larger in Industrialized countries where there is so much waste. Anybody can take their food budget down by 50% from $50/week to $25/week and not starve. You can’t take your food budget down from $2 to $1 and not starve unless you can replace it with off the grid food production.
I think part of the issue is that “waste” in the system equates to someone’s job. For example, if I carpool, I drive may car less, and have less need for a new battery, or car tires, or a new car. This leads to fewer jobs.
I don’t think that governments really will have the possibility of adding more jobs, because of the problem of more layoffs adversely affecting their finances (less taxes, more need for stimulus, more need for unemployment related benefits).
I don’t think it is really possible to keep enough credit going in the system. If a company sees no need for expansion, it will not borrow, and instead will pay down existing debt. Governments can try to keep borrowing, but they are already hitting a wall. The wall for those that have not yet hit it is not too far away.
As long as Da Goobermint loans money to itself it can create credit indefinitely. Who really ever had the trillions already loaned out here? It’s just entries in a ledger. Da Goobermint can also wipe out and repudiate odious debt with the stroke of a pen. The real issue here is those in control of the monetary system won’t let them do that. Those folks aren’t working at Da Fed, they work at the BIS.
But other countries don’t need to accept our money. Or the value of the dollar could drop.
They do so long as they are staring down the barrel of a very big gun.
Also, there isn’t a readily available substitute that is any better, so when you say the dollar will drop in value, drop in respect to what? To Gold? Since gold isn’t a frequently used commodity, it doesn’t really matter what that trades at. Its the dollar’s value relative to other currencies, and they all blow chunks.
The dollar is pegged by its proxy status for Oil, and by the fact militarily speaking the MIC owns the Saudis. It only loses relative value when the Saudis won’t take it, and that won’t happen for some time yet. Like after the Chinese sink the whole 7th Fleet with a bunch of cheap missiles built by suicidal workers at Foxconn.
Every dollar manufactured by the uS government is a claim to resources or products, eithernow or in the future (debt). With both the stocks of resources and products shrinking, more dollars chasing the same stocks will mean that each dollar will fetch fewer resources and products, gun or no gun.
Only if the dollars get distributed. Dollars sitting in reserves aren’t chasing goods and services. They’re there to keep liquidity as deflating assets are rendered illiquid. It’s an accounting trick but does not drop more dollars into the real economy. Some of it goes into speculation, but eventually burns up in speculative losses.
Hi RE, Robin, Jan, Gail,
I think this thread brings forth some useful possibilities to consider. As most of you know, I have difficulty accepting the proposition that an imminent lethal collapse is a foregone conclusion. RE has also suggested that we are actually looking at a variety of potential scenarios and the extent of their probabilities of realization. For my part, the most valuable aspect of this forum is the exploration of these potential scenarios/probabilities/timelines and the clues that lend credence to the one that is most likely to be unfolding. I doubt we have many followers here who are still hoping for some BAU miracle for decades to come – they are too busy watching the Exxon commercials on TV. But, I think there are some of us here who see many shades-of-grey in the crystal ball.
So, this thread brings forth a couple of interesting thoughts: RE highlights the effect of the PIIGS losing oil purchasing credit/power and the ripple effect involving Chinese exports – all conspiring to reduce oil demand/price but with a negative effect on employment factors and then the ensuing negative feedback loops. This seems to be a modeling exercise that Gail could expound upon. The idea that lower oil price is an indicator of collapse is completely alien to the conventional economic theory that rising prices in a “free market” will ensure adequate supply and foster new technology to reduce production costs – and then we will achieve some kind of happy medium for BAU to hum along – at least for us “preeminent” western folks who “deserve” the lion’s share of world resources. Most conventional economists would see falling oil prices as a harbinger of an improving economy and proof that free markets and technology were doing their job.
Robin and Jan bring up the food issue and Jan says:
What bothers me about this thought is the fact that a majority of our 7B population lives in cities and many, many of those cities are in metropolitan areas of 10 to 20 million people living in vertical buildings (dreadful looking things) that have scant potential for any kind of gardening. Yes, I’ve seen all the slick MSM stories about growing food on balconies and abandoned warehouses – but, I’ve yet to see an honest mathematical analysis of how this (along with nearby country side) could actually sustain these cities.
My overriding concern in trying to understand the potential scenarios is the synergistic effect of FF depletion, GW, mineral depletion, soil erosion, species extinction, ocean acidification, deforestation, etc. How does the footprint of each human impact these even in a minimal consumption model? What is the actual carrying capacity of planet earth assuming intelligent application of our acquired scientific knowledge and a rational lifestyle (sans cars)? Perhaps the answers to these questions are irrelevant given the state of our “overshoot” – but, perhaps future generations would find them useful. As the regulars here know, I think that collective mankind is intellectually crippled by cultural memes that blind us from employing our inherent brainpower to deal with our predicament – but, “hope springs eternal …..” or something like that.
BTW, RE seems to be very well read and has done a lot of research into the condition of humanity – perhaps in time we can even teach him how to spell “Government” (just kidding).
“a majority of our 7B population lives in cities… that have scant potential for any kind of gardening.”
There are examples of how this could work. Havana, Cuba, supplies 50% of its own food, for example.
Cuba is an example of post-peak life that we ignore to our peril. What seems to have worked there after the fall of the Soviet Union is extreme egalitarianism. Everyone lost weight as they transitioned from petro-agriculture to organic agriculture. Women voluntarily stopped having children during this ~5 year “special period.” Ditch-diggers and doctors, janitors and business executives — they all felt the pain of energy reduction the same.
Whether any so-called “industrial nation” could practice such egalitarianism is left for the reader to ponder. But I think this is really what the “occupy” movement is all about — even if they don’t realize it yet. If the 1% continue to cling to power and wealth as formerly middle-class people begin to die of starvation, we’ll see violence on the scale of the French Revolution.
The only thing that gives me some hope comes from my formal studies in ecology. In environments of high trophic availability, competition reigns, but in environments with a scarcity of energy, cooperation dominates. How far does it have to decline before people “get it” and start cooperating?
Unlikely you ever get me to spell Goobermint without the Gonzo 😉
Anyhow, I believe that despite my unconventional writing style, most people can grasp the underlying analysis and the reading I have done to draw out the picture. I’m IRL a very well educated guy in the conventional sense of the word, Ivy league education and all that nonsense. Since the Light Bulb went off for me in my head with the failure of Bear Stearns, I’ve spent virtually every day reading and analyzing the problems as they manifest themselves. So at this point I have a pretty thorough knoweldge base to work from. Its a work in progress though, as it is for all of us. Nobody is really an “expert” in this stuff, we’re all just making our best guesses.
“Collapse Theory” wasn’t ever a subject I could have majored in while I was at University. I’ve had to bone up on it since finding information wherever I can. Gail’s blog is another very good source for me. Great crew of commenters here also.
“My overriding concern in trying to understand the potential scenarios is the synergistic effect of FF depletion, GW, mineral depletion, soil erosion, species extinction, ocean acidification, deforestation, etc. How does the footprint of each human impact these even in a minimal consumption model?”]-Bicycle Dave
So many variables are introduced here that you cannot possibly make any accurate predictions, which of course is what anyone looking for some HOPE in the situation HOPES to do!
You have to do a reduction to the most probable variants you can make some estimation on first here The climactic problems tend overall to be longer term, as do most of the mineral depletion issues. The Monetary issues are the near term problem, with their concomittant economic and political dislocations. If you cannot resolve those problems, long term mineral depletion questions are irrelevant.
The very FI’RST thing that must be resolved is debt overhang of the industrial paradigm. Until you resolve that problem, all the rest of them are irrelevant. Debt and a disfunctional monetary system can in and of themselves cause such widespread havoc that all the rest of the considerations are moot points. Debt by itself can force Global Thermonuclear War in some scenarios, regardless of actual extant resources. If we cannot solve the Debt problem, we most certainly cannot solve the climate change problems.
Frankly, long term, it may not be possible to solve the climate issues anyhow. I personally do not think they are anthropogenic. They appear to me to be part of a much longer cycle the Earth is subject to. If that cycle has reached its end point, an ELE is inevitable no matter what is done here.
Meanwhile though, you gotta fight the fire that is burning here first. Its the Debt problem and the grand failure of a monetary system in place since at least the time of the Medici. If you can’t solve that problem, your screwed no matter what happens elsewise.
In emergent systems, the behaviour of the system is often extremely difficult to model, because of the plethora of interactions that generate the system. This is seen in biology, in ecosystems (the “economy” being one of them), and is magnified by many orders of magnitude by the convergence of multiple crises such as population overshoot, resource depletion, climate change – you name it.
The sum of human knowledge can be modelled as the volume of a sphere: the region where we can be aware of our ignorance is the surface area of the sphere. With knowledge increasing by the third power, the appreciation of our ignorance increases by only the second power, resulting in the impression that the unknown is decreasing compared to the known.
Top-down hieracchies are characteristic of organisational systems which can often be managed well with extensive (=adequate) knowledge of the system.
In emergent systems, even extensive knowledge may be inadequate, and the same management strategies often run into unexpected consequences.
Many of these points are brought out in the EconTalk podcast Tales on Antifragility where the host Russ Roberts interviews Nassim Nicholas Taleb on his forthcoming book of that title.
You have probably read some of my early posts related to the debt problem and the 2008 problems:
Peak Oil and the Financial Market: A Forecast for 2008
Delusions of Finance – Where we are Headed
I think that there is a real possibility that low oil prices could reduce world oil production. I also think that a breakdown in the international trade system is possible, if too many things go wrong. We are so far off in the realm of the unknown, that perhaps what a person needs to develop is possible “scenarios,” rather than a model based on known facts.
There are so many unknowns, it is hard to know where to start. Financial problems are likely to come very soon. A lot of the future depends on how those are resolved.
I will have to think about your idea.
Perhaps TPTB are trying to cover themselves and retain the confidence of the plebs as we are approaching some sort of price and so demand destruction peak.
Twice might be too much for even the self deluding public.
We might already be there:
An Essex oil refinery which collapsed into administration is only operating at 30% capacity amid continued concerns about job losses, it has been claimed.
Watch out the watchers seem to active again, several of us have had problems in the last week or so and Harvey has been hacked again http://harveyorgan.blogspot.com/, they accessed his PC to get on to the blog, the ‘gift from Harvey’ don’t click on it obviously!
I think I may even have had a visit from two improbably muscular average height swarthy types who I have never met before commenting on my love of money, they were in the queue for my bus (a high roller I am :=) ) when they came at me from opposing sides and had a fictional conversation over me that ended with the comment described and knocking one of their clenched fists together in front of my face.
They didn’t board the bus…
There seem to be more articles and news stories about the high price of oil now. It is a problem, especially on the coasts.
Yes, I mostly communicate with ‘mericans online as I like the segment of the population that is open and well educated in the UK that is an oxymoron.
A few things annoy me like your daft spelling and using the WTI price as though it is either the world standard or approximates to the cost of oil products in the USA.
I imagine the greater costs on the coasts reflects the exposure to the world market rather than the captive Canadian exporters?
The BBC even get in on the act occasionally from a psycho war standpoint WTI $100 perhaps TPTB use futures to manipulate the differential.
TPTB certainly did the same when silver got close to the psychologically important $50
* ‘The BBC even get in on the act occasionally from a psycho war standpoint WTI less than $100 is easier to accept than Brent greater than $100 perhaps TPTB use futures to manipulate the differential.’
WordPress doesn’t like greater than or less than signs! 🙂
A while back, I looked at the relationship between WTI and Brent, and also the relationship to gasoline prices. This is the post I wrote then: Pipeline changes to fix WTI/Brent spread are likely to add new problems. The cheaper refined products from WTI crude (as well as Canadian crude and other crude that followed the price of WTI) tended to stay more in the middle of the country.
Prices on the coasts stayed higher, because their crude was from foreign sources, which tended to follow Brent prices. Now some of the East Coast refineries have closed, because they could not compete with the cheaper products using WTI crude as a base. This has further exacerbated the problem of higher prices on the East Coast.
Fear not, fellow OurFiniteWorld.com folks! Today on BusinessInsider, Henry Blodget (you know, the guy who pumped stocks and almost went to jail for it in the late 1990s, early 2000s) told us all that anyone investing in Gold is stupid and instead, as Warren Buffett has done and said, we should put our money back into the stock market…your know, that thing being propped up by money created out of thin-air by the Central Banks (specifically the Fed). Oh, and if you invest in Gold you are also a misanthrope by nature (Thanks Joe Weisenthal).
Don’t you love the media? They will certainly make sure that anything you see with your own two eyes that is obviously true is ridiculed and mocked. Of course, my Gold seems to be doing fairly well since I bought in the $100s. Fiat currency is death. Death of corrupt empires as we now are.
I will have to admit Business Insider isn’t really mainstream. But a person takes what comes along.
Just to be clear, I never meant to discredit your writings that appear there or insult you in any way. Blodget just seems like an opportunist who has no interest in truth and Warren Buffett to me, a Midwesterner by birth, seems like a fraud and a hack. I am not convinced he has any clue what is going on and that most of his investment successes are from just investing conservatively in down times and lucking out with solid recoveries that raised asset prices.
You, Gail, are a breathe of fresh air in your honest and lack of financial interest in your writings in general. I appreciate that people like you still exist and it gives me hope that we as a human race have a future outside of the political, financial and extreme selfishness that has evolved in this country. I think if you aren’t a bit of a misanthrope these days you aren’t paying attention.
Social Justice is the only way. Eat the rich! Grow our population more so there will be more poor!
Re: oil’s impact on the near term financial stresses.
Greece has no domestic oil production of significance. Their burn rate (consumption) is 400K bpd at Brent pricing. 400K X 365 X $115 (Brent pricing) = $16.8 billion drained out of the country each year. This is down about 10% from 2007 pre global economic smash.
Greek GDP $312 billion (2011 est). That’s **5.4% of GDP drained out of the country each year**.
In contrast, US oil imports are 11.5 mbpd X 365 X $115 (Brent pricing) = $482 billion / year drained out. US GDP = $15,000 Billion. **3.2% of GDP drained out each year**.
Examining Italy, the big kahuna of EU financial devastation. Their consumption is 1.3 mbpd (X 365 X $115) –> $5.5 billion/yr drained out . GDP $2,000 billion. **2.7%** (Eurostat is questioning the GDP measure)
“Do Kerr, Murray, or King have any history with the peak oil crowd, or can we take this as evidence that the message is getting through to a wider group of researchers and authors?”
Kerr has been writing this kind of article on oil in SCIENCE for years. He usually gives a somewhat “balanced” view. This perhaps his most “Peakish” article.
Nice summary! This kind of work is essential for making the necessary transition / system change; it provides the ‘why’ and ‘when’ for the how – things like the Transportation Transformation http://stopthepave.org/transformation and System Change http://www.systemchange.ca
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This review paper by the authors of the UK Energy Research Centre’s peak oil report was also published in Energy last month:
The stairstep ramp up in lending instruments within our economy is to some degree a reaction to the oil issues of the early 1980s (when adjusted prices when inflation adjusted prices were at their highest) and the demographic bulge of the baby boomers. With growth appearing to be stagnating and limited, lending policy changes as early as the Carter Administration were a much more attractive option than previously.
This types of feedback loops of course make all of it very tangled up and difficult to seperate out and say “this caused this”.
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It takes energy to convert resources (the primary economy) into products (the secondary economy). Economic”growth” is an increase in the rate of this conversion, which entails an increase in the flow of energy. The absence of such an increase can be compensated by increasing the efficiency of energy use upto the point of optimisation. Beyond that point, sans increased energy flow there will be no economic growth: au contraire there will be regression instead of growth if energy flows contract.
Employment directly or indirectly is activity to manipulate energy streams that conversion resources into products. The shrinking of energy streams will be associated pari passu with shrinking employment – in conventional jobs. Those who manipulate smaller energy streams, as in small-scale agriculture, will be correspondingly less well remunerated.
If increasing the energy streams requires a disproportionate commitment of other resources, manipulations of the tertiary (symbolic) enonomy by creating more symbols (such as pieces of green paper bearing pictures of dead presidents or magnetised particles on hard drives) will not rectify the situation.
Robin, my way of thinking is right in line with what you have just said. Resources are Delta’ed based on energy. 1st order, second order.
One can only hope that we quickly begin to see more things made with human hands, as they are inevitably more commonly beautiful than mass-produced soon-to-be trash.
Best name for a company, practically ever, by the way, is “art in the age of mechanical reproduction”.
I have an old friend who distills their organic root beer liquor.. Really delightful stuff if you can pick it up in the state/country where you live! 😉
Strav7 wrote: “One can only hope that we quickly begin to see more things made with human hands, as they are inevitably more commonly beautiful than mass-produced soon-to-be trash.”
Even better, things made with human hands out of mass-produced trash!
I’m hoping that the time-honoured profession of “tinker” will once again come into vogue. At least, that’s how I plan to at least partially make my living.
good point Jan.. you’re too quick u replied while i was addenduming. 😉
yes why not re-use the useful properties of those things we already have?
reuse –> repurpose… annd add that special touch.
you’re great at synthesis Jan, and your comments here are much appreciated. I think I was a little quick with an instigative comment in the past. I’ve thanked Gail a myriad of times for her work. (I feel like the dudes praising the scarers in Monsters, Inc. in regards to her) Thank you for your work also. Your mention of the maximum power principle a few months ago really helped shaped the way I view world dynamics.
Also, your analysis affected by Tainter’s collapse theories and ensuing convo’s has made his work a part of my very very long to do list.
Also, Gail, in regards to your comment below, if resources are x, and energy determines the rate of change of x…. then both depletion rates, and resource quality determine the rate of change in the rate of change of x. I dunno how much you’ve studied calculus, but basically you named the lesser mentioned of the two factors in the second order derivative in the whole equation (assuming it is constrained in the liebig sense by energy).
keep up the good work! *hoping for a soft landing*
oh, and as you mentioned, ALL (x”) / population
I don’t know if this is a new framework or if it is just new to me. seems like a very functional basis from where to start things.
p.p.s. when all their power turns into vapor,
if i miss you, well that’s my fault.
totally epic song snippet provided Free Of Charge!!
I realized, what seems new to me is just standard fare. Still maybe the perspective will help out somebody. g’night.
Thanks for the kind words, @strav7. I have a fascination with unconventional thinking that sometimes gets me into trouble.
No worries about any “instigative comments.” I strive to take nothing personally. It’s all good.
But unlike you, I’m not “hoping for a soft landing.” That seems to me to be a recipe for a harder lesson later. Let’s get it all over with, so the lessons are clear.
What I’m hoping for is a renaissance in earth-based spirituality and a reverence for natural systems, which I don’t think can happen while fundamentalists of all stripes are hell-bent on using it all up before the afterlife. The “afterlife” is Now.
Yes, I have definitely studied calculus. Even taught it as a grad student. So I am pretty familiar with first and second order derivatives.
Also, coincidentally, this friend happens to be a degree’d economist who totally thinks that substitution will mitigate peak oil. :-/
Who knows, if we’re really lucky, maybe we can achieve a lower energy steady-state renewable economy. I’d still like to see a handmade renaissance. (although all energy costs accounted for I worry the only way that will happen is post collapse)
You are right. Furthermore, the fact that we are moving to lower and lower quality resources adds to the need for an increasing rate of conversion. The fact that there are more people on earth doesn’t help either.
1. James Murray is in the School of Oceanography, University of Washington, Seattle, Washington 98195, USA. He was founding director of the University of Washington’s Program on Climate Change.
2. David King is director of the Smith School of Enterprise and the Environment, University of Oxford, Oxford OX1 2BQ, UK, and senior science adviser to the bank UBS. He served as chief scientific adviser to the UK government in 2000–07.
3. Richard A. Kerr has an education in science and journalism and has been a Staff writer with Science since 1977.
Nb. Leading journals ’Nature’ (UK) and ‘Science’ (US) have been publishing key studies from research in atmospheric science for decades. King was much exercised by the enormity of policy implications of evident climate change when he was an advisor to UK government.
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This may slowly get to be similar to the climate change analysis whereby all scientists are on one side and all others on the other.
G’day Gail et al,
Good to see others that have the accuracy of logic with the ability to do some low level mathematics, data analysis and project established trends.
You can view my analysis here http://camwest.pps.com.au/renewable-energy/
It is a shame that there are not many others like us. Unfortunately we are fighting the Keynesian economists who seem to have no idea that fiat currencies are meaningless and that the one true and natural currency is energy.
Because you can’t inflate an Erg.
not even with a heat pump?
To me, the most interesting thing about this is that ¾ of the authors are not from among “the usual suspects” of peakists. (Pardon me, Gail, for lumping you in with that group!)
Do Kerr, Murray, or King have any history with the peak oil crowd, or can we take this as evidence that the message is getting through to a wider group of researchers and authors?
Murray tells me that he is a regular reader of my posts. Sir David King had not really been in the peak oil camp in the past. This is an Oil Drum post on a statement he made as Chief Scientific Advisor to the UK Government. http://europe.theoildrum.com/node/2830 I believe Murray convinced King to change his mind.
Ricahrd A. Kerr is a Staff Writer for Science magazine. In many ways, his article is less complex than the others. It is presented as a “News Focus” item. I don’t know him. http://news.sciencemag.org/sciencenow/author/richard-a.-kerr/index.html
In many ways, I am not in the regular peak oil crowd either, because I assign a greater importance to economics than most of them do.
well i certainly know where you think we are on these graphs: http://thepeakoilpoet.blogspot.com.au/2012/01/party-on-dudes.html
but i have moved away from sharing that place with you
simply because i prefer to live without the gloom that goes with being certain about something we can’t be certain about