Oil Prices Lead to Hard Financial Limits

We live in a finite world.  Clearly, a finite world has limits of many kinds. Yet economists and other researchers use models that assume that these limits are unimportant for the foreseeable future. They have certainly not stopped to think that any of these might be very hard limits that are difficult to get around, and furthermore, that we might be reaching them in the next year or two.

What are the hard limits we are reaching? One of the main ones is that at some point, there is a clash between the oil prices importers can afford, and the amount oil exporters require.

Figure 1. Author's view of conflict in required oil prices

Figure 1. Author’s view of conflict in required oil prices

In fact, there can even be a conflict between prices producers in a non-exporting country like the US or Brazil need, and the prices citizens can afford to pay.

Why Oil Exporters Need Ever-Higher Prices

Oil exporters need ever-higher prices, partly because the cost of extraction continues to rise, and partly because oil exporters use taxes from oil to fund public works projects and to keep their many unemployed citizens pacified. The Arab Petroleum Investment House estimates this combined cost for OPEC countries to be increasing by 7% in 2013. Required prices by oil exporters are already in excess of current market prices for some countries, making the situations in these countries less stable. Examples of countries needing higher oil prices than current prices to balance their budgets include Nigeria, Venezuela, Iran, Iraq (APIH report) and Russia (Deutche Bank estimate).

There is evidence that the collapse of the Former Soviet Union in 1991 occurred when oil prices dropped too low. The Soviet Union was an oil exporter, but with the low oil prices, it could not afford to make investments in new productive capacity. It also could not afford to fund government programs. The collapse did not happen immediately, but happened after low prices had sufficient time to erode funding. Ultimately, the central government collapsed, leaving the individual state governments. See my post, How Oil Exporters Reach Financial Collapse.

How do oil importers reach price limits?

According to most economic theory, oil importers should never reach a price limit. If higher prices occur, as they did in the 1970s and early 1980s (Fig. 2), these higher prices should quickly lead to conservation, plus greater oil extraction and the development of substitutes.

Figure 2. World oil price (Brent equivalent) in 2011$,  based on BP 2013 Statistical Review of World Energy data.

Figure 2. World oil price (Brent equivalent) in 2011$, based on BP 2013 Statistical Review of World Energy data.

In fact, in the late 1970s and early 1980s, high oil price did lead to changes of the expected kind. It was possible to replace oil-fired electric power plants with coal-fired power plants or nuclear electric power plants. It was also possible to replace the very large, fuel inefficient cars that US automakers were making with more fuel-efficient cars, including ones that Japanese automakers were already making. In addition, it was possible to quickly bring additional inexpensive oil on-line, such as from Alaska (Figure 3) and the North Sea. The decline in the 48 states production (excluding tight oil) was never really fixed.

Figure 3. US crude oil production, divided into "tight oil", oil from Alaska, and all other, based on EIA data.

Figure 3. US crude oil production, divided into “tight oil,” oil from Alaska, and all other, based on EIA data.

More recently, there has been much less success in increasing world oil supply. Higher oil prices eventually led to some new production, such as US tight oil (green in Fig. 3). But even with the new US tight oil production, world oil supply has not risen very much  (Fig. 4).

Figure 4. Growth in world oil supply, with fitted trend lines, based on BP 2013 Statistical Review of World Energy data.

Figure 4. Growth in world oil supply, with fitted trend lines, based on BP 2013 Statistical Review of World Energy data.

It is not clear how long the current run-up in tight oil production will continue. Current production is enabled by high oil prices, available credit, and low-interest rates. Even these may not be enough: a recent headline says, Shale Grab in U. S. Stalls as Falling Values Repel Buyers.

What happens when oil prices rise, and no additional supply or substitute is available?

Economists tell us that when oil prices rise, and no additional supply or substitute is available, demand destruction occurs. It turns out that demand destruction for oil corresponds to what most people would call “recession. It is as if the economy shrinks to a smaller size, so that less oil is required.

This economic shrinkage takes place in a number of ways. Higher oil prices make oil less affordable for consumers, businesses, and governments. The indirect result of this is job layoffs, because consumers cut back on discretionary items, such as vacation travel and eating out at restaurants. Governments cut back on projects like road repair, laying off workers. Businesses find they need to raise prices of goods they sell, because of the higher prices they pay for oil. The result is that their products are affordable to fewer consumers, again requiring laying off workers. So the net result is job loss, and continued weakness in hiring, such as the US has seen for several years now.

Governments are particularly affected by high oil prices, because with fewer people working, government tax collections are reduced. More people file for benefit programs, such as unemployment or disability coverage, when they cannot find work. This adds to government funding issues. If banks fail, governments may be called to bail them out, also adding to government expenditures.

There have been academic studies showing that high oil prices tend to create recessionary impacts.  James Hamilton has shown that 10 out 11 post-World War II recessions were associated with oil price spikes. He has also shown that oil price changes in the 2005-2008 period were sufficient to lead to the Great Recession (Brookings Paper). I have also written a related academic paper, Oil Supply Limits and the Continuing Financial Crisis.

Because of these issues, if high oil prices remain after a recession, we should expect continued recessionary impacts, such as an inadequate number of jobs for young people and growing government debt. The government can cover up these issues to some extent with ultra low interest rates. In fact, such low interest rates, together with continued deficit spending, seem to be the reasons the US has been in “recovery” since the Great Recession officially ended in June 2009. However, we still find (Fig. 5) that the big oil importing countries (US, UK, and Japan) have much lower GDP growth in recent years than the rest of the world.

Figure 5. Annual percent change in Real GDP by part of the world, based data of the USDA.

Figure 5. Annual percent change in Real GDP by part of the world, based data of the USDA.

These countries also have much less growth in oil consumption than the rest of the world, indicating that when it comes to oil consumption, citizens and businesses of the US, EU and UK are being outbid by businesses and workers elsewhere.

Figure 6. Oil consumption based on BP's 2013 Statistical Review of World Energy.

Figure 6. Oil consumption based on BP’s 2013 Statistical Review of World Energy.

Workers elsewhere may use less oil per person, but because they have jobs, they are able to purchase new scooters and other goods they want. Their employers also use oil to make and ship goods, keeping their demand high.

In the US, EU, and Japan, we continue to lose jobs to automation and to outsourcing to low wages countries. As a result, wages are stagnating, and young people are having a hard time getting jobs, making oil less affordable. If only there were more high-paying jobs.  .  . Of course, in a globalized world using coal as a primary fuel, the goods we would make would be too expensive for the world market.

Related financial limits we are hitting

Oil importers around the world are disguising the effect high oil prices are having on economies, through low interest rates and continually rising debt. In doing this, oil importers are able to keep the price of oil that they can afford high. In other words, using these techniques, oil importers are able to keep the blue “affordable by importers” line high in Figure 1.

At some point, there is a limit to how much the adverse impact can be disguised. The following are several areas where limits are now being reached, that will tend to bring down the “affordable to importers” line in Figure 1.

1. Limits on the amount of governmental debt. In the US, the need to raise the federal deficit cap will come up again as soon and October. There will be pressure to try to reduce spending, to reign in the federal deficit. If the economy were growing faster, the debt limit would be less of an issue. But with continued high oil prices, growth is slowed. Debt limits can be expected to continue to be an issue.

2. Slowing growth, and related debt limits, in developing countries. High oil prices affect importers or all kinds, even developing countries that use less oil as a percentage of their total energy consumption. The slowing growth also makes debt harder to manage. News sources are talking about slowing economic growth in China, India, and Brazil.

A recent WSJ article about China is titled, Debt Drags on China’s Growth. According to the article, interest and principle payments on business and household debt currently absorb around a third of China’s GDP. Some debt is being taken on, just to allow interest on past debt to be paid. These high debt levels may cramp future growth in China.

3. Rising longer-term interest rates, because of scaling back or ending quantitative easing. As noted above, low-interest rates are helping to cover up our current issues of inadequate good-paying jobs and inadequate government revenue. If interest rates rise, the government will need to pay more interest on its own debt, leading to a needed tax increase.

Figure 7. Ten year interest rates based on data of the Board of Governors of the Federal Reserve System.

Figure 7. Ten year interest rates based on data of the Board of Governors of the Federal Reserve System.

Another effect of rising interest rates is that the market value of bonds outstanding will fall. This happens because the price of bonds is adjusted so the new owner will get the current (higher) yield to maturity, instead of the original low yield to maturity. Owners of bonds, such as the Chinese and Japanese, are aware of this, and have started selling their treasuries, before prices fall further. (See Reuters: China, Japan lead record outflow from Treasuries in June.) This type of sale of treasuries tends to raise the yield on treasuries, even before the Federal Reserves actually cuts back its monthly purchase of securities under quantitative easing.

If interest rates on 10-year treasuries rise, mortgage interest rates will rise, cutting back on the number of families who qualify for loans for new or resale homes. Last week there were articles saying, “New home sales plunge 13.4%,” presumably from the amount by which interest rates have risen already. If interest rates rise enough, there may also be a decrease in the value of resale homes, because there will be fewer buyers who can afford  move-up homes, lowering demand for homes.

4. Popping of asset bubbles, as a result of rising interest rates. At least part of the rising value of assets of many types (stocks, homes, farms, oil and gas leases) is likely  to related to the very low-interest rates recently experienced. Bubbles tend to occur, because with  debt earning very low-interest rates, borrowers are anxious to earn higher rates of return, however they can. Investors bid up prices using money borrowed at low-interest rates, in hope of making capital gains later. Of course, if interest rates rise, all of this may “turn around”.

One piece of evidence regarding the effect of rising interest rates on stock market prices, versus falling interest rates, for the period graphed in Figure 7, is the following: During the period 1957 between to 1981, when interest rates were rising, the S&P 500 rose by less than inflation. In contrast, during the period 1981 to 2013 when interest rates were falling, the S&P 500 stock market index averaged a gain of about 5% per year, over and above the inflation rate. The difference is in the direction a person would expect, and is quite large.

The Outlook 

As we reach financial limits of many  kinds, further recession, possibly quite severe, seems likely. Some of the limits are ones we have not encountered before, particularly the one with oil prices being too low for exporters, but too high for importers. This makes the situation particularly frightening. At some point, the clash between the price oil importers can afford and the amount oil exporters need could cause oil production to drop dramatically, over only a few years. Such a drop in oil production would likely have a very adverse impact on economic growth.

If oil limits indeed reduce economic growth, this makes models based on the assumption that the future will look like the past invalid. Instead, we need to expect a very changed world. At some point, we may even reach permanent contraction, as oil limits change the nature of the world economy.

About Gail Tverberg

My name is Gail Tverberg. I am an actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change. Oil limits look very different from what most expect, with high prices leading to recession, and low prices leading to financial problems for oil producers and for oil exporting countries. We are really dealing with a physics problem that affects many parts of the economy at once, including wages and the financial system. I try to look at the overall problem.
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321 Responses to Oil Prices Lead to Hard Financial Limits

  1. Scott says:

    Interesting Idea… just make the nuclear plants without containment vessels and put them on one thousand mile long electric lines away from most of us, these areas are places that the government may tell people to leave, the Nuclear power districts… I always thought it should be away from us anyway, but the problem is cooling if they need water. Do they need to be by the Sea or large body of water or river? I am not sure about the Thorium power stations we have discussed a bit — do they need water like the conventional nuclear reactors? Anyone who knows can comment on that.

    Regards,

    Scott

  2. Don Stewart says:

    Dear Gail and Others
    This comment will offer what I hope is a respectful challenge to a couple of the assumptions which play key roles in the articles:
    1. Collapse is the best solution we have to climate change
    2. Bankruptcy necessarily implies collapse

    Taking up the climate change issue first. Consider Darren Doherty’s statement at 1:16 in this video:

    I will note that a 1.6 percent increase in carbon in the soil means that the carbon level increases from, say, 1 percent to 2.6 percent. At 1:18 he discusses the use of perennial grasses and trees as carbon sequestration vehicles. He notes that perennial grasses work faster than trees.

    Now take a look at this video with Joel Salatin and Joe Mercola, MD taking a tour of part of Joel’s farm in Virginia. Remember that Joel considers himself a ‘grass farmer’, and that these are predominately perennial grasses that you are looking at. And that Joel manages these grasses to maximize carbon sequestration. For example, a perennial grass can send roots down 25 feet into the soil. When the visible part of the grass is growing, it must be supported by more roots. So the plant sends out rootlets far below the surface. But then a cow grazes the grass, so there is less visible biomass, which prompts the plant to kill some of the fine roots deep in the soil, which leaves a carbon deposit deep in the soil.

    https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=3&cad=rja&ved=0CDIQtwIwAg&url=http%3A%2F%2Fwww.youtube.com%2Fwatch%3Fv%3DUXOtq2J-mNk&ei=6tAlUuDyFYu0sQSV6IDAAw&usg=AFQjCNE3Rew5BXUJEcKyERbb0B89p0z00w&sig2=ajRUytWDQH-H9Tj0w4txJw&bvm=bv.51495398,d.dmg

    I have previously mentioned the work that Alan Savory has done restoring deserts with grasses and rotational grazing.

    A combination of animals and trees is found in silvopasture:
    http://forest.mtu.edu/pcforestry/resources/studentprojects/silvopasture.html

    And we have had some fairly extensive discussions of food forests and mulch systems with no tillage for growing annual vegetables.

    If you doubt that humans can actually do anything to increase carbon levels in the soil, I suggest that you watch the entire hour and a half of Doherty’s talk, and also check Albert Bates current blog post:
    .http://peaksurfer.blogspot.com/2013/08/getting-your-food-from-firehose.html

    In summary, I don’t think it is a given that collapse is the best we can do in terms of climate change. We have the ability to store more carbon in the soil, and we will reap a multitude of benefits beyond climate change if we do so. Those who dismiss ‘the farming solution’ and claim that moving away from a soil carbon destroying chemical based system of agriculture is equivalent to a reversion to the Middle Ages just need to do their homework.

    The second challenge is to the notion that bankruptcy necessarily implies physical collapse. Let’s suppose we begin with a single firm that is highly levered and commands a high price/earnings multiple because the stock market thinks the company has learned the secret of perpetual exponential growth. Some fine day the stock market discovers that the management, which was paid to achieve earnings at any cost, has run the company off the cliff. The company goes to bankruptcy court and the paper assets of the debtors, the equity investors, and the workers are all shorn and the company is restructured in the light of its true prospects. But the company as a producer of real goods and services may emerge as a productive entity…depending on how much structural damage the old management did trying vainly to save their paychecks. So it is possible, at least in theory, for a financial superstructure to collapse without a collapse in the actual productive capacity of the company.

    Consider a very simple business…a family farm. Let’s assume that the family farm both feeds the family from its products and also sells products in the marketplace in order to earn the money it needs to buy things from outside the farm economy. A traditional family farm probably has 3 generations living on it. It doesn’t have any stocks and bonds. Family ties ensure that one can work hard on the farm in middle age and then begin to take life easier when one grows old. Children are productive from an early age but aren’t expected to life hay bales right away. Talking about the ‘necessity’ for earning interest obviously isn’t applicable to this very simple organization. One begins life by consuming more than one produces, then in the middle years one produces more than one consumes, and in old age one again consumes more than one produces. Over a lifetime, one’s consumption matches one’s production. There is no magic of infinite exponential financial ‘growth’. The rewards are not money…just a good life.

    Let’s suppose that, after reviewing the Carbon Farming material, you grudgingly admit that perhaps it is possible. You acknowledge that the entire weight of corporate and political power will be arrayed against the ideas, and so think that our dysfunctional social and political and economic systems will prevail and we will actually kill ourselves with climate change. Besides, what corporate executive making 50 million dollars a year because they have managed to convince Wall Street that they have the secret to perpetual exponential growth in earnings is going to say ‘actually…we can’t produces exponential earnings growth’.

    And, for all you Peak Oilers, you note that fossil fuels are involved in even the simplest of the current methods. For example, Joel Salatin uses a very light-weight fence of metal and plastic and he uses electricity. He uses a tractor to pull his mobile equipment. He has a pick-up truck. His products are delivered to customers with automobiles and trucks.

    There are two points we need to remember about the oil connections. First, Joel is using, in his production methods, far less oil than a conventional farmer. Distribution is still a big issue and he talks about ‘aggregators’ in his discussion with Joe Mercola. The oil that he is using is going for high value services such as the electric fences and taking the animals to slaughter. Second, in a rational world, Joel’s ability to bid for a declining supply of oil would be higher than a lot of other oil users. If we rank outputs, Joel’s production of food, clean water, and carbon in the soil has to rank very high. Third, Joel can visualize a path to pretty complete independence from oil. His equipment can be moved by burros, electric saws can be replaced by hand saws, rural communities may regrow providing local outlets for food, etc. Much of his oil use is driven by the economic necessity to be price competitive with people who are using far more energy slaves.

    Can we imagine an oil company as a Cash Cow? A cash cow company is not expected to grow exponentially. It is expected to continually decline, but to produce a positive cash flow when astutely managed. My personal introduction to ‘cash flow harvesting’ was a dinner discussion with a Slum Lord at a charity dinner many years ago. For a good 30 minutes he educated me on the opportunities and pitfalls of buying slum properties and managing them for cash flow.

    If we let the ‘perpetual exponential growth’ financial machines crash and burn, but keep the productive potential intact, then we may be able to harvest plenty of oil to do what we need to do to put more carbon in the soil, which has numerous benefits beyond climate change. As with carbon farming, the obstacles are mostly not physical reality, but the dysfunction social, political, and economic systems.

    Don Stewart

    • dysfunctional systems are entirely the product of human nature, therefore our problem seems to be dysfunctional human nature.
      you cannot change human nature by wishing it so, therefore any change has to have a driving force.
      driving forces are invariably met with resistance by those who insist on retaining their particular status quo.
      that means conflict. usually violent.
      there will be a winner and a loser.
      the winner will inflict his point of view on the loser, usually by bumping him off.
      the winner will then grab everything for his own clan/tribe, and start all over again.
      until the next crisis.
      welcome to planet Earth

      • Don Stewart says:

        Dear End of More
        Overthrowing entrenched interests and habitual ways of thinking is difficult. It would be hard if the governments were simply neutral. As it is, the governments are using all their powers to benefit those who control the political process. And the rise of the ‘surveillance state’ and the emasculation of our constitutional rights has made it more difficult than ever to visualize any successful ‘revolution’.

        I am not a historian. What we need are a couple of examples where the Powers were undermined and it ended well…instead of disastrously. And then we need some creative thought about how we might go about accomplishing those goals in the world we live in today.

        Don Stewart

        • Perhaps the founding of the USA is an example of powers being undermined and ending well, my point is that theres always a messy interlude before normality returns…for a while, then things get difficult again—civil war—then that settles down and prosperity grows, but only so long as you can go on consuming resources to keep everyone reasonably happy.
          once the abundance is no more, people start to get annoyed, then you have a revolution again in the ‘certainty’ that that is what is necessary to bring about prosperity again
          Only this time there really is no more.

      • Don Stewart says:

        Dear End of More
        Also see
        http://www.whale.to/a/blume.html
        Don Stewart

        • Thanks for that link Don it gave me much to think about
          However I visited Blume’s site, and found he’s fallen into his own ‘infinite prosperity ‘trap, with the little cartoon car and happy motorist growing his own fuel
          Exactly where does he think cars come from? Permaculture? The Fred flintstone auto-factory?
          Blume ignores the reality that we live in an industrialised society, and all our employment depends on fuelburning. I couldn’t figure out where 26 million jobs were supposed to come from, unless they are permaculturalists feeding the rest of us.
          Our jobs essentially turn energy consumption, via the use of money tokens, into a means by which we consume more fuel, to earn more money tokens—ad infinitum
          no form of permaculture can grow enough fuel to produce enough fuel to keep ourselves in gainful employment.
          Logically then, most of us will cease to work at all, except maybe for basket weaving and cloth making, while a few experts produce our food from our body wastes.
          I’m no expert, but it seemed to me that Blume is getting more calories out of the soil than he’s putting in

          • Don Stewart says:

            Dear End of More
            I don’t personally know Blume. But I do recognize a lot of the symptoms he is describing. When an ecosystem is layered, it becomes very much more photosynthetically effective. In temperate regions, it is not uncommon for a permaculture designer to include four layers. I think those in the tropics are able to use more. So while it is true that a single layer of heavily fertilized and irrigated corn can produce a lot of calories, it is still true that a layered system such as Blume is describing will produce more biological activity and will do it without external inputs.

            These sorts of systems require labor. In our current system, requiring labor is, in Gail’s words, the ‘most expensive energy you can consume’. So here we are with hungry people and unemployed people and looming shortages of fossil fuel inputs, and many people refuse to consider labor intensive systems which produce more total food and more biological activity which can fuel many services (including biodiesel) because we have this great fear that it will ‘increase labor costs’. We choose to pay people to not work rather than ‘increase labor costs’.

            I don’t think Blume believes we can produce enough biofuels to keep the current system going. What I imagine he believes is that diverting 6 percent of an oil crop (such as canola) to biodiesel will permit these very energy efficient farms to be self-contained in terms of energy. I imagine he thinks that most of the people who work on a small farm also live on that small farm. Commuting to work will be practically non-existent in rural areas.

            Now if you are trying to feed New York City and you start counting up all the fuel that the citizens there use, the task becomes impossible. The obvious conclusion is that New York City has to change drastically. Perhaps a million people need to move out of NYC and become small farmers. Sharon Astyk wrote a book several years ago called Fifty Million Farmers. NYC might supply 1 in 50, maybe more.

            If one makes as a condition that any proposal MUST keep the current system operating, then one will never get anywhere and disaster is certain. I favor taking a cold, hard look at the resources, the ability of biological solutions to help us, the need to stop poisoning the biology, the very likely necessity to regrow very local distribution of food, the resuscitation of food storage methods such as drying and fermenting, and so forth. The point is that we have the know-how to harness photosynthesis to produce an awful lot of food. Arranging ourselves into careers which will produce the food and arranging ourselves spatially to be close to food and using things like waterways to move food are all serious issues, which we should be addressing promptly. But paying people to be idle and giving them food is a dead end.

            If there are still surplus people? I expect a lot of people will cling to illusions and just won’t make it.

            Don Stewart

            • The 6% of oil for fuel might power a few machines that were made long ago, down roads that were made long ago. But once you need a new machine, or even if you need to repair the old machine, I am afraid you are out of luck. At some point, you run out of spare parts, especially for things like rubber tubing that disintegrate.

              I didn’t watch the video, but it seems like Blume would have been better off figuring out a sustainable system, perhaps with horses or oxen or even humans providing the labor. A system that works for maybe 6 months is not worth bothering with. If we are going to transition to something, it has to be reasonably sustainable. Anything that depends on vehicles and biodiesel powered farm equipment is not sustainable at all.

            • Don Stewart says:

              Gail
              I think I want to scream. Blume was NOT trying to demonstrate a 22nd Century Survival Model for Silicon Valley. He was making a living on 2 acres of leased land on the edge of Silicon Valley early in the 21st century. He was NOT the recipient of a National Science Foundation grant to explore the outer reaches of what is possible. So no, he did not reconfigure Silicon Valley…he pretty much accepted it the way it was. Which demonstrates common sense.

              WHAT DID HE DO? He demonstrated that biological farming/ gardening methods can produce a great deal of food ON THE FARM with minimal outside inputs and he demonstrated that he could sequester carbon in the soil. At any given time, he had half his 2 acres in cover crops. So he was running quite a good sized CSA with one acre in production.

              Now anyone can say something like ‘the problems are so overwhelming that the situation is hopeless and we are all going to be dead, so what’s the use?’ To those people, I have nothing to say.

              But for anyone who is interested in systematically working on the problems of food and climate change, Blume (and others) have given us some valuable information: Biological farming can produce a lot of food and it can sequester carbon. That is not what the US Congress believes, it is not what Monsanto is telling them and the world through TV advertisements, and it is not what most farmers and gardeners in the US are doing. If you want to remedy things, you can try political action or get involved with a small group or anything in between. But wringing one’s hands won’t change anything.

              Are there lots of remaining problems around the issue of food? Of course there are. And I have discussed a number of them. I’m not going to try to recapitulate all that.

              While a professional would want to question Blume rather closely, one has to admire the fact that he was able to accomplish what he did during the time he had the land. So be grateful for the demonstration, and get to work on the remaining problems.

              Don Stewart

            • Sorry. I shouldn’t criticize Blume. There are a lot of different things a person can try to accomplish.

          • Scott says:

            Hello, This is worth a listen. Re posting JHK with Michael Klare — Scott

            http://kunstler.com/podcast/kunstlercast-244-interview-with-michael-klare/

          • Don

            Your posts are interesting, for a variety of reasons—-but on reading a reference to wooden wheels, I fear i must bow out of this discussion

            • Don Stewart says:

              Dear End of More (if still reading)
              After thinking some more about your concern about the wheeled vehicle and your comments about Eric Toensmeier and the difficulty of being entirely self-sufficient.

              The guy in Silicon Valley had a big CSA he was serving. You can’t provide food to people in the US today without involving fossil fuels and vehicles. This is the ‘distribution’ issue, that concerns Joel Salatin, among others. The short answer, I think, is that as transport collapses, the market for the products of a commercial farm will constrict. As he noted, the foodshed for New York City used to be a 7 mile circle. We’ll probably get back to that. But it isn’t true today. People a hundred miles away truck food into NYC today to sell at farmer’s markets. Around here, the radius is 25 miles. My guess is that people will disperse to be close to the food.

              But more broadly, I don’t think most Permaculture people aspire to be entirely self-sufficient. I think a lot more subscribe to the ‘hundred people’ theory where you know a hundred people who provide the big majority of what you need. Trade with people you don’t know is pretty rare. It will depend, to some extent, on how far you are from navigable water. Those on navigable water (such as New York City) will do more trading with people they don’t know. Those in a landlocked place (such as where I live) will live a much more circumscribed life.

              So I offer these thoughts:
              1. Don’t expect anyone to tell you how to live a totally self-sufficient life.
              2. Don’t expect anyone to give you all the answers to your problems.
              3. Read and study people who have something to contribute to your problem, as you perceive it.

              Don Stewart

        • Don
          The only way you can have a self-contained agricultural system is where nothing comes in or out. (and that includes people btw)
          By illustrating a motorised wheeled vehicle Blume destroys his own hypothesis. By definition, such things cannot be part of the system, because fuelburning removes energy from the loop which has to be found from somewhere-( I won’t dwell on the input of rubber, plastics and metals here–an even bigger nonsense).
          All our energy comes from the sun, ultimately we can have no more than the sun delivers to each square metre per day. If we use more than that, we have to ‘steal’ it from somewhere or someone/thing else. If you cut down a tree (essentially 100 years of stored sun-energy) to build a house, that is the habitat/energy source for other organisms converted to our use. A coal seam is maybe 1 million years of stored sun-energy. The difference is only that of time. I strongly recommend http://www.withouthotair.com/, which is available as a pdf, or buy the book. In that David Mackay sets out clearly just how much energy we have available.
          Blume’s reference to ‘jobs’ implies trade, if you have trade, then that breaks the loop too because goods must be traded in and out for some kind of benefit/profit. (human nature kicks in here again)
          Living and working on a small farm would be, in our terms, a form of serfdom. That is a secure place in return for access to basic energy, ie food. If society collapses, that is what we face, because while some would adopt permaculture as a way of life, millions would not. Therefore you can only have fiefdoms, defending such food resources as are available.
          An extreme view I agree, but 3.5 billion city dwellers (half the world’s population) won’t sit around twiddling their thumbs once the food trucks stop delivering, neither will they take up permaculture. They will however look for something to eat.
          Virtually all our food consumption system functions on a just in time basis, which means that most people wont be able to wait for a harvest, no matter how big its promise. Sweeping statements: a million people moving out of NYC to become small farmers… may well have happened by 2150 say, but the intervening upheaval will be unpleasant to say the least.
          We are all very comfortable in our hamster cages, thank you, and will not take kindly to any disturbance.

          • xabier says:

            End of More

            But will the food trucks stop rolling, once and for all? It’s not impossible, and in some places almost certain, but I suspect the likely scenario is not instant starvation but long-term ever- increasing chronic malnutrition for those who fall into poverty (pushed out by automation, globalization ?) That will kill a lot of people slowly, and alter politics, but not be Apocalyptic.

          • Don Stewart says:

            Dear End of More
            As I have repeatedly stated on this forum, it is suicidal to try to make a living today with no energy slaves, while the average American is using 100 of them. So throwing rocks at someone for not living a pure enough life may entertain you, but it doesn’t solve any problems.

            I expect wheeled vehicles to be around for a very long time, perhaps with wooden wheels. It is not uncommon to see a 40 year old tractor. If the tractor can be powered by diesel made from farm-grown oil seeds, then the tractor may be useful for a long time.

            Let me give you an example. A question was recently posed on our small farm website about electric fences and solar PV. One farmer answered that she used to use solar PV, then she discovered that the fences only discharge electricity when an animal touches it and takes a shock (which is seldom), so the cost of grid electricity, if you have it on the farm, is negligible. She just hooked her fence up to the grid and forgot about the solar PV.

            Why bring this up? Because many people who comment on this site would throw rocks at her for being ‘unsustainable’. Well…she’s been farming for 30 years, and I admire people who have the work ethic and business sense and common sense to keep a small farm going for that long. She is doing what she needs to do today to make the money she needs. If the grid fails, she can always repurpose the solar PV panels.

            But what about animals in the very long term? Farmers used to use specific dense and thorny plants for fences. They also didn’t have the current plague of deer because they simply killed them and ate them. In the very long term, farms will look a lot more like they looked in 1850 in terms of fences. The grasslands will revert to open range, which is generally regarded as ‘heaven on earth’. But today…you better have a deer fence or you will never make it to next year, much less 2100. And miles and miles of barbed wire if you are in the grasslands.

            Don Stewart

        • After my reference to David Mackay, I caught up with some of his lectures, I recommend watching them, a short one, then if you feel like it, a long one

        • Xabier
          The cost of food will rise, and the regularity of the foodtrucks will decline pro rata, as food itself become increasingly unaffordable. We are after all trucking in energy.
          No, the foodtrucks will not just stop, any more than our oil supplies will just stop.
          The cost will just climb out of reach of more and more people, until the whole energy delivery exercise becomes uneconomic as far as large conurbations are concerned

      • xabier says:

        End of More

        Yes, there is a very dark side to human nature. But also – light! Who would have guessed that anything good would have come out of the Dark ages, for instance?

        Isaiah Berlin -the liberal philospher – always used to quote Kant: ‘Out of the crooked timber of humanity, you will never make anything straight.’ It seems impossible not to be a pessimist.

        But, looking at an old house in my village the other day, it seemed to me that the truth is that we can sometimes make a pleasant dwelling with those crooked timbers, and it might last longer than we imagine.

    • We have to keep the whole “system” together to harvest oil that is still in the ground. To do that, the price has to be high enough to keep oil exporters from falling apart. This high oil price cannot lead to collapse of oil importers. We are not talking about bankruptcy of an individual company. We are talking about a system that is built on cheap oil that can no longer support itself. The big problem that past societies had is that needed tax rates to support programs rose above what common workers could afford to pay. We are reaching that stage now. The tax problem reflects a lack of resources to support the economy as it is structured now. A much simpler structure might work (Dictators over smaller areas, for example, instead of the current government), but it is not clear that it would be possible to keep up the infrastructure (roads and bridges; 24/7 electricity; international imports of experts, needed parts) to keep the oil industry operating.

      • Don Stewart says:

        Gail
        The System can’t and won’t maintain itself. It will be replaced by some system which is financially structured in view of the reality of resources. E.g., financial wealth will disappear by the tens of trillions of dollars. That, in effect, is what bankruptcy courts do. They ‘disappear’ wealth until the capital structure comports with the new reality. But that doesn’t necessarily have to mean that production grinds to a halt. Production is now and always has been about real resources…not financial fictions. Refineries are closing in Europe and the US, and I imagine there were some write-downs on corporate books, but the system keeps producing oil and its products.

        To me, the key public policy consideration is to not let the struggle for survival on the part of the financial elite destroy the productive capacity of individual companies and economies as a whole.

        As for governments, they need desperately to engage in triage and also to stop throwing sand in the gears.

        The focus needs to be on production and avoiding pollution and everyone working and family and social cohesion and regenerative agriculture. Let the debts and the entitlements be scaled down to a realistic level.

        As a practical matter, I think governments are likely to pursue rapid inflation and phony numbers to scale down entitlements such as social security. I think they will continue to favor the financial elite and do everything they can to protect them and will continue to support a global Empire. I DO expect a train wreck, I just point out that no laws of science require it.

        Don Stewart

        • It depends. If you can somehow engineer the situation so that only some unneeded portions are lost through bankruptcy, then I suppose you are right. I don’t think that we have the luxury of this happening though. Maybe at first, it is just some unneeded portions, but at some point, it is some things we rely on fairly heavily.

          The things I worry about losing:

          1. The US Federal Government. If we have to start over with a multitude of governments of smaller areas, each with its own monetary system, the world will be fairly different. We cannot afford the programs offered by the US federal government, and quite possibly by state and local governments, right now.

          2. Major parts of the electric grid. There could be several different reasons–for example, electric companies can no longer collect enough funds from people who would like service because so many are jobless, political breakup, storm damage that no one has funds to repair, inability to get replacement parts for necessary components. Once the electric grid is not available, we also cannot transport oil and gas by pipeline (except in areas where gas pipelines are powered by gas–often where there is no electricity).

          3. Oil exports from the Middle East, probably because Middle East war spreads to entire area.

          4. Repair of roads and bridges.

          5. Operating banks.

          Perhaps there is a period of time (10 or 20 years, say) where things do sort of hang together, before things really fall apart. Then you might be right. It depends on whether there is a way to keep the system operating on a reduced basis, without losing too much of the essentials.

      • xabier says:

        Gail

        Who can quarrel with your assessment? The striking feature of the last few decades in advanced economies is that the lowering of consumer purchasing power which is a consequence of high tax rates, to fund the big modern state and its programmes, rising energy costs,food costs, etc, has been balanced out only by increasing availability of credit to ordinary people. Credit that their earnings potential does not justify. That credit system is under great pressure now, and as we saw in 2008, when it is withdrawn, corporate sales in many markets fall dramatically. Hence the desperate flight to super-low interest rates in the developed world. The kick in the tail is that these low interest rates inflate the housing bubble, reducing even further the discretionary purchasing power of the consumer….and so it goes on. But when will it finally break?

  3. ravinathan says:

    Gail and others: you may be intrigued by this podcast of a discussion between Michael Klare and Kunstler, where Klare expresses his opinion that energy resources such as shale.could potentially meet our needs for the next 25 years. Keep in mind that Klare is well aware of peak resources and has written a book about it. Despite Kunstlers doomer probing, Klare points to the world wide availability and discovery of shale resources. When challenged on the financial returns on these investments, he responds that returns are sufficient to exploit these resources and that energy companies facing depletion in their traditional oil business will have little choice but to invest in shale. His view is that the limits to growth will not be from energy but from climate change. This differs from Gail’s perspective and I must admit to felling some frustration with Klare’s measured academic balanced view. I had to remind myself that it is precisely the oppositional arguments that I should pay attention to.
    So where will the constraints to shale exploration come from if capital to exploit is available? Water? What if the shale industry learns to reuse drilling water? It appears that climate change is the most likely constraint to business as usual.
    http://kunstler.com/podcast/kunstlercast-244-interview-with-michael-klare/

    • The issue at hand is the damage that high oil prices are doing to the economies of oil importers right now, as well as the perilous state that oil exporting economies are in because oil prices are not high enough for them (even though they are too high for oil importers). Thus, it is not clear we really have time to do anything of this sort.

      If, in fact, it were possible for oil prices to keep rising (to make shale increasingly worthwhile to extract) without too great problems in oil importing countries, then Michael Klare would be right. As it is, I see the big obstacles to exporting shale technology worldwide to be:

      1. Dense populations in would-be fracking locations, making the use of the technique more questionable. I have heard that a major shale location is under Paris, for example.
      2. Lack of water, especially in China. Even with reuse, China is likely to be short of water.
      3. Lack of existing pipelines that can be used without a lot of initial front end cost.
      4. International boundaries that make treaties necessary before pipelines that go any distance can be built.

      If we hit limits from oil first, then climate change becomes a secondary issue.

      • xabier says:

        Gail

        I don’t know whether you saw the open letter from the British Prime Minister about fracking?

        He tries to imply that it will mean ‘cheap energy’ and lower fuel bills. That fact that it only you makes financial sense in a high-price environment is deftly brushed aside.

        He also claims that it can take place all over Britain, even though one years ago there was talk of severe water rationing due to a very dry winter (common now) in most southern and eastern regions, Were I live is classed as ‘semi-arid’ and is highly agricultural.

        Good for a laugh, or a weep……..

        • Chris Johnson says:

          Xabier and Gail:
          Certainly not an expert, but I’ve seen several references to fracking with other than water: various ethyls and. Also, the sand and salt in fracking water raise the question of whether fracking water needs to be clean at all. Google that one and you get a lot of interesting response, only a portion contradictory.
          Yours is the first indicator I’d heard that the UK was getting arid. I wonder if that implies the North Atlantic water and air currents are fading/failing. Weather watchers have long pointed to that phenomenon as critical to keeping the ice up north rather than downtown Koblenz. Well, since we’ve melted the North Pole, maybe we won’t have that problem…
          Cheers, Chris

          • xabier says:

            Chris

            Water supply is quite a problem in the south and east of the UK, where of course both population, industry and industrial agriculture are concentrated. People are lavish in the use of domestic water.

            In the northern parts, there is abundance of water with heavier rainfall, and much fracking is planned there.

            Weather patterns are simply all over the place these days, but the sometimes very dry winters are a great cause for concern as reservoirs and so on do not replenish sufficiently. .
            I am certainly moving to install a rain-water collection system and a well.

        • I’m sorry, I didn’t see that letter. I suppose hope springs eternal.

          On a similar note, I got an e-mail from Platts today, thinking I might want to advertise in Fortune. It said,

          Dear Gail,

          This October, Fortune will partner with the experts at Platts to produce a custom content section on “RESURGENCE OF OIL”, a special section in Fortune Magazine that explores how key participants in global markets are assessing and betting on this market.

          Click Here for more information.

          RESURGENCE OF OIL
          How growth in US oil production is transforming the energy industry—and the economy

          Issue Date: October 28
          On-Sale Date: October 14
          Ad Close: September 11
          _________________

          I suppose they contacted me since I get some (free) Platts e-mails.

          Good grief!

        • I’m sorry, I didn’t see that letter. I suppose hope springs eternal.

          On a similar note, I got an e-mail from Platts today, thinking I might want to advertise in Fortune. It said,

          Dear Gail,

          This October, Fortune will partner with the experts at Platts to produce a custom content section on “RESURGENCE OF OIL”, a special section in Fortune Magazine that explores how key participants in global markets are assessing and betting on this market.

          Click Here for more information.

          RESURGENCE OF OIL
          How growth in US oil production is transforming the energy industry—and the economy

          Issue Date: October 28
          On-Sale Date: October 14
          Ad Close: September 11
          _________________

          I suppose they contacted me since I get some (free) Platts e-mails.

          Good grief!

          • xabier says:

            PM Cameron’s letter on fracking is a classic of propaganda, up there with the Nazi hints of ‘war-changing super-weapons’ in about March 1945.

            I did have to rub my eyes at first, but then the laughing started. Maybe we will be able to extract a lot of cynical humour from decline and collapse?

            At least I’m not going to be forced to buy shares in fracking companies…….

          • timl2k11 says:

            From the PDF: “VALUE-ADDED BENEFITS & OPPORTUNITIES
            • Our writer will interview your company spokesperson or customer, and
            excerpts will be published in the story”
            Oh, I’m sure this won’t be biased in any way. I wonder what percentage of readers know that what they are reading is written for the benefit the advertisers, not the readers.

  4. Re: Collapse of the Soviet Union

    4/10/2010
    Russia’s oil peak and the German reunification
    http://crudeoilpeak.info/russia%E2%80%99s-oil-peak-and-the-german-reunification

  5. Don Stewart says:

    Dear Gail and Others
    Let me try to clarify some issues around Permaculture or Restoration Agriculture and population and climate change. (Any mistakes I make in attributing opinions to others is my own fault.)

    David Holmgren, Toby Hemenway, Darren Doherty, and Sepp Holzer (and probably many others) think we can grow enough food to feed 10 billion people. Toby Hemenway thinks that a hundred years from now we may only be able to grow enough food to feed between 500 million and 2 billion. All those guys also think we can sequester a lot of carbon in the soil. But they all think that continuing to burn fossil fuels the way we do now isn’t a smart thing to do, even if supplies permit it. Most of them are also Peak Oilers of one persuasion or another.

    Let’s consider the years 2013, 2025 and 2100 just to get our crude models functioning. In 2013 we have the ability to grow enough food to make every one of the 7 billion humans fat. Yet we have a couple of billion hungry people. So we have to factor in ‘social dysfunction’ which takes many shapes in various places and in various socio-economic settings if we want to talk about hunger and obesity with any specificity. What we would really want to aim for is producing just the right amount and type of food so that everyone was lean but well fed and disease prooof. We know how to do that, but we don’t do it. If you follow the money trail, you will be on the road to discovering why we have this failure.

    By 2025, if we follow the advice of H,H,H, and D, we would have transformed our suburban, urban, and rural landscapes for minimal external input food production. We would be partnering with microbes so that the microbes do the heavy lifting…not fossil fuels. We would have stopped killing microbes. Biological activity would have multiplied, producing plenty of surplus for humans to harvest. We would be able to produce enough food to feed 10 billion people. How many of them would we expect to be hungry? That all depends on whether we have managed to change the dysfunctional social system we had in 2013.

    By 2100, resource restraints are much more in evidence. We can no longer order up diesel powered equipment to move earth. Metals may be in very short supply. Transportation, except by water, may be very difficult. Nails may be carefully straightened and saved. And I think that this is where Toby’s number of 500 million to 2 billion comes from. We currently have plentiful resources to do what we need to do with agriculture and gardening, but someday those resources will be much scarcer. How many hungry people will there be in 2100? It depends on a couple of big factors. Will we, as Toby would like, have reduced our birthrate to the level currently prevalent in Europe, so that the population of Earth is 2 billion, or will we have continued to reproduce like bunnies and have 20 billion people? In addition, we have to contend with the same bugaboo of a dysfunctional social system. And did we actually make the changes to farming and gardening?

    In short, we currently have in place a knowledge base and a resource base to grow enough food to feed 10 billion people with minimal external inputs. We will likely not have the resource base in 2100 to grow enough food to feed that many people. The dysfunctional social system may continue to generate hungry people in the midst of plenty. Or we may simply fail to do farming and gardening using best practices.

    What about climate change? In 2013 we have the knowledge and working examples which show us how to produce food in partnership with microbes and minimal external inputs. Farms and gardens CAN be net energy producers, instead of the energy sinks and net producers of CO2 that they are today. But we do not, mostly, farm and garden that way. The official policy of the US Dept of Ag is that farms should get more and more gargantuan so that they can make ever more efficient use of external inputs. By 2025, if we were to think and act as we thought and acted in 1942, we would have transformed our agriculture such that huge amounts of carbon are being stored in the soil and external inputs are minimal. In Darren Doherty’s words, ‘we could stop climate change in its tracks’.

    By 2100 we will know whether Daniel Yergen was closer to the truth, or Jean Laharrere was closer to the truth, or Gail Tverberg was closer to the truth. If Yergen turns out to be the prophet, and we are continuing to burn all the fossil fuels we can get our hands on, we will be well on the way to turning Earth into Venus. If Laherrere is closer to the truth, then climate change won’t be a problem if we have chosen the ‘carbon farming’ approach. If Gail is closer to the truth, industrial civilization will have long since collapsed and humans, if they survive at all, will be reduced to small bands of hunters and gatherers living in a climate which is still adjusting to the high carbon dioxide levels of 2013.

    Don Stewart

    • I am afraid I am still a skeptic on the feeding 10 billion people, unless we have access to a whole lot of things we depend on today–roads, fences made of metal, netting to keep pests away from fruit, transportation of soil amendments by some method other than humans carrying one arm-load at a time, irrigation systems using today’s hoses, greenhouse type arrangements, etc.

      There would also be the detail about where this food could be produced, and where the people of the world really live. Some countries would not get much produced at all (Iceland, Norway, and Saudi Arabia come to mind) while others might produce more than enough. How would it be stored and shipped to the people who need it, with simple boats with perhaps sails and oars?

      • Scott says:

        I watched most of that Video that Don Stewart sent that showed that new high tech turkey and animal fencing, simple, and not expensive, but the system needs just a bit of little power, but these things need a high tech system to build them — but these items are good and give us hope for the near term. Too bad we do not have more land with good water but we will get by for a while with all of these things as long as there is not a major financial collapse or war. But that is the big variable.

        Scott

        • “A little bit” is just as hard to come by as a lot, when the problem is a broken system. If the electrical transmission system is broken, or the banks aren’t operating, that is a problem, whether the amount needed is a little or a lot.

          Also, high tech approaches that use a little bit are not sustainable. They lull us into not taking the necessary steps to develop a sustainable system–one that works without high tech input. They encourage us to have more children than we can support in the next generation.

      • I agree—there is a classic blank-out of the problems of feeding cities, and half the world’s population live in cities.
        Until railways spread into nationwide use, the city fixed its own limits by the distance food could be carted in to market. that was rarely more than 10 miles for staple foods, which meant towns and cities were circled by market gardens
        the railways market gardens to be built over and cities to expand accordingly
        similarly when refrigerated ships were developed, populations expanded on the consumption of cheap meat.
        but all that depended on cheap energy, without that we go back to food by the cartload instead of the shipload.
        growing food might be less of a problem than moving/processing it

        • error—the railways allowed market gardens to be built over

          • xabier says:

            End of More

            From the distribution side of things, as you will know it’s only in the last few decades that the small independent, back-street shops -butchers, greengrocers and general stores, – have died out in the suburbs of even large cities like London, often only few minutes easy walk away, and leading to car-dependency in order to buy anything. I gather much the same happened in the States, but perhaps earlier with the building of vast residential suburbs?

        • Agreed. From that point of view, more spread out cities (like Atlanta) might have an advantage. The businesses would still have problems though, getting workers and goods to them. So most people living in cities likely would not have jobs, causing a problem when it comes to paying for things like electricity and taxes.

  6. ravinathan says:

    A remarkable article on our population predicament which points out the fundamental weakness in permaculturists confidence in feeding the world’s current population and more sustainably! Tom Murphy makes the connection between pop growth and energy consumption quite brilliantly and points to the futility of believing that our current population is sustainable. He also explodes the common refrain that economic growth is the best contraceptive. Not for the Quataris! Nor for any of the energy surplus countries either..it is just another soothing myth that allows us to breed as usual, a comforting lie that the post modern Permie Greens contribute to.
    http://physics.ucsd.edu/do-the-math/2013/09/the-real-population-problem/

    • Don Stewart says:

      Dear Ravinathan
      I don’t see much conflict between what Toby Hemenway says in his lectures and Tom Murphy says. Toby goes back a little further and attributes the population growth coincident with grain agriculture to the fertility effect of grain…I have plenty of energy so its time to breed. Toby (who is a biologist) thinks that the signal from leafy greens and meat is much more subdued.

      No permaculturist I know disputes the fact that the ability to turn soil with a plow stimulates bacteria and provides a rush of nutrients to plants. What permaculturists point out is that the constant plowing is unsustainable and results in eventual desertification. That is why Toby Hemenway thinks that the population of Earth in 2050 will be lower if we stick with chemical agriculture than if we convert to biological agriculture….the effects of pollution and soil degradation and all the other effects of chemical agriculture plus resource depletion will catch up with us and food production will decline. If we convert to biological agriculture, we can produce a lot of food (but not an infinite amount), we eliminate the bad effects of chemical agriculture, we remove some of the negatives of grain (which currently provides around 70 percent of our calories, including what is fed to animals), and we can sequester a lot of carbon.

      Two things make biological agriculture available to us today in a way that it was not available to our ancestors 10,000 years ago. The first is our much better scientific understanding and consequent ability to target our efforts. The second is the current availability of resources to both remediate the damage already done and to shape the Earth to support more biological activity. Humans, for example, can build gravity fed ponds which hydrate a hillside and support much higher levels of biological activity. But it is really helpful to have earth-moving equipment when you start building ponds. Our ancestors did it by hand, but I doubt it was much fun.

      Can we flip a switch and convert to biological farming and gardening? Probably not. When David Holmgren was recently asked about natural gas as a bridge to somewhere, he said that in his opinion we will be so desperate for nitrogen fertilizer that that use will preclude any ideas about powering cars with natural gas. David thinks we can feed 10 billion, but we will need nitrogen fertilizer…perhaps as we labor to restore true biological methods or perhaps he thinks that biological methods can’t produce enough nitrogen to feed 10 billion–there are respectable arguments on both sides. All the permaculturists I know, however, think that ultimately we have to depend on biological methods. Darren Doherty advises his clients to convert to biological methods over a 10 year period. He points out that it takes time for a healthy ecology to re-establish itself after so many decades of abuse, and that it doesn’t do any good to be right in the long run if you die in the short term.

      Don Stewart

    • THanks for the link. I hadn’t read his article yet. (I enjoyed meeting Tom Murphy at the Univ. of Vermont this year, and the Biophysical Economics Conference.)

      He makes a good point about populations of countries of energy exporters is growing. Also, that the size of family curve is U shaped, rather than simply decreasing.

      It is hard to break apart the combined effect of immigration and new births. People who immigrate tend to go to countries where energy is plentiful. Reduced energy availability tends to lead to emigration away from a country–look at the countries of Eastern Europe. There is a lag in this process, that Tom’s method can’t unravel. It adds even more to the tendency of countries with more energy to add population, whether or not it is by new births.

      • ravinathan says:

        Today the NY Times published a report on the stabilizing fertility rate in the US after some years of decline that they attributed to the weak economy. Good news for economic growth in the US of A folks! Consumers are signaling their optimism by procreating little consumers. More tax paying consumers who will fund our pensions. Economic growth requires growing populations, which in turn depletes non renewable resources and raises their cost thus eroding economic growth. What a bind we are in! The juggernaut rolls on.

        • xabier says:

          ravinathan

          Even better prospects when one considers that the higher birth-rate is found among the lower-earning and least -educated section of the population, (often new low or unskilled immigrants – certainly that is the case in Europe and Britain. It’s not just about head-count, but politicians and economists don’t seem to want to get it. It was in 1813, when kings and emperors needed large conscript armies and the land needed labourers, but not now………..

  7. ravinathan says:

    The argument remains that permies side step the population predicament and in many ways contribute to the notion that permaculture practices will feed current populations and more. Like most good hearted liberals they will not allow themselves to judge the procreative choices of humans and take a stand. They fear that wading into the pop argument will take away from the adoption of permaculture practices. In terms of real world experiments, Eric Toensmeier of Paradise Lot fame admits that they cannot produce enough to feed themselves. In answer to my direct question to Toensmeier during a workshop he honestly admitted that at best they meet about 25 percent of their dietary needs through their garden. I have adopted oermaculture practices in my property and have learned from experience how difficult it is to grow food sustainably and reduce our energy footprint.

    • xabier says:

      Population control is off the agenda outside totalitarian states since WW2 and the Nazi scientists: it’s irrational, but there we are. We just have to await the Four Horsemen.

    • Don Stewart says:

      Dear Ravinathan
      Eric Toensmeier is gardening a very tiny plot of land. What I have advocated here is the production of perishable food in the garden while those foods that are easily kept and transported are grown on commercial farms. Most of the calories are going to come from the farms, but most of the phytonutrients which make one disease proof will come from the garden. David Holmgren and others have advocated the same way of thinking and acting.

      It doesn’t do much good to have plenty of calories but few phytonutrients (witness the current epidemic of diabetes), and of course one would starve trying to live on leafy greens (25 pounds per day). The two have to go together.

      The appropriate question is how to think rationally about the problem in a world moving into resource scarcity. I keep coming out with the answer that gardens for perishables is the answer for most people. Perishables are the most expensive foods most people buy. So a garden makes economic sense today and makes sense tomorrow in a transport limited world.

      Don Stewart

      • xabier says:

        Don

        Good sense.

        And productive gardening can give hope, pleasure, purpose and nutrition to those made employed or condemned to very low-pay and insecure work by growing automation and economic decline – a major social task today.

        But let’s scan the developed world and see where any such schemes are being pursued by regional and national governments (not just micro-groups of sustainability-minded folk): no, there’s nothing on the radar…..

        The only sustainability that states are interested in is that of the banks, housing bubbles, etc. It’s tragic: intelligence and imagination point the way, vested interests and short-termism block it.

        And again, teach a man to feed himself and not exist on a state dole, and he may just not vote for you. He might start to think for himself as well as feed himself.

      • ravinathan says:

        Don, what you and other permaculturists miss is a version of Jevon’s paradox that any increase in Agro productivity, with or without the use of fossil fuels will come to nought as human population increases to meet food production, I believe that your permaculturist cheer leading is well intentioned but futile, until humans squarely face up to the challenge of limiting population, failing which we are locking ourselves in to the road to collapse, just like other civilizations and species before homo economicus that outgrew their ecological niche.

        • Don Stewart says:

          Dear Ravinathan
          Where were you when I mentioned that Edo Japan limited population by the simple expedient that the farmers had to feed their children?

          Don Stewart

          • ravinathan says:

            Don, you are now placing yourself into a contradiction. On one hand you claim that oermaculture can feed 10 or 15 Billion and more sustainably citing carious permaciulture gurus and on the other point to the forced population control of Edo Japan. Which is it? Without taking a clear position on population limits permaculture is at best limited and at worst deluded.

            • Don Stewart says:

              Ravinathan
              First, you need to remember that Permaculture has roots in Anarchism–there isn’t any pope to issue official proclamations.

              If you ask Sepp Holzer, he thinks Earth can produce enough food to feed 16 billion people. But Sepp moves lots and lots of earth around to achieve a very high level of control of water. It is my impression that most Permaculture leaders don’t really support all that earth moving. As I said before, Earth is now producing enough food to make all 7 billion fat. The reason some people are hungry is the dysfunctional systems we have in place–not the inability of Nature to generate food.

              Toby Hemenway, who wrote the best-selling ever book on Permaculture, recently gave an interview to Doomstead Diner. He was asked if Earth could grow enough food to feed 10 billion. He said he thought it could in the short term. In the long term, he thought Earth would support between 500 million and 2 billion. He gave those same numbers in a public talk at Duke University several years ago.

              David Holmgren, a co-inventor of Permaculture, was asked about natural gas as a fuel for cars. He said he thought it wouldn’t happen…that we would be so desperate for nitrogen fertilizer to grow food that we wouldn’t have any left over for vehicles. But he said he thought that, in the near term, Earth could grow enough food to feed 10 billion with continued use of nitrogen fertilizer and dietary changes such as less meat. As far as I know, he hasn’t said anything about the long term.

              I have tried to explain to you why the long term is different from the short term, and why (if Gail is correct about the hard linkage between financial and physical systems) the short term might be very short indeed.

              I don’t need to ‘go one way or the other’. You need to understand the dynamics and the dependencies and make up your own mind and do what you need to do. Look for better sources of information that I am, if you want to.

              Don Stewart

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  9. Don,
    Until a person starts producing food for themselves it is difficult to convince them how easily it can be done. I don’t think you will be able to convince people who don’t want to grow food that permaculture holds any answer to food production. But I think there are many, many young people anxious to start small farms. They are ones who are attending the workshops you tell us about and experimenting on what works for them. I won’t argue that permaculture can feed 10 billion people. I don’t think it can. But when petrochemicals and oil are no longer available, I think this system will be still producing food.

    Not only can gardens provide fresh economical food (fruit, vegetables, greens, herbs) but it isn’t difficult to grow protein even if you live in town as long as you have some yard. West Lafayette allows families to have chickens in town (hen not rooster). Lafayette does not. My family raised meat rabbits when I was a kid. We used their manure to fertilize our garden. We had 4 pens each 2′ x 6′. Kept 3 does and 1 buck. You can bred does up to three times a year and we had one that was a “checkered giant” that usually had a liter of 14 babies. The babies reach good eating size (about the same size as a large hen, 8 to 10 lbs. of meat) in about 4 to 6 months. Summer is best because they eat lots of grass and weeds. We generally didn’t bred the does more than twice a year, as winter was hard on new mothers. I looked at the meat rabbits when I was at the county fair. Might not be a bad investment! I think rabbit tastes even better than chicken, and the skins can be used as well.

    By the way, you are right about the importance of soil organic matter. The soil I make runs about 8% organic matter, lots of compost added. One customer told me that he did an experiment with tomatoes. He bought a 6 pack of seedlings and planted 1 in my soil and the other 5 in another area of his garden where he used conventional gardening methods (tilling each spring, sprays for weeds and bugs, and liberal use of granular fertilizer). He had come to me because he said his soil was “wore out”, which is pretty typical of all our conventional farmland. He said the 1 tomato plant produced more tomatoes than all 5 of the others put together. Organic matter and microbial activity make all the difference in the world.

    This is the fifth year that I have saved seeds from my heirloom tomatoes (which allows me to control for fungus and improve the variety) and I start my own seedlings in potting soil that I make from the worm compost (vermicompost), which I also make from our kitchen food waste. Many people have been complaining about tomato blight in our area again this year. I haven’t had a problem on any of my plants. Even horn worms no longer bother my plants because the plants grow so fast the worms don’t do much damage. I stopped picking off the worms about 3 years ago and noticed that wasps now populate my garden. As soon as the worms appear, the wasps aren’t far behind. The wasps lay their eggs on the worms…end of worms. If I pick off the worms there is no food for the wasps, and no population to control worms. I have found that most permaculture methods are very simple and require little in the way of resources or work on my part. Just eduction. I am able to grow a large amount of fresh food with little or no addition of petrochemicals or other products that required oil. And while our current system is still operating, I am supporting that system by buying goods and services I still need as I transition towards more self supported food production.

    Speaking of energy and supporting the economy, we finally decided to test our 20 year old refrigerator to see how much energy it was using. 1,968 kwh per year. Ouch! So we have decided to replace it with a new model, even though I realize it may require repairs within 10 years. The new model is supposed to use 408 kwh of electricity per year. This amount of energy savings represents about 12% of our home energy use. It is about the amount of electricity we use in a month when we our geothermal system is in heating mode.

    regards,
    Jody

    • Don Stewart says:

      Dear Jody
      Nice to hear from you.

      I agree with most everything you say. Backyard rabbits are quite practical, and are one of the best ways to use kitchen scraps. Put them over a worm bin and you have a super recycling system plus rabbit stew.

      I don’t know exactly what to make of the ‘wooden wheels’ controversy. I was just watching a Lillian Gish movie from 1920. She is a girl from a village in New England, and everyone is riding around in wooden wheeled buggies and such. What is so terrible about that? The story turns on personal tragedies and triumphs, not the supposed awfulness of a horse drawn, wooden wheeled buggy.

      If you look at photos from the third world, it is quite common to see repurposed gasoline or diesel vehicles being pulled by oxen or horses or mules. The first car that my wife and I bought ended its life with the roof cut off, pulled by a draft horse, hauling manure on a New Jersey farm. We let the farmer have it in return for hauling it away.

      I think people are going to have to re-imagine the components of life.

      I wholeheartedly agree about the fertility and disease fighting power of plants. Wasps are also to be prized. Last year I discovered that a cover crop of field peas attracted swarms of wasps. So lots fewer bugs. The key is to gently steer your ecosystem, not fight it.

      The other thing that people don’t understand is that a plant which is strong and defends itself also gives the human eater tons of phytonutrients which we use to fight disease.

      Don Stewart

      • Don,
        I certainly agree with you on the plant phytonutrients and health. I grow many fresh herbs and greens and I find that eaten raw they give me a delightful energetic vitality. Hard to describe until one tries it. Sometimes even the smell of fresh herbs makes me feel good, an inexpensive form of aromatherapy. Rosemary, basil, and mints are my favorites.

        Since I started eating more fresh greens and herbs I’ve noticed that my immune system responds to infectious agents rapidly and effectively. I’ve noticed that when I get a small cut or scratch they heal within a day or two without need for special ointments or bandages. Periodically if I feel like I am “coming down” with a flu, usually after being exposed to people who are hacking and coughing, it usually only takes is a day of bed rest and I’m over it. Most infections just make me feel more tired than usual, slight body aches, and tender glands in my neck. This is when I know my body is fighting something. I get all the extra sleep I can, including a long afternoon nap. I keep telling my husband not to go to work when he feels he’s getting sick, but like most people today, he feels like he’s not sick enough to stay home.

        It’s sad when a store clerk is hacking and coughing while waiting on customers. I know that they would really like to be at home in bed but they don’t have much choice in working when they are sick because they don’t have sick leave benefits and cant afford to take off work. I understand this and see it as another symptom of our unhealthy economic system. If we don’t take care of our immune system we will not be able to fight off disease and we will end up succumbing to other opportunistic bugs invading while his immune system is trying to recover from the original infection. And we spread our germs to others.

        Growing good quality food certainly is one way to improve our health economically, and in the future this will be even more important for our survival.
        cheers,
        Jody

    • stravinsky7 says:

      Hey Jody, do you run a business or is it more neighbor to neighbor? I have family up that way, and we’ve also been making it up to PU for the kids’ spring science activities every year. : )

      My experience with gardening has been atrocious.. I have yet to get to the point of positive returns, although I am improving. For instance, two years ago was my first year, 30% of plants bore fruit/veggies. Last year was crazy drought, and it turns out I overcompensated, overwatered and had associated problems (I didn’t know). This year, I was focusing on getting a certification, and was totally time-constrained. I bought plants, and encouraged my wife to plant them.. She has an interest, philosophically speaking, in gardening. It did not bear fruit irl, it is repetitive, hard, dirty sweaty business, actually speaking (of course).

      Anyways, if you have a business, or know of one local, let me know, I could use help!

      Ryan

      Ryan

      • Ryan,
        I own a business called Soilmaker. We sell compost, compost-amended topsoil, and mulches. You can find our location, hours, and contact information on our website (www.soilmaker.com).
        I’d be happy to answer your questions about gardening. The two previous years, 2011 and 2012, were tough years for gardens due to drought and heat. This year has been great until the last 6 weeks, now we have a mini drought again. The weeds are thriving though. It takes awhile to figure out what to plant, when to plant, and how much to plant. One of my early years I planted the whole package of zucchini. They all germinated and rather than thin such nice plants I moved them apart. One can have too many zucchini plants! Even neighbors asked me not to give them any more veggies.
        regards,
        Jody

        • ravinathan says:

          Jody, I would be interested in seeing your recipe for the compost that you sell. Unless of course it would be revealing trade secrets in which case I would understand.

          • ravinathan,
            Making good quality compost has more to do with the process than a strict recipe. Most recipes are pretty flexible. To make good compost requires experience, an understanding of the organisms that are doing the work, the conditions they need to work best, and the proper type of food substrate for them. The rest is moisture, air flow, and time.

            I would be happy to share the types of materials we use in our recipes, but not the exact proportions. I keep my recipes somewhat proprietary, and they also have to change in proportion based on: C:N ratio of the incoming waste materials, seasonality issues, and what the finished product are going to be.

            We are essentially a yard waste composting facility, so yard waste (leaves, tree branches, garden debris) make up the bulk of our waste stream. We handle all of the yard waste from the City of West Lafayette, the Purdue campus, some landscaping companies and county residents. We also take all the animal bedding from the Purdue Veterinary hospital, horse bedding from several local stables, and an industrial biosolid ( a by product from the manufacture of corn starch). We make three different compost recipes.

            1) leaves, straw, wood shavings, and spent corn. This makes the best amendment for making our blended topsoil.

            2) mixed yard waste and spent corn. We receive yard waste from the city that is picked up from curbside. It contains a mixture of everything home owners collect from their yards (branches, weeds, grass, dead flowers, pumpkins, etc.) Makes a good all-purpose soil amendment or mulch for flower gardens.

            3) horse manure and bedding. Most stable owners use wood shavings for bedding, so the bedding contains lots of manure and wood shavings. Depending on the ratio of manure to wood shavings we may have to add more carbon, i.e. straw. Home owners use this for veggie gardens.

            Jody

            • Scott says:

              Thanks Jody that was very interesting about your compost business. I have got several small piles going in my yard too and a box which helps supplement the garden, but I find myself buying a couple of pickup loads each spring too really helps. Here in Oregon we have a local composter company like you which is great. But it is good to know how to make it on our own if we need to.

              We are locked into this global food supply for now, but the more I grow food at home, it taste better and surely is better for us. With meat, we try to buy the organic or free range chickens, although they are more humane, they just taste better too. Grass feed beef is a bit hard to find but that is better too.

              Best Regards,

              Scott

          • Hi Scott,
            Another way to make more compost at home is to compost weeds. I let a lot of weeds get to be a foot or more tall before I pull them or cut them off so they regrow. I keep them back from the base of my vegetable plants so they don’t compete too much for nutrients and water. But areas off to the side I let weeds kind of take over and periodically pull them for the compost pile. Really builds up some big piles fast.

            How is your garden doing this year? We’ve had such an enormous amount of fruit production this year I can hardly keep up. I think we’ve gotten two to three times the amount of fruit we normally do. This winter we will be enjoying lots of strawberry, rhubarb, and grape jam, peach, pear, and apple sauce/butter, and frozen blue berries. I think I’ve canned over 100 pints and 50 quarts of fruit.
            Regards,
            Jody

            • Scott says:

              Hello Jody, we have had a strange year I think because the bees were late this year, I let my field flower in the late summer which helped them I think but this year some trees had no fruit.

              Here in the Northwest, we had lots of rain this summer (well a few times both time I went camping was my bad luck got the tents wet both times) But most days have been sunny. However, just yesterday we had a storm with Lightning and and inch and a half of rain here, but it is heating up again now this weekend and should finish off the corn etc.

              We have learned that every year is different and you cannot trust what you plant to feed you, you need back up plans. We still buy lots of stuff from the store as most of us do but we would like to do more on our own which is a good goal for all I think.
              Kind Regards to all,

              Scott

        • ravinathan says:

          Jody, thanks for your generosity in posting the components of your commercial compost. You are indeed fortunate in having so many sources of ingredients for compost which should allow you to mingle many kinds of greens and browns for a richer blend I have been dumping the weeds in the chicken yard first in the hope that they will eat the seeds before I rake it up. Does your composting process kill the weed seeds, otherwise I presume your clients will be disappointed?

          • ravinathan,
            Composting is supposed to kill weed seeds, but I haven’t seen a lot of good research on this. More research has been done on parasites or intestinal worms, which can be found in sewage sludge and pose more of a threat to human health. Some of our compost is several years old and the piles will sprout weeds from air born seeds. Once weeds come, seeds follow. When we blend compost with soil, the soil also carries its own seed bank.
            The best recipe for back yard piles is leaves and food scraps. If you have access to horse, sheep, or cow manure that helps the pile heat up and should kill weed seeds.
            regards,
            Jody

  10. timl2k11 says:

    Because of the many things discussed in the articles posted here, I expect the next debate over raising the debt will be the worst yet. Our politicians are realizing we have very little room to work with and that our current level of spending is simply unsustainable. I expect both sides to trench in and not budge quite possibly giving way to a prolonged government shutdown.

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