World Oil Production at 3/31/2014–Where are We Headed?

The standard way to make forecasts of almost anything is to look at recent trends and assume that this trend will continue, at least for the next several years. With world oil production, the trend in oil production looks fairly benign, with the trend slightly upward (Figure 1).

Figure 1. Quarterly crude and condensate oil production, based on EIA data.

Figure 1. Quarterly crude and condensate oil production, based on EIA data.

If we look at the situation more closely, however, we see that we are dealing with an unstable situation. The top ten crude oil producing countries have a variety of problems (Figure 2). Middle Eastern producers are particularly at risk of instability, thanks to the advances of ISIS and the large number of refugees moving from one country to another.

Figure 2. Top ten crude oil and condensate producers during first quarter of 2014, based on EIA data.

Figure 2. Top ten crude oil and condensate producers during first quarter of 2014, based on EIA data.

Relatively low oil prices are part of the problem as well. The cost of producing oil is rising much more rapidly than its selling price, as discussed in my post Beginning of the End? Oil Companies Cut Back on Spending. In fact, the selling price of oil hasn’t really risen since 2011 (Figure 3), because citizens can’t afford higher oil prices with their stagnating wages.

Figure 3. Average weekly oil prices, based on EIA data.

Figure 3. Average weekly oil prices, based on EIA data.

The fact that the selling price of oil remains flat tends to lead to political instability in oil exporters because they cannot collect the taxes required to provide programs needed to pacify their people (food and fuel subsidies, water provided by desalination, jobs programs, etc.) without very high oil prices. Low oil prices also make the plight of oil exporters with declining oil production worse, including Russia, Mexico, and Venezuela.

Many people when looking at future oil supply concern themselves with the amount of reserves (or resources) remaining, or perhaps Energy Return on Energy Invested (EROEI). None of these is really the right limit, however. The limiting factor is how long our current networked economic system can hold together. There are lots of oil reserves left, and the EROEI of Middle Eastern oil is generally quite high (that is, favorable). But instability could still bring the system down. So could popping of the US oil supply bubble through higher interest rates or more stringent lending rules.

The Top Two Crude Oil Producers: Russia and Saudi Arabia

When we look at quarterly crude oil production (including condensate, using EIA data), we see that Russia’s crude oil production tends to be a lot smoother than Saudi Arabia’s (Figure 4). We also see that since the third quarter of 2006, Russia’s crude oil production tends to be higher than Saudi Arabia’s.

Figure 4.  Comparison of quarterly oil production for Russia and Saudi Arabia, based on EIA data.

Figure 4. Comparison of quarterly oil production (crude + condensate) for Russia and Saudi Arabia, based on EIA data.

Both Russia and Saudi Arabia are headed toward problems now. Russia’s Finance Minister has recently announced that its oil production has hit and peak, and is expected to fall, causing financial difficulties. In fact, if we look at monthly EIA data, we see that November 2013 is the highest month of production, and that every month of production since that date has dropped from this level. So far, the drop in oil production has been relatively small, but when an oil exporter is depending on tax revenue from oil to fund government programs, even a small drop in production (without a higher oil price) is a financial problem.

We see in Figure 4 above that Saudi Arabia’s quarterly oil production is quite erratic, compared to oil production of Russia. Part of the reason Saudi Arabia’s oil production is so erratic is that it extends the life of its fields by periodically relaxing (reducing) production from them. It also reacts to oil price changes–if the oil price is too low, as in the latter part of 2008 and in 2009, Saudi oil production drops. The tendency to jerk oil production around gives the illusion that Saudi Arabia has spare production capacity. It is doubtful at this point that it has much true spare capacity. It makes a good story, though, which news media are willing to repeat endlessly.

Saudi Arabia has not been able to raise oil exports for years (Figure 5). It gained a reputation for its oil exports back in the late 1970s and early 1980s, and has been able to rest on its laurels. Its high “proven reserves” (which have never been audited, and are doubted by many) add to the illusion that it can produce any amount it wants.

Figure 5. Comparison of Russian and Saudi Arabian oil exports, based on BP Statistical Review of World Energy 2014 data. Pre-1985 Russian amounts estimated based on Former Soviet Union amounts.

Figure 5. Comparison of Russian and Saudi Arabian oil exports, based on BP Statistical Review of World Energy 2014 data (oil production minus oil consumption). Pre-1985 Russian amounts estimated based on Former Soviet Union amounts.

In 2013, oil exports from Russia were equal to 88% of Saudi Arabian oil exports. The world is very close to being as dependent on Russian oil exports as it is on Saudi Arabian oil exports. Most people don’t realize this relationship.

The current instability of the Middle East has not hit Saudi Arabia yet, but there is increased fighting all around. Saudi Arabia is not immune to the problems of the other countries. According to BBC, there is already a hidden uprising taking place in eastern Saudi Arabia.

US Oil Production is a Bubble of Very Light Oil

The US is the world’s third largest producer of crude and condensate. Recent US crude oil production shows a “spike” in tight oil productions–that is, production using hydraulic fracturing, generally in shale formations (Figure 6).

Figure 6. US crude oil production split between tight oil (from shale formations), Alaska, and all other, based on EIA data. Shale is from  AEO 2014 Early Release Overview.

Figure 6. US crude oil production split between tight oil (from shale formations), Alaska, and all other, based on EIA data. Shale is from AEO 2014 Early Release Overview.

If we look at recent data on a quarterly basis, the trend in production also looks very favorable.

Figure 7. US Crude and condensate production by quarter, based on EIA data.

Figure 7. US Crude and condensate production by quarter, based on EIA data.

The new crude is much lighter than traditional crude. According to the Wall Street Journal, the expected split of US crude is as follows:

Figure 8. Wall Street Journal image illustrating the expected mix of US crude oil.

Figure 8. Wall Street Journal image illustrating the expected mix of US crude oil.

There are many issues with the new “oil” production:

  • The new oil production is so “light” that a portion of it is not what we use to power our cars and trucks. The very light “condensate” portion (similar to natural gas liquids) is especially a problem.
  • Oil refineries are not necessarily set up to handle crude with so much volatile materials mixed in. Such crude tends to explode, if not handled properly.
  • These very light fuels are not very flexible, the way heavier fuels are. With the use of “cracking” facilities, it is possible to make heavy oil into medium oil (for gasoline and diesel). But using very light oil products to make heavier ones is a very expensive operation, requiring “gas-to-liquid” plants.
  • Because of the rising production of very light products, the price of condensate has fallen in the last three years. If more tight oil production takes place, available prices for condensate are likely to drop even further. Because of this, it may make sense to export the “condensate” portion of tight oil to other parts of the world where prices are likely to be higher. Otherwise, it will be hard to keep the combined sales price of tight oil (crude oil + condensate) high enough to encourage more tight oil production.

The other issue with “tight oil” production (that is, production from shale formations) is that its production seems to be a “bubble.”  The big increase in oil production (Figure 6) came since 2009 when oil prices were high and interest rates were very low. Cash flow from these operations tends to be negative. If interest rates should rise, or if oil prices should fall, the system is likely to hit a limit. Another potential problem is oil companies hitting borrowing limits, so that they cannot add more wells.

Without US oil production, world crude oil production would have been on a plateau since 2005.

Figure 9. World crude and condensate, excluding US  production, based on EIA data.

Figure 9. World crude and condensate, excluding US production, based on EIA data.

Canadian Oil Production

The other recent success story with respect to oil production is Canada, the world’s fifth largest producer of crude and condensate. Thanks to the oil sands, Canadian oil production has more than doubled since the beginning of 1994 (Figure 10).

Figure 10. Canadian quarterly crude oil (and condensate) production based on EIA data.

Figure 10. Canadian quarterly crude oil (and condensate) production based on EIA data.

Of course, there are environmental issues with respect to both oil from the oil sands and US tight oil. When we get to the “bottom of the barrel,” we end up with the less environmentally desirable types of oil. This is part of our current problem, and one reason why we are reaching limits.

Oil Production in China, Iraq, and Iran

In the first quarter of 2014, China was the fourth largest producer of crude oil. Iraq was sixth, and Iran was seventh (based on Figure 2 above). Let’s first look at the oil production of China and Iran.

Figure 11. China and Iran crude and condensate production by quarter based on EIA data.

Figure 11. China and Iran crude and condensate production by quarter based on EIA data.

As of 2010, Iran was the fourth largest producer of crude oil in the world. Iran has had so many sanctions against it that it is hard to figure out a base period, prior to sanctions. If we compare Iran’s first quarter 2014 oil production to its most recent high production in the second quarter of 2010, oil production is now down about 870,000 barrels a day. If sanctions are removed and warfare does not become too much of a problem, oil production could theoretically rise by about this amount.

China has relatively more stable oil production than Iran. One concern now is that China’s oil production is no longer rising very much. Oil production for the fourth quarter of 2013 is approximately tied with oil production for the fourth quarter of 2012. The most recent quarter of oil production is down a bit. It is not clear whether China will be able to maintain its current level of production, which is the reason I mention the possibility of a decline in oil production in Figure 2.

The lack of growth in China’s oil supplies may be behind its recent belligerence in dealing with Viet Nam and Japan. It is not only exporters that become disturbed when oil supplies are not to their liking. Oil importers also become disturbed, because oil supplies are vital to the economy of all nations.

Now let’s add Iraq to the oil production chart for Iran and China.

Figure 12. Quarterly crude oil and condensate production for Iran, China, and Iraq, based on EIA data.

Figure 12. Quarterly crude oil and condensate production for Iran, China, and Iraq, based on EIA data.

Thanks to improvements in oil production in Iraq, and sanctions against Iran, oil production for Iraq slightly exceeds that of Iran in the first quarter of 2014. However, given Iraq’s past instability in oil production, and its current problems with ISIS and with Kurdistan, it is hard to expect that Iraq will be a reliable oil producer in the future. In theory Iraq’s oil production can rise a few million barrels a day over the next 10 or 20 years, but we can hardly count on it.

The Oil Price Problem that Adds to Instability

Figure 13 shows my view of the mismatch between (1) the price oil producers need to extract their oil and (2) the price consumers can afford. The cost of extraction (broadly defined including taxes required by governments) keeps rising while “ability to pay” has remained flat since 2007. The inability of consumers to pay high prices for oil (because wages are not rising very much) explains why oil prices have remained relatively flat in Figure 3 (near the top of this post), even while there is fighting in the Middle East.

Figure 3. Comparison of oil price per barrel needed (Brent) with ability to pay. Amounts based on judgement of author.

Figure 13. Comparison of oil price per barrel needed by producers (Brent) with ability to pay. Amounts based on judgment of author.

When the selling price is lower than the full cost of production (including the cost of investing in new wells and paying dividends to shareholders), the tendency is to reduce production, one way or another. This reduction can be voluntarily, in the form of a publicly traded company buying back stock or selling off acreage.

Alternatively, the cutback can be involuntary, indirectly caused by political instability. This happens because oil production is typically heavily taxed in oil exporting nations. If the oil price remains too low, taxes collected tend to be too low, making it impossible to fund programs such as food and fuel subsidies, desalination plants, and jobs programs. Without adequate programs, there tend to be uprisings and civil disorder.

If a person looks closely at Figure 13, it is clear that in 2014, we are out in “Wile E. Coyote Territory.” The broadly defined cost of oil extraction (including required taxes by exporters) now exceeds the ability of consumers to pay for oil. As a result, oil prices barely spike at all, even when there are major Middle Eastern disruptions (Figure 3, above).

The reason why Wile E. Coyote situation can take place at all is because it takes a while for the mismatch between costs and prices to work its way through the system. Independent oil companies can decide to sell off acreage and buy back shares of stock but it takes a while for these actions to actually take place. Furthermore, the mismatch between needed oil prices and charged oil prices tends to get worse over time for oil exporters. This lays the groundwork for increasing dissent within these countries.

With oil prices remaining relatively flat, importers become complacent because they don’t understand what is happening.  It looks like we have no problem when, in fact, there really is a fairly big problem, lurking behind the scenes.

To make matters worse, it is becoming more and more difficult to continue Quantitative Easing, a program that tends to hold down longer-term interest rates. The expectation is that the program will be discontinued by October 2014. The reason why the price of oil has stayed as high as it has in the last several years is because of the effects of quantitative easing and ultra low interest rates. If it weren’t for these, oil prices would fall, because consumers would need to pay much more for goods bought on credit, leaving less for the purchase of oil products. See my recent post, The Connection Between Oil Prices, Debt Levels, and Interest Rates.

Figure 4. Big credit related drop in oil prices that occurred in late 2008 is now being mitigated by Quantitative Easing and very low interest rates.

Figure 14. Big credit related drop in oil prices that occurred in late 2008 is now being mitigated by Quantitative Easing and very low interest rates.

Because of the expectation that Quantitative Easing will end by October 2014 and the pressure to tighten credit conditions, my expectation is that the affordable price of oil will start dropping in late 2014, as shown in Figure 13. The growing disparity between what consumers can afford and what producers need tends to make the Wile E. Coyote overshoot condition even worse. It is likely to lead to more problems with instability in the Middle East, and a collapse of the US oil production bubble.

Conclusion

I explained earlier that we live in a networked economy, and this fact changes the way economic models work. Many people have developed models of future oil production assuming that the appropriate model is a “bell curve,” based on oil depletion rates and the inability to geologically extract more oil. Unfortunately, this isn’t the right model.

The situation is far more complex than simple geological decline models assume. There are multiple limits involved–prices needed by oil producers, prices affordable by oil importers, and prices for other products, such as water and food. Interest rates are also important. There are time lags involved between the time the Wile E. Coyote situation begins, and the actions to fix this mismatch takes place. It is this time lag that tends to make drop-offs very steep.

The fact that we are dealing with political instability means that multiple fuels are likely to be affected at once. Clearly natural gas exports from the Middle East will be affected at the same time as oil exports. Many other spillover effects are likely to happen as well. US businesses without oil will need to cut back on operations. This will lead to job layoffs and reduced electricity use. With lower electricity demand, prices for electricity as well as for coal and natural gas will tend to drop. Electricity companies will increasingly face bankruptcy, and fuel suppliers will reduce operations.

Thus, we cannot expect decline to follow a bell curve. The real model of future energy consumption crosses many disciplines at once, making the situation difficult to model.  The Reserves / Current Production model gives a vastly too high indication of future production, for a variety of reasons–rising cost of extraction because of diminishing returns, need for high prices and taxes to support the operations of exporters, and failure to consider interest rates.

The Energy Return on Energy Invested model looks at a narrowly defined ratio–usable energy acquired at the “well-head,” compared to energy expended at the “well-head” disregarding many things–including taxes, labor costs, cost of borrowing money, and required dividends to stockholders to keep the system going. All of these other items also represent an allocation of available energy. A multiplier can theoretically adjust for all of these needs, but this multiplier tends to change over time, and it tends to differ from energy source to energy source.

The EROEI ratio is probably adequate for comparing two “like products”–say tight oil produced in North Dakota vs tight oil produced in Texas, or a ten year change in North Dakota energy ratios, but it doesn’t work well when comparing dissimilar types of energy. In particular, the model tends to be very misleading when comparing an energy source that requires subsidies to an energy source that puts off huge tax revenue to support local governments.

When there are multiple limits that are being encountered, it is the financial system that brings all of the limits together. Furthermore, it is governments that are at risk of failing, if enough surplus energy is not produced. It is very difficult to build models that cross academic areas, so we tend to find models that reflect “silo” thinking of one particular academic specialty. These models can offer some insight, but it is easy to assume that they have more predictive value than they do.

Unfortunately, the limits we are reaching seem to be financial and political in nature. If these are the real limits, we seem to be not far away from the simultaneous drop in the production of many energy products. This type of limit gives a much steeper drop off than the frequently quoted symmetric “bell curve of oil production.” The shape of the drop off corresponds to (1) the type of drop off experienced by previous civilizations when they collapsed, (2) the type of drop-off I have forecast for world energy consumption, and (3) Ugo Bardi’s Seneca cliff.  The 1972 book Limits to Growth by Donella Meadows et al. says (page 125), “The behavior mode of of the system shown in figure 35 is clearly that of overshoot and collapse,” so it tends to come to the same conclusion as well.

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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861 Responses to World Oil Production at 3/31/2014–Where are We Headed?

  1. Pingback: Interview with Ron Patterson: Peak Oil | Doomstead Diner

  2. indigoboy says:

    ~ A request for like minded individuals.
    Whilst we may disagree on the minutia of this dilemma ahead of us, I believe most commenter’s here ‘get it’. What has troubled me most, is that I can’t seem to get friends and family engaged or even willing to discuss this predicament we all face. I have also joined my most local Transition Town Initiative, only to find that their main concern appears to be a children’s clothes swap event , and recipes for lentil soup.
    I fear I am making no progress in the things that matter, or *will* matter.
    I live in the UK, in Lancashire, and that is as far as I need to go right now. If there are others in the UK who are similarly troubled by their lack of planning progress, I would like to hear from you. I would like to organise and meet up with a group of like minded individuals in the UK to create a kind of alliance or ‘League of Survivors’, for the want of a better phrase. The object of such a group and meet up, would be to develop a sort of ‘First 90 days plan’, specifically for our UK situation ?
    If you feel you understand what I mean, and would like to add your thoughts, skills and energy to such a group, you can contact me at indigoboy (at) hotmail (.) co (.) uk
    I am looking for a critical number of four individuals or better. We need to up our game, planning and expectations surely? I very much look forward to your response.

    indigoboy 30 : 7 : 14

    • Jan Steinman says:

      “develop a sort of ‘First 90 days plan’”

      Beware the “boiling frog syndrome.” This is a process, not an event — at least in time scales humans are used to.

      When do you start your “first 90 days?” When gas hits $5/gallon? The next time the stock market hiccups? August 2008? Oil embargo of the 70s?

      I find plans based on events to be flawed to irrelevance in a world filled with “unknown unknowns.”

      Day by day, do something toward you future. We don’t need a “90 days plan.” We need a “rest of your life plan.”

      • indigoboy says:

        The 90 day plan would be discussed and formulated further by the group in question. But the ’90 days plan’ is something that would be triggered to begin when it becomes obvious that the next 90 days will be *nothing like* the last 90 days. That’s as far as I can go to explain.

        • Don Stewart says:

          Dear Indigoboy
          At the risk of sounding like a broken record, I would like to recommend that you take a look at Kelly McGonagal’s book The Willpower Instinct. On page 66 she addresses the issue of ‘Training the Willpower Muscle’. You can read it yourself, but I would summarize it by saying that one must begin with small, clearly defined steps and then expand into more ambitious projects over time. For example, experiments have shown that practicing not using the F word or saying ‘yes’ instead of ‘yeah’, or using one’s non dominant hand, can significantly increase willpower in unrelated areas.

          ‘The important muscle action being trained in all these studies isn’t the specific willpower challenge of meeting deadlines, using your left hand to open doors, or keeping the F word to yourself. It’s the habit of noticing what you are about to do, and choosing to do the more difficult thing instead of the easiest. Through each of these willpower exercises, the brain gets used to pausing before acting. The triviality of the assignments may even help this process. The tasks are challenging, but they’re not overwhelming. And while the self-restraints require careful attention, they’re unlikely to trigger strong feelings of deprivation.’

          Let’s suppose that you form a group and adopt some goal which makes sense today and makes sense in any collapse scenario. For example, eating out of one’s pantry rather than out of a grocery store. Then one begins to master the individual skills and thought processes involved in doing that. It’s relatively easy to keep a pantry that will last for a week. More complicated as the time grows longer. Perhaps you aim for one year, eventually. Let’s say, a garden with saved seeds plus a one-year pantry. To do that in one step might very well be daunting. Taken in steps, with a clearly understood goal of surviving a supply chain collapse, may make a lot of sense.

          You could apply the same sort of procedure in other areas, such as water, sanitation, home heating, food preparation, etc.

          I think it is a mistake to think that any amount of thinking and planning for a supply chain collapse can replace actually doing something, beginning now. We need to exercise the muscles.

          Just thoughts…Don Stewart

          • Jan Steinman says:

            “experiments have shown that practicing not using the F word or saying ‘yes’ instead of ‘yeah’, or using one’s non dominant hand, can significantly increase willpower in unrelated areas.”

            What a “win-win!”

            My personal favorite is to always look someone in the eye, smile, and say “You’re welcome!” Whenever someone expresses thanks. That started after someone noted to me (a new Canadian) that Canadians reply to thanks in this way, whereas Americans are more likely to not look at you while mumbling “Uh-huh.”

            And then there’s chocolate. Sometimes, will power just doesn’t seem all that important. 🙂

        • xabier says:

          Indigo

          It’s the women who control households in the UK, no doubt about it: try working through the Womens’ Institute network to raise awareness of supply-chain threats and economic reality.

      • Creedon says:

        Jan, your advice that your decisions need to be for the rest of one’s life is great. I base my decisions on whether to make a change on whether I can continue it indefinitely. Each decision in our lives needs to be incremental and based on the views expressed in this blog. I also believe that the future collapse will have to happen in stages. I can not see past about 2030. According to surplus economics this is about the point that EROI is too low to sustain the current civilazition.

        • I am doubtful that EROI can tell us much about the sustainability of civilization. Sustainability is determined by ability to the maintain supply chains and by ability to keep up drilling without too much fighting. Also by when governments collapse.

          From what I understand of the EROI discussion is that somehow, EROI analysis suggests that countries like Uganda and Sudan do not need as high an EROI as the the United States and Great Britain to keep up their civilizations since they don’t have many paved roads or pipelines to repair. ( I am not even sure that this really true.) The discussion means that countries can afford higher priced oil than other countries. For example, China and India could keep their economies operating during the last recession, and we in the US, Europe, and Japan could not. But I think that this really reflected the fact that China and India ran their economies on coal rather than oil.

          But if oil prices drop too low, and supply chains are broken, collapse could come in a very different way.

      • The big event coming is loss of jobs. People tend not to plan around such events.

        • Creedon says:

          I agree that the big event coming is the loss of jobs, and probably stock market collapse, and devastation of the corporate world. I am currently putting this not later than 2017 to 2018 because at about that time the fracking bubble should pop or will be popping. The popping of the fracking bubble will involve both debt and depletion. It seems to me that these problems are unavoidable.

          • Creedon says:

            Tim Morgan talks a lot about surplus energy economics and although I find it of value I agree that it is an over simplification of our world situation.

          • edpell says:

            When the frack bubble bursts the electric system goes down. Without electric homes can not run their well pumps, refrigerators, furnaces. No water, no sanitation, not fresh food, no heat.

            • Jan Steinman says:

              “When the frack bubble bursts the electric system goes down.”

              Everywhere? Why?

              Won’t that really only impact natgas-fired electricity, which is mostly peaking load, anyway? Won’t the big coal plants and the big hydro dams keep stumbling on, perhaps with outages?

              In Gaza, people are currently living on three hours of electricity a day. Or are they so superior to industrialized westerners, who will simply “pull the plug” rather than get by with less?

              The west coast, in particular, is hydro-rich, and the inter-mountain intertie could be taken down, to isolate that region from the rest of North America. The Pacific DC Intertie could be taken down as well, to isolate the hydro-rich PNW from energy-sucking California.

              While it is true that “everything is interconnected,” I think people underestimate the ability we still have to disconnect and isolate. Even the Roman Empire did that (splitting into east and west) as it declined.

            • Don Stewart says:

              Jan
              I think that the critical assumption Gail and many others make is that the financial system cannot shrink and survive, and secondly that if the financial system goes down, everything else goes down. Thirdly, that everything around the world is now connected and so interdependent that nothing can function standing alone.

              I would sum that view up as ‘World War II couldn’t happen today’. In that war, the world split into at least 3 or maybe 4 segments. There was the Axis dominated Europe. There was the Japanese dominated Far East. There was the engaged part of the world fighting the Axis and Japan (England and Empire, US, etc.). The fourth part might be considered the ‘unengaged’,, for example South America. But the fourth part and the third part continued to e connected by trade..

              Don Stewart

            • Paul says:

              All it takes is one part to break and the entire grid goes down… or an entire hydro plant stops producing electricity.

              I think we could stumble on for a short period of time but these are massive systems — I can imagine things are breaking and being replaced frequently.

    • Paul says:

      Perhaps check if there are any permaculture communities in your area — I think anyone involved in that would be receptive to the ideas discussed here

    • antares71 says:

      Hey indigoboy,

      I share your frustration. I myself have been subject of mocking i the past for bringing to the table conversations about oil-peak, self-reliance, sustainability and the building of a new resilient and fair society. I also find hard to meet like-minded people to even discuss (don’t actually pretend to embark in some projects) on these subjects to exchange ideas.
      If I lived in the UK I would certainly contact you. I resolved to a piece of mind to go solo with my projects, not to preach but to share my life-style in the hope of inspiring others and soliciting their curiosity. I take any opportunity to remind my colleagues, who whine about not getting any pay-rise while prices keep rising, that I regularly got more cash in by buying back more and more of my mortgage. I am always willing to give out a sample of the beer I brew or the fruit wine I make and challenge them to try. Basically preaching by example not by words.
      Maybe on my path I will finally meet other like-minded people but until I live in the city I doubt that.
      Perhaps you would be interested to hear what Dmitry Orlov has to say about that, higly recommended: https://www.youtube.com/watch?v=wCmgEN-F-gc
      Wish you all the luck man!

      • Jan Steinman says:

        “preaching by example not by words… Maybe on my path I will finally meet other like-minded people but until I live in the city I doubt that.”

        I’ve been working like that for eight years! And yet, I continue to try.

        I think things are not yet bad enough for people to give up nearly any perceived convenience. But I think there will soon arise a return of the ethic of frugality and thrift, and at that time, those who “preach by example” might have an easier time of it.

        Those in their 80s still remember when things like thrift and frugality were considered virtues, when people would compete with each other based upon how little they needed, rather than on how much they can consume.

        • Creedon says:

          We’re all frogs in a pot. The water is getting warmer. What is the thermometer showing today.

        • Paul says:

          I was visiting a wise 80+ year old uncle the other day and were discussing our diseased society that feeds itself using unlabelled GMO and hormoned meat…

          He was telling me how when he was young they had no electricity and lived very frugally raising most of their own food

          Amazing how in just a few generations we have separated completely from a frugal, much more self-sufficient lifestyles.

          Perhaps once the pressure of the Mad Men to consume and impress is removed, the people that survive will embrace the old ways and find meaning to their lives that as I see it (and the amount of antidepressants supports this) does not exist.

          I shop therefore I am is bullshit.

    • dashui says:

      indigoboy,
      u need to approach tribe building indirectly.
      join or make a group that has some sort of appeal to u.
      in UK bushcraft is well developed pastime. u should try looking there for like minded people.

    • kesar says:

      You can read “Utopian Dreams. In Search of a Good Life” from Tobias Jones. The book describes utopian communities all around Europe (a few in UK). And although they are not based on LTG ideas, they try to build new type of local societies and relationships with more or less resilience and self-reliance. I bet you will find some people there, who are aware of our current state and comming consequences.

  3. Paul says:

    Japan’s industrial output is collapsing… http://www.cnbc.com/id/101877369

    So many potential fire storms out there — a pin is approaching China’s property bubble — the stitches are starting to fray on Japan’s economy… Europe sinks into deflation … the US continues to fester (and lie)…

    Who wants to be first to blow to pieces?

    • CTG says:

      Paul, have you downloaded this from Korowicz? http://www.davidkorowicz.com/publications/view_document/8-catastrophic-shocks-in-complex-socio-economic-systems-a-pandemic-perspective

      We actually had a near miss in 2003 when SARS outbreak happened. I was in my home country Malaysia and we have a few people in my area die of SARS. We were “not so” interconnected in 2003 as still have some local industry. By 2007, due to “cheap labour” in China, most of our basic industries have move there or just vanished. As of today, even our food (fresh vegetables and meat) were imported from Vietnam and China.

      If SARS went to a pandemic mode, then the supply chain issue will come in again. In hindsight, I realized in 2010 that we had a near miss. Those in contact with a lot of customers like shopkeepers, supermarket workers and hotel staff are quite reluctant to work as they may get the virus.

      The virus mortality rate or infection rate went up and if everyone has this thought, then the whole society will freeze in its tracks. The truck drivers are not keen to work and go absent. The shops are closed and probably broken into and ransacked. Hospitals will overflow with patient. Just the scare is enough to cause empty shelves and a broken supply chain.

      If the present Ebola were to go airborne and with its mortality rate, then we have a serious problem with the supply chain. Just imagine if 10% of the workers in a plant plant succumbed to the virus, the other 90% refuse to work, then our grid will be gone. For our modern society, no electricity means no civilization. So, the virus may not actually kill humanity but the scare and the effects of globalization and long supply chain will.

      We are way overdue for a pandemic. My belief is the humanity should mirror the forest. Small forest fires will trim the bushes and grass. If you keep on dousing the small flame, the brush and grass will go tall and dense. When drought comes and a fire strikes, it will be a total burnout! (remember 1988 Yellowstone)

      • Stefeun says:

        CTG,
        your image of the forest and bush-fires seems to suit to the debt. If not “cut” on a regular basis, it becomes “tall and dense” and likely cause “a total burnout”.
        I also share your point of view reg. supply-chains and contagion (in both meanings of the latter).

        • Paul says:

          Thanks CTG – yes I’ve pulled down this and some other research for the Korowitz site… he does some very good work

      • Paul says:

        I was living in Hong Kong when this hit — the city was indeed paralyzed and panic was in the air with each days death announcements — the property market crashed — restaurants and hotels were getting crushed as was the airline industry… if this would have worsened or continued much longer or spread much wider — this certainly could have tipped over the global economy.

        Complexity and interconnectivity = fragility.

        • James says:

          I was vacationing in Thailand at the time and it was great. Rooms at nice resorts were half-price, only a few die-hard Germans with their hearty topless fraus were basking on the beaches. I’m not sure I would try to vacation in Liberia or Nigeria now, although there may be great deals to be had. It is called disaster vacationism, don’t let a good plague keep you home.

          • Paul says:

            I once met a fellow on Manado — a dive island near Sulawesi – he was a pipe fitter from Alberta — over a beer he was telling us that he gets a lot of time off and he generally looks for places that had experienced recent strife — primarily because hotels had very low rates…

            Want to get rich?

            Buy the url http://www.strifetravel.com … and off you go… I am sure the big boys like Expedia would be lined up to buy you out in no time!

  4. Paul says:

    I refuse to visit America — but I do often wonder how the man on the street (as in living on the street under a bridge eating dog food from a can warmed over plastic shopping bags) feels about this: http://www.zerohedge.com/news/2014-07-30/president-obama-explain-how-inventory-stuffing-good-all-us-live-feed

    Does someone without a job or any prospects of finding one – or one of those who holds down a minimum wage part time job — do they actually believe this — or do they look at this stuff and see it for what it is — a big fat lie?

    http://www.zerohedge.com/news/2014-07-30/president-obama-explain-how-inventory-stuffing-good-all-us-live-feed

  5. Don Stewart says:

    Dear Robin and All

    Relative to the issue of psychological determinism and Kelly McGonagle’s book on Willpower.

    I recommend reading her chapter titled Too Tired to Resist. The chapter is a review of a decades long journey by psychologists and behavioral economists to understand the phenomenon of ‘willpower depletion’.

    Briefly, studies show that using willpower to, for example, refuse a fat and sugar dessert makes one MORE likely to cheat on one’s spouse. There are hundreds or thousands of these studies. It is like willpower is a bucket of water, and every dipper you take out leaves less for future use.

    One of Roy Baumeister’s students in Florida found that low resistance to temptation was correlated with low blood sugar. Giving people sweet lemonade restored their ability to resist temptation.

    But Robert Kurzban, a psychologist in Pennsylvania, calculated that the actual amount of glucose which was needed to fuel the brain to resist temptation was actually very small. If you still have enough energy to walk, you have plenty to resist temptation. (And, of course, drinking the sweet lemonade is giving you far more calories than you are burning with all that self-control. Collateral damage.)

    A psychologist and a behavioral economist in South Dakota proposed that the brain is relying on the DIRECTION OF CHANGE of blood sugar, rather than the absolute level of blood sugar. From an evolutionary standpoint, if our blood sugar was declining, it probably meant that food was scarce and we needed to get more aggressive and take more chances. This theory fit the data.

    Of course, in the modern world, the chance that any Americans will actually run out of blood sugar is vanishingly small. So the behavior which made sense in hunter-gatherer times no longer makes sense.

    While all this was going on, the Endurance Athletes were figuring out how to resist the temptation to stop running or bicycling or swimming because we believed ourselves ‘exhausted’. ‘Exhaustion’ is more in the mind than in the blood sugar.

    The conclusion is:
    ‘What does this have to do with college students cramming their heads with knowledge and their mouths with junk food? Or with dieters cheating on their spouses, and office workers losing their focus? Some scientists now believe that the limits of self-control are just like the physical limits of the body—we often feel depleted before we actually are. In part, we can thank a brain motivated to conserve energy. Just as the brain may tell the body’s muscles to slow down when it fears physical exhaustion, the brain may put the brakes on it’s own energy expensive exercise of the prefrontal cortex. This doesn’t mean we’re out of willpower; we just need to muster up the motivation to use it.

    Our beliefs about what we are capable of may determine whether we give up or soldier on.’

    I submit:
    *If you think the future may be different, and a lot less tolerant of error, than the present, then you may be rewarded for paying attention.
    *What is true for the average is not necessarily true for the informed who have practiced. Darwinian selection may operate.

    Don Stewart

    • antares71 says:

      Hey Don Stewart, this phrase you reported is closer to what actually happens “…Some scientists now believe that the limits of self-control are just like the physical limits of the body…”. This is spot-on!
      The fact is that will power is subject to exhaustion as it is a muscle if you continually use it. However, after resting and re-building itself the muscle can perform again if not better. We can resist temptation but we can’t over use it or else we are left without barrier and we indulge in what we wanted to refrain from.
      I experience it myself when I pass by a bookshop. Most of the time I manage to refrain buying book on the thousand of subjects I am interested (especially classic literature and history would empty my account) but then a day I happens to see the book I need to make progress in one of my many pursues (mainly carpentry) and feel feed-up to hold back and buy it! That day comes after previous days of having overused my will power to resists other spending sprees.

  6. Pingback: Comment on World Oil Production at 3/31/2014–Where are We Headed? by Creedon | NOFrack.co

  7. Creedon says:

    I am of the belief that the collapse talked about on this blog will happen in stages. John Michael Greer teaches this. I am going to guess that there will be two stages of collapse between now and 2030. The next stage should happen in the next few years. For there to be a stage of collapse there has to be a weak link in the system that gives out. Having just reviewed the Wall street angle on this, they view their position as rather strong right now; profits are rather good. I do not personally see interests rates going up. It would ruin the current system and they would have to move to a new system. I would say that the weakest link going forward may be the fracking bubble, but that, that bubble will likely take a few years to play out.

    • Stages this time around are likely to be different from in the past. Losing grid electricity would be a big step down. Losing very much oil would mean losing very many jobs, and that combination would by itself would have a lot of bad repercussions. Governments may fail. It is not clear the financial system could stay together.

    • B9K9 says:

      Jim Quinn has always been on top of what’s goin’ down. Unfortunately, at least for him, he shares some of the same sentimentality as Paul and other sensitive idealists.

      Seriously, folks, read Zinn, Bastiat, Bourne, GBS, Mencken, et al to get a clue! There has never been an age, at ANY TIME in history (including the ancient fantasy Greek “democracy” which existed on the backs of a huge slave population), when there wasn’t a savage fight for survival, control & power.

      That myths were invented to provide a semblance of cover, and grant both perpetrators and followers with a sense of heroic self-righteousness, is no excuse for anyone possessing even a limited intellect to not understand the truth of the matter.

      It’s all a mirage, and has always been a grand illusion. Sh!t, not one of us is even supposed to be here in the first place! If h sapiens hadn’t stumbled across 200m years of stored solar radiation 200 years ago, all of our ancestors would have died off from one thing or another. This would have been necessary in order to keep the global population between 500m-1b wretched souls leading lives solitary, poor, nasty, brutish, and short.

      But no, we got lucky and caught a break. The net result? A sense of entitlement, a belief that the world we exist in is “true”, a feeling that we can judge others according to some social ideals invented solely to keep human livestock at bay and prevent the masses from threatening those feasting at the top of the pyramid – of their own construction.

      I know it’s hard to come to grips that there is no meaning, no justice, that there’s “no there, there”. Seriously, though, you need to buck up and take it like a man.

      • Stefeun says:

        History is a tale that is told by the winners. Who are the winners? Sanguinary warriors, mad kings and greedy traitors. (not always easy for historians to find out what really happened)
        Another one, for fun: Man is to History what pig is to sausage.

        • xabier says:

          Stefeun

          Pigs are much smarter than men: they know when they are about to get the chop, and always resist……

      • Paul says:

        Yes we are a vile species — but if everyone simply said ‘it is what it is’ — would we be on this forum discussing this?

        Or would we be in chains in a dungeon — or cowering under the weight of a totalitarian nightmare?

        Many fought and died to get some of us the freedoms we have enjoyed.

        These freedoms are not ‘mirages’ – they are real.

    • John Doyle says:

      This link is quite informative in that it helps to see just where the collapses will occur most severely. It’s still impossible to tell what and when the trigger will be, but if it’s financial it will probably have to be from the USA trying on a debt jubilee. But any of the six or seven most populous countries will have the biggest problems IMO.
      If shipping gets strangled then even remote countries will be in trouble as oil supplies require shipping. Australia is for example on target to have no oil supplies of its own by 2020 and so will become stranded. Even the best safe havens like New Zealand will not avoid suffering.
      Places like Nigeria have oil but if they get into trouble for other reasons their oil might have to stay in the ground.
      Australia could switch to coal, but most coal fired engines are only museum pieces today. Generating electricity might carry on but not transport, not to mention all the myriad uses of petroleum. Also if we say restrict petrol consumption to essential services, but the other petroleum fractions are needed, we will have a glut of petrol. This happened when in 1974 governments tried to restrict private motoring and then wondered what to do with all the unused petrol still in production as part of the oil supplies to industry etc.
      Strangling shipping will at least stop a lot of mass migrations which are sure to occur when any country’s population starts to starve.
      There will lots of skirmishes over invasions of starving people.

      • CTG says:

        John, the world in 1940s is very different from the 1980s, 2000s and 2014. We are so connected now. Nothing is made locally. I work in a factory and I am there to see that parts for our machines comes from every corner of the world.

        I am happy to see new names in Gail’s blog and for the old timers like Xabier, Paul, Jan, et al know that I stress a lot on the supply chain and we have talked much about it in other older posts. I will repeat this for the newer folks. Supply chain is the one that will bring down the entire modern civilization quickly and brutally.

        Your electronic part in the PV (the electronics in the inverter) will contain semiconductor chips from China, relays from Japan and specialized parts from US, UK or any other places. The high performance bearings or nut/bolts in the wind turbine (it does not matter if it is a big or small one) may contain some % of vanadium or other special alloys. Probably they are made in Japan. So, where are you going get them if world trade collapses? When financial institution collapses, the source of vanadium will be in peril (probably from Africa or somewhere where you need letter of credit to do business). So, there goes your vanadium, the nuts/bolts and financially, the turbine. Just because of a nut/bolt that is made on the other side of the world.

        Talk about food supply chain and “just in time” delivery, fertilizers are probably not stockpiled (if it is still available) and refinery has to function in order to get the raw material for fertilizer. There are hundreds of thousands of valves, levers,pipes, instruments in the refinery and fertilizer plants that made be made by companies situated all over the world. How about the water pumps and its parts, the trucks that delivers the food, the internet that supports the invoicing and order. Supermarkets do not keep stock anymore. It is usually delivered on a daily basis. If it miss one shipment, the shelves will be empty. How about the fuel pump, the grid, transportation (planes, trucks, etc). There are practically millions of parts that is interdependent. Pray tell me how those are going to function when the collapse begin.

        All it needs is the repeat of 2008 where trust between banks evaporate. No letter of credits issued, no parts delivered and the dominos will fall rapidly. I was in the center of this storm when my factory nearly went belly up. Suppliers did not accept our letter of credit (or trust out banks) and customers cannot pay us. If the central bankers did not come in and print money, we will probably be gone in 1-2 weeks.

        In the 1970s, information travels slowly and the globalization is not present. A tsunami in Tokyo will not affect India and a German default will hardly impact New Zealand. So, you have pockets of collapse. Now, Australian banks are bankrolling a Swiss firm who is doing mining in Mongolia with additional credit from Japanese and UK banks. They are hoping their gigantic machines from US and China will arrive in time via shipping companies that are controlled by Greeks who in turn are owning money to banks from Netherlands , which at the same time are also loaning deposits obtained from India to make the machines that helps to mine Mongolian ore (the ore will be exported to France to make cars destined for South Africa)! See the links ?? One broken link will cause the chain to collapse.

        • Interguru says:

          Beautifully said.

        • Paul says:

          An excellent summary

          For anyone who has not seen this — I suggest reading from p. 59 to understand what happens when things unravel: http://www.feasta.org/wp-content/uploads/2012/06/Trade-Off1.pdf

        • xabier says:

          CTG

          Good sense always worth repeating.

        • John Doyle says:

          CTG, Thanks for replying. Actually I am well aware that we are inextricably networked. And that it is getting denser every day. However examples you mention show we can always be surprised at just how intricate is the complexity.
          What you and I seem to agree on is the banking industry will likely be the big trigger sending a collapse tsunami throughout the world. It is, though, our “best” option, because if we carry on BaU for say another generation the planet’s reserves will be so depleted our future post collapse environment will be stone age stuff.
          I guess I was saying that a country like Madagascar [Tom Friedman in yesterday’s NYT] will fail earlier than some other countries without disrupting enough of the network to be systemic. This list of failed countries is getting longer by the day. Egypt cannot feed itself now, and the turmoil in the Middle East is as much about food as politics. The Arab Spring was partly triggered by food troubles.
          There is going to not be an all at once collapse IMO. If the banking system fails first, and it is an excellent candidate, the rest will follow quickly. Even mass migration will be stymied as the distances are long for the most vulnerable populations and shipping would dry up.
          We here in Aus are about to exhaust our last in ground oil supplies. By 2020 we will be 100% reliant on imported oil. and we are also closing down refining capacity. This is very clever [not]
          policy.
          We really need the pollies, the 1%, the poor, to become aware we are living on borrowed time!

          • CTG says:

            The collapse of advanced economies will be swift and devastating. Long supply chains and too many people depending on imported food. The collapse of advanced economies will also bring down developing economies (think of the factories and sweatshop that will be closed down) soon.

            • Paul says:

              Agree. I cannot see how —once this starts to unravel — it can be anything but fast. The minute banks again do not trust their counter-parties — and they also do not have faith in the central banks ability to back stop the system (and why would they have faith – central banks are throwing everything at this now and they are failing) — this blows sky high.

              It might take a few days or even weeks — as the markets await the central banks response — but when they realize the game is up — that the gun barrels have been melted down — the troops will pour onto the streets — the global economy will collapse — and crowd control will be the order of the day.

              I am doubtful there will be food rationing — why feed people who are already dead (as in why waste food with the little food that will be available)

            • Jan Steinman says:

              “I cannot see how —once this starts to unravel — it can be anything but fast.”

              Y’mean, like in ’08?

              By your argument, everything should have unravelled in ’08, when the banks did indeed stop trusting each other. Orlov claimed ’08 was indeed an Orlev-1 collapse.

              I favour a stair-step decline. Different parts of civilization will collapse, and civilization will recover up until the next limit is hit, at which point, things will stagnate again, go into overshoot, and repeat with a different sort of collapse.

              Oil is not going to disappear overnight, although the most expensive oil will probably “go away.”

              In a deflation scenario, money becomes worth more — that $400,000 house can now be purchased for $300,000 — and so you don’t need as much of it to purchase resources needed to keep at least the least-expensive wells flowing.”Chop shop” liquidators will buy up bankrupt oil rigs for pennies on the dollar, and sell them at a profit to those who will put them someplace where they can make money.

              Although it’s tempting to want to see sudden and complete collapse, I think people who think we’re going right back to the stone age in one swell foop may be disappointed.

            • John Doyle says:

              That’s more in line with my own thinking, although the uncertainty is high either way. David Korowicz allows for both, depending on whether the “operational fabric” can continue to hold up. It could have intermediate states, semi stable ones.
              But the end is still a reduction of energy availability to which we will have to adjust. So until it bottoms out it’s still down and the loss of growth.
              The aim is for governments to have some sort of plan to allow food etc distribution, in the short term at least, and not just have nowhere to go when a collapse starts, because there won’t be a lot of warning in any scenario.

            • Paul says:

              Jan – 08 was just the warm-up. The central banks still had some firepower and were able to back stop the system.

              Since 08 we have piled on far more insanity quadrupling down on polices that got us to 2008 — anything goes when you are facing the end of the world…

              So when the next shoe drops can the central banks pick up the pieces again?

              I seriously doubt it — they are already fixing stocks, bonds, and property — subprime is nearly 30% of the US auto market … tens of trillions of dollars have been used to bandage a head that was nearly severed in 08.

              I think that the scale of the ‘fixes’ that we are seeing indicates that the central banks know that the next crash is the last one. They are throwing the kitchen sink at this sucker.

              The system relies on confidence in the banking system — when confidence in the central banks to back stop a crash is gone — everything unravels — the supply chain breaks — potentially overnight — the panic begins — the looting begins — and the troops come onto the streets.

              Think about what would have happened in 08 if the central banks would have failed to maintain confidence in the system – within days we would have been toast — because already shipments were not leaving docks because counterparties did not trust each other and LC’s were not being accepted.

              In a just in time supply chain — one day is an eternity when you are waiting for the part — or the shipment of grain..

            • Jan Steinman says:

              “Think about what would have happened in 08 if the central banks would have failed to maintain confidence in the system – within days we would have been toast — because already shipments were not leaving docks because counterparties did not trust each other and LC’s were not being accepted.”

              It seems you see collapse as final and absolute. Have you read Dmitry Orlov’s Anatomy of Collapse? Orlov sketches out five levels of collapse, and the things necessary to transition between levels.

              What you are talking about is a “Level-2” collapse — the collapse of commerce. It does not necessarily follow from a financial (“Level-1”) collapse, nor do the following levels necessarily follow from it.

              Orlov’s “Level-5” collapse (personal relationship collapse, every person for themselves) seems to be what people think of when they imagine the failure of “business as usual.” And yet, there are many more interesting things that must happen in-between.

              If you put all your energy into mitigating a Level-5 collapse, you may miss many opportunities for “A Prosperous Way Down,” as HT Odum put it.

            • Paul says:

              Jan – I may be simplifying things but the way I see this happening is that when the CONfidence game that is the financial system breaks — food production stops — and the die-off begins in earnest within a week or two.

              I can see no way to keep even a fraction of the global population fed hence I don’t believe there will be much in the way of stages. I think we spiral into the vortex rather quickly.

              I tend to think that is a good think for those who have anticipated the big event… if 7+ billion have to go then best they go quickly

            • Jan Steinman says:

              “food production stops — and the die-off begins in earnest within a week or two.”

              People go about three weeks or so with no food. But surely, there will be something to eat, and people can go on malnourished for years.

              I expect a long period of decline and malnourishment, followed by inevitable pandemics, as weakened immune systems (and a crumbling medical system) make people easier prey.

            • Don Stewart says:

              Jan
              Another possibly instructive example from WWII is Sweden. Never entered the war, but was largely cut off from trade. Some trade with Germany, I believe. Times were hard, but few starved.

              I do agree that our basic tools are now much more vulnerable. Tools in WWII Sweden were mostly mechanical and could be fixed. Tools now are heavily electronic and many cannot be fixed…components can only be replaced from a global supply line.

              Don Stewart

            • Paul says:

              Maybe they can scrounge up something if this hits in the summer and some will survive for awhile – North Koreans eat grass from time to time… but come winter…

            • CTG says:

              Jan, It was indeed end of the world as it would be (from hindsight) if not for central banks intervening by money printing.

              it is good to have a discussion. Let us imagine if 2008 happens again in 2014 and the banks do not trust each other. It could happen now in 2014. Banco Esprito Santo in Portugal could play the role of Bear Sterns or Lehman.

              This post is independent of the previous threads as I am not sure where to put. Let us have a discussion on some of the things that are on my mind but have no one to share with.

              In 2008, central banks are not printing money and you can see from any charts available online that global trade/credit creation/consumer confidences, etc spiked down dramatically and then came up again when central banks started printing to “loosen or grease” the wheels of trade. That restored trust but the printing never stopped.

              If this happens again in 2014, what will central banks do? Print more? The effects of QE is already wearing very thin. Debt jubilee? yes they can do it but they still cannot restore trust. Does the bank want to extend a new loan? what collateral? Will it be implemented worldwide? Will everyone agree to debt jubilee? Those who were loaded to the gills will benefit the most but that will destroy the economy. Any new rabbits in the hats? I am not sure but it will have a lot of nasty unintended consequences.

              Extraction of oil, refining of oil and maintenance of modern conveniences like telephony (mobile or fixed), internet, transportation, medical requires a complex web of supporting services and products and they cannot as a standalone. i.e. you cannot have hospitals, telephones or internet in a city while all other cities collapse. For modern civilizations, I am not sure how your step-down collapse will take place. There are no fall backs like going back to telegraph or organic farming or draft animal transportation because we don’t have the skills, resources or time to do the transition (especially when the shelves are bare).

              Imagine if a large advanced country liks US or countries like EU declare a 4-day bank holiday and a bail in is called up (-20% off everyone’s bank account). What will happen? In 1950s, yes, my grandfather will not have a problem because he has no money in the bank. He does not use a phone and neither will he go to the hospital unless he is really sick. You can have a step-down collapse and it will be an uneven collapse with cities the fastest. He still has a farm to fall back and can grow his own food.

              Now, if the bank closes for 4 days and with a bail in, it will be chaos. Most people do not have enough cash to last for 1 week. They don’t carry so much cash. Credit cards cannot be used. Food will be cleared, whether by cash or by guns. I do not know how trucks can deliver food and imports may be a problem as overseas supplier may hold back their deliveries (due to bank holiday and no payment can be transacted).

              Do remember that supply chains has a critical point. If it tips too far off the balance and if it is the whole country (big country), then it will never revert back to equilibrium. If the shelves are empty in a large city and if it will be a few days before the next supply comes in (who will supply and who will pay for it), then the supply will never come as it will be hijacked halfway on the road.

              Much as I want a peaceful and slow collapse, I see that humanity has painted itself in the corner. The wall is ahead but it still press the accelerator.

              I will put out some points (like martial law and rationing ) for discussion in my later posts. These are something in my head that I would like to share and see what others have to say. I need some time to put them in words….

            • John Doyle says:

              CTG, I am also thinking about possible answers to this looming problem, trying to see if we can save some of the furniture for the future. Because the exponential equation mandates the end of our growth economies we cannot escape a “correction”.
              I think our best bet is a financial event as it allows some leeway with resource depletion.
              I think we cannot carry debt into the future as it makes no sense to have expanding debt in a shrinking economy. In any case the banks only have 2-9% of shareholders’ funds, the rest being lent out. So we eliminate banks, their loans and assets all at once. The existing banks are gone forever! There’s no escaping winners and losers so let’s clean the slate and reset. If you have a mortgage you are better off as your property is debt free still in your name. All lenders are eliminated, not just banks. Government can set up a temporary money supply.
              Then, what to do about the currency? I think that while the crash is happening currency stays fiat, otherwise why would one rate declining assets? So we wait for stability, obviously in a much poorer state. Then we can restart banking and money . In the interim currency would be free and include coupons to enable an even distribution of food etc. The aim here is to avoid riots.
              The whole world should be much the same as the whole world is in the firing line.

            • I think you have also wiped out jobs and pensions. Without anyone being able to afford anything, prices drop dramatically.

              Use a page of paper (or a clay tablet) to run tabs for individual. Most people will have nothing to sell, so they won’t be able to buy anything. Without jobs, they will have no way of earning anything. Prices of everything will drop dramatically.

            • John Doyle says:

              In my scenario no one will be in debt [it’s a complete non sequitur to think that debt can continue in a crashing economy] no home owner will have a mortgage [they have all been wiped out along with all lenders] and as you mention, Gail, nearly everyone will not have a job. So as Dmitri Orlov says
              one can be productive in other ways;https://www.youtube.com/watch?v=wCmgEN-F-gc
              Home owners and renters can grow a lot of food with acquaponics on their land. It just needs found materials to set up plus access to plants or seeds and fish to start; [Backyard Liberty]
              ETC ETC…

            • Paul says:

              Wouldn’t they starve long before the first crop was harvested? And would most people not have the slightest clue as to how grow a tomato – and where would the aquaponics gear come from when the entire global supply chain is irrevocably broken?

            • John Doyle says:

              Yes, of course. The population HAS to drop to whatever level is sustainable so we live within our means, dictated by the planet’s remaining resources. Everybody will be affected, but not everybody at the same time, nor exactly alike.
              For those who plan ahead, such as yourself, it’s not any guarantee of success, but it still improves the odds. It can give some hope which is not silly like in religion. One can be prepared by trialling say aquaponics, which works even on a balcony. Who is familiar with it?

            • Paul says:

              CTG – unless the PTB have another rabbit to pull out of their hat – I agree – we get a fast collapse.

              I don’t think a debt jublee is another rabbit — and generally when the money printing machines have been turned on… that has been the beginning of the end…

          • xabier says:

            It is the sub-conscious awareness of ‘living on borrowed time’ that – perhaps – results in extravagant denial and absurd policies and behaviour.

            Borrowed time is the human condition: we are mentally very adept at evading reality.

            There is unlikely to be a general ‘Awakening’, it is not even worth hoping for.

            Which is not to say there aren’t things to be done.

        • Very good response!

          • Creedon says:

            I still have hope for a general awakening because when the next crises hits, I don’t see how people are not going to see that we have a permanent oil problem, but maybe I am wrong.

      • Simple Simon says:

        People have this notion of NZ being a safe haven.
        However, John’s right – suffering to come. Before europeans arrived from around 1800 onwards, the Maori (who started arriving in 1300) had their population peaking at less than 150,000 and were in a fairly constant state of inter-tribal warfare (more or less over scarce resources).
        NZ now has a heavily fossil-fuel dependent population of 4,500,000 – 30 times the apparent sustainable maximum.
        UGLY !!

        • Lizzy says:

          That’s true, SS. The Maori were stone-age hunter gatherers. Clever as they were, they didn’t farm. Correct me if I’m wrong, but the fishing was nets cast from the shore, not from boats. I’m a South Islander, where there were very, very few Maori in olden times. Now there are huge, productive farms. Canterbury Lamb, for example. I know a lot is due to super-phosphate and irrigation, of course, but still, there is a lot of productive capacity.

          • Paul says:

            I completed a hunters course in BC Canada recently – one of the instructors was from NZ – we were chatting and he was telling me that on a lot of the large game animals there are no limits — whereas in Canada there are limits and you must cart out every part of the animal — in NZ apparently game is so plentiful that you can just take the choice cuts…

      • antares71 says:

        This thread on interdependence is interesting!
        I wanted to add an observation. Days ago Europe and the US added more sanctions on Russia on key strategic areas, energy, banking and arms. I was yet again very surprised by the serious and thoughtful comment by Sergey Lavrov, Russian’s foreign minister. He basically said that all these sanctions shows that Russia is too much interconnected and that these sanctions will be an opportunities to set-up Russia to a more self-reliant path.
        I said I was YET very surprised because the first time I was surprised was when Putin commented on the first round of sanctions (freezing accounts of key Russian’s officials). Putin at that time said that the problem was that VISA and Mastercard monopolise all the payment in the world that it was time for Russia to create an alternative to offer to the world.

        • Creedon says:

          I agree that for whatever reason the talk with the most sense these days seems to be coming from Russia, the talk and actions of the good old USA seem more and more senseless to put it nicely.

        • dashui says:

          I wonder if the sanctions targeting russia’s oil companies are an attempt by the US to elevate the price of oil, in order to keep US oil fracking going. Lately it looks like the price of oil is declining.

          • antares71 says:

            I think this may well be the real reason. I stop some years ago to look at political reasons bihind politics and always look for economical interests. However, what interested me in this story is that the Russians have realised that interdependence equal blackmailing. They realised that they felt into the trap of relying on Western payment systems, Western energy technologies, Western systems as a whole etc… and in doing so they cannot now walk on their legs alone.
            I think what Lavrov meant was like: “Ok, you got us! we are dependent on you now. We realise now it was stupid of us. But that shall not be the case any more. You can keep your systems, we ‘ll make our own and rely on what we own so that you won’t have any power on us!”. Obviously this is my personal interpretation, I do not know Lavrov personally so this is not something he told me.

            • Paul says:

              Every nation is dependent on every other nation — there is no way around that in a globalized world. And there is no opting out — particularly if you have resources that the others covet

            • antares71 says:

              Paul, true. Of course they will never achieve 100% independence. Mussolini tried that with autarchy and it showed it was not possible in the 30’s, imagine now. But I think Lavrov referred to interdependence that threat national security on key strategic areas. Consider the other way round for example, France soon shipping to Russia the latest and greates on war ship that will allow Russia new combact capability that did not have before. Or all the Americans killed by the very weapens they manufacture in their country.

        • If Russia realizes that there is a good chance that everyone else is going down, the rational response would be to try to become much more independent. They at least have oil and gas, plus a better climate than Saudi Arabia.

          • xabier says:

            Gail

            I suspect the historical experience of Russians gives them a longer-term view than most people. They and all Eastern Europeans have learnt to be realists: they all know what Orwell’s’boot stamping on one’s face’ is like.

            The US-led attempt to ostracise and alienate Russia is proceeding apace: I see PM Cameron has just written to NATO arguing for heavy troop deployments to deter ‘Russian aggression.’ I wonder who in Washington drafted his copy for him? A shameful moment for British diplomacy.

            The aim is clearly to overthrow Putin and his circle, and dominate the extraction and sale Russia’s resources. Such a simple plan, just like Iraq: what could go wrong…….?

            • Don Stewart says:

              Xabier
              Put it all together. I said from the beginning that this had to be about the Russian oil and gas. The US would not risk nuclear war to prevent some Russian speakers from joining the country they want to be a part of. If this was a part of Nicaragua that wanted to join Guatemala (or vice versa), it would never make the newspapers.

              It made no sense to me why Europe was so set on preventing South Stream. After all, North Stream bypassed the Ukraine bottleneck to get gas to northern Europe. What’s not to like?

              Then we have the spectacle of Yats (handpicked by the US) resigning when the parliament refused to turn over the pipelines to outside investors.

              So the deal is either to:
              1. Conquer Russia in a war and seize the oil and gas
              or
              2. Get control of the distribution lines that Russia depends on to market their gas. This explains why the West wanted Yats in charge, why Europe seems to be committing suicide over South Stream, and why Yats resigned, and then why Yats unresigned (after extracting more promises of financial assistance, I would guess).

              Don Stewart

            • Christian says:

              Xabier and all who are concerned on WW3:

              Politicians say they’ll go to a big war? Remember politics involves the art of lying, and that this is one of its most characteristic traits these days. Banksters are used to make money with wars, even more than soldiers themselves, but they’ll be hard pressed if asked to show a business plan for WW3. Resource scarcity is not a big conflicts trigger, see Ukraine, Iraq, Syria, Gaza… All of them are small intensity conflicts: few, small and rather cheap weapons are used all overthere. Not such a big business as was say invading Iraq.

              I understand in the US a major war situation would be perfect to install martial law, even (and because) general population doesen’t want it. But it is hard to imagine this working somewhere else, excepting China may be. Russia don’t need any war and hard handed state is not much dificult to play there anyway, and I don’t see EU citizens accepting such a situation. The rest of the world is not relevant to the issue. It’s good to remember Tainter’s remark that societies finally collapse when the masses stop suporting it and participating in it. Perhaps not so much in the US and China, but I understand in Europe a war situation would multipy citizens disregard and state failure.

            • Paul says:

              If I were Putin I would stick a nuclear device under every oil and gas well in the country. And I’d wire the trigger to my heart beat — if it stops — the whole thing goes up.

              Then I’d give Obama the tough guy a phone call on the hotline and I’d throw a little sickening Americana at him taunting him with gems as:

              – good to go Barrack!
              – lock and load!
              – make my day!

              And then I’d watch Obama and his Deep State masters squirm because even if they are contemplating a first strike attack on Russia — they’d know they are already defeated.

            • Christian says:

              Xabier, paraphrasing you: it’s more likely the world will not end with a bang but with a whimper. It’s not impossible that, in a total desperation moment, someone pull the trigger. But the game is to keep the hamster running, not to nuke it.

            • xabier says:

              Christian

              I agree: only economic war, not hot war.

            • Christian says:

              Lol. Good one Paul

              In 1984 there were massive wars among oligopowers; Orwell wrote in 1947 and perhaps didn’t truly realized the implications of versatile thermonuclear arsenals, the first of which was peace

              Of course to the US it’d be easier to get Saudi Arabia and Katar rather than Russia, and much more profitable (far less locals to empoverish and far less weapons to fight, in fact it’d not even be a war just a massacre as Gaza). This is a pretty good example of why all this western BS playing the cold war revival is just that, BS for the masses

    • Thanks!

  8. Stefeun says:

    Just watched this on Arte (German-French TV channel):
    The CIA’s Covert War in Laos (1960-1975)
    The US dropped there more bombs than on Germany and Japan during WW2, combined, they said. They called it a civil war, but it wasn’t, definitely.
    A 52 minutes documentary: “The Most Secret Place on Earth”

    http://youtu.be/i8cIki7awN8

    • dashui says:

      Hey this reminds me of my buddy Pete from laos! Great guy.
      CIA trained special forces captain-sniper, leader of a 5 man team that would hunt communists in the mountains of Laos.
      He was sent to paris to school, he would go down by the Eiffel Tower and when nobody was looking snatch a pigeon, wring its neck, take it back to his apartment for roasting.

  9. B9K9 says:

    @Paul says “There is no point in fighting the freak show.”

    Which is why you should join the parade – as a band leader. Look, not only does everyone here and amongst the TPB know the score, but all of us also know the end times will result in a combination of political and religious extremism.

    So why not get ahead of the curve? After all, that’s what the political/secular PTB are doing via the MSM and their chosen target(s) du jour. Personally, as a devout atheist, I believe the religious market holds the greatest opportunity for power, wealth & control.

    The real question is, do you condemn believers for falling away from strict church doctrine, or blame others as a way of diverting attention? Or, possibly, a combination of both? Hmmm.

    The beauty of religion, at least in the USA, is the state usually keeps out of the way. Consider one J Smith, who brilliantly conceived a child rape cult back in the 1820s. Imagine being able to kidnap 13-14 yo girls in broad daylight off the street, have your buddies (also fellow “priests”) immediately “marry you” (to multiple wives no less), and then proceed to have legal, constitutionally protected sex! Aye carumba. Shit, no wonder they were constantly run out of every town.

    As this baby spins out of control, it will be sort of weird to be involved in whipping up the retards to do one’s bidding. Still, as Victoria advised, we must buck up and think of England. LOL

    Seriously, though, doesn’t anyone else get bored discussing the same old, same old? I imagine there is probably a large entrepreneurial contingent hanging out on this board. Where’s the old excitement in seeing a ground-floor opportunity that everyone else is seemingly missing? We KNOW what’s going to happen – why not get in first, establish a series of positions, and ride this sucker like Kong?

    • Paul says:

      I am having difficulty seeing any ground floor opportunities in a situation in which billions will almost certainly perish.

      If I make it through I don’t think my world will extend much beyond the driveway to my farm…

      • Daniel says:

        Your farm?????

        • Daniel says:

          Unless you are of Indonesian decent that farm will revert back to the people of Indonesia and you will become a worker there…

          • Paul says:

            You may be right — but our farm is already a community farm — the village fellows who help us already share in what is produced – in fact they get the majority of what is produced – and we are already working with them doing much of the hardest work.

            So not much use in throwing us off the land.

            I am also about to install the magic water making machine aka the solar bore pump + surface pump for the ponds… which will provide water to irrigate our land + water for neighbours.

            And I am the king of the magic water making machine (i.e. the only one who knows how to keep it operating) …

            Best to keep the king happy… especially in the dry season…..

            In desperate times — it is best to — hedge accordingly.

            • xabier says:

              Paul

              I think even the Mongols kept the technical specialists alive when they massacred towns: the Romans certainly did when they killed their captives – being the water-pump man sounds like a smart move!

            • Paul says:

              It’s probably futile … but it makes me feel a bit positive – in a sea of negativity!

              What I really would like to do is trade some gold coins for 2 dozen AK 47’s and 10,000 rounds of ammo… I imagine some very bad people will be around after things bust up…. If only I had the weapons I could be like Colonel Kurtz up there in the jungle!!! (with a sane agenda of course)

              Weapons are not allowed in Indonesia — however when the chaos starts who knows…. a little gold might go a long way.

            • Daniel says:

              Interesting…I have done some research on those pumps….which one are you using? Spare parts available….I remember in taking a class on electric motors that well pumps could last forever if they didn’t have a slight design flaw built into them….not to bore you to death, but it is basically the concept of a motor boat and how it has a zinc stem to absorb the electromagnetic pulse made by the spinning in the water……Long story short a ceramic pipe would be much more suitable or some other small change in design…but then that would make it so you would not sell as many pumps year after year…

            • Paul says:

              I’ve a friend who is a mechanical engineer who grew up on a farm in an arid part of Australia who has quite a bit of experience with solar gear who is assisting on this. Without a doubt these can break and they will wear out… but generally they do last many years… I may consider buying a second back up set of gear but for now just focusing on getting this in place asap.

              At the end of the day there is only so much one can do to try to cushion the fall — and this may all be moot because there are thousands of ponds storing spent fuel rods that need cooling — of course we don’t want to think about what happens when those are no longer cooled — that could be an extinction event.

              Could this be why the PTB is so desperate to delay the collapse for as long as possible — and making the situation even worse — because they know the end game is the same regardless?

            • CTG says:

              Paul , you are giving TPTB too much credit of being so smart and all knowing….

            • dashui says:

              In order to fit in, what u need to do is to marry several of the local young ladies.
              Tell your wife u don’t really want to, but your willing to sacrifice yourself for the team.

            • Paul says:

              I have to wait until the SHTF and I am declared the ‘Water Machhine King’ before I can try that one on… It might be very very good to be the king!

          • MJx says:

            Paul in his “paradise”

      • Jan Steinman says:

        “I am having difficulty seeing any ground floor opportunities in a situation in which billions will almost certainly perish.”

        Have you read A Prosperous Way Down, by the late HT Odum and wife Elizabeth?

        One thing is certain: there are going to be a lot of hungry people. Why not make your living feeding them? I’m not talking about gouging the needy. But if you can feed people, you will be in an advantageous position.

        It sounds like you are already doing that. So why the long face?

        • Paul says:

          7.2 billion people — and even the Amish are farming using petro-chemicals to farm … difficult for me to be anything but extremely pessimistic about what is coming…

          • Don Stewart says:

            Paul
            Regarding the Amish. The religion of the Amish says nothing about organic practices. In my experience, each small group of Amish make up their own rules. For example, some groups use balers with gasoline motors on them (but pulled by horses), while a few use entirely horse powered balers, assembled out of scrap industrial machines. While the Amish generally don’t like entanglement with government, there are certified organic Amish farms. I don’t think any of the small groups REQUIRE organic certification of their members. This is the reference to certified farms in Pennsylvania and Ohio.

            http://organic.lovetoknow.com/Organic_Amish_Farms_Directory

            If you want an account of a very conservative Amish community written by an outsider, read Eric Brende’s book Better Off: Flipping the Switch on Technology. You will learn how the Brende’s learned to live without electrical appliances, such as refrigerators. Brende’s conclusion is that much technology is simply not worth the effort. However, at the end of the book, the family is living in St. Louis, but living a very simple and frugal life based on what they learned living among the Amish.

            Don Stewart

            • Paul says:

              I must admit that I don’t know a lot about the Amish — my understanding was that they were much like religious Luddites… that they rejected technological advancements in favour of living sustainable traditional lifestyles… (I did not think they were communists or anti-capitalists)

              It does strike my as rather strange that they insist on driving buggies yet they farm using petrochemical inputs…

              But as the Amish gentleman said to me — when you have 12 children and you have to help them buy land of their own — and you have to pay the mortgages on properties — you can’t farm using traditional methods because you could not compete.

              My take-away is that their system is not really any different from ours — because we have forced them to follow ours. At least (I assume) none of them have their faces buried in Facebook hoping for more likes and friends…

            • Don Stewart says:

              Paul
              The first thing you need to understand is that the Amish are following a religion, not the British notions of ‘organic gardening’ or the Japanese notions of ‘natural farming’ or any other farming system. The second thing you need to understand is that they are quite decentralized. Small groups make decisions about how they will live, independently of other small groups, on a consensus basis. Their basic religion in terms of technology is that some technology is helpful, while other technology is harmful in terms of living a fulfilling spiritual life. Where each self-governing group draws the line between ‘helpful’ and ‘not helpful’ is a result of the consensual decision making process applied to their centuries old heritage.

              Most modern Americans have no sense of what is ‘helpful’ or ‘not helpful’. We tend to simply look at something and decide whether we want it or not. And if it increases GDP, then it is good by definition. The Amish are not like the average modern American.

              If you read the book I recommended, you will see that early on he engages in a conversation with some Amish about the bad farming practices of the previous gentile owners: growing corn repeatedly with heavy fertilizer, herbicide, and pesticide use, and running heavy equipment on the land. The concerns expressed are the opinions of those individuals, and reflect the culture of their small, self-governing group. If you visited an Amish settlement somewhere else, you might hear different opinions.

              Furthermore, the Amish are no different than any other farmer in terms of the need to make money. There is a video of a soil scientist talking with some farmers who grow in greenhouses. They really want to get out of the chemical rat race, but can’t stand financially to have even one quarter where their income drops. The soil scientist ruefully agrees that she can’t promise them that she can turn the greenhouse on a dime and guarantee the continuation of their expected cash flow. Changes do tend to be disruptive. She predicts that she can increase production over a reasonable period, and eliminate a lot of expense, but she cannot guarantee a seamless conversion. An Amish farmer with debts will have the same issues to deal with.

              Amish people can embrace organic methods or natural farming methods or permaculture methods without violating their religious ethics. And some do. I don’t really think it is useful to talk about ‘Amish farming’.

              Those who know more about the Amish than I do may want to correct me.

              Don Stewart

            • Jan Steinman says:

              “Small groups make decisions about how they will live, independently of other small groups, on a consensus basis… Where each self-governing group draws the line between ‘helpful’ and ‘not helpful’ is a result of the consensual decision making process…”

              I think it’s more nuanced than that. Pure consensualism has lots of problems that the Amish seem to avoid. It’s been called “Decision-making by the least qualified!” I am no fan of consensus decision making in any situation that is not strictly peer-to-peer.

              My understanding is that Amish decision making is closer to oligarchy or functional anarchy, with elders making most of the important decisions, or at least having much more influence than younger adults.

              If you get a typical American mixed-age group together today and try to do consensus, I think you’ll find that the “doers” will leave the group and all you’ll have left are “talkers,” and even then, most of your decisions will be to not do things. Consensus generally turns out to be extremely risk-averse. Most of us are far too narcissistic and individualistic to do effective consensus.

            • Don Stewart says:

              Jan
              I am using a small sample. I was discussing the decision by one small group to allow tractors to drive milk separators. They debated the issue for a couple of years. Most people decided that the ability to produce Grade A milk justified the use of tractors. Everyone agreed that tractors should not be used for horse’s work. One couple continued to hold out. The group derided that the requirements for consensus had been met and tractors were allowed.

              In another case, I was visiting on the front porch of an Amish family in Pennsylvania. Across the road, some kids were racing around in ATVs. I asked about them. The people told me that their group did not allow the ATVs, but a nearby group did. They commented that it made life difficult for therm explaining why their own children couldn’t have them.

              As for elders, my experience is mostly in Illinois east of St. Louis. The old couple tended to retire and move upstairs at about the age of 45. They sold their worldly possessions at auction (you would see the black buggies in the front yard). Kept very little, helped out on the farm but clearly relinquished control to the younger generation. Since they were ‘retired’, I doubt they dominated discussions.

              Don Stewart

            • dashui says:

              Amish, not conservative enough 4 me, im more the Hutterites, there are even some in Japan.

  10. VPK says:

    Wall Street Journal article on where we are headed regarding looking for oil:
    http://online.wsj.com/articles/oil-prospectors-shift-back-to-wealthy-lands-1406516236

    http://online.wsj.com/articles/oil-prospectors-shift-back-to-wealthy-lands-1406516236

    As New Zealand’s resource minister, Mr. Bridges is the man behind New Zealand’s big-oil aspirations. He travels the world to pitch New Zealand to petroleum prospectors.

    It used to be a tough sell. New Zealand is remote and among the world’s most expensive places to drill offshore. Big prospectors largely avoided it.

    Today, it is experiencing an exploration boom that is part of a broader shift: After decades of focusing on less-developed nations, big companies are tilting toward wealthy countries when hunting for oil and gas. Such places have higher costs and tighter regulations, but their political stability offers more-predictable cash flow.
    Developed-world governments like New Zealand’s are trying to tap into the shift. Five years ago, New Zealand’s government decided the economy depended too heavily on industries such as sheep farming and tourism inspired by the “Lord of the Rings” movies, Mr. Bridges says.

    It saw opportunity in oil companies “wanting to extract themselves from problematic sovereign-risk issues,” he says. In 2009, New Zealand announced a “Petroleum Action Plan” to lure oil companies, and it hired an Oklahoman oil executive to woo prospector

    The developed world still poses one age-old prospecting risk. Anadarko’s two wells didn’t strike commercially viable amounts of oil or gas, an Anadarko spokesman says.

    “It’s disappointing,” Mr. Bridges says. Still, with North Africa and the Middle East unstable, he says, he’s optimistic companies will keep drilling. Indeed, the Anadarko spokesman says the company still plans to drill other offshore wells in New Zealand.
    ….
    For decades, Shell invested heavily in finding and pumping oil in Nigeria’s Niger Delta. But in early 2006, militants began attacking Shell facilities, kidnapping workers and blowing up pipelines. Thieves drilled holes in pipes to siphon oil. Shell says it lost money there in some recent quarters.

    So companies like Shell are shifting toward more-predictable lands. In 2013, the world’s biggest non-state-controlled oil companies—Exxon, Shell and Chevron Corp. CVX -0.62% —spent 66% of their exploration-and-production budgets in OECD countries, estimates Sanford C. Bernstein Ltd., up from 49% in 2003.

    Exxon in 2013 put 67% of such spending into OECD nations, Bernstein estimates, versus 51% in 2003. The data don’t include companies’ acquisitions of other firms; the biggest recent one was Exxon’s $25 billion 2010 purchase of XTO, a North America-focused shale producer. An Exxon spokesman says the company invests in projects with “the best rate of return.”

  11. Paul says:

    Luxury cruise line accused of offering ‘environmental disaster tourism’ with high-carbon footprint Arctic voyage

    http://www.independent.co.uk/travel/news-and-advice/luxury-cruise-line-accused-of-offering-environmental-disaster-tourism-with-highcarbon-footprint-arctic-voyage-9635556.html

    I hear there will be an on-board presentation about the merits of recycling plastic bags in the interest of saving the world

  12. Stefeun says:

    Poll: Putin’s Approval Rating Is at All-Time High in Russia
    http://www.nbcnews.com/storyline/ukraine-plane-crash/poll-putins-approval-rating-all-time-high-russia-n161161

    The opinion-poll was made -not by some Russian agency- by Gallup, based in Washington-DC
    http://www.gallup.com/poll/173597/russian-approval-putin-soars-highest-level-years.aspx
    Don’t miss the 3rd chart about Russian approval of leaderships (compares for US, EU and China).

    • Paul says:

      The western MSM whores have it out for Putin — who better than to advise on this than one a former editor of one of WSJ who has seen the light http://www.paulcraigroberts.org/2014/07/28/war-coming-paul-craig-roberts/

      • MJx says:

        I think traditional “war”is out of the question and more like Orwell’s “1984” in which there are smirkish attempts to vie for areas of control.

        • Paul says:

          That makes sense. So we may have to wait for the expensive energy driven financial collapse to put the diseased whore out of her misery.

        • As nations get poorer, the skirmishes may be more local. It is too expensive to wage a big war.

          • Jan Steinman says:

            “As nations get poorer, the skirmishes may be more local. It is too expensive to wage a big war.”

            I tend to agree, but unfortunately, we have these nasty things called “ICBMs” that two guys with keys can launch.

      • Stefeun says:

        From the video linked at the end of PCR’s post, quote from Sergei Glazyev, Economic Advisor to the Russian President: (timing 11:10, worth listening from 9:55 onwards)
        “the US want to create a regional war in Europe (…) they are working to increase the numbers of nazis in Ukraine to push Russia into direct conflict (…) to free Donbass people (…) in first instance their objective is Europe (…) wars in Europe are the means of their economic miracle, their own prosperity (…) they have already won the first three, third one being the cold war, so this would be the 4th one.”
        Approximative transcription (sorry for the holes), but this is the idea, which I personally find very powerful (even if I don’t take all of what is said at its face value).
        http://financearmageddon.blogspot.co.uk/2014/07/official-warning-u-s-to-hit-russia-with.html

      • xabier says:

        Paul

        I had to go to a post a parcel on Monday, and the press headlines and current affairs magazine
        covers – which I rarely see because I never buy any – appalled me: I have never seen such crude propaganda, demonising Putin.

        It was very disquieting: a true ‘1984’ moment – had I been transported back to a totalitarian dictatorship of the 1930’s? No, this is the US-dominated MSM of 2014 -an ugly, depraved, barbaric sight.

        • Paul says:

          And the sheeple — ironically many of whom have read Orwell — have not the slightest clue that they are living under a soft totalitarian nightmare right now.

          For every curious person who looks for the truth by exploring alternative media, there are 100,000 or more who remain glued to the likes of CNN believing it is not 100% propaganda 100% of the time.

          And of course the NSA knows exactly who the dissidents are who have strayed to non MSM for information. We are already on ‘the list’

          • ktos says:

            Would you think the same if Putin was attacking your country?

            • Paul says:

              Let’s get the facts straight here:

              1. Ukraine had a democratically elected government
              2. That government was corrupt – but then every government in Ukraine is corrupt
              3. The US supported and armed a rebel movement that overthrew the democratically elected govt of Ukraine
              4. The US installed a puppet regime in Ukraine
              5. Crimea is for all intents and purposes part of Russia – the people speak Russian – Russia has had a massive naval base there for many many years – and Crimea voted overwhelming to go with Russia in a recent referendum http://en.wikipedia.org/wiki/Crimean_status_referendum,_2014
              6. The US clearly is not pleased with this so it continues to arm Ukraine in a war to take Crimea.
              7. The US and it’s puppet stooge almost certainly shot down an airliner so as to vilify Putin – just as it is almost certain their puppets launched chemical weapons killing women and children in Syria – so they could blame Assad

              SEYMOUR HERSH EXPOSES US GOVERNMENT LIES ON SYRIAN SARIN ATTACK – BLOCKED IN AMERICA
              Pulitzer Prize-winning investigative journalist Seymour Hersh has published an article demonstrating that the US government and President Barack Obama knowingly lied when they claimed that the Syrian government had carried out a sarin gas attack on insurgent-held areas last August. Hersh’s detailed account, based on information provided by current and former US intelligence and military officials, was published Sunday in the London Review of Books. The article, entitled “Whose sarin?,” exposes as a calculated fraud the propaganda churned out day after day by the administration and uncritically repeated by the media for a period of several weeks to provide a pretext for a military attack on the regime of Syrian President Bashar al-Assad http://www.wsws.org/en/articles/2013/12/10/pers-d10.html

              Assuming you are an American who primarily gets ‘news’ from US versions of Pravda such as CNN, FOX, NY Times, Washington Post…

              I will turn this around on you and ask — how would you feel if Putin were to have supported and armed the Occupy Wall St protestors?

              After all, they were protesting against corrupt government officials and crony capitalist oligarchs in the finance industry in the US.

              Surely if you support the US position backing the rebels in Ukraine — then you would have no problem at all with Russia doing the same in your backyard.

              Because if you don’t then that would make you a hypocrite of the highest order

    • I can understand why we are not winning any friends in Russia.

  13. Jeremy says:

    The MOST frizolous TV PROGRAM EVER: “Master Chief” hosted by Gordon Ramsey.
    I don’t watch TV much and now I know why. This show has two cometeting teams preparing elegant course dinners for 3 “judges” and “dinners”. Actually, Ramsey’s wife travels over 6,000 miles to be one of the diners to judge!
    https://www.youtube.com/watch?v=0N5hVYagC3U
    Amazed on the what these chaps deem “important” and now we know why the people are in a stooper
    Key and Peale had fun with it:

  14. theedrich says:

    A critical global factor rarely mentioned here is cybernetics and information technology in general.  Currently the U.S. is the world’s most powerful nation not because it has more soldiers but because it dominates this technology.  Whether drones, satellite imagery, sophisticated weaponry (e.g., Massive Ordinance Penetrators), “tradecraft” (electronic spying) or countless other elements, America is still in the vanguard.  The fact that most software is based on the American English language is also a great advantage.

    However, all of this depends on high-IQ techies.  The average IQ of the U.S. is declining due to obvious demographic changes partly caused by political and economic considerations, to say nothing about the explosive spread of mind-destroying narcotics.  Americans do not want to hear about this, and use every insult in the book to refute it.  Meanwhile, East Asia with higher average IQs and larger populations from which to draw is racing forward.  (No computers outside a few high-end experimental ones are made in the U.S. any more.)  We need not talk about the degradation and/or diminution of higher-level education in the “hard sciences,” math and IT.  (And by the way, exceptions only prove the rule.)

    In brief, it is only a matter of time before the U.S. is overtaken in the extremely important high-IQ fields.  The dominant dynamic in biological evolution is what is termed evolutionary epistemology:  the process by which a more “intelligent” animal or plant outcompetes its ecological neighbors.  (E.g., a shark with its capable teeth, power, speed, etc., “knows” its environment better than its smaller prey.)  Humans are currently the highest on the tree because we have developed consciousness (a development which is, incidentally, the true interpretation of the Genesis myth of the so-called “fall” from pre-human, animal status in the Garden of Eden).  Among humans, the smarter generally do better than the dumber, pace Karl Marx.

    Wishdreaming about equality will not change this principle of evolution.  As PeakOil-forced tension increases among nations, we can expect a far more dangerous world.  And the prospect of an additional (and perhaps very sudden) “limit” to growth of any type in America.

    • With respect to declining IQ (to the extent this is happening), I think the big drivers are

      (1) Bad food supply. Too much processed stuff and meat raised on grain. People are getting fatter and are sicker.
      (2) Lack of exercise. Our bodies expect exercise.
      (3) Minds numbed by too much TV and video games.
      (4) Decline in family structure, as both parents work, and TV provides the norms for social behavior. Parents are taking a less active role in raising their children. Schools are supposed to make up for lack of parental support.

      • Paul says:

        I don’t have TV at home but from time to time I do switch it on (momentarily) when I travel and I am appalled by the mind-numbing content that completely dominates.

        Whether it is reality TV or the endless verbal diarrhea and propaganda that spews from the MSM channels trying to pass off as ‘news’ — if you were not a moron before you started to watch you soon would be.

        What does Malcolm Gladwell say about 10,000 hours of something to be good at it?

        Well – 10,000 hours of watching TV will make you an expert idiot.

        I am here in Canada for a few weeks and I am feeling like I am on another planet — nobody questions anything — if it is on TV news it must be true — the TV would never lie to me.

        As I observe this matrix of — for lack of a better word — idiots — I can’t help but think — it will not be such a bad thing when the end of cheap energy puts them out of their misery.

      • xabier says:

        Gail

        There is another phenomenon: not so much declining IQ, as bright students who don’t want to excel. A friend of mine is a transplant surgeon and researcher and also a Director of Studies for medics at Cambridge University: he’s been very perplexed to find that students (who need excellent grades to get in) are very happy to get a low 2:1 grade in University exams, whereas in our day only a high 2:1 or a 1 was personally satisfying, and was on the whole expected by tutors. He reads them the riot act, and they are genuinely puzzled – ‘I passed, what’s the problem?’!! He’s found that the other directors are having the same problem. He’s now trying a mantra I gave him: ‘Work is More Fun than Fun!’ We’ll see what happens.

        • Robert in Ho7uston says:

          Modern birth control is changing society (child/family/group) dynamics in many ways we do not understand and have not studied. Instead of children being a semi-involuntary product of economically necessary marriage, simultaneously liability and asset, families now carefully and expressly choose how and when to have children. Parents attitutes towards children must be different, and the resulting children different.

          A greater sense of entitlement in children so born is only the first consequence. I expect even larger effects.

        • Perhaps the purpose of life is simply to have fun. Don’t do any more work than necessary. Especially if your connections to others (parents, siblings) are weak. Somehow, we need to pass on values to kids other than what they get from reality TV. Many of you don’t believe in religion, but that has historically been a way of passing on values to family members (not necessarily right, of course).

          • Daniel says:

            Many here are close minded to religion but I am starting to question certain parables that roll around in my head…..The meek shall inherit the earth….and The last shall be first and the first shall be last…..Civilization has always been collapsing..it is our nature…

            • Paul says:

              Not only will the meek inherit nothing — in this life they will be enslaved by the strong (who of course will use religion to spin the bs that the meek shall inherit the earth to keep the little people from tearing them from their BMW’s and thrashing them…)

            • But the meek do need hope. And this reading gives hope to the meek. Perhaps the reward comes later, or though a changed mental state.

            • Paul says:

              Or perhaps the meek need to stop swallowing the line that if they stay in line they inherit the earth — and instead turn on their masters and put their necks on the guillotine.

              I recall many years ago reading something about the Alex Bongcayo Brigade in the Philippines — a tyrant factory owner ignored the pleas of his workers to install safety measures on factory machinery — after yet another worker lost a limb the Brigade swung into action — and put a bullet through his head http://www.britannica.com/EBchecked/topic/1932116/Alex-Boncayao-Brigade

              Since reading that I have always felt a certain amount of admiration for Mr Bongcayo…. because some people cannot be reasoned with….

              I also have thought – what a great name this would make for a rock band.

          • Robert in Houston says:

            The organisation that life involves can only be thermodynamicly maintained by creating more disorganisation in its’ environment. System entropy _must_ increase, and life is but a catalyst.

            Additionally, all life forms can be viewed as a certain unstable molecule’s (DNA) method of survival (reproduction). Those molecules that didn’t, are gone.

            • Jason says:

              Robert…you have too much time on your hands…..what if nothing is as it seems…everyone on here thinks they have it all figured out…and that TPTB have no idea what is going on….I am open to everything and anything….Paul you totally misunderstood Daniel’s quote…people living close to the earth have the best chance of survival….to pontificate on your soapbox about what is going to happen as if it is a sure thing is to show your ignorance….yes we can make an educated guess here and there but it is a very hard to know….funny how most people on here are from left wing liberal past lives……

            • We seem to be dissipative structures, working to take as much energy from a higher state to lower state as possible.

  15. Christian says:

    I posted something new at

    http://ecoentropia.blogspot.com.ar/

    It’s called The Plateau. There are no news for you since it is a sort of combination of what we were working on during the last months. In spanish, don’t know if I am able to do a good translation.

  16. Stilgar Wilcox says:

    http://time.com/3049419/white-house-eu-us-to-impose-new-russia-sanctions/
    “Blinken said Russia appeared to be using the international attention focused on the downed Malaysia Airlines plane as “cover and distraction” while it moves more heavy weaponry over its border and into Ukraine.”

    I cracked up when I read that and who could blame them as our MSM of course always seeks out the most ’emotional’ story available.

  17. Daniel says:

    Read what I wrote, Timmy……if there is a WWW all the talk of peak oil etc…..is a F…ing waste of time……..it is like giving a lecture on the titanic about icebergs after the titanic has already hit an iceberg!!!

  18. Daniel says:

    Where we are headed? Try world war three….in a couple of years or one your cute little charts won’t mean anything….Have you been watching Ukraine…..Iraq….middle east? Thousands dead already…well don’t feel bad…many smart people never saw the past wars coming either…..

  19. Don Stewart says:

    Dear Gail and All
    Notes about stress, yoga, health, serious challenges and self-made dilemmas.

    From Chris Martenson

    Darwin’s understanding of natural selection is often misapplied. In its basic form, natural selection simply means that the world is constantly changing, and organisms must adapt or they will expire. This dynamic is scale-invariant, meaning that it’s true for individuals, enterprises, governments, cultures and economies. Darwin wrote: “It is not the strongest of the species that survives, or the most intelligent, but the ones most adaptable to change.”

    When we find that we MUST change our behavior, we feel stress. Chris Martenson’s and Charles Hugh Smith’s essays on the nature of work, Ugo Bardi’s writing on resource depletion, and Gail Tverberg’s writing on Limits to Growth all make a convincing case that most of us are going to have to make large changes in our behavior, or else Darwinian selection will do it’s thing and we will be unable to enjoy life and we will also likely be out of the gene pool.

    As Martenson says:

    ‘The great irony of free-market capitalism is that the only way to establish an enduring security is to embrace innovation and adaptation, the very processes that generate short-term insecurity.’

    As the economy changes, then changes must ripple through the rest of what we do: the ways we find pleasure, our living arrangements, family and community relationships, caring for our health, and almost everything else we can think of.

    Kelly McGonagle explains that humans have uniquely evolved sophisticated mechanisms to guide our actions. Specifically, there are three separate parts of the pre-frontal cortex which focus on things we don’t want to do (such as get ourselves addicted to heroin or end up in jail), things we do want to do (such as file our taxes on time or find a mate), and our long term goals (such as raise wonderful children, find a life-long mate, and practice right-livelihood). Our primitive brain still operates, however, and is focused on immediate temptations. And, apparently alone among animals, we are able to observe ourselves with awareness, and use the awareness to change behavior.

    It is a mistake to think that suppressing the primitive brain and allowing the recently evolved pre-frontal cortex to control our lives is the answer. People with damaged primitive brains do not live successful lives.

    In short, the good life involves a balancing of both the primitive brain and each of the three segments of the pre-frontal cortex. McGonagle:

    ‘Thanks to the architecture of the modern human brain, we each have multiple selves that compete for control of our thoughts, feelings, and actions. Every willpower challenge is a battle among those different versions of ourselves. To put the higher self in charge, we need to strengthen the systems of self-awareness and self-control. When we do, we will find the willpower and the want power to do the harder things’.

    Taking a small detour. Stress is known to focus our attention narrowly, and prevent us from taking a broad view. If a tiger is after us, this is a good thing. If we are tempted by unhealthy food, it is a bad thing, as the bad food becomes irresistible. Therefore, McGonigal gives us the list of American Psychology Association recommendations for relieving stress: exercising or playing sports, praying or attending a religious service, reading, listening to music, spending time with friends or family, getting a massage, going outside for a walk, meditating or doing yoga, and spending time with a creative hobby.’

    Please note that the successful strategies for stress reduction were all around long before humans had fossil fuels, and will be around when the fossil fuels are gone.

    I would also like to refer again to the book Scarcity, which shows how the perception of scarcity distorts human behavior. To a first degree of approximation, I submit that the effects attributed to Scarcity and the effects of unnecessary stress are the same…distorted perceptions and narrowed focus leading to ineffective behaviors.

    I submit that the term ‘stress’ is leading us astray. I will offer an alternative definition:

    Stress I is the physiological reaction to a systemic threat and is a very good thing. If we are hungry, the stress response in our body both prompts us to seek food, provides physiological support for finding food, and promotes our cooperating with others in the seeking of food. If we weren’t able to respond with Stress I, we would die because doing nothing is always easier than going out and killing a wooly mammoth.

    Stress II is the same physiological reaction, but to a perceived difference between what we want and the realities of the world. That is, suppose we have a hundred dollars to spend, but want to buy two hundred dollars of stuff. The difference between want and ability sets up a stress response, which is relieved when we pull out the credit card. Going into debt has all sorts of negative repercussions for the future, but it sure does relieve the stress in the short term. Credit cards don’t make the American Psychological Association list for the very good reason that the stress relief is very short lived.

    One of the underlying problems with Capitalism is that corporations are especially skillful at distracting us, reducing the ability of our pre-frontal cortex to modulate our behavior, creating the perception that consumer products are going to change our lives in wonderful ways, and over- promising on the actual abilities of consumer products to relieve stress. Kelly McGonagal spends much of her book teaching us how to identify the strategies being used against us, and thus defusing their effectiveness, while building up our ability to pursue long term goals.

    After that aside, we are able to put McGonagal’s TED talk into some perspective. Let’s suppose someone loses their job and has no income. They are facing a systemic threat, and talking about stress reduction techniques is probably not only a waste of time but also harmful. The person needs to be very focused on getting a job and seeking help from relatives and friends, and the stress response promotes that behavior. If a newly impoverished person believes that stress is deadly, they are more likely to die for lots of reasons. If a newly impoverished person believes that the stress response is either not a big issue, or is so scientifically savvy that they see it as their friend, they are less likely to die.

    However, let’s consider the Stress II case. The shopper who both marshals their intellectual capacity to identify the tricks being played by the retailer, and also engages in stress-reducing and self-awareness exercises, is doing a very good thing.

    How does all this relate to Limits to Growth and Peak Oil and The End of Work As We Know It?

    To a first approximation, I think the challenge goes as follows:

    *Select a collapse path based on your best information. Plan to evolve from where you are to where you think you will need to be.

    *Reduce exposure to the failure of global capitalism

    *Reduce dependence on the State for necessities such as food and water and shelter and sanitation.

    *Increase reliance on the American Psychological Association’s list of activities, and reduce reliance on consumerism.

    *Practice the willpower exercises recommended by McGonagle and others. Strong willpower may place us among Darwin’s (and Martenson’s) chosen few.

    Don Stewart

    Rumi: The wise want self-control. Children want candy.

    PS Nate Hagens talk in Minnesota, which appeared today, covers much of the same ground in psychology, but without the emphasis on self-control.

    http://www.resilience.org/stories/2014-07-28/the-converging-environmental-and-economic-crises

    • xabier says:

      Don

      Rumi, a Sufi philosopher of the 13th century from Central Asia, is said to have devised the famous Dance of the Whirling Dervishes, now a tourist spectacle in Istanbul.

      Many have since been puzzled by the absurdity of the idea that spinning around fast for lengthy periods to some rather tedious music and chanting can possibly put one in contact with the Divine.

      Rumi actually said that he thought the Turks were so mentally and physically sluggish, that they needed livening up a bit before they could approach his philosophy. In short, get fit in order to get thinking…..

      On developing will-power (not to Hitler levels one hopes) he did make a useful suggestion: try listening to emotionally powerful music, or a rousing speech, until you have trained yourself not to be moved by it. Learn to perceive, not to be played upon by those who would manipulate you.

    • MJx says:

      I watched the whole video and it is indeed worth seeing, especially the latter parts and comments Mr. Hagens makes regarding here an now. Thank you

    • Ann says:

      Individuals do not evolve. Populations evolve. That is the basis of evolution. Humans are so fixated on themselves as individuals that they cannot see the forest. I’m sure some of the last of the yeast cells in a vat of beer knew they were eating the final molecules of sugar and tried to warn the rest of the cells, to no avail.

      • Don Stewart says:

        Dear Ann
        My understanding of the science is that individuals do indeed evolve. Or at least they change. For young children, we may call it ‘development’. With older people, we may call it ‘neurogenesis’ or ‘learning’. We may talk about changes in epigenetic markers.

        Don Stewart

      • Don Stewart says:

        Ann
        Here is Kelly McGonagle’s explanation for why willpower is important:

        ‘Willpower has gone from being the thing that distinguishes us humans from other animals to the thing that DISTINGUISHES US FROM EACH OTHER. (caps mine) We may all have been born with the capacity for willpower, but some of us use it more than others. People who have control of their attention, emotions, and actions are better off almost any way you look at it. They are happier and healthier. Their relationships are more satisfying and last longer. They make more money and go further in their careers. They are better able to manage stress, deal with conflict, and overcome adversity. They even live longer.

        When pit against other vritues, willpower comes out on top. Self-control is a better predictor of academic success than intelligence, a stronger determinant of effective leadership than charisma, and more important for marital bliss than empathy.’

        But is willpower simply an inherited trait? The whole book argues otherwise. ‘If we want to improve our lives, willpower is not a bad place to start. But to do this, we’re going to have to ask a little more of our standard-equipped brains. And so let’s start by taking a look at what it is we’re working with.’

        I will grant you that this isn’t what Darwin was describing relative to the beaks of finches. But it does propagate through a group because we are social animals. And there is selection. It might be heritable through epigenetic markers, although I haven’t seen anything on that specifically. If this isn’t what Darwin meant by Evolution, the word evolution is still quite descriptive of what is going on and the ultimate effects of selection.

        Don Stewart

    • Stilgar Wilcox says:

      The UK being willing to frack should be headlines around the world. It should be the wake up call that gets most people to acknowledge crude oil is at a peak or post peak depending whether tight oil is included. Instead it will probably be just another headline forgotten in a day or two, replaced by photos of royal baby George.

      • xabier says:

        Fracking in the UK: head to New Zealand those who can!

        • xabier says:

          It is being promoted as leading to: ‘jobs, growth, and…..freedom from Russian blackmail.’ !

          All three very doubtful propositions.

          • Lizzy says:

            Freedom from Russian Blackmail? Whiskey tango foxtrot…
            Very doubtful indeed!

            • xabier says:

              Lizzy

              Yes, I think PM Cameron said it. I’m getting a raft ready to paddle to New Zealand, this country disgusts me these days! Rather like all the ex-serviceman who left England after WW1, disgusted with the politicians and the war profiteers.

  20. interguru says:

    In a ass backwards way, Forbes gets it

    http://www.forbes.com/sites/johntamny/2014/07/27/houstons-1980s-implosion-foretold-our-slow-growth-rush-into-fracking/

    Of great importance, this weak-dollar energy boom has occurred at the expense of overall economic growth, much as it did amid the last energy renaissance in the 1970s. When the dollar is in decline, investment as mentioned previously flows toward real assets like oil, and away from financial assets like stocks geared toward creating future wealth. Stocks are surely up from their 2009 lows, but compared to 2000 when the dollar was quite a bit stronger, stocks have merely returned to where they were 14 years ago.

    A domestic energy boom that has oddly fascinated so many conservatives means that the richest, most advanced nation in the world is now migrating a great deal of its always limited capital to a commercial sector that backwards countries like Venezuela, Saudi Arabia, Iran, and Russia have similarly mastered. And we wonder why growth is so slow amid our “energy renaissance”? Of course it is. We’re doing things others can do, as opposed to innovating in ways that very few can do. If this isn’t enough, do readers feel it’s mere coincidence in a period of sagging global growth that Texas, North Dakota, Russia and much of the Middle East have seemingly found the economic answer? For those who think Russia’s Putin a menace, shall we speculate just now arrogant he would be if a barrel of oil cost $20?

    While it may well be true about the billions of barrels of oil within these fifty states, what’s not commented on enough is that economics is about tradeoffs. Applied to the prosaic commodity that is oil, the tradeoff for the false God that is energy independence will be slower growth as investment chases money illusion over more intrepid investment that could with time make today’s technology, transportation and pharmaceutical advances we all enjoy appear rather dated.

    • We end up investing more and more per barrel to get oil out. The increase in number of jobs looks good, but the “work” that each barrel of oil can perform is unchanged. Thus, we are becoming more and more inefficient over time–hardly the way to “rapid growth.”

    • Christian says:

      “prosaic commodity”. Sure.

      There is a Manifesto you can sign and share:

      Last Call – This is more than an economic and political crisis: it’s a crisis of civilization

      “Among European citizens, it is not uncommon to believe that our present consumerism society can (and must) “progress” into the future. Meanwhile, the majority of the inhabitants of the planet just dream in achieving our same level of material comfort. However, our level of production and consumption has been reached at the cost of exhausting natural (including energy) resources and by disrupting the equilibrium of Earth’s ecosystems.

      “But these are old news. The most lucid researchers and scientists have warned, since the 1970′s, thatif humans were to maintainthe current trends of growth (economic, demographic, resource use, pollution and increase in inequality), the most probably outcome during the 21st century is the collapse of civilization.

      “Today there is a growing evidence in the news indicating how the path of unlimited growth is similar to a slow motion genocide. The end of cheap energy, the catastrophic scenarios of climate change, and the geopolitical conflicts over the natural resources illustrate that the years of the apparently unlimited progress are forever gone.”

      • Christian says:

        I notice Ugo Bardi commented the manifesto. Gail, perhaps you’d be willing to do as him (while I prevent you it ends somewhat rosie)

  21. I lived in Houston Texas from 1951 to 1956, before the widespread use of air conditioning. I survived but was often uncomfortable. Some of the Houston locals seemed better adapted. I was from Amarillo, a high dry climate. Few died from the heat and humidity but when I was assigned to write a term paper for Pediatrics, I chose morbidity and possible mortality from pediatric diarrhea. It was said that in hot humid climates, cholera or similar infections could kill infants in less than 24 hours. Evaporation of water keeps the body near 98.6 and is ineffective at high humidities. At that time the only air-conditioning at Jeff Davis Charity Hospital was in the surgical suite. My conclusion suggested that they add a unit in the diarrhea ward. Subsequently Jeff Davis was dynamited. The replacement hospital was air conditioned.

    • MJx says:

      Read where even in Portland Maine that A/C has become a “necessity” in the brief summer month(s)! The old timers are in amazement!

      • Coast Watcher says:

        Very true abut Portland, Maine. A/C is now standard for all new retail and commercial construction, and even some new homes. When we moved back to Maine in 1979 the first thing I did was cut the belt on the car A/C because we were in Maine and didn’t need it anymore. Today we have ceiling fans and three window A/C units in our home to cope with the heat and humidity. Are we getting softer or are the summers getting warmer?

        • We are having an unusual heat wave in Ventura County, I must still take a coat when I go shopping or risk freezing in a grocery store. The cold milk etc. is open to the customer aisles.

  22. I vaguely recall some four + decades age, reading a cover article in Fusion Magazine from the Lyndon LaRouche group touting fusion energy, unlimited population growth and colonization of space. He was quite popular in some circles.

  23. John Drake says:

    Gail, you have written:

    “Unfortunately, the limits we are reaching seem to be financial and political in nature. If these are the real limits, we seem to be not far away from the simultaneous drop in the production of many energy products. This type of limit gives a much steeper drop off than the frequently quoted symmetric “bell curve of oil production.” The shape of the drop off corresponds to (1) the type of drop off experienced by previous civilizations when they collapsed, (2) the type of drop-off I have forecast for world energy consumption, and (3) Ugo Bardi’s Seneca cliff. The 1972 book Limits to Growth by Donella Meadows et al. says (page 125), “The behavior mode of of the system shown in figure 35 is clearly that of overshoot and collapse,” so it tends to come to the same conclusion as well.”

    The interface between the energy world and “main street” is “wall street”, i.e. the financial system. The political world almost always takes “decisions” based on this key relationship.

    As the average EROEI for all the energy sources of the Gaia based human civilization drops, a complex set of interactions take place, which you are admirably attempting to understand and explain.

    The complexity of the complete spectrum of these interactions is however such that it is likely to be impossible to fully understand, simulate and predict.

    Hoverer, the ultimate result of a continuing significant decline in this average EROEI is inevitably that a system collapse will take place, albeit at some undefined point on the downward EROEI curve and according to a still precicely undefined modus operandi.

    The Club of Rome “Limits to Growth Report” states that the overal behavior mode of the system is that of overshoot and collapse. That conclusion was reached in 1972. Subsequent much more refined EROEI analysis have simply repeatedly confirmed this.

    TPTB have known this conclusion at least since 1972.

    What options do they have ?

    You know that on a planetary scale it takes more and more energy to extract key strategic minerals because remaining reserve concentrations are dropping fast while increasing overall volumes are still needed to meet the needs of an out of control rapidly rising population.

    At the same time, the EROEI of your primary energy source (fossil fuels) is also dropping fast.
    A fall back to a “medieval world” is not an option because, if you loose your high tech civilization, the remaining +400 nuclear fission plants & as numerous radioactive spent fuel cooling ponds will rapidly start leaking deadly radiation, which with the help of trade winds, will bring about an “On the beach” scenario at a planetary scale.

    You also do not have the option of replacing fossil fuels by controlled aneutronic thermonuclear fusion to produce electricity because, in the currently unstable planetary human civilization, the spreading of this technology represents a deadly nuclear proliferation problem AND you know that in a world of unlimited energy the “party” with the capacity to produce at the lowest cost will eventuallly win the economic war and reach planetary dominance.

    Hence, if you have a group of closely built complex skyscrapers and you know that you can only afford to maintain one for the long term, to avoid the risk of the others unexpectedly and uncontrollably collapsing on yours, would it not be tempting to – pull them – in accordiance to a controlled demolition methodoly.

    Once this is done, your remaining planetary high EROEI fossil fuel reserve will last longer and you will more likely be able to safely afford to introduce very high EROEI controlled eneutronic thermonuclear fusion to replace fossil fuels for the production of electricity. The long transition to electric transport becomes possible as well as to construction equipment using electricity as fuel. Air transport will use your remaining supply of oil for as long as possible.

    A stabilized electricty based economy and high tech society (capable of keeping under control the remaining planetary “nuclear fission monster”) would hopefull be able to stretch existing planetary reserves of strategic minerals for a sufficient amount of time to discover “other Earths” orbiting around other stars and more importantly to develop a faster than light human transportation system capable of relatively rapidly (2 months or so) reaching these “other Earths”.

    The high grade strategic mineral reserves of “other Earths” will offer new bases from which to sustain and spread human civilization. Without them, it will be only a matter of time before human civilazation reaches another “overshoot and collapse situation”, as descrided by the 1972 “Limits to Growth” Club of Rome report.

    Finally, another key element to consider: the only insurance policy against unpredictable planetary scale “fat tail extinction events” is the spreading of human civilization on several “other Earths”.

    • Jan Steinman says:

      “the only insurance policy against unpredictable planetary scale “fat tail extinction events” is the spreading of human civilization on several “other Earths”.”

      Thus, enabling the perpetual growth myth.

      What happens when we mine all the planets in the galaxy? Only a matter of time.

      No thanks. I’d rather learn to live within limits than spread like some galactic cancer.

      • John Drake says:

        If you want to ensure the survival of human civilization against planetary scale “fat tail extinction events” – which we know will eventually occur on Earth- you need to spread out humanity on several “other Earths”.

        There are approximately 200 billion stars in our galaxy, “The Milky Way”, and based on the findings of the Kepler satellite there are likely to be millions of “other Earths” in our single galaxy. Need I add that there are, in the presenty know Universe, at least as many galaxies as there are stars in “the Miljy Way”. Hence, we have a very long way to go before exhausting the strategic resources of all the existing “other Earths”…

        But more fundamentally, once humanity will have spead on a dozen “other Earths” to ensure against planetary scale “fat tail extinction events”, one would hope that it will have collectively learned how to manage “population control” according to an acceptable code of ethics.

        Once this is done, the growth pressure will ease and, hopefully, further exploration of the know Universe will be done because of the desire to know more than the need to survive.

        • interguru says:

          For every grain of sand on the earth, there are many (about 10,000 if you carry out the numbers in the article.) stars in the sky. Many of them have rocky planets.

          All we have to do is get there.

          http://www.npr.org/blogs/krulwich/2012/09/17/161096233/which-is-greater-the-number-of-sand-grains-on-earth-or-stars-in-the-sky

        • dashui says:

          hey, I’m not going anywhere near Uranus!

        • Jan Steinman says:

          Sorry, I just don’t think humans are all that important. Perhaps we’ll kick a hornet’s nest if we venture off this rock, and end up drawing the attention of some species much more powerful than ourselves.

          Shannon said that any optimally encoded signal is indistinguishable from noise. A civilization has about 100 years of crude technology in which it can be detected. Sagan asked, “Where are they?” The answer may be that they are so far ahead of us, we cannot detect them.

        • I wish somebody would scotch this ”other earth” nonsense.

          Example 1— we find an asteroid comprised of solid gold—hooray—everyone is going to be rich. But the cost of the expedition to said asteroid is underpinned by a financial system that is itself dependent on gold reserves. (130,000 tons of the stuff).
          The asteroid has 10 million tons of gold–say–, so when we haul it back to Earth…our financial system collapses overnight. Then we have the next problem…gold has no use whatsoever, so youve hauled back 10 million tons of—-nothing!!

          Example 2—- You find a planet rich in iron, copper, oil–whatever. What exactly are you going to do with it?? You can haul it back to Earth using a spaceship powered with Unobtainium (the only known substance to allow warp speed)… You now have a billion tons of say , iron, Wealth–jobs—industry–factories—infinite prosperity for all!!
          Then somebody has the temerity to point out that iron needs heat before you can do anything with it. OK—so you ship oil 100 light years across the galaxy?? NO?? so you use the oil to make ‘stuff’ on planet Zarg and ship ‘stuff’ across the galaxy?? I bet the Chinese are in on that one.

          Example 3— Using Unobtainium drive again–we find a planet rich in all the resources we need, plus the hydrocarbons necessary for heat applications to make use of them. A select few of us decide to take over said planet and appropriate its resources for our own use (think Columbus). We can be certain that if another planet has hydrocarbon, it will have life forms that won’t take too kindly to another program of empire building, no matter how many blankets and beads we offer to trade.

          Oh—and just one other trivial little detail—all of the above has got to be accomplished in the next 20 years at the very outside. After that, there will be just about enough oil in our industrial system to grease the axles on carts. If anyone still knows how to make wheels of course.

        • MJx says:

          Dr Peter Ward wrote an excellent examination concerning the likelihood of life on other planets. What he discovered was that existence of life would be not impossible to find, but for a planet to support large mammal creatures like us very hard, hence, the title “Rare Earth”
          “Rare Earth lays out a series of factors which appear to be crucial to the development of complex life. Some have been known for years, such as the necessity of a planet being the right distance from its sun (like Goldilocks’s soup, not too hot and not too cold), a stable planetary environment, and the absence of any threatening nearby astronomical phenomena to scald the planet with radiation. Others, however, have only been recently recognized. The spectacular 1994 impact of Comet Shoemaker-Levy-9 with Jupiter made abundantly clear the role that Jupiter plays in protecting us from cosmic catastrophe: the planet acts as an gravitational vacuum cleaner, sucking up incoming debris and preventing it from reaching the inner Solar System. Without Jupiter, life on Earth might have been obliterated long before ever gaining a secure foothold.

          Some factors are more local in scope. The presence of a large moon helps to stabilize the Earth’s axial tilt and slow its rotation, keeping climatic variations in check. Geology is also a crucial consideration. One of Rare Earth’s most fascinating ideas is the importance that plate tectonics might have played in the evolution of animals. By creating mountains, deserts, lakes, and all the other myriad varieties of microenvironments on Earth, plate tectonics encouraged the process of speciation–the development of different types of organisms capable of surviving in a greater range of conditions. The advantage? More chance of at least some form of complex life surviving later planetary catastrophes. It’s already happened: the dinosaurs weren’t able to survive the conditions after the impact event that occurred sixty million years ago–but if the small mammalian creatures arising at that time hadn’t been able to adapt, we wouldn’t be here today. The heat and movement of the planetary core that drive plate tectonics also create Earth’s magnetic field, shielding its surface from lethal radiation.”
          http://home.earthlink.net/~exetermw/rareearth.html

          • Interesting!

          • Stefeun says:

            Stephen Jay Gould also showed that the size (and density) of our planet is very important, not too big not too small in order to have sufficient atmosphere and correct mechanical constraints onto living beings.
            (can’t find the quote; it was a chapter in his book “Ever Since Darwin”,1977)

    • The whole idea of this is a little too wild for me to imagine. We are already near limits. We don’t have the time to develop inexpensive new energy sources. The amount of energy it would take to go to other planets, and extract resources from them or move our population there would be huge. Major makeovers would likely be required to move populations there, because climate and air mixture would likely not to be to our liking.

      • xabier says:

        Infinite expansion in Space? We’d be better off planning to burrow underground to make friends with the Dwarves in their gold mines…..

      • John Drake says:

        The basic idea is not to move billions of tons of strategic minerals from “other Earths” to Gaia but to send a small contingent of colonists so that they can start afresh a new human colony on these virgin worlds, thereby reducing the “fat tail planetary extinction risks” that the human civilization currently incurs by being all concentrated on Gaia.

        Who says that the amount of energy to travel to “other Earths” would necessarily be “huge”? We know that it would be so using chemical propulsion but we also know that this propulsion mode makes it impossible to reach faster-than-light speed. However, more exotic propulsion technologies – currently considered in many discrete scientific circles -might allow faster-than-light deep space human travel that would not consume a “huge amount of energy”. Today a jet airplane can fly across the Atlantic in about 6 hours. It took Columbus a few months to do the same in 1492.

        You only need to think a little bit “outside the box” to understand that the so called limits of today are not absolute ones… at least as far as space travel is concerned.

        • Paul says:

          And why do we think that finding a new planet to rape and pillage is a good thing?

          I sincerely hope that the human race is eradicated before it can cause further suffering on earth or any other inhabitable planet in the universe.

          When I see the utter depravity of our species (just take a look at what is happening in Gaza) I struggle to understand why we call ourselves special.

          We are a wicked wicked collection of voracious beasts – we are an abomination that imprisons other animals in the most abhorrent conditions and feeds off of them — we are worse than the evil monsters of sci-fi cinema.

          Get over the ‘we are special’ myth – we are a cancer on the planet.

        • Stilgar Wilcox says:

          Going to another planet is completely out of the question even if one was in our own solar system, so the distance was not a problem. The simple reason is because we have evolved along side the flora and fauna here on Earth, not anywhere else. We are one with the multiple bacteria in our guts and air but expose us to another separately evolved set of microbes and we would be toast. In fact, I would bet all the travelers exposed just to the air of another planet would be dead inside 24 hours, a few days at the most.

          This is why it is absurd for people to suggest aliens abduct humans or do experiments on them without them being in space suits. How could they breathe our air? Why would they be so stupid as to risk cross infection? They are smart enough to travel all the way here but stupid enough to operate on us without full protection? Even doctors who are of the same species wear goggles to avoid blood spatter in the eyes, but aliens, oh no they don’t need any protection, not even gloves. It’s pretty funny if you think about it.

        • Columbus travelled at a walking pace, we travel at 600 mph
          Columbus used the energy embedded in trees to harness the wind to make his ships move.
          we use the embedded energy in 150m year old trees to do the same thing–only faster
          As Ive pointed out elsewhere–the wright brothers and Niel Armstrong used the power of exploding chemicals to lift clear of gravity.
          No matter what fantasy drives your science, we havent managed to move any significant payload off the Earths surface by any other means in 100+ years of powered flight.
          What we see as progress is in fact improved technology–it is not new technology.
          Unless we can overcome this little problem in less than 20 years or less, there won’t be enough energy in the system to manufactire bicycle wheels. let alone go startrekking.

        • Christian says:

          “faster-than-light deep space human travel that would not consume a “huge amount of energy””

          LOL. In the meanwhile, more people can’t even buy a bus ticket. Tell me, are you suggesting you are allowing taking a part of your own taxes to spend such a project?

          • Paul says:

            Moving to another planet — even if we could which planet might that be? The entire concept is ludicrous

        • timl2k11 says:

          “Who says that the amount of energy to travel to “other Earths” would necessarily be “huge”?”
          This guy by the name of Albert Einstein.

          • John Drake says:

            Mining strategic minerals from a planet or asteroid where humans cannot operate in a “normal temperature, atmospheric environment & gravity” environment would be very costly.

            Mining the same strategic minerals out of “another Earth” with a similar temperature, atmospheric environment and gravity as Gaia would be as easy as it is now. As a matter of fact the same type of equipment as we currently use could be brought on line.

            Of course, one would need to ensure that the mining crew is adapted to the local microbiological environment but gene therapy has made tremendous progress and one would hope that it could eventually ensure adequate immunoligical protection.

            Hence, in terms of capital investment, terraforming another planet or mining a very different planet than Gaia would be a much more costly proposition than simply moving a prime crew of colonists to “another Earth” and letting them build another human community using essentially existing technology and hopefull the wisdom acquired by learning from the errors made by human civilization on Gaia.

            • interguru says:

              Let get real, http://en.wikipedia.org/wiki/Space_Shuttle. says the gross lift off weight is 240,000 pounds so you might say it takes 28.4375 pounds thrust to put one pound in orbit, but that is pretty sloppy.

              Solving our resource problem from space is a pipe dream.

              You might think of a railgun, but the technology is not here. In any case, while it will be more energy-efficient, I doubt that it would make space mining piratical. Even if you have 100% efficiency and no atmospheric drag — it would would theoretically take 7.89 KwHr to accelerate one pound mass to 25,000 mph, escape velocity. In the real world it would be much more and beyond cost-effective. The extreme acceleration of a railgun would not allow any manned launched
              http://home.earthlink.net/~jedcline/ets.html

            • Even if the same equipment would be needed, we would have the mammoth job of getting all of the stuff to the other planet. We would then have a problem, if one part breaks, and needs to be replaced. A work around would be to send lots of spare parts and a repair-person. The costs would be higher because of all of the transportation expenses and work-arounds.

  24. Paul says:

    America’s Lost Decade: Typical Household Wealth Has Plunged 36% Since 2003

    http://www.zerohedge.com/news/2014-07-26/americas-lost-decade-typical-household-wealth-has-plunged-36-2003

    This just happens to coincide with the beginning of higher oil prices…

  25. Paul says:

    For those who have gone back to the land … why bother with farming grains… http://www.theatlantic.com/health/archive/2013/12/this-is-your-brain-on-gluten/282550/

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  27. Paul says:

    Had a 30 minute conversation with an Amish fellow in the St Jacobs area in Ontario earlier today and contrary to what I had believed they are completely reliant on industrial farming (oil and gas based fertilizers and pesticides)… as the guy stated — it is not economically viable to run a commercial farm using organic methods — the key issue is that it would be difficult and expensive to find labour to do such work — also huge crop risk using organic pesticides — you can lose an entire crop which bankrupts you….

    So it would seem even this most traditional of communities will be destroyed when the SHTF.

    • Organic pesticides and soil amendments still need to be transported, nearly always using oil. Many organic farms use irrigation, and tractors for various tasks. So organic methods tend to be dependent on our industrial model, as well.

    • VMJx says:

      One of the top influential reads of the 1970’s was Gene Logsdon’s write up “Amish Economics”. Anyone picking up a copy of the Whole earth Catalog and going through it perhaps remembers it:
      http://books.google.com/books?id=Aqlpr6HkkesC&pg=PA130&lpg=PA130&dq=amish+economics+by+gene+logsdon&source=bl&ots=DoJytTSG_7&sig=X9kt6Sq2GHTBZoERBrrSYyvb5Mg&hl=en&sa=X&ei=ea3VU4j3KKTNsQTD0oDoAQ&ved=0CB0Q6AEwAA#v=onepage&q=amish%20economics%20by%20gene%20logsdon&f=false
      He wrote and more up to date essay in 2009. “Did the Amish Get it Right After All?”
      http://chelseagreen.com/blogs/genelogsdon/2009/02/18/did-the-amish-get-it-right-after-all/
      grew up when horses were still the rule in farming. I had a runaway with a team and a wagon when I was 11 years old, so I know the dark side of it too. Because of the strange circumstances of my life, I worked on horse-powered farms again in my early twenties. I assure you: farm work is no harder or easier using horses than tractors. Each has its pluses and minuses physically. Mentally, farming with horses is more relaxed (they always start in the morning no matter how cold) except during a runaway. The horse farmer I worked for during those years, (1950s) was by no means Amish. He did have a big old tractor to plow his hilly acres. He used horses because he made money farming with horses. He was the best economics professor I never had. The way he farmed wasn’t what you’d find in articles in the leading farm magazines; it wasn’t very pretty. But it was a lot prettier than the Americans lined up at the employment offices today because they opted out of hard work in favor of the great American dream of ease and forty-hour weeks.
      Anyway, if interest can read more there. I believe the Amish will be in better position than more if a the downturn happens sharply

      • Paul says:

        I used to think that — but no sure any longer.

        Being Amish does not change the fact that you have destroyed your soil if you have farmed using petrochemical inputs… the Amish farmers are not really any different than the massive industrial farms — they are using the same farming methods (because they have no choice).

  28. One could argue that prices will be too high to afford and too low for reasonable production. Some analysts say that world central banks will inflate oil prices as well as other asset prices longer than expected. The big difference between an oil price inflation and a stock market bubble ist the connection to the real economy, like you’ve pointed out perfectly.

    Pretty unclear how oil prices play out further. One likely scenario could be a further increase of the money supply which could support rising nominal prices.

    btw.: Do you have any price target for the next years which would be critical to watch?

    • I think the big thing I am worried about is interest rates rising. In that case, I would expect oil prices to fall–which would be a major problem for oil supply.

      I don’t think anyone is worried about oil prices rising. Oil buyers are not hedging this risk either. People can’t afford higher prices, and there is the belief that more supply is available if needed.

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  30. Rodster says:

    You read stuff like this and you just shake your head. I’ve been of the belief that China is quickly killing itself from Industrialization.

    “RIVER IN CHINA MYSTERIOUSLY TURNS BLOODY RED OVERNIGHT”
    https://gma.yahoo.com/river-china-mysteriously-turns-bloody-red-overnight-182207097–abc-news-topstories.html

    Quote: “A waterway in eastern China has mysteriously turned a blood red color.

    Residents in Zhejiang province said the river looked normal at 5 a.m. Beijing time on Thursday morning. Within an hour, the entire river turned crimson. Residents also said a strange smell wafted through the air.”

    • A person wonders and worries. I have been invited to visit China for three weeks next spring (to lecture at a university), but these incidents and the general pollution problems make a person worry–not to mention all of the other things going wrong.

  31. Stilgar Wilcox says:

    I was trying to find out what US 2nd qtr. GDP was and could not get a number from a Google search. Wasn’t the 2nd qtr. April, May & June? Isn’t this late July? So does anyone know what that came in at?

    • timl2k11 says:

      The 2nd qtr first estimate comes out July 30th.
      See: http://www.bea.gov/newsreleases/news_release_sort_national.htm

      • Stilgar Wilcox says:

        Thanks tim, I’ll be looking for it. They usually post their highest estimate first, followed by lower adjusted figures. If it ends up in a later adjustment negative, then we are officially in a recession. Let’s find out what it is first though, as we are to presume that better weather would have jacked up the economy/ lol.

        • timl2k11 says:

          I’m suspicious of the -2.9% print for the 1st quarter GDP. One way the government could avoid the stigma of officially being in a recession is to understate GDP for one specific quarter and than overstate it by the same amount for the next quarter. So, for example, instead of say -1.5% 1Q GDP and -0.5% 2Q GDP they could state it as -3% 1Q and 1% 2Q. Then later on, when no one really cares anymore, they can make “historical revisions” that reflect what actually happened.
          Interestingly they blamed most of the drop on reduced healthcare spending due to Obamacare, which makes little sense as that would free up discretionary spending for other areas. It would also imply that cheaper healthcare is somehow bad for the economy!

          • Cheaper healthcare => fewer jobs in healthcare => one of the few growth areas in jobs goes away

            So, yes, cheaper healthcare may be bad for the economy, (just like cutting back on the number of lawyers would be), but I am not sure about one quarter.

    • At one point, the schedule said that 2nd quarter GDP was to be released Friday, July 25, but that must have changed.

  32. Don Stewart says:

    Dear Gail and All
    A frequent pattern here is to state that the current financial system and/ or current resource system is about to collapse and it will be horrible and there is nothing we can do about it. ‘It’s not something we will do, it is something that will be done to us’.

    I recommend that people who are thinking that way pay attention to Kelly McGonigal’s TED talk:
    http://www.ted.com/talks/kelly_mcgonigal_how_to_make_stress_your_friend

    New research shows that stress does indeed kill people…but only if they believe that it kills people. If people perceive that their body is giving them the resources to deal with stress, they live long and prosper. Note particularly the role of oxytocin as part of the stress response. When we are stressed, our hormones are prompting us to reach out to others. This is not to say that we can’t override our hormones and become anti-social, but you will come to appreciate the body’s design which produces such adaptive behaviors.

    Also, at the end, stay tuned for the one question from the moderator. We are better off pursing a life of meaning, even if it is more stressful.

    Don Stewart

    • xabier says:

      I’ve quoted it before, but it bears repeating in relation to Don’s comment on stress:

      Churchill and a General had some very bad news early in WW2:

      ‘This is terrible news! I feel ten years older!’ said the General.

      ‘This is indeed terrible news! I feel at least ten years younger!’ exclaimed Churchill.

      (And much better than Hitler’s usual reaction, which was shoot the messenger or pretend it hadn’t happened.)

    • A boring life would not be very interesting. We will leave that for someone else.

  33. MJx says:

    Neat article concerning North Sea Oil and depletion:
    http://www.theguardian.com/big-energy-debate/scottish-referendum-north-sea-oil-gas
    “One challenge the industry faces is tapping new wells. At depths of almost 2km, the technical challenges associated with installing equipment are immense. There is now a move towards new modular units that are dropped into place and then managed by remotely-operated underwater vehicles. New cages to protect the technology and mechanisms to manage the tools remotely are all patentable technologies.

    Another challenge, affecting many brownfield sites in particular, is low reservoir pressure. As a harsh offshore area, lifting costs in the North Sea have long been carefully balanced against production revenue. However, as production slows due to reservoir depletion, some sites are becoming uneconomical. This has led to an increased focus on work to understand how new subsea, underwater technologies could increase reservoir output.

    As reservoirs become depleted, a much higher proportion of water is pumped up along with the oil or gas and getting it back to a processing area can be costly. Innovative oil and gas companies are developing reliable processing systems which separate oil and gas from water while still on the sea bed. The oil and gas alone is then pumped to the surface”

    All leading to rushing to the exits:
    http://www.fool.co.uk/investing/2014/07/18/surging-north-sea-project-costs-are-putting-the-regions-future-at-risk-tullow-oil-plc-premier-oil-plc-xcite-energy-limited/
    “It emerged this week that the drilling of wells in the North Sea has crashed by around 50% this year, compared to the year-ago period. The reason for this is simple: the cost of extracting oil in North Sea has quintupled over the last decade, discouraging companies from investing within the region.

    • Thanks for the links. It always gets to be a question of what price is affordable. The oil appears to there; the question is getting it out cheaply.

  34. theedrich says:

    The first rule in the old hippocratic oath was, “First, do no harm.”  This caveat seems to have been lost in our age where the political maxim for solving any and all problems is, “Do something!”  The latest result of this notion is a new, incredibly complex boondoggle which no one in the healthcare business really understands, where the goalposts are being constantly moved for political reasons, data and money paid online are going missing, and countless other errors and difficulties are throwing everything into chaos.  If this is the “solution” to the wish for fairyland medical coverage, what can we expect from the government when we begin to suffer the unexpected results of the aforesaid Liebig’s Law of the Minimum?  Given the current policy of the feds to import parentless children, “economic” refugees, prostitutes, narcotics dealers and many others with special talents from the Third World, it looks like we are moving into a Brave New World in which traditional America will have been consigned to the memory hole.

    As a postscript, it might be mentioned that Michael Ruppert’s suicide was the aptest metaphor for current American society as a whole.  It no longer wishes to deal with reality as it is, and would rather die, going out partying.

    • MJx says:

      On the contrary, you are wrong about Michael Ruppert’s suicide and obviously did not watch the video presentation of his friend . Mr. Ruppert dealt with direct reality and never ran away from the truth. There are unknowns concerning why he chosed this time to depart. Perhaps ill physical health (he was a chain smoker) or a bit of depression or both. We may never know. Abbey Martin spoke these moving words that dealt with his life:
      One thing for certain Mr. Martin DID NOT AVOID reality and go out “partying”.

    • MJx says:

      Obviously you did not at all watch the video or know about Michael Ruppert or his life work. If you did you would not wrote what you did. Michael Ruppert dealt with reality and face reality and spoke out in regard to dealing with those hiding the “truth”. He paid dearly for his actions. He was a heavy smoker and had a bout of deprerssion. Perhaps ill health contributed to his reason for leaving? We may never know.
      We know this much and Abbey Martin summed it up in a moving tribute:

      • Rodster says:

        Actually The Verge wrote a great piece on Michael Ruppert and it puts another twist on this man. I happen to be a fan of Mike especially after watching his Collapse movie. It was a wake up call for me. In short, Mike had his demons, some brought about by himself and some he attracted because of his affiliations with individuals in the US Govt.

        But as the article explains, Mike did at times runaway from his problems when things got hot. It was an excellent article but that doesn’t change anything about Mike or his message. At least not with me.

        http://www.theverge.com/2014/7/22/5881501/the-unbelievable-life-and-death-of-michael-c-ruppert

        • VMJx says:

          If the Verge wrote it (yes, I read it all), it has to be ALL factual! Of course, now we are unable to listen to Michael Ruppert about the article. I am aware that Mr. Ruppert had “issues” (don’t we all to some degree). Perhaps he would make an interesting
          Shakespearean figure. At least he had something in common with Uncle Sam, both are (were) broke and seem addicted (Michael to cigarettes and Uncle Sam to oil).
          I posted the video of the account of his death by his friend, Jack Martin, only to provide insight on one human’s acceptance of the “end”. Something we all must deal with eventually.
          Other than that, one can judge the man for themselves

        • MJx says:

          Came across this concerning the above article on the “collapse network” website:
          http://www.collapsenet.com/free-resources/collapsenet-public-access/news-alerts/item/12627-the-mike-ruppert-i-knewmy-response-to-thevergecom-article-about-michael-c-ruppert-by-jessyre

          The Michael C. Ruppert I Knew…My Response to theVerge.com Article About Mike Ruppert by JessyRe’
          July 25, 2014

          Aside from any personal clarifications, however, I found a lot of things unsettling about theVerge.com article. I found it to be, at the very least, an unfair representation of Mike and, at worst, what appears to be a deliberate smear against his reputation. The article takes a tone and direction that implies that Mike was a delusional, unstable, “doomer” who fabricated stories to fit his version of reality. This type of attitude towards Mike is the exact thing he was up against for so long; this is, in fact, was one of the very things that drove him at times to feelings of despair.

          “The Verge” article was outright bias and smear.

          • Coast Watcher says:

            Mike Ruppert was a near-diety among a certain segment of the doomer and Peak Oil communities. Frankly. I found him far less than impressive. He seemed to jump on every doomer bandwagon that came along, from the survivalist/nuke war groups in the early 1990s to y2k in the late 1990s. He came late to the Peak Oil debate, after y2k had turned into such a bust for him, and didn’t offer much that other people hadn’t said first and better. I lost all respect for him when he stood up at the Commonwealth Club in San Francisco and flatly claimed Dick Cheney had personally guided the 9/11 airplanes to their targets via remote control from a secret Secret Service command post, all without a shred of proof. Cheney may be evil incarnate, but that was too much. I ignored him (and Cheney) ever since.

            • MJx says:

              Oh yeah!
              One just has to connect the dots:
              https://www.collapsenet.com/free-resources/collapsenet-public-access/news-alerts/item/12621-there%E2%80%99s-so-much-more-to-mike%E2%80%99s-story-collapsenet%E2%80%99s-response-to-thevergecom-article-about-%E2%80%9Cthe-unbelievable-life-and-death-of-michael-c-ruppert%E2%80%9D-by-wesley-t-miller
              Does Farmer have cooperation and agreement from other members of the Commission? Yes. Did they say Bush ordered 9/11? No. Do they say that the 9/11 Commission was lied to by the FBI, CIA, Whitehouse and NORAD? Yes. Is there full documentary proof of this? Yes.

              Farmer states…“at some level of the government, at some point in time…there was an agreement not to tell the truth about what happened… I was shocked at how different the truth was from the way it was described …. The [Norad air defense] tapes told a radically different story from what had been told to us and the public for two years. This is not spin.”

              How about the CIA and drugs? Matt’s article quotes the U.S. Justice Department as dismissing Mike’s allegations many years ago. Okay, fair enough, but that was then. NOW, over the past several years, we have had many of the world’s largest banks actually plead guilty to laundering massive amounts of drug cartel money, or settling for that offense out of court. I’m talking about HSBC. I’m talking about Wachovia. Bank of America. Western Union. J.P. Morgan. How could that happen to such an allegedly well regulated industry, filled with the best and brightest graduates of the top Ivy League schools? Mike was very good at pointing out the revolving door between Wall Street and the CIA, naming names and showing connections, so can his work now be so easily disregarded by thinking adults?

              There is so much more of Mike’s story to tell. Stay tuned.

            • Jeremy says:

              Dick Cheney….you are dissed about what Michael claimed about him?…It IS far WORSE!
              http://www.washingtonsblog.com/2013/03/cheney-admits-that-he-lied-about-911.html

              Falsely linked Iraq with 9/11 (indeed, the entire torture program was aimed at establishing such a false linkage; and Cheney is the guy who pushed for torture, pressured the Justice Department lawyers to write memos saying torture was legal, and made the pitch to Congress justifying torture. The former director of the CIA said Cheney oversaw American torture policies)
              Falsely claimed that spying on Americans, torture, the Patriot Act, the Afghanistan war, the Iraq war and the “war on terror” were all necessitated by 9/11 … when all of them started or were planned before 9/11
              Falsely stated that an attack such as 9/11 was unforeseeable, when Al Qaeda flying planes into the World Trade Center and Pentagon was something which American military and intelligence services – and our allies – knew could happen
              Falsely pretended that he was out of the loop during the 9/11 attacks
              Falsely blamed others for 9/11, when Cheney was in charge of all of America’s counter-terrorism exercises, activities and responses on 9/11. See this Department of State announcement and this CNN article …
              … And when Cheney was apparently responsible for letting the Pentagon get hit by an airplane (confirmed here and here)
              And was instrumental in squashing a real investigation into 9/11
              * Indeed, Cheney initiated Continuity of Government plans on 9/11 which essentially nullified
              It is too bad we IGNORED Cheney, the guy is a thug

            • Paul says:

              Jetliner or Cruise Missile?

            • Coast Watcher says:

              Geez, overreact much?

            • VPK says:

              flatly claimed Dick Cheney had personally guided the 9/11 airplanes to their targets via remote control from a secret Secret Service command post,
              OMG, Coast Watcher needs to listen to THIS:
              flatly claimed Dick Cheney had personally guided the 9/11 airplanes to their targets via remote control from a secret Secret Service command post,

            • VPK says:

      • theedrich says:

        Sorry, MJx.  I did watch the entire video.  My point is that Michael Ruppert was in the grip of an acute version of the gross materialism that poisons America in general.  While there can be cases of great suffering which drive individuals to self-murder, in the video there was no mention whatsoever of any ill health.  Michael had an extremely erratic life and, obviously, no reason beyond his own self-importance to live.  This is the problem with those who neither believe nor trust in an infinite Mind which has given them life.  In committing suicide they throw that gift back in the face of the Giver.

        • VMJx says:

          You may view suicide as such. That is fine with me. Personally, I do not find it as a taboo act as you wrote.

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  36. Alturium says:

    About those thinking of changing the world through Education…

    Day 1 – You are appointed Grand Educational Czar of Everybody.
    Day 2 – You convene the current bureaucratic heads and they chant: You Are Awesome!
    Day 3 – You start having large public meetings and declare that Open Transparency Is Your Style.
    Day 4 – You decide to publish a book Apathy Shrugged to promote your goals.
    Day 5 – You hire a new staff to help deal with all the emails and issues from Day 3.
    Day 6 – You appear on late night shows to show off your wit and proclaim Everything Will Be Different This Time. Later you attend a Hollywood party in the Malibu highlands.
    Day 7 – You ask the department heads to put together a Plan for achieving your educational goals. The minions scurry about trying to convert your vague ideas into digestible bureaucratic instructions.
    Day 8 – The grueling schedule of meetings, e-mails, paperwork, and late-night socials is starting to take a toll. You consult a doctor for pain medication for headaches.
    Day 9 – A story is published about how you were caught smoking cigarettes in high school.
    Day 10 – It turns out your plan will cost too much. You start to negotiate but realize that some parts of the plan will have to wait till Year Two. It’s only a small delay you rationalize.
    Day 11 – Half of the department heads are pissed off after Day 10 when they find out you tried to cut funding for their pet programs.
    Day 12 – Some technically smart people happen to interrupt one of your meetings and inform you of some dire dose of reality. You are tired of repeating the same story about the donkey who became president of the jungle and instead openly ridicule them. They are shocked by your behavior and shamed when they see everyone laughing at them. To set an example, you fire one.
    Day 13 – You hire a lawyer to defend the book advance you received on Day 4 and cite that hostile political operators are at work.
    Day 14 – By this time, most of the department heads are either silently sabotaging or are openly hostile to your memos of change. You start to fire some but the others stir up rank-and-file and you realize you are fighting a losing battle.
    Day 15 – A flurry of memos, worthy of a Russian blizzard, descend on everybody’s desk.
    Day 16 – The President quietly informs you while sipping coffee that you may be working too hard. And then tells that you that more compromising will get what you want in Year Three. You are reluctant to give in, but the photo op was Awesome! You comfort yourself that your memoirs will be a best seller.
    Day 17 – As you review The Newly Adjusted And Better Plan you start to have a sinking feeling that it doesn’t at all resemble your lofty goals to save the world. You chase a few pain killers down with Jack Daniels after reaching page 542.
    Day 18 – The next day your brisk walk and perky comments do not clear the usual morning cloud of confusion. You realize that the staff is a little grumpy because you haven’t delivered on the perks they expected. Like handicapped parking at the Zoo.
    Day 19 – You gather the troops and give them The Volcano Is About To Explode! speech. Some of the secretaries hold back tears but most seem to get the message you are here to change the world no matter how many butts you have to kick. As you close the door to your office, you exult I Am Awesome!
    Day 20 – Another story is published with saucy details of you smoking weed from Day 6’s Hollywood party. Rumors circulate about your bizarre behavior after taking too many painkillers.
    Day 21 – You decide that political survival is the #1 goal. How can the country appreciate your brilliance if you are dragged down by the tabloids?
    … Day 100…You realize that you have an excuse or scapegoat for every part of your actions and start to look forward to your next political ascension…

    • Thanks! Unless you have a quick and easy solution to sell to everyone (wind turbines and solar PV, for example) that won’t cost them anything and will fix the situation, you are out of luck, I am afraid. Or how you can get rich, as oil price spikes!

  37. Vince P says:

    I work for the largest airline now in the USA, made so by a recent merger. I can attest that there are significant expansion plans to create more growth in the industry. No one that i work with takes peak oil seriously or for that matter some have not even have heard about it. When mentioned it does NOT register at all. There is NO response or reply. It is as if that reality can NOT happen.
    If you all are correct, there will be a shock of disbelief that there is actually a shortage of affordable oil. The reaction will be is the Oil companies are doing it INTENTIONALLY for increase PROFITS.

  38. dolph9 says:

    Even though I’m not an extreme leftist nor a supporter of Obama, I find the comments of Tom Settles above to be detestable.

    The reflexive right wing views (confused as they are), the vicious attacks on Canada, India, China, and Japan (each of these being countries with their own dynamics), the pathetically childish, assured view that only global warming will save us from an ice age, etc.

    All of this points to a small minded, uninformed man who has been watching too much Fox News and not doing enough thinking.

    I will call him out on it, Gail, even if you won’t.

    • I learned when raising children, “Ignore bad behavior, reward good behavior.” I respond to points that I can reasonably responds to, not to political points.

      I don’t agree with Tom Settles, but there certainly are some that do.

      I don’t want to make the site a place where we argue about political views. I see all political views as having serious deficiencies, so I don’t endorse any of them.

  39. MJx says:

    Speaking of dieing; here is a moving testament to Michael Ruppert that was posted by a friend to give a clear picture on what occurred at that “event”. I watched the whole video and felt it provided insight to the whole issue of facing our end and knowing that it is our time. “Our Finite World” that Gail has made clear that all is not everlasting. Actually, without death, there could not be life.
    Beautiful area Mike Ruppert was living at near the border in Napa valley. His DVD, “Collapse” was just one message shared with the public at large. Rest in Peace with the Great Spirit:

  40. indigoboy says:

    I accept this is a touch off topic but I’d appreciate thoughts on these figures below, and whether we are witnessing a challenge to the US dollar reserve status, plus an attempt at a Gold peg?.
    In the last couple of weeks, the BRICS countries have just opened a new joint bank and put $100 billion US dollars in it. Strangely, using US dollars seems counterintuitive? But more intriguing, is why ~ $100 billion dollars ?
    World Gold reserves as of 2014 suggests that jointly the BRICS hold :
    B R I C S
    67 + 1035 + 557 + 1054 + 125 (tonnes)
    So total BRICS joint tonnage of gold holdings (2014) = 2838 tonnes of gold.
    1 tonne = 35,274 ounces.
    So the BRICS hold 2838 x 35,274 = 100,107,612 ounces of gold (jointly)
    If we use a base figure of $1000 per ounce as the price of gold, we can say that the BRICS joint gold holding has a value of :
    100,107,612 x $1000 = $100,107,612,000
    A figure which is *astonishingly close* to the $100 billion deposited into the new BRICS bank ?
    Could it be, that in the next few months they [BRICS], might be planning to ‘flip’ those US dollars in their new joint bank account to [ BRICS Drawing Rights ] on an (initial!) one to one basis with the US dollar, and then follow through the process, by pegging their new BRICS currency to the value of their (2014 holdings) of gold?
    Would such a move give the new currency [BRICS], an alternative safe haven status for wealth looking for a home and security from the ‘stranglehold’ of US dollar?

    • Rodster says:

      It’s possible a challenge can be made to the $USD but it really doesn’t matter does it? Why? Because you can’t have a gold backed currency in an “infinite growth economic system”. That’s where everyone seems to miss the plot.

      The US went off the Gold standard because the US at the time was printing money? Why? Because of “The Great Society” and “Vietnam”. The French realized just like the rest of the World that the US was paying everyone back with monopoly money. So they wanted repayment in Gold. Richard Nixon decoupled the currency and made it straight FIAT money.

      The global economic system we are in today is in an advanced state of decay and EVERYONE is doing the same thing. So even if the BRICS counter with their own verion of the IMF and a gold backed currency,……..”it won’t last”. And i’d venture to say it will die off quicker than the USD.

  41. Robert in Houston says:

    Excellent article. Just a small additional rebuff to those who believe the “Shale Gale” will save us: The depletion rates on fracked wells is astronomical 50-70% per year from these tight formations compared to 2-5% from conventional reservoirs.

    Yes, shale oil production rises rapidly but must not be extrapolated because depletion takes hold and total production plateaus. Like Lewis Carol’s Red Queen, we have to run[drill] as fast as we can just to stay in the same place. The US might get 3-5 MB/d from shale — but that is all.

    • A person wonders how long this will all hang together. On the natural gas side, and now with respect to distillate, the plan is to export the product, in the hope of getting the price up higher. With higher price, it is possible to put up with the high decline rates. But wages don’t go up at the same time, so what happens is that with higher product prices, everyone’s standard of living drops. Economic growth slows down, and debt defaults start to rise.

      • Robert in Houston says:

        Certainly there will be misery and defaults. How could it be otherwise? One way or the other (infl), there is too much debt and outstanding wagers (derivatives) for the available capital and productivity to support. If there were not excess, profit pressures now unconstrained would create it. So the US FRB and other CBs provide props which eventually will get overwhelmed. Medium-term 2-20 years ugly. The back-side of Hubbert’s pimple also gets steep once past the plateau. More misery and strife at all scales as people shift from production to predatory behavior for greater returns.

        Longer term everything hinges on technology development: Humans have always lived in a Malthusian trap, and escaped only by technologically rendering previous constraints obsolete (non-constraining). Worryingly over the past century, conservation-conformist Europe has produced far fewer tech developments than wasteful-chaotic America. We (and especially the Chinese) may need to learn to tolerate waste and disorder to foster the innovation H.Sapiens needs to escape the trap.

        • Even if we invent new technology now, we still will need a long time to implement the changes. Getting the minerals we need becomes an increasing problem as well. Even with waste and disorder, it is not clear that one gets to the desired result.

        • GreenHick says:

          Or has someone gamed an escape plan for the 1%? “We” don’t need to have macro solutions in a plutonomy. Once the pretense of a broad-based consumer driven economy dies, the calculus may be to determine how the fossil majors can keep financing their marginal plays at $1000 / barrel of boutique oil (and water) for, say, 5% of the global population that can pay it and the 20% of the world’s sweatshop and plantation states that can pass those costs along as they manufacture and grow product for that 70 million people plutocrats and their servant classes.

          Rationing accomplished by means of price alone.

          The rich retire to their islands and Elysia, leaving the rest to f**k off and die as expeditiously as possible.

          • I have a hard time seeing production drop to such a low level. Pipelines will not be able to operate. Most refineries will not operate. Workers won’t be able to get to work. Trucks won’t be able to deliver goods. Roads won’t be repaired.

            • John Doyle says:

              I can’t believe such would happen overnight. After all oil will still have machinery functioning and able to continue in the short to medium term. No army is going to suddenly be told there is no oil. They alone will commandeer what’s necessary, particularly if hostilities are on the horizon.
              The government will ration supplies to support essential services. It doesn’t matter if the cost is high. The cost will only be fiat money, not gold or silver. The public will just have to get used to it.

            • You are right. Things tend to happen in slow motion. It is hard to understand the timing very well.

            • Paul says:

              When we tip over oil production will almost certainly completely halt — because the complex economy required to support high tech extraction will halt.

              So we will be left with strategic reserves.

              Does anyone think that these reserves will be used for maintaining services for the general population e.g. medical services, growing and transporting food for rationing etc?

              Why bother wasting what is left on you and me — when we are almost certainly dead – because when the strategic reserves run out — in a matter of months — most of us are dead.

              If I am a decision maker I am using that fuel to keep the military machine in place — I am ordering the military to use those 1.6 billion rounds purchased by homeland security to keep people off the streets — to kill anyone who violates martial law.

              And I am waiting for billions to die – as quickly as possible.

              You might say I am cold of heart — but remember the elites have no problem with murdering the masses — the masses are the little people — they are dispensable — and after all billions MUST die because when the oil and gas stop the food stops because food production is reliant on petrochemicals.

              The elites will want the die-off to happen as quickly as possible — they will not want messy revolutions overthrowing them — they will want people to remain in their homes, running out of food and water, lying down … and dying calmly.

              And they will be hoping there are some pieces to pick up afterwards.

  42. Rodster says:

    Continuing on what Gail presented and the relationship between government debt levels and cheap oil, I find this article interesting. So the entire Globe is running with the same economic meme. Infinite growth and the cheapest cost possible until you come full on with expenditures and you have to find new ways to cut costs even if it means putting your own people out of work. China is NOW facing what the US did back in the late 70’s to early 80’s, “EXPORT LABOR COSTS.”

    ————————————————————————————————————
    “Ethiopia Becomes China’s China in Global Search for Cheap Labor”
    http://www.bloomberg.com/news/2014-07-22/ethiopia-becomes-china-s-china-in-search-for-cheap-labor.html

    • Rodster says:

      I’d also add that in the end it makes everyone poorer. Those who lost their jobs due to cheaper labor and those who benefit from the new job creation at a lower wage. This entire economic meme keeps playing out over and over again where one class has all the wealth and it keeps growing vs the class of cheap labor who find it harder to make ends meet thereby become much poorer in the process.

    • Thanks! According to the article, ” Pay at the Huajian factory ranges from the basic after-tax minimum of $30 a month to about twice that for supervisors.” It is hard to compete with those wage levels.

      The article talks about lots of unemployed people, and $1 a day would seem like a step up for some. But this would seem to be even below India’s wage levels.

  43. Don Stewart says:

    Dear Gail and All
    This is, I promise, my last note related to Kelly McGonigal.

    Her chapter 7 is titled Putting the Future on Sale: The Economics of Instant Gratification.

    Students from Harvard and the Max Planck Institute were pitted against chimpanzees to see which exhibited the most rational behavior. The Chimps won, hands down.

    The students and the chimps were shown 2 treats (such as M and Ms for the students and grapes for the chimps. But if they waited 2 minutes, they would be rewarded with 4 more of the treats, for a total of 6. The chimps waited 2 minutes 72 percent of the time. The elite students were willing to wait only 19 percent of the time.

    However, if you change the experiment by describing the conditions to the students, but not showing them the treats, their willingness to wait increases dramatically. Decades ago, a researcher at Stanford tested small children with marshmallows to see if they would wait for more marshmallows. The children who were able to resist frequently resorted to physiological tricks to hide the marshmallows or make it more complicated to get them. The children who resisted flourished in later life…those who gave in have been less successful.

    The explanation goes to the ‘Two Minds in One Brain’ theory that McGonigle has written about in earlier chapters, and to the big prefrontal cortex in the students.

    Showing the treats activates our primitive mind. Describing the treats, without showing, activates our more modern mind. We are likely to behave more rationally in the latter case.

    But there is also a problem with the big prefrontal cortex. Humans are far more adept than chimps at making up stories about why the future will be better than today. For example, a cynical student might concoct the story that ‘even if I eat the treats right now, the next phase of the experiment will involve them giving me more treats’. Or the story that ‘I will take the treats right now, because I know that, later, I can always get more treats from somewhere’. Pushed to extremes, making up hopeful stories about the future is essential for suicide bomber recruitment.

    Hopeful stories about the future are also behind the ‘they will think of something’ solution to resource depletion and climate change denial.

    Don Stewart

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  45. GreenHick says:

    Gail wrote:
    “In particular, the model tends to be very misleading when comparing an energy source that requires subsidies to an energy source that puts off huge tax revenue to support local governments.”

    Although I’m prepared to grant Gail’s point regarding the greater complexity of frameworks needed for comparing different energy sources, her own basis for comparison here strikes me as itself misleading. However brief, this snippet is not, I think, unrepresentative of her views. These foreground what would appear to be solar / wind / geothermal’s sickly need (rapidly diminishing, in relative terms) at least, for subsidies and the muscular net tax revenues (rapidly deteriorating) yielded by hydrocarbon energy sources.

    We could begin by asking what net benefit tight or extreme oil might yield to the people in whose names these revenues and subsidies are tallied. I think this perspective would actually enrich one of Gail’s more trenchant points–which is to say that neither the new hydrocarbon plays nor renewables will yield anything like the net revenues or net energy of yesteryear. But while the net energy picture or prospects for most or virtually all energy sources (including plant-based energy) may be declining, the prospects for hydrocarbons are trending downwards much more steeply than for other sources.

    Gail makes another interesting point (elsewhere) in observing that “renewables” themselves depend on a globalized industrial base largely powered by fossil fuels. But rather than simply chalking this up in hydrocarbon’s favour, we might rather look to attempts to build wind and solar power with factories that are themselves wind and solar powered, in turn drawing from designs for technologies using less rarified or high-energy materials (such as heat exchange pumps serving as grid-scale batteries heating gravel as their energy storage medium).

    More technoromantic cornucopianism? Solutionism? None of that’s on sale here. It will assuredly not be enough, may do little less than make certain paths of descent a little less catastrophic, a little less devoid of vision or affirmation. Might there be better paths forward?–we can only hope, but at least we would be looking for these rather than standing on the sidelines (at least as we express ourselves intellectually here) consoling ourselves with or congratulating ourselves for having called it, our collapse.

    As for subsidies, we could begin with the obvious direct subsidies to oil and gas operations, the write-downs and accelerated depreciation schedules, the tax deductions that permit these companies to use money otherwise flowing towards the public purse to suborn our media and politics, the dilution and deferment of environmental regulations and oversight, the immense flows of water, the degradation of public infrastructure (as in the impact of fracking trucks on public roadways and of fracking on aquifers), the skewed distributions of net benefits to the absentee 1%, the public subsidies to the warfare state, and the fiscal, financial, human and moral costs of the ghastly violence and war crimes perpetrated to maintain the flow of oil from or beneath the homelands of the less powerful, or less human, from impoverished parts of the world to the enriched and engorged.

    And then we might move on to the actual “externalities” of a fossil hydrocarbon-based civilization–destruction of soils, waterways, boreal and tropical forests, reefs, bayous and deep oceans, and then the accelerating and ever more evidently imminent Permian-scale mass extinction, the heat death of the only known home to life in the universe. Which might be taken to put the planetary subsidy of this particular externality at as close to infinity as our crippled systems of value will ever see.

    Collapse, yes, probably. But part of frustrates with Gail’s analyses is that the work points up no paths forward. Its value is primarily critical. Just as there are many paths up the mountains, there will be many down, arguably steeply down, but it’s as if we were saying that if this civilization cannot be saved, if we cannot “win,” the “problem” of our stalled transcendence cannot be solved, then the difference between failing more or less (perhaps considerably less) catastrophically isn’t worth searching out and working towards.

    • Humankind is a biological species.
      In our present form we have been here around 200000 years–give or take.
      To us that is permanence—but in Earth terms we are nothing more than a brief flash of light in the darkness of infinite time.
      Think, until little more than a century ago we knew only the naked flame for light and heat.
      One doesn’t care to think it, but in nature’s terms we may well be an evolutionary dead end—in that we would be just one of 000s of species that came and went.
      It could be that mankind’s unique feature is to be the first species to extinguish itself.
      Gail points no paths forward because there are none. I’ve had my book http://tinyurl.com/oa854gt criticised for exactly the same reason, as if Gail or other truthmongers can somehow point a magic wand towards the path that leads to utopia.
      There isn’t one. It’s the blinding reality of that that makes people angry.
      Like all living things we must consume all that is available in order to promote our species. When we’ve done that we will die back to sustainable numbers. That may or may not be zero

      • Paul says:

        “Don’t care you say my children and grand children are doomed!!!”

        That’s what it comes down to — doesn’t it.

        Well actually — anyone living is doomed — we are that close to the precipice

        • I have 7 grandchildren too.
          Not saying something doesn’t make that something cease to be
          though it mast be said, the doomsayers of 500 years ago—-of which there were many—didn’t have the internet on which to say it.

          • Paul says:

            I have had the same thought — doesn’t matter how angry someone gets — or how much they don’t want this to happen — it will happen.

            I wonder if people get angry because this time they suspect when confronted by the facts deep down they know this is probably true.

            People often resort to anger when their position is unequivocally exposed by facts that prove them wrong.

            I suspect the same dynamic is at work here — they probably know they are wrong — people may want to believe a recovery is coming but everything they are experiencing says it is not coming… and when you point out the reason why there will be no recovery they cannot deal with that — so they lash out and crawl back into their shells of cognitive dissonance.

            If they didn’t employ that defense mechanism they’d fall into depression and start popping Xanax to get through the day

      • I doubt we are the first evolutionary dead ends. There must be others as well.

    • I noticed that Prof. Charles Hall, who is the author who came up with EROEI and has written umpteen papers on the topic, sent a link to my current to his list of 800 people in his latest list of “articles of interest.” So I am presuming that he doesn’t have a huge problem with what I said. He sends links to my articles around quite often, but I thought that this one might have hit a nerve.

      The problem I have is that there is not possible way that we can keep our current system operating, as it is currently operating. In particular, we can’t keep the roads paved; we can’t keep international trade going in anything like its current form; we can’t maintain the electrical grid for very long; we can’t maintain current governments as energy supplies start to shrink. There are a whole host of things that go wrong.

      At best, a relatively small number of people who have set up paths for themselves, that are not dependent on roads or the electrical grid or very much protection of from governments will be able to continue, at least as long as they can keep their systems operating. In some cases, solar panels may be helpful for them. Low tech wind mills may be helpful as well, as may “run of the stream” hydro. But I think that the whole idea that we can keep the current system operating on wind and solar PV (perhaps with hydro as well) is ridiculous. We are going to have to scale back to a much lower system that likely will not support anything like 7 billion people. I am not entirely sure that we can even build such a system by ourselves–normally, economies have to be self-organized. People usually need suppliers and a whole host of folks to trade with. How such a system can be organized while the current system is still operating (and we don’t entirely know the capabilities of what we will have left) is mystery to me.

    • kesar says:

      Determine the actual letter you are in DABDA model (Kübler-Ross). Analyzing potential death of the civilization might be similar to actual death of a close person.
      Many of us here went trough all stages of this path with different reactions and responses, I guess. Choose yours.

      • GreenHick says:

        Can’t say I disagree with many of the comments threading to my reply to Gail.

        But for those on this list at least, the question of whether this party can continue is somewhat passé, yet we seem to keep making it central. So much energy spent preaching to the choir.

        Rather, for me, what paths–policies, strategies, values–not so much as individuals but as communities might be less catastrophic in their descent trajectories than others? Without a doubt–wind, solar, microhydro will not save the undifferentiated “us” but yet each of us, in our places and communities, will be travelling different descent pathways and facing different configurations of choice, chance and necessity. Targetted investments in resilience, local mini-grids, rationing, nationalization / resocialization of locally generated / distributed energy … all of these might be locally interesting if we could get over the “It won’t save us, allow us to keep everything else the same” mantra.

        And unless we’re talking about assured near-term human extinction, some descent paths may level out and sustain themselves, for perhaps a billion or 500 million people.

        In another scenario we could avoid the massive die-back that authors such as EO Wilson, William Catton and Guy McPherson has been assuring us is coming simply by refraining from having any more children. The species would simply disappear in 4 generations with no excess deaths. 6 Billion, 4 billion, 2 billion, zero. One policy, one choice, one strategy, one set of values among many that we might (more) usefully discuss here.

        Double the rate with a modest proposal to ennoble mass seppukku for the most dishonoured generations to walk this earth, to have so squandered its gifts. Another strategy, another conversation.

        Or we could eat our children literally rather than have devoured their prospects in a slightly more oblique sense.

        Modest proposals all.

  46. Harry says:

    The oil majors will be announcing their 2014 Q2 profits over the next few days. Statoil are down 12% and selling off assets: http://www.businessweek.com/news/2014-07-25/statoil-profit-drops-12-percent-in-second-quarter-on-lower-production

    • justeunperdant says:

      Form the link above:

      State-controlled Statoil this year joined oil companies including Royal Dutch Shell Plc (RDSA) in cutting or slowing spending to counter rising costs and stagnant energy prices.

      Statoil said in February it would focus on improving shareholder returns at the expense of previous production-growth targets.

      Translation : we are out of cheap oil and cannot grow the production. We are returning the money to shareholder because we are shutting down the company.

  47. Paul says:

    Japanese CPI printed 3.6% in June, modestly down from May’s 3.7% YoY, but hotter than the expected 3.5% YoY analysts predicted. If you don’t eat food or use energy then inflation merely bit 2.3% of your income this year but if you did then you may have noticed that energy costs are 9.1% higher YoY, TVs +8.0%, and Food +4.1%

    http://www.zerohedge.com/news/2014-07-24/japanese-inflation-holds-near-23-year-highs-food-energy-tv-costs-soar

    • They did manage to create inflation! As the article says, “lowering standards of living all over Japan.” Making it relatively less difficult to pay off its debt. As I recall, they didn’t really sell all that many more autos etc–certainly not to their own people.

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