When forecasting how much oil will be available in future years, a standard approach seems to be the following:
- Figure out how much GDP growth the researcher hopes to have in the future.
- “Work backward” to see how much oil is needed, based on how much oil was used for a given level of GDP in the past. Adjust this amount for hoped-for efficiency gains and transfers to other fuel uses.
- Verify that there is actually enough oil available to support this level of growth in oil consumption.
In fact, this seems to be the approach used by most forecasting agencies, including EIA, IEA and BP. It seems to me that this approach has a fundamental flaw. It doesn’t consider the possibility of continued low oil prices and the impact that these low oil prices are likely to have on future oil production. Hoped-for future GDP growth may not be possible if oil prices, as well as other commodity prices, remain low.
Future Oil Resources Seem to Be More Than Adequate
It is easy to get the idea that we have a great deal of oil resources in the ground. For example, if we start with BP Statistical Review of World Energy, we see that reported oil reserves at the end of 2013 were 1,687.9 billion barrels. This corresponds to 53.3 years of oil production at 2013 production levels.
If we look at the United States Geological Services 2012 report for one big grouping–undiscovered conventional oil resources for the world excluding the United States–we get a “mean” estimate of 565 billion barrels. This corresponds to another 17.8 years of production at the 2013 level of oil production. Combining these two estimates gets us to a total of 71.1 years of future production. Furthermore, we haven’t even begun to consider oil that may be available by fracking that is not considered in current reserves. We also haven’t considered oil that might be available from very heavy oil deposits that is not in current reserves. These would theoretically add additional large amounts.
Given these large amounts of theoretically available oil, it is not surprising that forecasters use the approach they do. There appears to be no need to cut back forecasts to reflect inadequate future oil supply, as long as we can really extract oil that seems to be available.
Why We Can’t Count on Oil Prices Rising Indefinitely
There is clearly a huge amount of oil available with current technology, if high cost is no problem. Without cost constraints, fracking can be used in many more areas of the world than it is used today. If more water is needed for fracking than is available, and price is no object, we can desalinate seawater, or pump water uphill for hundreds of miles.
If high cost is no problem, we can extract very heavy oil in many deposits around the world using energy intensive heating approaches similar to those used in the Canadian oil sands. We can also create gasoline using a coal-to-liquids approach. Here again, we may need to work around water shortages using very high cost methods.
The amount of available future oil is likely to be much lower if real-world price constraints are considered. There are at least two reasons why oil prices can’t rise indefinitely:
- Any time oil prices rise, economies that use a high proportion of oil in their energy mix experience financial problems. For example, countries that get a lot of their revenue from tourism seem to be vulnerable to high oil prices, because high oil prices raise the cost of airline travel. Also, if any oil is used for making electricity, its high cost makes it expensive to manufacture goods for export.
- When oil prices rise, workers find that the cost of food tends to rise, as does the cost of commuting. To offset these rising expenses, workers cut back on discretionary spending, such as going to restaurants, going on long-distance vacations, and buying more expensive homes. These spending cutbacks adversely affect the economy.
The combination of these two effects tends to lead to recession, and recession tends to bring commodity prices in general down. The result is oil prices that cannot rise indefinitely. The oil extraction limit becomes a price limit related to recessionary impacts.
The cost of oil is currently in the $60 per barrel range. It is not even clear that oil prices can rise back to the $100 per barrel level without causing recession in many counties. In fact, the demand for many things is low, including labor and capital. Why should the price of oil rise, if the overall economy is not generating enough demand for goods of all kinds, including oil?
Oil Companies Can Report a Wide Range of Oil Prices Needed for Profitability
The discussion of required oil prices is confusing because there are many different ways to compute oil prices needed for profitability. Companies make use of this fact in choosing information to report to the press. They want to make their situations look as favorable as possible, because they do not want to frighten bondholders and prospective stock buyers. This usually means reporting as low a needed price for profitability as possible.
Oil prices can be computed on any of the following bases (arranged roughly from lowest to highest):
- (a) The “going forward” cost of extracting oil from wells that are already in place, excluding fixed expenses that the company would incur anyhow. This cost is likely to be very low, likely less than $30 barrel.
- (b) The cost of drilling new “infill” wells in existing fields, excluding the overhead expenses the company would incur anyhow.
- (c) The cost of opening up a new oil field and drilling new wells, excluding the overhead expenses the company would incur anyhow.
- (d) Add to (c), overhead expenses (but not including taxes paid to governments, dividends to policyholders, and interest on borrowed funds).
- (e) Add to (d) amounts paid to government, dividends to policyholders, and interest on borrowed funds.
- (f) The price required so that the oil company has sufficient cash flow so that it doesn’t need to keep taking on more debt. Instead, it can earn a reasonable profit (and from this pay dividends), and still have sufficient funds left for “Exploration & Development” of new fields to offset declines in production in existing fields. It can also pay governments the high taxes they require, and pay other ongoing expenses. Thus, the system can continue to operate, without assistance from other sources.
I would argue that if we actually want to extract a large share of technically recoverable oil, we need oil prices up at this top level–a level at which companies are making a reasonable profit on a cash flow basis, so that they don’t have to go further and further into debt. If they are getting less than they really need, they will send drilling rigs home. They will use available funds to buy back their own shares, rather than spending as much money as is required to develop new fields to offset declines in existing fields.
Required Oil Prices
Many people believe that low prices started in late-2014, when oil prices dropped below the $100 barrel level. If we look back, we find that there was a problem as early as 2013, when oil prices were over $100 per barrel. Oil companies were then complaining about not making a profit on a cash flow basis–in other words, the highest price basis listed above.
My February 2014 post called Beginning of the End? Oil Companies Cut Back on Spending (relating to a presentation by Steve Kopits) talks about oil companies already doing poorly on a cash flow basis. Many needed to borrow money in order to have sufficient funds to pay both dividends and “Exploration & Production” expenses related to potential new fields. Figure 1 is a slide by Kopits showing prices required for selected individual companies to be cash flow neutral:
Figure 1.See this link for larger view of image.
The problem back in 2013 was that $100 per barrel was not sufficient for most companies to be profitable on a cash flow basis. At that time, Figure 1 indicates that a price of over $130 per barrel was needed for many US companies to be profitable on that basis. Russian companies needed prices in the $100 to $125 range, while the Chinese companies PetroChina and Sinopec needed prices in the $115 to $130 per barrel range. The Brazilian company Petrobas needed a price over $150 per barrel to be cash flow neutral.
Kopits doesn’t show required prices for OPEC countries to be cash flow neutral, but similar price estimates (required funding including budgeted tax amounts) are available from Arab Petroleum Investments Corporation (Figure 2, below).
Figure 2. Estimate of OPEC break-even oil prices, including tax requirements by parent countries, from Arab Petroleum Investments Corporation.
Based on this exhibit, OPEC costs are generally over $100 per barrel. In other words, OPEC costs are not too different from non-OPEC costs, when all types of expenses, including taxes, are included.
As more oil is extracted, the tendency is for costs to rise. Figure 3, also from the Kopits’ presentation, shows a rapid escalation in some types of costs after 1999. This is what we would expect when we reach the end of readily available “cheap to extract” oil and move to more expensive-to-extract unconventional types of oil.
Figure 3. Figure by Steve Kopits of Douglas Westwood showing trends in world oil exploration and production costs per barrel. CAGR is “Compound Annual Growth Rate”.
What prices do we need on a going-forward basis, to keep the oil extraction system operating on a long-term basis? I would argue that we need a price of at least $130 now in 2015. In the future, this price needs to rise to higher and higher levels, perhaps moving up quite quickly as we move to more-expensive-to-extract resources.
Is it really necessary to include tax revenues in these calculations? I would argue that the inclusion of taxes is especially important for oil exporting nations. Most of these countries depend heavily on oil taxes to provide funds to operate programs providing food and jobs. As the quantity of oil that they can extract depletes, and as the population of these countries rises, the per-barrel amount of revenue required to fund these government programs is likely to increase. If we want to have a reasonable chance of stability within these countries (so that exports can continue), then we need to expect that the tax loads of companies in oil exporting nations will increase in the future.
Also, if there is any plan to subsidize “renewables,” funds to make this possible need to come from somewhere. Indirectly, these funds are available because of surpluses made possible by the fossil fuel industry. Thus taxes from the fossil fuel industry might be considered a way of subsidizing renewables.
Why Production Doesn’t Quickly Reset to Match Prices
Do we really have a problem with oil prices, if oil production hasn’t dropped quickly in response to low prices? I think we do still have a problem.
One reason why oil production doesn’t quickly reset to match prices is related to many different ways of reporting oil extraction costs, mentioned above. A company may not be making money when all costs are included, but it is making money on a cash flow basis if “sunk costs” are ignored.
Another reason why oil production doesn’t quickly reset to match prices is the fact that oil is the lifeblood of companies that produce it. “Cutting back” means laying off trained workers. If these workers are laid off, companies will find it nearly impossible to rehire the same workers later. The workers have families to support; they will need to find work, even if it is in other industries. Companies will need to train new workers from scratch. Thus, companies will do almost anything to keep employees, no matter how low prices drop on a temporary basis.
A similar issue applies to equipment used in oil operations. Drilling equipment that is not used will deteriorate over time and may not be usable in the future. A USA Today article talks about auctions of equipment used in the oil industry. This equipment is likely to be permanently lost to the oil industry, making it hard to ramp back up again.
If a company is a government owned company in an oil-exporting nation, there is an even greater interest in keeping the company operating. Very often, oil is the backbone of the entire country’s economy; most tax revenue comes from oil and gas companies. There is no real option of substantially cutting back operations, because tax funds and jobs are badly needed by the economy. Civil unrest could be a problem without tax revenue. In the short run, some countries, including Saudi Arabia, have reserve funds set aside to cover a rainy day. But these run out, so it is important to maintain market share.
There are additional reasons why oil production stays high in the short term:
- Some companies have contracts in the futures market that cushion price fluctuations, so they may not directly “feel” the impact of low prices. Because of this, they may not react quickly.
- Oil companies will very often have debt obligations that they need to meet, and need cash flow to keep meet them. Any cash flow, even if the price covers only a bit more in the direct cost of extraction, is helpful.
- Large amounts of equity funding have been available, even for companies issuing “junk bonds.” Companies that would otherwise be reaching debt limits have been able to issue large amounts of stock instead. Bloomberg reports that in the first quarter, $8 billion in stock was issued, which is a record.
All of these considerations have allowed production to continue temporarily, but are unlikely to be long-term solutions. In the long run, we know that we are likely to see problems such as defaults on junk rated bonds of oil companies. Futures contracts guaranteeing high prices eventually run out. Also, if prices remain low, government programs of oil exporting countries may need to be cut back, leading to unrest by citizens.
Regardless of what is happening in the short-term, it is clear that eventually production will drop, quite possibly permanently, unless oil prices rise substantially.
Why are Oil Prices so Low?
I see two reasons for low oil prices:
- Debt is now not rising fast enough, because debt levels are reaching limits. Increases in debt levels tend to hold up commodity prices because increasing amounts of debt allow consumers to buy additional cars, homes, factories and other goods, thus creating “demand” for oil and other commodities. At some point, debt limits are reached. This can happen because a growth spurt is slowing, as in China, or because governments are reaching limits on the ratio of debt to GDP that they can carry. When debt levels stop rising rapidly, the debt “pump” that has been holding up prices in the past disappears, and commodity prices tend to stay at a lower level.
- The wages of ordinary workers are lagging behind. If a young person cannot find a good paying job (or owes too much on college loans), he most likely will live with his parents longer, delaying the purchase of a house and car. If a family discovers that the cost of day care for children plus the cost of commuting is more than the wages of the lower-earning parent, the lower-earning parent may choose not to work. A household with only one employed worker is less likely to buy a house or a second car than a two-worker household. These kinds of responses to low wages tend to hold down “demand” for goods made with commodities. Thus, affordability issues (or low demand related to affordability) tends to hold down the prices of commodities.
The problem of lagging wages of ordinary workers is a very old one. The problem occurs whenever there are issues with diminishing returns. For example, when population reaches a level where there are too many farmers for available land, the average size of plot for each farmer tends to decrease. Each farmer tends to produce less, because of the smaller size of plot available. If each farmer is paid for what he produces, his wages will drop.
We are reaching the same problem today with oil. We continue to produce increasing amounts of oil, but doing so requires increasing numbers of workers and increasing amounts of resources of other types (including fresh water, steel, sand for fracking, and energy products). Workers are on average producing less oil per hour worked. In theory, they should be paid less, because the value of oil is determined by what the oil can do (how far it can move a vehicle), not how much labor was required to produce the oil.
The same problem is occurring in other areas of the economy, including natural gas production, coal production, electricity production, medicine, and higher education. At some point, we find the economy as a whole becoming less efficient, rather than more efficient, because of diminishing returns.
We know from Peter Turchin and Surgey Nefedov’s book, Secular Cycles, that low wages of common workers were frequently a major contributing factor to collapses in pre-fossil fuel days. With lower wages, workers were not able to buy adequate food, allowing epidemics to take hold. Also, governments could not collect adequate taxes from the large number of low-earning workers, leading to governmental financial problems. A person wonders whether today’s economy is reaching a similar situation. Will low wage growth of common workers hold down future GDP growth, or even lead to collapse?
Are the Projections of EIA, IEA, BP, and all the Others Right?
Perhaps these projections would be reasonable, if oil prices could immediately bounce to $130 per barrel and could continue to inflate in the years ahead.
If, on the other hand, low oil prices are really being caused by lagging wages of ordinary workers and the failure of debt levels to keep rising, then I don’t think we can expect oil prices to reach these lofty levels. Instead, we can expect oil production to fall because of low prices.
The amount of oil available at $60 per barrel seems to be quite low. Perhaps a little low-priced oil would be available from Kuwait and Qatar at that price, but not much else. Some additional oil might be obtained, if governments of non-oil exporters (such as the USA and China) choose to cut back their tax levels on oil companies. Even with the additional oil made possible by lower taxes, total oil supply would still be far less than needed to run today’s world economy.
The world economy would need to contract greatly in order to shrink down to the oil available. Such shrinkage might be accomplished by a cutback in trade and loss of jobs. Debt defaults would likely be another feature of the new smaller economy. Such a scenario would explain how future oil production may deviate significantly from the forecasts of EIA, IEA, and BP.
Dear Miguel and Artleads
‘Death is unavoidable however if I had the option to take decisions that would bring the best of me while living before reaching that day I would choose to take those decisions, maybe something greater tha myself could come out of that additional time.
Civilization is not facing death yet, we still have our sun (energy) we still have our planet (resources) we put ourselves on this peril we can get out of it, but we have to pay for our way of life and the decision of those who preceded us, moreover untill we are able to harness more eneregy and extend our finite world gifts wisely managed we should recognize our mistakes and use that chance we have using our free will.’
Let me suggest a few things from Capra and Luisi’s book.
From page 136: ‘The observation that the ‘bio-logic’, or pattern of organization, of a simple cell is the same as that of an entire social structure is highly non-trivial. It suggests a fundamental unity of life, and hence also the need to study and understand all living structures from such a unifying perspective.’
My comment: It has taken literally the history of Earth, including the history of Life, for scientists and artists to understand the significance of that paragraph. However, only a vanishingly small number of political and business leaders understand it and act on the knowledge. In the body of science, there are more people who understand it, but most scientists are not engaged in grand thoughts, but in drudge work for profit. Probably a lot of science and botanical illustrators understand it. Religious fundamentalists vehemently dispute it. Spiritualists mostly understand it, having an intuitive grasp due to a mind/body/universe experience. Very few of the general public understand it.
Can we agree that artists and scientists and educators ought to be about teaching the general public the truth of that paragraph?
Also on page 136:
‘The non-predictability [of a complex system] means the developmental structural changes of a living being in an environment always occur as a structural ‘drift’ congruent with the structural drift of the environment. In this way, by lining the notion of structural coupling [organisms take energy and materials from the environment and transform them with internal processes] with the notion of structural drift, we arrived at the basic mechanism of evolution. For example, adaptation—the compatibility of the organism with its environment—is a term that is correlated to the structural coupling.
As it keeps interacting with its environment, a living organism will undergo a sequence of structural changes, and over time it will form its own, individual pathway of structural coupling. At any point on this pathway, the structure of the organism is a record of previous structural changes and thus of previous interactions. In other words, all living beings have a history. Living structure is always a record of prior development.’
My comment: It is futile to think that some Magic Teacher can come in and completely and instantaneously change an individual, much less a group. The individual and the group they are part of are going to have to change in response to experiences with their environment. BUT, I think, we can also be ‘slightly ahead of the curve’. (From Ahmet Ertigan, the head of Atlantic Records during their glory days.) Get too far in front of the curve and you are ground up or ignored or killed. Lag behind the curve and you reduce your chances for survival. Being slightly ahead of the curve lets you anticipate those things which will likely be valuable tomorrow, and put some of your efforts into acquiring the tools or mastering the skills. A good teacher or artist will have the ability to convey to students WHY the tool or skill is worth the effort.
An individual human is both the product of history, but also a product of the application of intelligence in terms of anticipating the future. Even our basic neuronal functioning is about projecting the future, and then correcting the trajectory when we get another bulletin from reality. So we are already determined in the sense that we don’t have a subsistence farm to escape to because we never established one, but we have free will in terms of what we do with our time today…which influences what we will be tomorrow.
Don Stewart
Also on page 136:
‘The non-predictability [of a complex system] means the developmental structural changes of a living being in an environment always occur as a structural ‘drift’ congruent with the structural drift of the environment. In this way, by lining the notion of structural coupling [organisms take energy and materials from the environment and transform them with internal processes] with the notion of structural drift, we arrived at the basic mechanism of evolution. For example, adaptation—the compatibility of the organism with its environment—is a term that is correlated to the structural coupling.”
I lost a long response to this. So here’s a VERY short version of it. I notice that the near-foothills vegetation as I travel is organized in successive horizontal bands that parallel the flow of the hills. Drift or flow, perhaps.
Then I notice that traditional rural structures are scattered about on the plains, and don’t flow together. Very much distracting from the serenity of the landscape.
Concurrently, there is a drive to build more houses in the area, houses that are suburban in appearance and lifestyle expectation. This is orders of magnitude more demanding of resources, and cater to a false aesthetic of fossil fuel dependency and “the American Dream.”.
BUT
A different and more modest type of housing (theoretically) could be added in bands to those scattered traditional (earlier, more rural and modest) structures so that they form bands that mirror the flow of the hills, foothills and mountains. This would “require” a host of small, inexpensive structures that fit in with what was there before. Their colors could be toned down so as to harmonize more with landscape color, not calling undue attention to their SEPARATENESS or individuality.
Maybe I’ll have more to say about this take on “drift” (perhaps different from the authors’) later.
Can we agree that artists and scientists and educators ought to be about teaching the general public the truth of that paragraph? and
I think, we can also be ‘slightly ahead of the curve’
Some may some others may not, there is another balance there, which I think relates to the curve as well. The balance between self preservation and selfless behaviour.moreover and possibly that type of knowledge cannot be taught directly there should be a way of willingly self discovery and understanding but it is also needed an external inlfuence that gives you a glimpse of the knowledge.
Also human intelligence has similarity with that of some animals however we only have human drifting to study how that intelligence developed (there are no dogs nor dolphins with that intellectual drifting),(that if I do not get confused with science fields and definitions)… neverthless we tend to copy and learn from nature following the paths of non selfaware organisms, we modify those structures when we try to break the natural flow or limits in order to obtain our desires (intelligence used to adapt the environment in contrast to our body and behaviour adapting to survive the environment.)
As Artleads put it: fitting in the environment but sepparating the individuality.
Hi Miguel,
“…there is another balance there, which I think relates to the curve as well. The balance between self preservation and selfless behaviour.moreover and possibly that type of knowledge cannot be taught directly there should be a way of willingly self discovery and understanding but it is also needed an external inlfuence that gives you a glimpse of the knowledge.”
Although words tend to get me confused, I sense that what you have here is very profound. Many different entities must be balanced–what’s outsider the self, what’s inside the self (insofar as we can distinguished the two), and how these entities are balanced between themselves. And that is just a way to try and get started.
But what I’m mostly trying to say is that what ties everything together is a defined geographic space–like a village or a city block or a town or a county on upwards. Eventually, the entire sphere of planet Earth needs tender handling to try and keep it alive. But one starts with oneself and one’s immediate surroundings (a manageable unit in who’s management one has a stake) and work steadily outward.
You can talk of drift as in how clouds drift, and winds drift. But I don’t think you can influence human habitat unless you take it down to earth, to the level of the land we live on and that food grows on. If all you do is talk about widely separate organizations and operations unified by a philosophy but not hinged together geographically, I don’t believe you can get down to essentials. The kind of drift which interests me is that between one segment of land and another. You can’t defend yourself from ‘no place.’. You can only defend yourself from within the confines of a place that you inhabit.
Folks, Russia (note, Russia, not the Soviet Union) and China cannot be beaten. They are too large, powerful, and internally cohesive which is why the West hates them.
This is not to say that they won’t have problems, and this is not to say that they will be hegemonic to the extent that America has…but that’s not the point. There is no absolute need for a world hegemon, for one power, just as there is no absolute need for humans to live any particular lifestyle above that of the essentials of daily life.
That’s why American power can wane without necessarily being replaced completely by another. Look at world history, happens all of the time.
By the way, hundreds of millions (if not billions) of people in Latin America, Middle East, Europe, and South Asia are also quietly looking forward to the end of American dominance even if they don’t speak openly about it.
No getting around this one.
http://www.theguardian.com/world/2015/jun/08/g7-leaders-agree-phase-out-fossil-fuel-use-end-of-century
Dear Gail and Artleads
Relative to Diminishing Returns from both fossil fuel production and also the efficiency with which we turn them into work, and to Artleads comments about influencing groups to change. I will offer a few exhibits.
The first is Nate Hagens’ talk on Earth Day, 2015.
https://www.youtube.com/watch?v=da5sP3wRuJ8&feature=youtu.be
First, I have commented here many times quoting Nate. But he has now attracted the attention of Ron Patterson, who promises to give us his thoughts on these weighty subjects and perhaps increase Nate’s visibility.
Nate says that we use fossil fuels to make goods and services which we HOPE will move our neurotransmitters and hormones in a favorable direction. But Nate points out that all of the chemical rewards (e.g., dopamine) are in the ANTICIPATION phase, not when we actually get the reward.
Now let’s consider the problem that Skip Laitner lays out. And I will shamelessly give it my own twist. Substituting fossil fuels for humans reduces human employment…unless we are able to do the substitutions on a trajectory of exponential growth, in which case new products and services keep emerging which gives us a rough measure of ‘full employment’. According to Laitner, unless we can achieve breakthroughs in the efficiency with which we turn energy into work, we will have a lot of unemployment.
Many people who read this blog and other similar blogs will conclude that continued exponential growth in either efficiency or energy supply is simply not in the cards, and that shrinkage is more likely. The more lurid scenarios involve collapse into terminal violence.
But…let’s go back to Hagens’ line from fossil fuels to neurotransmitters and hormones. If there is something in that line which is still capable of dramatic improvements, it’s probably in that last connection between goods and services and the neurotransmitters and hormones.
Which is where I see localization of the type promoted by Slow Money and Kickstarters and Farmer’s Markets and the like being effective. It’s just a lot more fun to have coffee at Cocoa and Cinnamon than in your local Starbucks franchise. One cup of coffee at Cocoa and Cinnamon delivers more pleasure than 10 cups from the Starbucks on the Jersey Turnpike.
I also think that Barbara Fredrickson is correct that change requires ‘broadening and building’, and that humans are most accepting of new ideas when they are ‘comfortably disturbed’. That is, I am at some event, and someone shows me something new, and my nervous system becomes active and ready to add some new neuronal connections. BUT, the nervous system doesn’t go into shutdown mode where the whole point is to reduce the pain of the tiger’s claws.
So I have considerable tolerance and even enthusiasm for events such as these, which expose people to skills and ideas which may stretch their current abilities in directions which may be quite useful as we slide down the Diminishing Returns curves in the physical world:
http://www.fireflygathering.org/scheduleClasses/
Fast Eddy wouldn’t be caught dead here, because somebody is surely going to sing around the campfire, but my own attitude is that someone who learns, say, ‘chicken processing and cooking’, and who didn’t know how to kill and process a chicken beforehand, is a better person at the end of the conclave. A certain mental maturity is being achieved, one step at a time.
I imagine that the chicken processing will involve a sharp knife. I don’t want to interrupt and say that ‘only knapped flints’ from that other class should be allowed. Purity has to wait. It’s the end of Barbara Fredrickson’s process, rather than the beginning.
Don Stewart
It looks like they have an amazing number of classes offered.
Some would say that Hagens is Kumbaya, and dreamily optimistic, but I liked his lecture. I particularly agree the pleasure principle in doing the “right thing” is what we need to find. I absolutely ENJOY conserving. Art is the optimal discipline for showing the fun in change. One huge problem with art training (at least back when) is that you never hear the term economy mentioned…EVER. Debt is such a foreign concept to one of my conditioning that I doubt I will ever understand it. With artists so alienated from the real world, the hill some of us would climb is all the more steep.
(Apologies if this is a repeat post.)
Some would say that Hagens is Kumbaya, and dreamily optimistic, but I liked his lecture. I particularly agree the pleasure principle in doing the “right thing” is what we need to find. I absolutely ENJOY conserving. Art is the optimal discipline for showing the fun in change. One huge problem with art training (at least back when) is that you never hear the term economy mentioned…EVER. Debt is such a foreign concept to one of my conditioning that I doubt I will ever understand it. With artists so alienated from the real world, the hill some of us would climb is all the more steep.
http://www.theguardian.com/world/2015/jun/11/mexicos-pemex-unveils-large-oil-find
350 million barrels of shallow waters oil discovered.
When I find this type of news it makes me hard to believe how badly they want to keep bussines as usual, anyaway.
This is my humble analysis using what I have learn
-. This is probably an overstatement, if that is so could this be a cover for the oil extracted by fracking wells in Mexico, since this convenient discovery just happened after the new federal energy reform.
-. How come Pemex didn’t find this shallow water fields in the previous 50 years.
-. At 54dls per barrell Pemex will add on more debt,(and they say this is competitive) that or any foreign (most likely US.) company extracting the oil, however let’s consider that this new fields are close to existing although old infraestructure, reducing the cost to some extend.
-. 350 millions of barrels, isn’t that what the world uses in 10 days??? (I have to read again that post about oil discoveries).
I do this so I can explain it to any person even those not follwing oil market.
The US alone consumes nearly 19M barrels of oil per day http://en.wikipedia.org/wiki/List_of_countries_by_oil_consumption
350M is 18 days of oil for the US….
Thanks!, but I can’t belive it how can they say such nosense… I need a reality check… to understand what is going on with entrepreneurs and people working on the oil industry
The MSM is in the business of regurgitating edicts from the Ministry of Truth. Add to that most people haven’t got a clue and do not question — so when they say 350M barrels of oil is a massive find … almost everyone buys into that … because they are clueless and prefer to remain clueless
They are in the matrix.
Fast Eddy, your writing style reminds me so much of someone… All those ellipses… and — the long dashes…
How’s it going in Bali? Or have you moved to NZ now?
You missed a stage or two …. Wee Willy Winky was an amusing chap… Tolstoy’s Degenerate Grandson was aw… right…. I am considering changing to a symbol (like Prince did) … or perhaps I will just be Koombaya…
I am indeed in New Zealand — just finished up a couple of beers with my new farming mates…
I think oil finds are labeled like cereal boxes–“large,” “extra large,””giant economy,” and so forth. Even 350 million barrels is considered important enough for a story. As we get to smaller sources, the cost per barrel rises, because of diseconomies of lack of scale.
looks like oil workers will be the next minimum wage earners.
Slump in growth: Exports and imports suffer across key emerging markets
It was only five years ago, but it feels like a different era. Roger Agnelli, the then chief executive of Vale, the Brazilian mining company, had just taken delivery of the first of an order of 35 Valemax ships, the biggest dry bulk carriers ever built. The vessels, bought primarily to ship iron ore to a voracious China, were so large that each one could carry iron ore sufficient for the steel to build the Golden Gate Bridge in San Francisco three times over.
“We are living through our best days . . . I strongly believe that even better days are ahead of us,” said Mr Agnelli in 2010. But Vale’s fortunes would soon begin to fade. Mr Agnelli was ousted a year later, and China temporarily banned the ships from its ports on safety grounds. In the first quarter of this year, the company reported its worst financial performance in six years.
Vale’s problems are symptomatic of a broader malaise, with emerging markets slumping in the first quarter to their weakest performance since the 2008-09 crisis. China’s appetite for metal ores and other resources is on the wane, Brazil’s once-buoyant economy is in recession, Russia is in crisis and several smaller countries are also suffering declining growth and capital outflows.
Vale’s problems are symptomatic of a broader malaise, with emerging markets slumping in the first quarter to their weakest performance since the 2008-09 crisis.
Developing nation growth slowing, warns World Bank
Developing countries are facing a “structural slowdown” likely to last for years and are ceding their role as the world’s growth engine to more mature economies such as the US, according to the World Bank.
The Washington-based bank on Wednesday lowered its forecast for global growth this year to 2.8 per cent, partly because the much-anticipated benefits of lower oil prices have been limited.
The worry is that these problems are no longer contained within emerging market economies; they are spreading to the developed world too. The dependable boost that the global economy has derived from the youthful dynamism of its developing countries for well over a decade — with the exception of during the global financial crisis — has recently become an outright drag. The Bric countries (Brazil, Russia, India and China) — long seen as the world’s growth engine — are now a particular burden.
Adam Slater, economist at Oxford Economics, a research company, says this slowdown could create “an EM-induced recession for the global economy”. He notes that the Brics account for a fifth of global gross domestic product. “Two [of them] are already in recession and one is slowing sharply,” he says.
Trade is the mechanism through which robust demand has been transmitted to other economies, including Europe and the US. But, according to an analysis by Oxford Economics, a slump in import demand in the first quarter of this year turned emerging markets from contributors to global trade growth to detractors for the first time since 2009.
The size of the switch is stark. In aggregate, the 17 largest developing economies reduced world trade values by 0.9 percentage points in the first quarter, down sharply from the average 2.5 percentage points they added to trade growth annually between 2000 and 2014, when their share of global trade was 43.3 per cent of the total, according to Oxford Economics.
Early indications are that the slowdown in trade has continued into the second quarter. China’s exports shrank by a further 2.5 per cent year on year in May, their third month of decline, while its imports were down 17.6 per cent in dollar terms.
“Emerging markets have shifted from being a major support to world trade growth to a significant drag,” says Mr Slater. “The slowdown in China and other emerging markets represents a significant negative shock to world growth.
If emerging market economies continue to falter this year, the impact on the developed world could be profound.
The last time a serious emerging markets-led global slowdown occurred in 1999, in the aftermath of the Asian financial crisis, the developing world was a more marginal presence in the global economy.
Now it accounts for just over 52 per cent of global GDP in purchasing power terms and some 35 per cent in nominal terms. This compares with just 38 per cent and 23 per cent respectively at the time of the Asian crisis. “So weakness in EMs has a bigger global impact now,” says Mr Slater. “If we think about the old refrain from the global financial crisis that ‘it started in America’, then we may note that the US accounted for 24 per cent of world GDP [at that time].”
The contribution of these countries to growth, and particularly to trade growth, outstripped their weight in the global economy. Thus, the Brics accounted for 15 per cent of world trade between 2000 and 2014, but contributed 23 per cent of its growth during the same period. The loss of this outsized contribution is being keenly felt.
There is also a greater financial symbiosis that intertwines the fate of developing economies and the rest of the world in a way that did not really exist at the time of the Asian crisis. According to figures from the Bank for International Settlements, the exposure of its members lending across borders to recipients in emerging markets reached $6tn at the end of 2014, about double the level of 1999, Mr Slater says.
Policy makers are starting to sound the alarm. Choi Kyung-hwan, South Korea’s finance minister, told the Financial Times last week that the slowdown in global growth, at a time of unprecedented monetary laxity, posed a challenge similar in complexity to those faced during the 2008 crisis.
He criticised leading economies for not doing enough to stimulate growth and warned that “the advanced economies will again see spillovers from the negativity in emerging markets” if they do not do more.
His comments came as the Organisation for Economic Co-operation and Development slashed its forecast for global growth to 3.1 per cent for 2015, down from November’s forecast of 3.7 per cent. South Korea has not been spared the broader global slowdown, with exports sliding 10.9 per cent in May from the same month a year earlier and imports falling 15.3 per cent.
After years of boosting global growth, developing economies now a major drag on world economy
“Emerging markets have shifted from being a major support to world trade growth to a significant drag,” says Mr Slater. “The slowdown in China and other emerging markets represents a significant negative shock to world growth.
“We would be more confident that the world could ride this out if it were not for the fact that growth in advanced economies is still rather moderate,” Mr Slater adds.
After the crisis, emerging markets bounced back quickly to average annual GDP growth of about 6 per cent, compared with about 2 per cent in developed countries. But this engine of global growth has stuttered.
Bhanu Baweja, global head of emerging markets strategy at UBS, says growth in these markets has already slid to an average of 3.5 per cent during the first quarter of this year, its lowest level since the crisis. Even more emphatic is the fact that if the contribution of China is stripped out, the average gross domestic product growth of emerging markets in US dollar terms “may be close to 0 per cent in 2015”, Mr Baweja says.
At the same time international capital appears to be heading for perceived safety. The floods of money that made their way into emerging markets in the period of low interest rates since the global financial crisis are, in most countries, either slowing to a trickle or reversing course. In the three quarters to the end of March, these markets suffered bigger net capital outflows than they did during the crisis, according to NN Investment Partners. This week, the Institute of International Finance reported the biggest monthly sell-off in emerging bonds since the “taper tantrum” of 2013 when the markets feared the US was going to reduce the scale of its quantitative easing programme.
Bigger players
If emerging market economies continue to falter this year, the impact on the developed world could be profound.
The last time a serious emerging markets-led global slowdown occurred in 1999, in the aftermath of the Asian financial crisis, the developing world was a more marginal presence in the global economy.
Now it accounts for just over 52 per cent of global GDP in purchasing power terms and some 35 per cent in nominal terms. This compares with just 38 per cent and 23 per cent respectively at the time of the Asian crisis. “So weakness in EMs has a bigger global impact now,” says Mr Slater. “If we think about the old refrain from the global financial crisis that ‘it started in America’, then we may note that the US accounted for 24 per cent of world GDP [at that time].”
The contribution of these countries to growth, and particularly to trade growth, outstripped their weight in the global economy. Thus, the Brics accounted for 15 per cent of world trade between 2000 and 2014, but contributed 23 per cent of its growth during the same period. The loss of this outsized contribution is being keenly felt.
There is also a greater financial symbiosis that intertwines the fate of developing economies and the rest of the world in a way that did not really exist at the time of the Asian crisis. According to figures from the Bank for International Settlements, the exposure of its members lending across borders to recipients in emerging markets reached $6tn at the end of 2014, about double the level of 1999, Mr Slater says.
Policy makers are starting to sound the alarm. Choi Kyung-hwan, South Korea’s finance minister, told the Financial Times last week that the slowdown in global growth, at a time of unprecedented monetary laxity, posed a challenge similar in complexity to those faced during the 2008 crisis.
He criticised leading economies for not doing enough to stimulate growth and warned that “the advanced economies will again see spillovers from the negativity in emerging markets” if they do not do more.
His comments came as the Organisation for Economic Co-operation and Development slashed its forecast for global growth to 3.1 per cent for 2015, down from November’s forecast of 3.7 per cent. South Korea has not been spared the broader global slowdown, with exports sliding 10.9 per cent in May from the same month a year earlier and imports falling 15.3 per cent.
The Fed effect
Mr Baweja believes that the collapse in trade is the biggest threat facing the emerging world today — much more significant than the prospect of rising interest rates at the US Federal Reserve.
“Exports are contracting and the only mechanism of correcting countries’ external imbalances is import contraction,” he says. But such a correction is not the solution. “If you increase exports your economy is growing. If you kill demand, growth will be much lower. In obsessing about the Fed, people are missing the fact that we will see much less trade, which will lead to much lower EM growth.”
The effects are already being seen. The premium of emerging market growth over that in the developed world is now at its lowest level in 15 years. In dollar terms — the standard way of measuring trade and economic output — the same is true of real growth in developing economies.
This may lead some countries to turn to fiscal or monetary stimulus. Mr Choi says South Korea has room to do either or both; his ministry is planning to announce a “comprehensive package” of pro-growth measures in July.
Others will be more constrained. Brazil is battling to restore confidence in its fiscal accounts by cutting spending and raising taxation, even as the country faces deep recession. It is also raising interest rates to fight inflation and attract foreign capital.
At the other extreme, Hungary and Thailand are cutting interest rates in the face of deflation. But they may not be able to do that for much longer if the Fed raises rates later this year as it would expose them to the risk of destabilising outflows and currency devaluations.
More http://www.ft.com/intl/cms/s/2/2a6c3d6a-0f62-11e5-897e-00144feabdc0.html?segid=0100320#axzz3cgciqRAE
It is probably best not to copy whole articles. I tried to edit this one, because the original way it was copied in had some problems.
We certainly have been dependent on Emerging Markets for growth. Now with growth in these countries slowing, at least partly from lower commodity prices, it presents a problem for maintaining world growth.
Artleads
Here is another different angle on community activities:
http://stbartspittsboro.dionc.org/digital_faith/events/3165264
St. Barts church has a community lunch…open to everyone. Some local farms and a chef who worked for Dan Barber in NYC have teamed up to put this on. I’m looking forward to it!
Don Stewart
“Tickets: $50 per person plus a $3.74 fee per ticket if paying by credit card.”
Beyond the means of folks in my economic category, but those who have a few extra pennies have here a great opportunity to have fun while helping. 🙂
Artleads
The community dinners are free. This is a fund raiser to keep them free. I can afford it.
Don Stewart
This makes it more understandable where your Black community workers are coming from:
http://www.counterpunch.org/2015/06/12/how-poor-black-lives-matter-to-u-s-capitalism-today/
The savagery of the situation is unspeakable. A few points:
I would conjecture that the banking system should have figured in it as well. For instance, I wonder how the interstate highway system–that ripped through urban black communities, enabling the extreme segregation of “white fright” to suburbia, raising the cost of white-abandoned urban property for new Black arrivals, subsequent “redlining” to prevent investment in Black communities, etc.–was financed?
Banking also subjugates rural people. When the interstate didn’t go through Black urban hubs, it went through rural land, which I imagine helped to eliminate small farming.
If we are concerned about changing the catastrophic specter of the New Jim Crow, we perhaps should look more broadly at who and what else US-Capitalism-Today destroys.
U.S. Households Under Pressure: Stagnant Incomes, Rising Basic Expenses
Posted on May 30, 2015 by Charles Hugh Smith
How do you support a consumer economy with stagnant incomes for the bottom 90%, rising basic expenses and crashing employment for males ages 25-54? Answer: you don’t.
Read more at http://www.maxkeiser.com/2015/05/u-s-households-under-pressure-stagnant-incomes-rising-basic-expenses
Thanks! That is a very good article. A recent issue of the Economist had a cover story called “The Weaker Sex: No Jobs, No Family, No Prospects”. There are two articles: http://www.economist.com/news/leaders/21652323-blue-collar-men-rich-countries-are-trouble-they-must-learn-adapt-weaker-sex
http://www.economist.com/news/essays/21649050-badly-educated-men-rich-countries-have-not-adapted-well-trade-technology-or-feminism
In their view, these undereducated men need to learn to adapt.
In my view capitalism does not automatically provide places for everyone. Some are useless and without extra-capitalist methods (government) they would die.
I see a great need for building and infrastructure work, but that route seems to be blocked through many causes.
I don’t know if it helps not to be clear that these poor, uneducated men are black. The system-wide negativity around this demographic is overwhelming. It’s almost as if (apart from monumental economic and social restructuring) that millions of these men need to be taken out of the society and psychologically rehabilitated. I’m not sure they should be rehabilitated so as to fit into America’s industrial system. That suddenly seems very tired.
Some of these poor, uneducated men are black, but there are plenty of white uneducated poor men as well.
With the use of fossil fuels, for a short time the world economy could value “thinking jobs” more than physical labor. Once we lose the use of fossil fuels to help us, we will be back to needing manual labor. I would not be surprised if the role of women changes again, quite likely to more like what it was prior to fossil fuels–that is assuming we humans survive.
Behind my preoccupation with land use is the proposition that all kinds of social identification–race, class, caste, gender, sexual preference, religion, ethnicity, national origin, etc.–should be subordinate to community: where you are is who you are.
I ask my spouse what she thought of this, and she brought up the matter of choice. What about choosing which community you wish to live in? Do people in ghettos with drive-by shooting want to be there? Probably not, but they have no other choice.
So how does the issue of choosing where you live apply? Can people in dangerous places be given choices? Can the EU offer choices for people fleeing ISIS? Can the US offer choices for its ghetto residents or the immigrants at its doors? What’s the alternative if they don’t?
Artleads
Regarding people choosing to move out of ghettos:
‘In Metro Atlanta, Black Americans are the largest racial minority at 32.4% of the population, up from 28.9% in 2000. From 2000-2010, the geographic disbursement of blacks in Metro Atlanta changed significantly. Long concentrated in the city of Atlanta and DeKalb County, the black population there dropped while over half a million African Americans settled across other parts of the metro area, including approximately 112,000 in Gwinnett County, 71,000 in Fulton outside Atlanta, 58,000 in Cobb, 50,000 in Clayton, 34,000 in Douglas, and 27,000 each in Newton and Rockdale Counties.[7]’
I lived in Atlanta 2 decades ago, and only loosely follow what is happening there now. My understanding is that there were some changes in the policies toward public housing which actually encouraged people to leave.
Don Stewart
I had not figured on public housing. It would be interesting to see :
– what, if any, sustainability criteria go into their construction
– how they are structured in terms of community cohesion
– how they stack up re scale, type and other issues of choice
– what happens to them post collapse
For instance, how do you provide housing and community that might attract diverse groups of people? Each housing community having different kinds of assets and attractions that transcend “unevolved” people-identity-categories like race (although that might be a legitimate “evolved” category in some cases).
I recall that many of the people fleeing ISIS were well trained and heavily armed. You have to have the will to fight. My immigrant forefathers fled starvation in Ireland. If fighting is not the answer then running might work. History is written by the victors and survivors. If you can’t be the first then be the second.
Issues surrounding poor Black men in Amerika have been prominent. I had seen a TV program that had young African American boys in really authentic, grounded African villages, and I was searching for it or something similar online. So far, I only came up with this below. Much of it is pro-civilization BS–they would show me the door right away–but the founders have their shit together otherwise.
https://www.youtube.com/embed/cE7iIj1xtXY?rel=0&autoplay=1
Going to Africa: Yes. But this is a bunch of elite , “aspiring” black kids, mostly girls: not for me. OTOH, poor black men (the very bottom of society) seem to have a meaningful place in the post-collapse whatever. Building communities? Making wrecked cars run? Making diesel fuel from cooking oil? Herding goats? Patching up roads? Permaculture?
If your IQ is less than, say, 110 you are probably doomed.
Because in the new economy menial jobs are not needed.
Paul asks “B9K9 — perhaps you can advise how one would capitalize on future events.”
I’ve discussed this before, but it wasn’t allowed by the moderators, so we’ll see if it gets through this time. In essence, as the system begins to unwind, minority governments will be forced to conduct counter-insurgency campaigns against their citizens in order to maintain control.
OK, so once you’ve come to grips with what that actually means, you can go back to the classroom and study up on the classic, time honored approaches practiced by regimes throughout the ages. And what are they?
1. Divide the native population
2. Reward and grant (limited) power to favored in-groups
3. Persecute and terrorize selected out-groups
If you want to capitalize on events, you should obviously recognize which group you belong. But more importantly, you need to understand that unless you support the state, you will be viewed as threat. The problem being in group #3, is that in order to sufficiently terrorize the overall population, you could be an entirely innocent bystander, but will still be subject to snatch and grab tactics whereby you are disappeared to be tortured, killed & dumped.
If you’re serious about playing this game – if only to derive intellectual satisfaction that you were right about events –
then you’re going to have to identify ways in which to ingratiate oneself to the status quo. I for one know exactly which group I am in, and am more than prepared to salute those that demand allegiance.
There are more options, namely “The two greatest uncertainties will be how much damage will be done before the dust has settled, and how protracted the period of destruction and struggle for dominance might be. [..] The best that can be done is to work at placing ourselves as far outside of their sphere of influence as possible.” TAE
The TV series, “Lost” ended up being a big disappointment, but it was neatly metaphorical about the ways in which we just find ourselves in the world and become convinced that our lives depend on fighting with “the others” and pushing a button over and over again. It always seemed to me that the real “heroes” of that story, who really made the most of life while everyone else fought for control over the power of the island, all pointless at the end, were Bernard and his wife, Rose.
Good luck with the grand game.
We all suffer from certain delusions; Ibsen called it “life lies”, whereas I call it the “belief gene”.
Typically, the most pronounced examples are those that embrace ‘god, king & country’. These kinds of people are very dangerous, so it’s important to indoctrinate and control them to serve your particular purpose(s).
Next up are those that have shed religious pretense, but still cling to the idea of rationale government, in which institutions implemented for regulating life are created amongst men for the aggregate benefit and overall public welfare. Paul seems to have started here, and needed to shed his prior identity as he moved more fully into awareness.
Finally, we have those that understand the totality of the real environment in which they find themselves, but still have difficulty reconciling it with their previous brainwashing. This good fellow wrote a nice cathartic essay that allowed him to express what he finally came to realize is the truth:
http://www.thetruthaboutthelaw.com/the-first-amendment-was-dead-on-arrival/
Now, to get back to your point about perhaps not playing: it’s a delusion to not recognize that you were born into this game – you never had a choice (or chance for that matter). There is no getting out of it; go solo, leave the trappings behind, and there’s murder & death waiting for you on the highway. So, grow up, buck up, and get real.
B9K9, I am not sure why you care that others should “understand the totality of the real environment in which they find themselves,” and join in playing “the game.” I mean, why proselytize? I agree it is good to lose the delusions of god, King & country, the secular religious delusions about the Rule of Law and rational government, and mush about the greater good (which may exist, but it is certainly not the pursuit of men). I don’t see the necessity of leaping from that vantage point to Banzai! Let’s play the Game of Thrones! Who am I going to be, down-trodden serf rapable and murderable at will, ass-kissing courtier, social climbing administrator, merchant trying to stay in favor with TPTB while I increase my family’s wealth, knight or Royal Family?
You missed my point about Bernard and Rose. Not everyone is going to see abandoning the kind of life he or she would prefer to instead to take a part in the Game of Thrones in order to avoid “murder & death waiting on the highway” or in the farm field as a good trade. Moreover, not everyone has to. Why should you care? I am sure you will have plenty of companions in the world to come to share your worldview and ethic with and to practice on one another.
There is rather proufound difference between “not playing” and let me repeat again “The best that can be done is to work at placing ourselves as far outside of their sphere of influence as possible.”
You apparently missed the wider connotations of this meaning as we often cite historical real world examples of adaptation in similar times (to come) of unprecedented nad lasting turmoil.
Regarding that essay:
We are subtly indoctrinated with the idea that we should be proud to go fight and die for the politicians and the money power and to spend countless billions to avoid “losing our country” to “the enemy”.
War is generally all about resources in a zero sum game. We compete on an individual level right up to the level of nation states.
The winning nations are those with the best trained… best equipped… best financed armies.
The US has been the winner — and to the winner goes the spoils:
http://static.guim.co.uk/sys-images/Guardian/Pix/photobylines/2010/6/10/1276162234651/world-oil-consumption-001.jpg
Of course the upper echelons do not fight the wars — nor do their children (even though they benefit disproportionately when the war is won) — that job goes to the lower classes…
But make no mistake — everyone in the US benefits from a US win — everyone gets a bit of the plunder….
Conversely… losing means a huge drop in the standard of living of everyone in the losing country.
Therefore… to a great extent I have no problem with the indoctrination of the masses to get them behind war … pacifism (aka Koombaya-ism) is a dangerous condition that needs to be crushed… because the big dogs eat pacifists for breakfast.
I am far more concerned about what I am going to eat when the grocery stores close for good….
When the oil stops — the political games end — it will be every man for himself.
It will be chaotic — and violent.
And you will not be able to watch this unfold on CNN…. because the electricity will be out – permanently
I doubt your earlier post was hidden by the moderators. It may somehow otherwise have been lost. Trying again doesn’t hurt–I guess that is what you are doing now. We have been pretty light-handed in what we remove. Inappropriate responses to other posters are high on the list of what gets removed–telling people how stupid they are, or the equivalent.
Mike and the Mechanic Silent Running
“Swear allegiance to the flag
Whatever flag they offer
Never hint at what you really feel
Teach the children quietly”
Gail’s appraisal of the petroleum situation is essentially correct. She uses an economic approach to come to her conclusions, which is very difficult to do. Economics does not provide the unquestionable constraints that are provided by physical law. The Economist has the latitude to venture into regions that would be in the real world impossible to reach. They often use very convoluted, complex approaches with very questionable data, and then without the benefit of common sense proclaim their results to be definitive. Gail, for the most part, usually avoids such pit falls.
There seems to be a plethora of opinions as to why oil prices have descended to their present low level. Usually by Economists. Most of these conclusions result from speculation regarding the reason for the plunge. The workings of vast world wide, international power brokers in late night conspiracies have not been excluded. There seems to be as many opinions as there are Economists, and want-to-be Economists.
With the benefit of the constraints supplied by physical law it is possible to derive much simpler justifications for the oil price decline. Simply put, petroleum is losing its capacity to power the economy, and its price is reflected in that decline. This is no more difficult to believe than ice melts in a warm room, or if you drop something you are more likely to hit your foot than your head. In the real world physics defines common sense.
Petroleum production is just as susceptible to degradation as an old car, or house. Common sense tells us that eventually everything wears out. The world’s petroleum production system is also wearing out. Its ability to supply energy is declining. This realization provides a means to calculate how fast that is happening. We have performed the calculations, and have presented the conclusion in these graphs:
http://www.thehillsgroup.org/depletion2_022.htm
The decline in price is simply the result of petroleum’s declining ability to power the economy.
Of course a great number of Economists, and their followers will continue to insist that this price decline is occurring because Saudi Princes hate the shale industry, or that Europe is getting sick of sending all their money to Putin, and his gang. Those reasons may be true in their statement, but they have absolutely nothing to do with the price decline!
http://www.thehillsgroup.org/
Dear bwhill
A quck question. On your graph ‘the economic activity powered by a barrel of oil’,
it the barrel an incremental barrel or a total barre. In other words, does it reflect the effect of increasing barrels from 100 to 101, for an incremental 1 barrel, or it is all barrels produced, including the barrels produced from legacy fields as well as new fields and wells?
Thanks…Don Stewart
BWHill, thanks for your work. In text following the chart you cite, you state:
“The Maximum Consumer Price curve is curtailed at 2020 at $11.76/ barrel. At this point petroleum will no longer be acting as a significant energy source for the economy. Its only function will be as an energy carrier for other sources.” Can you explain what you mean by “its only function will be as an energy carrier for other sources.”? Please elaborate a bit. I don’t get that.
I suppose I see a number of reasons for the price decline that aren’t directly related to falling EROEI. We have less money getting back to the non-elite workers spendable income for a number of non-EROEI reasons:
1. Growing cost of government (to solve problems brought on by complexity as Joseph Tainter would say)
2. Growing cost of education and medicine, since these are also overhead of society. The need for more education is brought on by the need for workers to deal with more complexity. The need for more healthcare occurs as we move closer together. If these are costs are directly or indirectly paid for by workers, they tend to limit the funds workers have available for spending on houses, cars, appliances, and other devices that the economy makes that require the use of fossil fuels.
3. Growing inefficiency of the energy system itself, as it takes a larger and larger share of the workers from the system, and uses more and more of the resources (including energy resources).(The energy resources part is the only place where I can see that declining EROEI plays a role.)
4. Greater wages dispersion, caused perhaps by a growing need for supervisory people, and increased crowding in the ranks of non-elite workers caused by rising world population and globalization.
5. Increased use of loans to fund college eductions, leading to a situation where workers have little spendable income, even after they get jobs.
This is why I see collapse coming before falling EROEI would lead oil prices to drop to very low levels. This may be a fine point from most people’s perspective. Is the problem falling EROEI, or is it the growing need of the economy to get more (net) energy? If it is the problem of not enough net energy getting back to non-elite workers, and because of this stifled growth bringing down the financial system fairly early, then collapse would come quite a bit before 2020. It could come before falling EROEI would indicate it would.
And on that I disagree, because falling EROEI and financial limits are merely opposite sides of the same coin. If you have more workers extracting oil, those workers are all going to be expending energy to get that oil while at the same time extracting a bigger share of the pie from the economy. In general, more workers are going to mean lower EROEI. The two issues are inseparable. Of course, it does get more complex than just that issue, as you bring up issues such as the government needing more and more to deal with complexity, but in the end, there is a certain level where EROEI will kill the financial system and vice versa. What level of EROEI is going to be dependent on the financial system, how the economy works and how the government acts, but to me, a declining EROEI would indicate that a crisis happens around the time consumers cannot afford to purchase the oil at the prices that producers need to produce it, plus however much time it takes that mismatch to shake out in the financial markets. Right now, we’re just waiting on the shakeout.
Falling EROEI and financial limits are related, but they are not merely opposite sides of the same coin.
As I use the term, falling EROEI has a very specific meaning–growing fossil fuel energy use in the extraction and production of energy supplies (coal, oil, natural gas, wind turbines, etc.) . It has basically nothing to do with the many other areas of the economy where we are reaching diminishing returns, such as fresh water production, growing population relative to arable land, and depleting quality of mineral ores. Even growing government is a form of diminishing returns, but not related to EROEI, as I use the term. This is why is say they are not merely opposite sides of the same coin. EROEI is “proper subset” of diminishing returns, if you are thinking about a Venn Diagram.
Another way of saying what I am saying is that we would reach financial limits, even without falling EROEI (using the definition above). Many economies collapsed before fossil fuels began to be used widely.
I agree that we are waiting for the shakeout. Maybe we are using different terms for the same thing.
“as I use the term”
You can define energy however you want. Work expended. F*d. But it all boils down to the same thing, and that same thing had better be consistent with the physical world. How much F dot D is expended to get E. This is something that can be described by math all you want. But there is no “how I use the term” unless you are able to overcome over two decades of physics research. These things have hard definitions. And they control the economic situation in the end. EROEI matters.
And decades should read “centuries.”
I totally agree. High EROI FF’s built the enormous consumer base that now exists. Declining EROI has allowed the rise of Alt E devices and such things as electric vehicles. Such things had absolutely no chance in the heyday of cheap FF’s. Now with galloping debt, designed specifically to suck the life out of future generations, we are left with the parasites of solar panels, wind turbines and electric cars feeding on the decaying infrastructure of the fossil fuel age.
The consumer base that cheap FF’s built is now changing from an asset to a liability.
“Diminishing returns” is a direct consequence of declining EROI and I would go so far as to say that is exactly the same thing…….exactly the same thing. One does not have to quantify exactly the rate of decline or even how it manifests, one requires the ability to understand that declining EROI is the bottom line.
“EROI” seems to have two meanings: (1) An academic calculation meaning, which is (as far as I can see) only defined for energy products. It divides certain outputs by certain inputs, (2) A colloquial “what it should mean” understanding of EROI by those who read about it. This second meaning equates more or less to diminishing returns.
I am saying that the academic calculation, in practice, does not provide results consistent with what a person would expect based on “what it should mean”. This has to do with problems with the way the academic calculation is defined, and difficulties in the real world with the application of the formula. Because of the limited scope of the academic definition, it also seems to miss quite a few types diminishing returns.
@bandits
Yes. I think that people should really sit back and just contemplate energy expenditures. We can go to the EIA and see how much is burned up in terms of oil or coal or whatever fuel source, but we still do not really think about what an energy expenditure is.
It is obvious that running a heater or an air conditioner is an energy expenditure, but most people won’t think about why. The why is because a measure of temperature is a measure of the average kinetic energy of the molecules of the system being measured. It takes an energy input into a room to heat it, but it also takes energy to move energy from one place to another, and thus it takes energy to pump heat out of a room.
But it also takes energy to run the computers that all of our financial transactions happen on, it takes energy to move cash in an armored truck, it takes energy for an individual to go to a store to conduct a transaction, and it even takes energy to reach into one’s back pocket, take hold of one’s wallet and retrieve cash to hand to the cashier. It even takes energy for us to maintain our body temperatures. It quite literally takes energy for us to exist. It takes energy for us to do anything and everything that we do. There is no escaping energy requirements to simply exist.
It is the very nature of energy that makes EROEI important. You can argue that differing levels of EROEI make differing kinds of economies possible, and you’ll be correct, but you cannot argue that EROEI is not important without running into the fact that energy is what makes everything possible. Every object around you is the result of an energy expenditure, whether natural or man made, and this is without exception. And what is the keystone energy product in our economy? Oil. Without oil, we don’t get coal, nuclear, wind and solar to the degrees that we have them. Without oil, we would have to rely on other means to get those resources, and the other means available mean a much less energetic life.
But the lower the EROEI on oil, the more in the way of physical resources we have to put towards extracting the oil, and thus, the more expensive oil gets. If you have to drill 10 wells to get the output of what one used to get you, you are probably going to expend 10x the resources and pay 10x as much for those 10 wells as you would have for one. If the wells are also getting harder to drill, 10x may be wrong, as you simultaneously look for ways to boost efficiency while you deal with having to physically expend more energy. It also means that those resources are not available elsewhere. The guys working on the oil fields cannot simultaneously build houses. The steel used in materials and equipment cannot be used to repair a bridge while it is on the oil field, and steel does represent an energy expenditure. The currency going towards financing these operations cannot go to mom and pop businesses, at least not directly. Especially not when it is being acquired via junk bonds.
So the kind of financial system we have may set lower limits on the allowed EROEI, but EROEI sets limits on our financial system. These are two sides of the same coin. They are inseparable. Energy is everything, and without it, no financial system exists. So I’ll say it again: The limits set by EROEI on the economy are where the consumers cannot afford to pay what it costs to produce the energy, plus the time for the economic shakeup to happen. Low EROEI oil equals expensive oil. This wouldn’t be true if there were infinite oil, however, such things do not exist.
We are both talking about energy–no problem there. I am just saying that EROEI has a very specific meaning to me, that does not encompass nearly as many problem as the more general term “diminishing returns” covers.
@gail,
I’m saying that the two are inseparable. You can argue that the measurement of EROEI is inaccurate, and you might have a point, but EROEI is still in play. It costs a lot more in terms of both energy and in terms of USD to drill a 10,000′ horizontal well, then to frack it then it did to drill a well a few hundred feet and get a gusher in the 1910s, so even if the numbers aren’t accurate, it is clear that EROEI has gone down. Diminishing financial returns will be brought about by diminishing energy returns. Low EROEI and expensive to find and/or expensive to get to are generally synonymous. It drives diminishing returns. How our economy is organized dictates just how much we can withstand with regards to diminishing returns.
We can agree, if we are talking about what EROEI should be, not about the technical problems of definitions.
The next financial crisis?
“A liquidity drought can exacerbate, or even trigger, the next financial crisis. Sellers will offer securities, but there will be no buyers,” wrote Schwarzman, founder of Blackstone (BX), one of the world’s largest private equity firms.
http://money.cnn.com/2015/06/10/investing/next-financial-crisis-steve-schwarzman/
Thanks! It is not just banks that face new regulations. Insurance companies can find themselves with new regulations as well, and regulations can change what kinds of securities that employee-sponsored 401(k) plans invest in too. A person wonders that will happen to securities that have no “home”. It is hard to see in advance what the true impact of rule changes will be.
Artleads
As for the Slow Money conclave in Pittsboro. I suggest that it can be interpreted along the lines laid out in JMG’s current essay:
http://thearchdruidreport.blogspot.com/2015/06/the-era-of-dissolution.html
What MOST of the participants are doing is similar to Roosevelt ditching the gold standard. Roosevelt did not (at least to JMGs way of thinking) solve the basic problems of industrialism. However, the collapse DID remove some of the deadly overhead and permit the economy to continue to operate. (Later on, the US discovered war and empire, which gave us many rewards between 1950 and 2000).
What I see MOST of the people who will be there doing is trying to remove the stranglehold that financial global capitalism has on our lives. Ten years ago, many of the people at a meeting like this one would have been very concerned about fossil fuels…but people are either tired of that subject or think that it isn’t a real, current problem, or something.
Few of the people would agree with my connection between the inability of our society to increase the work we get from fossil fuels (or maybe the absolute decline in our ability to get work from fossil fuels) and the many other problems we are currently experiencing. Lyle Estill would understand what I was saying, even if he had quibbles about it. (I don’t think Gail accepts the connection I make, either.)
JMG, of course, is looking at the long term, and he sees something like a reversion to Edo Japan in the far future (although he may not phrase it that way). I will be one of the very few people at the meeting with any serious interest in looking at a world without fossil fuels.
I try not to be too dogmatic. Anything that moves us back from the brink is good. Anything that builds more socially and emotionally satisfying local economies is good. Anything that puts back together shattered communities is a good thing.
Don Stewart
Yep, JMG’s latest articles in that series was very strong argument piece against “instant doomers”. In the same vein, I’d also strongly suggest reading links and supplemental material linked from Ugo Bardi’s several posts on the fall or Roman Empire as narrated by the elite of the day, including the very recent one. It’s a very practical “guide” how (not) to get from “global” jetset lifestyle into “local” homelesness for the second half of your life.
Now to get proper orientation in our current timeline and trends is a tough one, I usually speak about the outlier possibility to drag the world kicking and screaming in more or less similar order towards say 2025-30, chiefly due to inertia of the current system and relative weakness of hegemon’s challengers. However, that’s only one scenario, we can take the other end of the spectrum and based on the fact how suddenly productivity outpaced wages ~10:1 since the end of 1970’s, i.e. wage earners and society as a whole was robbed by the global gang of sub percenters and their schemes, so that we are indeed on the borrowed time already for almost 40yrs. And in that respect Gail’s vision of restricted price of fossil fuels and severe crash before 2020 is very likely.
However again and reading JMG, it’s rather impossible for all these diverse cycles to sync all and play in few years time just to please some instant overnight doom fireworks. More likely we are going to be smashed first by fight/disruption over the nature of global credit system (40-80yrs cycle ending now), followed and/or intervention of finite world issues (300yrs+ cycle about to burst relatively soon), and quite likely adding on top of that even some larger cycles of planetary nature.. That’s what is in store for this and few next centuries of people on earth.
“I try not to be too dogmatic. Anything that moves us back from the brink is good. Anything that builds more socially and emotionally satisfying local economies is good. Anything that puts back together shattered communities is a good thing.”
As long as we don’t get sucked in to THEIR myopic views… I now have an intuitive sense of what is essential and strategic. Each of the “better” tactics out there tend to have a little something to put toward the strategic. I’m generally the only one in my circle who thinks as I do about the big (strategic) picture, but I’ve come to accept that. I believe that if you relate to others from a pure place, they will slowly start listening to you. It requires patience and faith.
I hope you don’t give up.
One aspect that needs to be examined more is the required oil demanded by the oil producing states themselves! Recent article regarding Saudi Arabia and the new refinery being built to process Petro and needs of a fast growing population that demands cars and air conditioning.
The same is true for Iran and which is why they are persuing nuclear energy for electricity.
http://www.adn.com/article/20150601/prices-are-down-saudis-keep-oil-flowing
merican oil production has nearly doubled over the past six years, crowding out Saudi Arabia and other OPEC imports. The situation has forced foreign producers into stiffer competition in Asia with supplies that once flooded the American market.
Saudi Arabia also needs to focus on its own larger and more diverse domestic needs. As the population has surged and the middle class has expanded, consumption has skyrocketed in recent years. Energy subsidies intended to prevent political instability have only added to the demand.
With consumption increasing, Saudi Arabia has been moving up the value chain, looking beyond exporting crude oil to higher-margin businesses like refining and petrochemicals. The country has a new $22 billion joint venture with Dow Chemical and several new refineries costing $12 billion each.
Saudi experts say oil policy is increasingly being set by younger technocrats surrounding the new king, Salman, who came to the throne in January. While the new leadership is still focused with the price of crude, it is equally attuned to how any production cuts might slow the overall Saudi economy and hurt jobs at a time of political turbulence.
It seems to me the general trend in recent years has been more refineries, but not more crude oil needing the refineries. When Saudi Arabia begins new extraction of oil that needs a special refinery, and in fact puts that refinery in place, its production mostly offsets declines in production elsewhere. The new oil that is available is refined products, not crude oil to fill the need of other refineries. We end up with underutilized refineries around the world, at least for certain types of oil.
Gail, I read in a different paper the domestic usage of oil in these countries (Saudi Arabia and Iran), is growing so rapidly with the population there will be be a sharp Decrease in exports with the depletion rates as such. So, these is just another problem that is not being faced at the moment
Yes, the domestic use of oil has been increased in quite a few oil producing countries. I haven’t looked at Saudi Arabia and Iran recently, so I am not sure exactly where each of them stand right now. There already has been a drop in exports because of the big growth in energy use. Any model that assumes production will go on as in the past, and use in the oil producing countries will grow, will come to the conclusion that exports will drop. I suppose that was part of the USA’s reason for wanting to ramp up the USA’s oil production.
Thanks Gail for your effort and insight in all aspects facing our limits.
This just posted online regarding Iran and the massive increase for prtro among drivers
http://www.ft.com/cms/s/0/86ae7896-047b-11e5-a5c3-00144feabdc0.html#ixzz3d1rk55xv
Iran’s cab drivers were left reeling by the removal of fuel subsidies last week — a move that many Iranians fear will have a domino effect on other sectors of an economy hard hit by years of sanctions.
The price of petrol increased by 43 per cent from 7,000 rials (24 cents) per litre — for which all car owners had a monthly quota of 60 litres — to 10,000 rials, a price many were already paying if they consumed beyond their subsidised allocation. Gas prices for domestic and commercial consumption also rose by 15 per cent.
http://www.ft.com/intl/cms/s/0/86ae7896-047b-11e5-a5c3-00144feabdc0.html#axzz3d1mHMLJX
No one will be sheltered when the SHTF
The IEA keeps talking about fossil fuel subsidies. What they are talking about is the kind of subsidies that Iran provides. Such subsidies are quite common in countries that export oil. In these countries, the cost of extraction is quite low; most of the cost of oil is taxes. What the countries in the past have been doing is, in effect, giving the local population a “break” on the taxes of the oil. The plan is that taxes on exports will be sufficient to provide the subsidy needed by the government. Now with oil prices low, exporters are not getting enough taxes on exports. They need to tax their own citizens as well, and thus need to remove the subsidies.
Making this change (thought of either as removing the subsidy, or adding the tax) will reduce the demand for oil in Iran, and thus indirectly, in the world. This kind of change helps to keep world demand low, and thus world prices low.
Banks quick to slash mortgage rates after Reserve cuts official cash rate cut
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11463007
Related to the drop off in commodity prices … which of course is due to weakening demand…. which of course is due to the fact that the world is tapped out on credit… and there the job market is brutal…
So New Zealand joins the race to the bottom on interest rates… because they have no choice…
It’s a race nobody wins.
http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/11666355/Bond-crash-across-the-world-as-deflation-trade-goes-horribly-wrong.html
copper4:
Can anyone translate what AEP is saying here in laymans terms please?
observer20:
Lots of people bought lots of bonds paying a really low rate of interest, or coupon, let’s say 1% a year.
Rates rise, maybe because of threatening inflation, maybe just a return to normality, maybe to protect a particular nation’s currency status.. and bonds start paying 2% and no one wants the 1% bonds with their much lower returns. So the 1% return bonds aren’t wanted by anyone and you can only sell them at a loss to the original amount paid for them…if you can sell them at all.
Cue massive losses by banks, insurance funds, pension funds et al, or even collapses as companies need to translate those bond holdings into cash to cover losses on some other dodgy position they took.
Financial crash mark 2.. only this time you can’t lower interest rates etc because they’re already on the floor.
Higher interest rates are a very big deal.
Insurance companies and pension funds holds big portfolios of debt on their balance sheets. As interest rates rise, the value of the bonds that they hold on their books falls, since if they had to sell the bond, they would get a lower price for it, reflecting the fact that the yield to maturity would have to match current yields to maturity.
If interest rates rise, this also tends to depress stock prices, partly because bonds with a higher yield are deemed a better value compared to stocks with no guaranteed yield. Also, the value of a stock is (in theory) the discounted present value of future payments (earnings of the company, or dividend payments plus stock price at the end of a holding period). If interest rates rise, the interest rate in computing the “value” of the stock rises, leading to a lower stock price.
As long as interest rates have generally been falling since 1981, these falling interest rates have given a “lift” to the economy, because everyone’s portfolio of bonds gradually became worth more, and stock values could rise more than they otherwise would. The chart above is up to date, so that actual amount of rise so far has been small.
Not only that, but as interest rates rise, companies wouldn’t be able to issue bonds for the purpose of funding stock buybacks, which is exactly what they’re doing. The junk bond market is simply the other side of the capital structure that is the stock market.
Good point!
To me, bond prices, government debt and money printing, aka quantitative easing have not been based in any kink of reality for years. Will reality begin to raise its head. I’ll believe it when I see it, and I will have to see good evidence over an extended period of time. Having said that, obviously, rising interest rates would be a game changer. It would probably translate into even lower prices for oil eventually.
Is all this talk about rising interest rates due to the possible collapse of the talks with the Greeks? We’ve lived in a world without consequences for so long that it’s very hard to imagine true consequences of anything.
“it’s very hard to imagine true consequences of anything.”
That is a good point. Free money is so abundant, it is hard to see a big turn around.
You are right–rising interest rates would translate to even lower prices for oil eventually. The $100 per barrel oil prices came after the US started QE, and interest rates were very low.
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Thank you very much for your hard work Gail! I was waiting for this post since I began following the oil prices and oil news. This means peak oil is not fully accurate if it only considers conventinal Oil, and Geology, it s more like peak cheap oil. Morever I wonder how they are able to keep production if adding more debt won’t work, at least for a long period.
As for BP predictions there is a cartoonish version of their forecsast were oil last till 2030 as a major resource and then renewables mostly nuclear and Hidrogen take over, shale gas becomes a main source of energy.
And economic growth will be possible by flattening energy demand. ( I don’t buy it of course)
https://www.youtube.com/watch?v=bzkHlRsUspk
My expectatives:
1. economy won’t bring more prosperity nor wealth, we will try to stabilize it by rationing resources made possible by innovation and new technologies but mostly change on behaviour, economy as we know will shrink as you pointed out. I hope it becomes more a matter of managing resources rather than creating wealth.
I support this belif on onging advances on sustainable practices, for instance Germany is developing a way to grow food on the desert even using salty water (http://www.dw.de/growing-veggies-in-the-desert-no-longer-a-mirage/a-17032261), not a flawless solution but it is an admirable progress, there are also examples like the efforts being done on Israel.
I am not been unrealistic just trying to find a middle point.
To be fair to the early Peak Oilers, guys like Colin Campbell and even King Hubbert were referring to cheap oil, the easy-to-extract, high ERoRI stuff. They knew about tight or “fracked oil” because it is not a new technique (contrary to popular belief) and the oil sands were known to them. They didn’t consider those because they knew they wouldn’t be cheap to extract.
We know that Titan, a moon of Saturn, has seas of liquid hydrocarbons. Good luck sucking those out of Saturn’s gravity well and transporting them back to Earth. Would make a good science fiction movie, though.
Right. The fact that the early researchers were looking only at cheap oil is part of what confused the “peak oil” story. Peak oilers thought that the easy to extract oil would “run out,” but the real story is that there is a whole lot more available, if we can extract slow-to-extract, expensive oil in its place. The truth is that we can’t, and it is financial limits that brings an end to the slow to extract, expensive oil (as well as oil extenders, such as ethanol). It is really “Limits to Growth” (financial crash, all fuels) that we are hitting, not Peak Oil.
😉 wait, wait, we use the FF to blast out of Saturn’s pull and drive back down the sun’s gravity well. Sure the EROEI is really bad 1.01 but the fuel is free! Quick someone call Elon.
Thanks for your ideas. I think we need to be looking for approaches that give reasonable returns on human labor and on land of the various types available. Our current system looks like a lost cause. We can’t assume it will be part of the new system. We can’t simply focus on “using less” fossil fuels either.
Fast, I am tricking out my Tesla with tandem trailers. One for the Lithium batteries and one for the PV panels. The loudspeaker for the Kumbaya musical accompaniment are on the middle trailer.
Wicked!!!
For a realistic view of life after oil try “The Earth Abides” by George Steward, published in 1949. It reads surprisingly up to date even today.
Actually that book is pretty much too optimistic for my tastes.
I prefer Alas Babylon, which was based upon what the author actually saw in Korea back in 1950.
Alas Babylon, we used that in my 9th grade English class in 1967. Everyone thought is was cool that the book was set in our area and our town was mentioned. I will have to get another copy to use as a reference book.
NZ heavy Traffic index down four months straight and worsening.
http://www.anz.co.nz/about-us/economic-markets-research/truckometer/
1
The ANZ Heavy Traffic Index comprises flows of vehicles weighing more than 3.5 tonnes
(primarily trucks) on 11 selected roads around NZ. It is contemporaneous with GDP growth.
The two Truckometer indexes fell in May.
The ANZ Heavy Traffic Index is concurrent with
GDP. It fell 1.1% in May (seasonally adjusted –
sa), its fifth (unrounded) consecutive fall. Such a
run of monthly declines has not been seen before;
the index is usually more volatile
Another indication of deflation – dropping milk prices: http://www.nzherald.co.nz/northern-advocate/business/news/article.cfm?c_id=1503446&objectid=11456768
A lot of farmers will go broke if prices do not recover…
Over a third of cow cockies are technically broke now. Just a matter of how long the banks will extend credit. There is no compelling reason to expect prices to recover. The cover story is oversupply vs cratering demand. US dairy suppliers have entered the global market for the first time and on an industrial scale. Moreover US suppliers are subsidised via the dodge of “insurance” of profit margins.
In short, NZ dairy farmers are bleeped.
US cows are mostly corn fed, and filled with hormones and antibiotics. I don’t think the milk is equivalent.
The largest export is whole milk powder which is auctioned as a commodity http://www.globaldairytrade.info/en/product-results . NZ used to be predominantly grassfed where it had a competitive advantage but has moved to industrial production with supplementary feed (palm kernel) and irrigation.
The US has built a heap of drying plants commencing 3 years ago as well as building vast barns trucking feed in. NZ can’t compete on cost not to mention subsidies. I don’t think US milk powder is discounted.
The NZ Govt’s Big Plan is to double agricultural production by 2025 – ridiculous if not outright madness.
Reblogged this on Southern Energy and Resilience and commented:
“The amount of available future oil is likely to be much lower if real-world price constraints are considered. There are at least two reasons why oil prices can’t rise indefinitely:
Any time oil prices rise, economies that use a high proportion of oil in their energy mix experience financial problems. For example, countries that get a lot of their revenue from tourism seem to be vulnerable to high oil prices, because high oil prices raise the cost of airline travel. Also, if any oil is used for making electricity, its high cost makes it expensive to manufacture goods for export.
When oil prices rise, workers find that the cost of food tends to rise, as does the cost of commuting. To offset these rising expenses, workers cut back on discretionary spending, such as going to restaurants, going on long-distance vacations, and buying more expensive homes. These spending cutbacks adversely affect the economy.
The combination of these two effects tends to lead to recession, and recession tends to bring commodity prices in general down. The result is oil prices that cannot rise indefinitely. The oil extraction limit becomes a price limit related to recessionary impacts.
The cost of oil is currently in the $60 per barrel range. It is not even clear that oil prices can rise back to the $100 per barrel level without causing recession in many counties. In fact, the demand for many things is low, including labor and capital. Why should the price of oil rise, if the overall economy is not generating enough demand for goods of all kinds, including oil?”
Good questions from @gailtheactuary
Thanks!
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Well this is how the BAU is actually doing.
>We are living in an epic period of change, danger, wealth creation, IQ, and opportunity. In 2008 the old economy was reshuffled and the cards re-dealt with smart people tending to get the best hands.
>Meanwhile, less intelligent, less creative people people are getting fired and replaced by computers and Chinese workers. The stock market keeps going up.
>Too big to fail policy has been a success, like it or not.
>Since 2008 and especially since 2013, the old world of liberalism, social justice, and overpaid jobs has been demolished… and people are desperate for answers. This website [ed: the Gray Enlightenment guy’s website] contains those answers. This is the field guide to the “New Era” we live in. You can play by the old rules and get left behind, or you can use these new ideas and gain understanding.
I am not sure I would agree that this is how things should work, but I think that a case can be made that this is how they are actually working.
I would appreciate it if people refrained from making inappropriate remarks to Kulm. You can disagree with what he has to say, but please leave it at that.
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Great article, Gail, and I agree. It seems as though the wave is cresting, i.e. oil peaking from past investment with private and public producers going all out to try and hold market share because they need every dime they can garner. But it doesn’t seem likely to hold or continue to rise, but instead drop down to a lower supply and economic level. Should be quite a point in time when that occurs. I can hardly wait, lol.
I wonder how the banks and central governments will hold up in all of this. The turning point is likely to come from one or more of the problems waiting in the wings, such as the Greek default on debt, or multiple defaults on oil company junk bonds, or Japanese debt problems.
The beginning of the end for the oil age
http://www.marketwatch.com/story/the-beginning-of-the-end-for-the-oil-age-2015-06-10
The age of oil has now begun to end, and that means at least more volatility, so be aware and beware, the world is changing in a massive way.
” In response to that new reality, Saudi Arabia allowed the price of oil to plunge”
I don’t buy that.
The most powerful nation on earth does not allow a minnow like Saudi Arabia to manipulate the most important market on the planet like that. If the price is low it’s because it has been determined that a low oil price is beneficial (I believe that prices were mani
Ask Saddam and Gaddafi what happens when you pull the dragon’s tail.
“Ultimately, probably in the 2020s sometime, the beginning of mass adoption of electric vehicles will begin to put a significant dent in oil demand as transportation is over 60% of all petroleum used globally (about two-thirds in the United States).”
I stopped reading there because a) that won’t happen because it can’t happen and b) we will have collapsed long before the 2020’s.
I suppose he will tip buying Tesla stock…. buyer beware:
http://davidstockmanscontracorner.com/tesla-bonfire-of-the-money-printers-vanities/
Thanks! Good quote from article.
Great article, Gail! Thank you.
We’ll see how this situation will unravel through the 2015 and first half of 2016. Pressure is rising.
Essentially an interesting description on the financial consequences of the average declining EROEI of the remaining planetary oil reserves.
The problem is the same with coal and natural gas (methane).
Declining EROEI is only part of what is going on. There is a whole lot more. The limit is financial, not EROEI.
Agree. But as we discussed previously numerous times, there is a way to prolong the charade some. Namely, juicing even a bit more out of the corpse of the individual private and public sphere, i.e. less healthcare, less public transport, less road and bridge maintananece, less science and education, less frivolous driving and shopping, less fire and emergency workers and so on, voila now you can keep your nice bankster system for few more decades.. perhaps wih some adhoc patches and updates here and there..
Can you explain what you mean by juicing?
Or is that just wishful thinking?
Because as I see it when deflation grabs hold of BAU — it will wring its neck like a chicken. And there will be nothing the central banks can do because they will have done all they can trying to fight off deflation.
And deflation is creeping in now…. see cratered commodity prices due to lack of demand
Yep, in New Zealand right now at least 1/3 of dairy farmers are cashflow negative, completely dependent on bank credit. Sheep prices are heading south too. I can hear the cracks and the top of the tree is shuddering.
Most of the world’s dairy operations are “conveniently” dairy only, exactly for the perceived cashflow “stability” aka lazy overnight profits “guaranteed”. Not suprisingly after a while massive overcapacity has been reached globally/regionally in the segment and prices fall like a rock, dairy is in crises in Europe now as well (Russian embargo didn’t helped either), moreover it’s quite a cyclical sight after say roughly decade+ I’ve seen it at least three times so far. However, this actual dairy drama is not any proof we reached the point of THE final deflation flushout Gail speaks about..
Cash flow negative is what pushes companies quickly into major financial problems. It can be hidden for a bit with more and more credit at very low interest rates. I think you are right about cracks.
Of course the interface, between the physical world of “harder to extract hydrocarbons” (declining EROEI) and main street, is the financial system.
The financial system – with its “creative accounting”, QE “money creation” programs, off-balance sheet liabilities, elastic debt tolerance standards – can for some time hide from “main street” the fundamental fact that the remaining number of “powered” years of our high tech civilization may be quite low.
However the more you stretch the “elastic economic lies” the more rapid and brutal the story ending may be.
Some people are quite aware of this.
The end may indeed come from a brutal shock transmitted through the financial system.
There are however a few alternative scenarios, if TPTB decide to preempt such a “fatal” global financial disintegrating shock by other types of shocks essentially designed to implement a “controlled power down” … with the objective of leaving around a billion “selected” people or so (may be half that number) to share the remaining strategic planetary resources, with the continuing benefits of a high tech civilization.
A “brave new surviving world” that would then struggle to find a very high EROEI new energy source (controlled aneutronic nuclear fusion?) to replace hydrocarbons as its primary energy source and then attempt to head for the “other Earths” orbiting around other nearby stars with their unlimited new strategic resources.
The “new high frontier” with its implicit “insurance policy” against the “fat tail risks” of “planetary extinction events”.
For what it’s worth (based on EIA forecasts):
http://www.bloomberg.com/news/articles/2015-06-08/america-s-shale-oil-boom-grinding-to-halt-as-u-s-forecasts-drop#media-1
It’s Official: The Shale-Oil Boom is Over
By Tom Lewis | June 9, 2015 | Daily Impact
“(…) This — now official — assessment is in the form of a set of projections by the EIA, which, we should remember, has pretty consistently been overly optimistic in its assessment of the oil business. Remember, they were the folks who estimated that the Monterey Shale in California held 14 billion barrels of recoverable reserves — two-third of America’s total oil wealth — until they ran the numbers again and re-estimated the Monterey at 96% lower.
So they might not be great statisticians, but they are the ones we have, and upon whom the world relies for US oil numbers. And they now say that shale oil production in the US — which for five years has been on a rocket-launch trajectory that should have punched through six million barrels per day by now — will fall to 5.58 million bpd this month and to 5.49 million bpd next month and ever faster thereafter. The trajectory of a rocket when the engine quits. (…)”
http://www.dailyimpact.net/2015/06/09/its-official-the-shale-oil-boom-is-over/#more-2937
Ron Patterson’s summary of this EIA Drilling Productivity Report:
http://peakoilbarrel.com/the-eias-drilling-productivity-report/#more-8129
Yes, the shale boom is turning down. I am not sure how much it would have to decrease to fix our problem. As noted in the article, we really need the price up at $130. That would seem to be hard to get to.
Re: http://www.bloomberg.com/news/articles/2015-06-08/america-s-shale-oil-boom-grinding-to-halt-as-u-s-forecasts-drop
That sheds new light on the Saudi story …. are the Saudis hitting the pumps as hard as they possibly can because shale has now peaked and we need to compensate?
If so then the gas gauge is getting closer to the red line
First, thanks for another intriguing post – please resist the temptation to dumb down.
http://www.zerohedge.com/news/2015-06-16/peak-oil-myth-or-coming-reality
“The 2014 Oil Price Shock did not improve the consumption rates in North America, Europe and Eurasia What if demand growth keeps slowing? Does this trend indicate that global demand for crude oil will eventually hit a ceiling? “Global oil demand will peak within the next two decades”, said energy expert Amy Mayers Jaffe in a recent article for The Wall Street Journal.”
“China already has more than 12 SPR sites and it plans to further increase its SPR capacity from 250 million barrels to 500 million barrels by 2020. So what happens once this target is achieved? “We need to understand the dilemma of hidden demand in China, where you have two types of demand – normal demand and strategic stockpiling. The latter won’t last forever,” this is what Jamie Webster of IHS had to say in a recent interview with Reuters.”
And the oil price – China is busy building capacity for a second 250M barrels, and India expects that its strategic reserve will be ready later this year. The benchmark capacity for these stores is some ninety days supply.
Dear Gail and Finite Worlders
In Gail’s previous post, I wrote a note about how looking at Cuba and Edo Japan might give us some clues about how we may need to live in the future.
In today’s issue of Resilence.org, we find an essay which I think has some relevant insights:
http://www.resilience.org/stories/2015-06-10/resilience-reflections-with-rahul-goswami
And here are the words I call to your attention:
‘My advice would also be that ‘sustainability’ and ‘resilience building’ are foreign words, uncomfortable ones at that, for those who have entered income strata in which consumption can take place in the way that the market has designed it. Individual, household and collective responsibility for actions are not popular concepts because they can tend to get in the way of aspirations, and when some of these aspirations have been shaped by shortages – whether of food, income, shelter, opportunity, education and so on – then it is extraordinarily challenging to find ways to rein them in. That’s the part that requires a long view, which doesn’t suit our younger and impatient selves!’
Consider that Edo was built on group cooperation, from the extended family through the Group of Five to the Village. Even among the shopkeepers and artisans in Edo, there was close cooperation in terms of things such as fire prevention and waste disposal and recycling. But Edo emerged out of the ashes of the devastating wars of the medieval period. They started with nobody having anything, and slowly worked their way up the ladder of material goods, through hard work and cooperation. As Goswami points out, modern people who have achieved the consumerist dream are starting from a very different place. Consider the song Second Hand Rose from Second Avenue. Rose has never had anything which wasn’t used, partly because her father ran a second hand shop. Suppose she marries ‘the guy I adore’, and they achieve a certain amount of prosperity, and Rose routinely buys clothing which no one else has ever worn. Now…what are your prospects of explaining to her that she needs to implement all those sturdy virtues of resilience which were found in Edo, including using fabric about a dozen times before it makes its way to the compost? Those behavioral values are what she married to get away from!
I think Goswami gives us an important insight. It is one thing for the G7 leaders to play golf and promise to get off fossil fuels in the distant future. It is quite something else for a person who has been poor to revert to the self-sacrificing mindset which is required for small group survival. Thus, we get the predictable attitude of India when people like the G7 lecture them about burning fossil fuels.
I also think that it would be harder for modern Americans to adopt the behavioral values of Edo than it was for the Japanese emerging out of the wars of the medieval period. For one thing, Extended Families no longer exist as production units for the vast majority of Americans. Getting together on a holiday for some celebratory consumption…but certainly not producing anything useful. And if the government told us to help ourselves by organizing into Groups of Five and Villages, I think most people would simply have no idea what to do.
I expect a Selection Event, not because humans are genetically wired in such a way that they cannot exhibit the behavioral values of Edo, but because of the practical difficulties of getting from where we are to where we need to be if fossil fuels, and other resources, disappear.
Don Stewart
After nine years of trying to form intentional community, I’m convinced that community must be formed around extended family. The tribe, the clan, the medieval village — they were all composed of mostly-related people.
This age of the “rugged individual” must end with ending of cheap energy. I think each of us has to get our extended family on-board with any plans and preparations we make. That probably won’t be everyone, but it can include second-cousins, etc.
Now those are some excellent insights. The idea of the rugged individual is an entirely US construct, one based on a set of very unique circumstances. In contrast, we know that family, tribal, racial and religious groupings form the best protection. What’s that saying from the 70’s? “Ass, grass or cash, no one rides for free.” Voluntary associations fail if there isn’t sex, barter or compensation involved in the equation.
I’d slightly disagree, the “rugged individual” model is also going strong in northern scandinavia, canada, australia, parts of Ireland/Scotland etc. Yes, most of them depend on fossil energy crutches and technology like tractors, 4×4, efficient burners, pumps, silos and so on, but there will be at least several decades of inertia when most of this will be still functioning on vegetable diesel/salvaged and cleaned motor oil and various spare-canibalized parts..
Not going to happen.
Sure you can make bio-fuel. But how do you make transmission and brake fluid and the other lubricants required by a vehicle?
You won’t exactly be able to go to the garage to change your oil because there will be no engine oil…
Too early to say whether it will amount to “several decades” or not. Results will likely vary widely based on actual conditions on the ground. The trouble with most such predictions is establishing a precise begin and end date in the first place. Not that most living through it will care one whit either way. I think we go through these mental contortions mostly as a form of mental salve in the first place. The reality – no matter how we imagine it – is likely to be something far different.
I know Dmitry Orlov talks about “unintentional communities” as working best. Those would include families or people drawn together for some other reason (being persecuted by the same people, for example).
Yes, the “living in community for community’s sake” argument leave me cold!
But the “other reason” we’ve been unable to sell is to form what Heinberg calls “lifeboat communities” with high potential for surviving an energy crash.
My guess is that if we can survive the mortgage and the crazy and lazy who show up here, people will flock here when times get worse. But things don’t seem “worse enough” for many very people to be seeking alternatives. Or they figure they can get five acres and do it on their own — the “rugged individualist” cultural aspiration coming out.
Don’t forget the medieval guild.
I’m guessing that over 90% of the assets we could use as a society go unused, extended (or even nuclear) families being among them. But I also wonder if narrowing down goals to the essence doesn’t also help us focus on who or what we need going forward? Regardless of biological ties. Wide agreement on what the essence is…how is that achieved?
Artleads
Looking into my crystal ball, I see that all will be revealed. But you must journey by dark of night to the meeting place where the secret society will meet. In honor of Fast Eddy, we will sing one round of Kumbaya, before getting into the serious business of local enterprises.
Don Stewart
http://moneyandmeaning.rocks/all-our-amazing-speakers/
PS Pittsboro has about 3000 people, so the intellect per capita will be pretty high, particularly if they can discourage me from attending, since I bring averages down.
You’re welcome to bring down the average here anytime, Don! 🙂
An impressive bunch. And I’ll recommend a round of of Kumbaya at all future community meetings. 🙂
With apologies to Gail for going off subject and taking up too much space…
Don,
You seem not to know what low intelligence truly is, so I’ll give you a demonstration:
I stripped away everything beyond the job descriptions, seeing if it would make the list more meaningful to me. I’m afraid it doesn’t. Who are these people? What do they have in common, or hope to achieve here at the end of the world? (The questions really are rhetorical.)
They appear to hail from different places. *I* would be interested to know to what parts of the US map their known influences applies. How do these geographic areas connect (if they do) to one another? *My* interest is land and place. I feel that if you don’t pin people or actions down on the map, they just float away meaninglessly…
So there are my two rather dumb cents for the day. 🙂
Local Living Economies
ED WHITFIELD
Social Justice Activist
WOODY TASCH,
Thought Leader, Founder and Chairman of Slow Money
ALISON TROTT BYRD
Local impact investor
ANDREA WIEGL
Author, News & Observer food writer and blogger
ANITA MORGAN WOODLEY
Actress, artist, activist & co-founder of Grocers On Wheels
BOB ARMANTROUT
Conference organizer & Biodiesel expert
CAROL PEPPE HEWITT
Slow Money NC matchmaker & author
COURTNEY TELLEFSEN
Founder of The Produce Box
DAVID ROSWELL
Sustainability & economic justice activist
FRANK PHOENIX
Philanthropist
FRANK STASIO
THURSDAY KEYNOTE INTERVIEWER: Host of NPR’s The State of Things
FRANZI CHAREN
Business Owner & founder of Asheville Grown
JESSICA NORWOOD
Founder/Executive Director of Emerging Changemaker Network
JOSH HUMPHREYS
President of Croatan Institute
KAREN JESSE
Spiritual guide
LASHAUNA AUSTRIA
Minister, chef, change-maker
LEILA WOLFRUM
Durham co-op market general manager
LEON GRODSKI DE BARRERA
Cocoa Cinnamon owner, artist, activist
LISA SORG
Editor of Indy Week
LYLE ESTILL
Author, speaker & President of Piedmont Biofuels
MARIA KINGERY
Social Enterprise Expert
MARY DEMARE
Rabbit farmer/owner of Fatty Owl Farm
TAMI SCHWERIN
Executive Director of Abundance NC
VIMALA RAJENDRAN
Owner of Vimala’s Curryblossom Cafe and food activist
MAGICAL BUS TOUR – TOUR GUIDES
LYLE ESTILL
Author, speaker & President of Piedmont Biofuels
Artleads
First, our two ‘celebrity’ guests are Woody Tasch, who started the Slow Money movement, and Judy Wicks, who operates the White Dog Cafe in Philadelphia and formed BALLE (Business Alliance for Local, Living Economies) a decade or so ago. The other people are from the Southeast US, which is a huge territory. Quite a few of the people are very local to me, living within bicycling distance.
What unites them is the notion that a local economy can be more resilient, socially and pschologically rewarding, and fairer than a globalized economy. What also unites them is the perception that it is the circulation of money within the localized economy that is of critical importance. As distinguished from, let’s say, an intentional community gathering which tries to get away from money as much as possible
Now the things that separate them…and realizing that diversity is usually a very good thing.
I was at a meeting talking about gardening recently. Being something of a pessimist, I see a kitchen garden as a survival tool, or a way to minimize one’s exposure to a corporate system founded on death (pesticides, herbicides, and compaction). But there was a group of black people who had driven a hundred miles to come to this meeting, and their interest was ‘saving our community’. There was a minister and a school teacher and several people I guess you might call activists who were promoting gardening through various mechanisms. They see the crying need for people, and especially young people, to make some money…and growing and processing food looked like it might have possibilities. The ‘vegetable box’ business has been pretty successful around here, adding to the traditional farmer’s markets and CSAs. So you see that my thought patterns do not follow exactly in the same patterns as this group of black community activists.
If you look at what Judy Wicks has done in Philadelphia, it follows yet a different set of thought patterns. Will Allen from Milwaukee has been in this area several times, and his ideas have yet a different flavor.
In terms of fossil fuels and other scarce resources, I imagine that most of these people are not too far from the mainstream view that we’ll run out someday, but not in the near future. The black contingent may look at Peak Oil with the same suspicion that the Indians look at Climate Change…a way to keep them divided and depressed. I don’t know if there are any immigrants in the group, but many of them look to grow food that they ate back home, and also supplement the meager incomes they get by doing jobs such as cleaning people working nights.
Lyle Estill, who will be leading the bus tour of local businesses, is a Canadian by birth, but has lived here now for 20 years or so. He is an entrepreneur who has started many businesses, and gives a humorous talk about the ‘hits and misses’ in his career. He has written a couple of books about the challenges and rewards of small, local businesses. He has been involved in biodiesel for a decade or so, and has seen it’s trials and tribulations. He bought a facility which made stuff for the Cold War, and turned it into a sort of local business incubator. Besides his own biodiesel operation, he has housed a distribution center for an organic farmers co-op, an aquaponics operation, a worm farm, a maker of organic agricultural products, a maker of human friendly cosmetics, a farm (where I worked until recently), and so forth. One of his great friends operates a US grown organic cotton T Shirt factory, which Lyle usually manages to get into his tours. Lyle has long believed that the fossil fuel economy is doomed, but he does not believe that biofuels can ever produce the energy volume that fossil fuels produce. Lyle built a ‘solar double cropping’ system at the farm, with PV panels elevated above farm crops. The crops grow better in the less intense sunlight which comes through the panels.
Lyle is married to Tami Schwerin, who operates The Abundance Foundation, which engages in all sorts of local activities. When I brought a woman from central Texas to teach us how to build Raised Bed Keyhole Gardens, the Abundance Foundation sponsored it.
Does this help?
Don Stewart
“What unites them is the notion that a local economy can be more resilient, socially and pschologically rewarding, and fairer than a globalized economy. What also unites them is the perception that it is the circulation of money within the localized economy that is of critical importance. As distinguished from, let’s say, an intentional community gathering which tries to get away from money as much as possible”
I like the sound of this. Concrete, on the ground, physical. Strikes me as being in harmony with Jane Jacobs, “The Death and Life of Great American Cities.” (Very highly recommended!) But it requires AWARENESS that you are referring to places on a map. Otherwise it becomes too abstract for most people (who are visual) to clearly conceptualize. Much of this good effort is therefore wasted.
WHERE has this work been put in place? Can it be identified on Google Earth? How does it affect or not the people and systems operating in that space? (Even if you can only identify a third of them, that might be a very giant step.)
“They see the crying need for people, and especially young people, to make some money…and growing and processing food looked like it might have possibilities. The ‘vegetable box’ business has been pretty successful around here, adding to the traditional farmer’s markets and CSAs. So you see that my thought patterns do not follow exactly in the same patterns as this group of black community activists.”
My major activist work was done in a minority community where this mindset predominated. I can share your frustration. (I might have had it even worse, since MY preoccupations were largely aesthetic!) If I had it to do over, I might appoint someone else as director, restricting myself to tours, which, apparently, I did well enough. I would split operations up, so that the hard-headed concerns that stumped us could proceed full steam ahead, without me slowing it down. (I had thought I could put history, planning, landscape, and “commercially relevant agriculture” all under one umbrella, but I suspect that this was not appropriate.
“In terms of fossil fuels and other scarce resources, I imagine that most of these people are not too far from the mainstream view that we’ll run out someday, but not in the near future. The black contingent may look at Peak Oil with the same suspicion that the Indians look at Climate Change…a way to keep them divided and depressed. I don’t know if there are any immigrants in the group, but many of them look to grow food that they ate back home, and also supplement the meager incomes they get by doing jobs such as cleaning people working nights.”
And so maybe it would be better not to challenge them. We could come together for mutual support, only when and where it suits us. If they’re into fairer policing, less “redlining,” more affordable housing, jobs for at-risk youth, on and on, there might be overlap.
For instance, people in “my community” were fairly oblivious to the aesthetic concerns that might have revealed the rich potential of the land to support varied vegetation, but also peace, clean air, high quality of life, stable property values, etc. They might not have cared how much of it was paved over for houses, as long as some of the houses were affordable to them. But now I would propose “tiny house” models that would simultaneously cost less and do less environmental and aesthetic (and long-term economic) damage. That might be a workable kind of overlap or compromise.
But most people won’t be able to think in terms of systems, or avoid the pitfall of single-issue thinking. And so I’d suggest giving them room to work independently, as would be congenial at their level of understanding, and for their perceived priorities.
“He bought a facility which made stuff for the Cold War, and turned it into a sort of local business incubator. Besides his own biodiesel operation, he has housed a distribution center for an organic farmers co-op, an aquaponics operation, a worm farm, a maker of organic agricultural products, a maker of human friendly cosmetics, a farm (where I worked until recently), and so forth. One of his great friends operates a US grown organic cotton T Shirt factory, which Lyle usually manages to get into his tours. Lyle has long believed that the fossil fuel economy is doomed, but he does not believe that biofuels can ever produce the energy volume that fossil fuels produce. Lyle built a ‘solar double cropping’ system at the farm, with PV panels elevated above farm crops. The crops grow better in the less intense sunlight which comes through the panels.”
Lyle and his wife sound closest to me in their concerns–of course far more able and practical than I. I have a close relative in the T-Shirt business too. I’d appreciate learning more about his friend’s factory.
Artleads
For now, maybe more later.
Dear Artleads
Are we on the map? Can we point? Indeed we can.
We begin the tour with a woman who started cooking illegal dinners to raise cash. When the authorities told her to quit or go to jail, the community raised money to set her up in a proper restaurant. I think this was before what we now call Slow Money got started. Vimala is on the agenda for the Slow Money meeting.
http://grist.org/article/food-nc-chef-vimala-rajendran-tells-how-cooking-can-save-a-family/full/
Here is the Slow Money website which lists all of the people who have borrowed. Please note that these are people-to-people loans. There is no bank. There are no lawyers.
http://slowmoneync.org/our-loans/
Here is the web site for Angelina’s kitchen, one of the first Slow Money borrowers. Angelina will be cooking for the Slow Money meeting.
http://www.angelinaskitchenonline.com
I buy something from Angelina’s almost every Tuesday at the farmer’s market. It is a very good feeling to know that I and others helped make something possible that no bank would touch.
A little bit different is the annual ‘picnic in the pasture’ which supports the work of Breeze Farm, which is an incubator for young farmers. They can rent some land, borrow the tractor, use the irrigation system, etc., while also getting some instruction in the practical aspects of farming. 30 chefs are paired with 30 farmers, they cook up something, and serve it from a tent. Beer, wine, and music in a big tent. The best event of its kind in the US.
http://farmtoforknc.com
Also see the web site for Cocoa Cinnamon in Durham, NC. Check out the contributing artists and local vendor list.
http://www.cocoacinnamon.com
This was a crowd funded effort using the internet. It is not a Slow Money project. It may be that the internet crowd funding will turn out to be more effective than the Slow Money model we started about 5 years ago. The Go Sun solar grill that I posted a couple of days ago is a kickstarter campaign. I was part of the kickstarted for the small tube cooker, a year or so ago. If you pre-order one of the grills, every time you use it you not only have the satisfaction of NOT being part of the problem (at least cooking one meal), you also have the satisfaction of knowing that somewhere in the South, a family with no electricity is using the same grill you are.
What all these efforts have in common is that people with some surplus money are invited to be part of a very nice project, which involves people and organizations you know. They DON’T involve the Squid and parasitic lawyers.
Hope this give you some ideas….Don Stewart
Hi Don,
I gave your links a quick glance. Some are so remarkable I wouldn’t have thought them possible. So how do you feel about what you have here with slow money? How do you see it adding up on a scale that you envisage, global or otherwise?
My concept is to select defined geographic units (in which I have a stake) and look into the issues of planning them exhaustively, things like slow money not being a goal but a strategy. (You might wish to look into “assert mapping” for communities. If I can find a relevant book I have, I’ll post it. )
I see places as systems. Roads, trees, sidewalks, blocks, etc., all form a coherent whole, dysfunctional or otherwise, depending on how we think about and work with them. If you don’t pin everything down to a place, whatever you do will float away. You yourself seem to see the limitation of this group that doesn’t understand the physical limits of world they inhabit.
Do you really think DoD and other related agencies haven’t considered that already? Who or what we need going forward biologically speaking is likely to be at wide variance with what we need morally and/or spiritually speaking, but I trust circumstance/fate will likely take care of that discrepancy. All of this hand-wringing about the demise of western civilization is misguided in the first place. WE’RE the reason for all this shit in the FIRST PLACE! How will the barely minimal continuation of a much reduced human species be ensured? By the total elimination of its most cancerous elements (and paradoxically, the only one that can rationally consider its own malignance) – the northern hemisphere Caucasian race.
Don, your response was more helpful than you may realize. I’ll try to say more later today. I liked James’s first comment too. More soon.
Don,
Nice post, and with your closing ‘Selection Event’ in mind, here’s what I would propose from a bit more practical standpoint, and one which I’ve gradually come to terms with myself, after turning myself in knots over this subject for quite some time now.
First, evaluate for yourself what this global turning and your place in it really means. Keep in mind that you, in your highly intellectualized western position of power (whether you realize it or not) have greatly contributed to the current state of affairs (once again, whether you know it or not), and what you honestly think you can do about any of it in your remaining days, even considering total renunciation, which, let’s face it, none of us is likely to actually do, is largely irrelevant.
Second, consider honestly what you realistically think is to be done and what is your prospective place in it. Are you merely tilting at windmills, or is their real work to be done to achieve meaningful objectives.
Third (and actually first), what is the meaning of YOUR life, and how do you want to feel on the day that YOU breathe your last? In the end, “we humans” are actually just US individuals, and the fate of “HUMANITY” at large is not our concern, whether we like it or not.
Anyway…
Hi James,
I like your questions/concerns here. I hope I touched on some of them in my 2:48 PM response to Don.
I think most of us can do worthwhile things for our family and loved ones in the time we have left. Whether or not we really want to try to save ourselves is something each of us has to decide. I am doubtful that there is much that can be done to save the overall system–just because we understand it doesn’t mean that we can necessarily fix it. A dissipative system will grow as long as it can, and there is not much we can do about it. There are probably little things we an work on–contribute to Planned Parenthood for example, and perhaps some other charities. I don’t see much point to most of the “renewable energy”, except for solar panels and biofuels being used by someone trying to survive the upcoming collapse. It doesn’t make the grid last longer.
“…just because we understand it (the overall system) doesn’t mean that we can necessarily fix it.”
I tend to agree. But we seem to be extremely far from understanding the full complexity of the over all system, and our individual interactions with it. It’s as if most of us were asleep.
Learning about peak oil and peak economy offers one aspect of our awakening, thanks to OFW. 🙂
“Rugged individuals” who have prepared for the end of BAU by learning skills
and putting aside some “essentials” will be the key to reforming societies after BAU.
Right now us “rugged individuals” can’t even talk to existing society without being
labelled eccentric or worse, so we are hardly society material right now.
I expect that when BAU ends, the “RI” will need to use any stored goods to extend
their transition to a truly sustainable life style with some items hopefully lasting years (tools, knives etc) while the high tech/breakdown prone stuff is a short term cushion.
(You don’t really need LED lights – go to bed when it gets dark).
These “RI”s will attract the unprepared as a source of food and help in getting food and shelter. This could be the transition point to a new society – where the unprepared begin to recognise that the “RI” is not a nut case after all and can help them survive.
The “RI” then has the opportunity to be a founding member of a new society with the
opportunity to mould to their own view how the new world should be. (droit du seigneur anyone?)
(The American approach seems to be just to confront everyone else with weapons).
Not sure I personally care about reforming society again. It wouldn’t be long before the
power plays, greed and selfishness of our species began to overpower the weak and vulnerable again. Maybe I will stay an individual – to only live as nature intended alone (or maybe with a single soulmate [platonic] ) and forget the rest of ‘humanity’.
I expect that when BAU ends, the “RI” will need to use any stored goods to extend
their transition to a truly sustainable life style with some items hopefully lasting years (tools, knives etc) while the high tech/breakdown prone stuff is a short term cushion.
(You don’t really need LED lights – go to bed when it gets dark).
Agree – I have ditched the techno short term crap that will break — and am mostly focusing on tools (shifting some of the budget to single malt…)
Not sure I personally care about reforming society again. It wouldn’t be long before the
power plays, greed and selfishness of our species began to overpower the weak and vulnerable again
Again – dead on the money — humans are not altruistic — we are competitive predatory beasts… kindness is weakness (and a dangerous trait to put on display) particularly when resources are short….
Anyone doubting this needs to ask themselves — if we are such docile animals… why do we need police… why do we need armies … why do we need priests trying to convince us to be docile
Civilization … a thin veneer that keeps the human beast in line and functioning in society…. it is frowned upon to pillage your neighbour (except when you are working in finance)
Of course the beast gets unleashed on a regular basis to pillage resources from other societies (aka war) — because that is deemed acceptable.
Fast, kindness is only a weakness if applied to individuals you are not genetically related to ( from an evolution point of view). Cooperation for mutual benefit is an important tool of competitive predatory beasts. Even Jane Goodall documents two weaker cooperating chimps taking over the alpha position from a stronger individual. The race to be president is all about forming group power for group benefit.
Cooperation is not the same as kindness.
Example:
The hippies with tattoos after a hard days work in the organic garden are sipping organic home made beer, banging on drums and dancing about the camp fire while someone sings Koombaya … that is cooperation…
A group of fellows looking like this approach:
http://static.topyaps.com/wp-content/uploads/2010/08/ms-13.jpg
The hippies say hey dude, have some of our home made organic brew and some organic sprout salad … that is kindness…
The gangster grabs the kind hippie by the hair and drills a knee into his face then his mates put the boots to gentle hippie… this is cooperation — the gang is cooperating
Then the fellas beat the piss out of the other males — then rape the women — they eat the food — drink the beer — then they chain the villagers and send them out to work the fields…
There is no room for kindness in a post plentiful world — the hippies are fools — they deserve to be enslaved … because they were kind… which means there were weak…
And in the jungle the weak die.
It’s particularly ironic that we supposed “rugged individuals” are actually anything but, isn’t it? I’m really coming to believe that this is all just folly of the highest degree.
I know you do not like me commenting on your stuff but I will do it anyways.
I do know well enough about Japan to comment.
I don’t know how good is Azby’s Japanese, but can he read all the Chinese characters in most Japanese scholarly books without a trouble? We do not know.
Japan has enough English-speaking people so one can live in Japan for quite a long time without trying to learn Japanese at all.
Plus his accounts about Edo Japan is mostly ‘fictional’. A fictional this. A fictional that. These do not help.
https://www.youtube.com/watch?v=sjVMcYzn19I
This movie was made on 1958 when Japan was still recovering from World War II. (The 1982 version is more well known but I think the 1958 version conveys the atmosphere better, although it was filmed in a studio).
While that movie is fiction as well, it portrays a bit more ‘realistic’ picture of what the Japanese perceived lives at these times.
That’s how the ordinary people probably lived back then. Not an enviable life.
Kulm
My objections to your rejection of Azby Brown’s book include that you pile supposition on top of supposition with no fact checking.
You continue to question Azby’s ability to read Japanese. He has lived and taught in Japan now for 30 years. He has written books in Japanese. His bibliography includes many books written in Japanese. Why do you keep saying he can’t speak or read Japanese?
As for the ‘fictional’. Azby explains that choice right up front. With 200 scholarly books addressing, usually, some very small part of the picture, he doesn’t think we need yet another scholarly book addressing yet another very small part of the picture. Instead, he thinks that what we need is more like a novel or a movie which gives a holistic view of life as it was lived by ordinary farmers and merchants and also by the samurai class. That is what he wrote. If you object to his choice, then go and write up your theories… but simply criticizing his choices is pointless.
As for Edo life not being very appetizing for a modern American or European or Japanese. I saw an interview with Azby from some time ago. He was asked about the reception the book got in Japan. He said he was disappointed that it was mostly ignored. The Japanese are too busy living the modern lifestyle to absorb any lessons from the book. He remarks that there are a few groups on the fringe who are beginning to become interested. The question is not ‘Are people attracted to this lifestyle?’, but instead ‘If we are forced to do without fossil fuels, what lifestyle can we expect?’ and ‘Does Edo have anything to teach us?’ In addition, ‘Does Azby’s skill as a designer and builder lend any special insights for his book?’
If you want to have an Adult conversation about the choice of ‘a day in the life’, or ‘Does Edo tell us things about life without fossil fuels?’, and ‘Does Azby’s insights into building add any useful depth to the book?’ ,then by all means make comments. Cheap shots are not welcomed by me.
Don Stewart
one can ‘write’ books in Japanese even if you do not know a word of it. there are ‘proofreaders’.
he could have cited the actual examples of a few real peasants , who lived where and when. he did not.
He wrote a book on what he wanted the Edo era to look like. the japanese know what it was really like so they do not care.
kulm
when you have a shred of evidence to back up your allegations, come see me. Until then, signing off…Don Stewart
I am just pointing out that Azby Brown cannot cite a real example and has to convey his messages in fictionalized accounts, like the old philosophical tracts which pretends to tell their stories as something which actually happened in some fictionalized country.
If Azby Brown feels his Japanese is good enough he can prove me wrong. However it is pretty unlikely for a non-Asian to be able to read all the Japanese scholarly books full of Chinese characters not used often in ordinary usage unless one devoted most of his or her life for that.
Azby Brown went to Japan to teach architecture, not to read medieval Japanese which is quite different from currently used Japanese. I doubt he had the time and inclination to study the original docs or at least the scholarly modern ‘translations’ which are still beyond everyday Japanese usage.
Sorry, but it is not up to Brown to “prove you wrong.” Rather, it is up to you to prove you right. You have not done so. You have just taken cheap shots, based on assumptions. Have you even opened the book?
I suggest that you do your research, write it up, find a publisher interested in your work, have their editors and researchers vet and fact-check your ideas, then market and sell the book. Then get back to us with your concerns.
And we have more on that:
After the castle fell, the shogunate forces beheaded an estimated 37,000 rebels and sympathizers. Amakusa Shirō’s severed head was taken to Nagasaki for public display, and the entire complex at Hara Castle was burned to the ground and buried together with the bodies of all the dead.[18]
https://en.wikipedia.org/wiki/Shimabara_Rebellion
https://en.wikipedia.org/wiki/Criminal_punishment_in_Edo-period_Japan
Don – I do not see what is so special about Edo… a typical medieval village would have been similar — you get your autocrat king instead of the samurai — and you get your peasants grinding away on the land…
I was reading this recently http://www.audible.com/pd/History/1493-Audiobook/B005F5JT3E and research indicated that a peasant in Europe in those days lived a lifestyle equivalent to a peasant in I think it was Bangladesh or Zimbabwe.
if you want your koombaya world just get on a plane to one of these countries and join a village.
Kulm – you make some good points on this issue — nobody wants to live like that — they might think it is wonderful…. but there are good reasons why:
1. people living in rural mostly BAU unplugged villages would prefer to switch places with any one of us
and
2. There are good reasons why not a single person here will take up my suggestion of moving to a modern day Edo village (heck nobody even takes up my suggestion to turn off their electricity for a weekend then come back and report on the experience! — I suppose they think electricity will continue post-collapse so the experiment is moot)
Fast Eddy
1. Edo is much closer to us than a medieval European village
2. The general level of health was higher in Edo than it was in Paris and London at the time
3. About 60 percent of the peasants in Edo were literate
4. The ‘design sensibility’ in Edo is pretty impressive, even today
5. As compared to any third world country today, Edo really was disconnected from fossil fuels
6. Edo controlled population, reforested, increased soil fertility, etc.
In short, if you think that fossil fuels are going away, and you would like to preserve whatever civilization you can, then Edo is not a bad place to look. Azby Brown is a very good guide to the practicalities of things such as building and the mechanics of farming and gardening and the pursuit of artisanal crafts. He also gives insights into how the larger society worked, warts and all.
Don Stewart
I am certain if I did some research I could find scores of short lived koombaya periods through history…. look at the natives of north america…
But I will not bother because it does not matter… because they don’t last very long — and also because this is irrelevant to my situation — there will be no koombaya village in my lifetime … I can the decades of Nightmare Period — and more likely the Extinction Period.
Anyway…. the EDO dictatorship ended for the same reasons that all Koombaya lands never last…
Population pressures — and the violent competitive nature of humans in a resource limited world which mean mean the constant threat of invasion…
This applied hundreds of years ago — and has applied since the beginning of time — and it will apply post collapse if anyone survives….
I guarantee you that if you are just trying to mind your own business and grow some turnips someone is going to want those turnips and they will be coming for you… and they will not be asking…
Because that is the way the world works… it’s something that the drum thumping koombaya crowd seem not to understand….
Your cushy life (and mine) is the product of the American government busted open heads across the world — including Edo Japan….
You prove my point by bringing up EDO — the Americans smashed your wonderful little village into pieces… because they could — because EDO was weak…
Decline of the Tokugawa https://en.wikipedia.org/wiki/Edo_period
A struggle arose in the face of political limitations that the shogun imposed on the entrepreneurial class. The government ideal of an agrarian society failed to square with the reality of commercial distribution. A huge government bureaucracy had evolved, which now stagnated because of its discrepancy with a new and evolving social order. Compounding the situation, the population increased significantly during the first half of the Tokugawa period.
Although the magnitude and growth rates are uncertain, there were at least 26 million commoners and about four million members of samurai families and their attendants when the first nationwide census was taken in 1721. Drought, followed by crop shortages and starvation, resulted in twenty great famines between 1675 and 1837. During the Tokugawa period, there were 154 famines, of which 21 were widespread and serious.[15] Peasant unrest grew, and by the late 18th century, mass protests over taxes and food shortages had become commonplace. Newly landless families became tenant farmers, while the displaced rural poor moved into the cities.
As the fortunes of previously well-to-do families declined, others moved in to accumulate land, and a new, wealthy farming class emerged. Those people who benefited were able to diversify production and to hire laborers, while others were left discontented. Many samurai fell on hard times and were forced into handicraft production and wage jobs for merchants.
Although Japan was able to acquire and refine a wide variety of scientific knowledge, the rapid industrialization of the West during the 18th century created a material gap in terms of technologies and armament between Japan and the West, forcing it to abandon its policy of seclusion and contributing to the end of the Tokugawa regime.
Western intrusions were on the increase in the early 19th century. Russian warships and traders encroached on Karafuto (called Sakhalin under Russian and Soviet control) and on the Kuril Islands, the southernmost of which are considered by the Japanese as the northern islands of Hokkaidō. A British warship entered Nagasaki harbour searching for enemy Dutch ships in 1808, and other warships and whalers were seen in Japanese waters with increasing frequency in the 1810s and 1820s. Whalers and trading ships from the United States also arrived on Japan’s shores.
Although the Japanese made some minor concessions and allowed some landings, they largely attempted to keep all foreigners out, sometimes using force. Rangaku became crucial not only in understanding the foreign “barbarians” but also in using the knowledge gained from the West to fend them off.
By the 1830s, there was a general sense of crisis. Famines and natural disasters hit hard, and unrest led to a peasant uprising against officials and merchants in Osaka in 1837. Although it lasted only a day, the uprising made a dramatic impression. Remedies came in the form of traditional solutions that sought to reform moral decay rather than address institutional problems.
The shogun’s advisers pushed for a return to the martial spirit, more restrictions on foreign trade and contacts, suppression of rangaku, censorship of literature, and elimination of “luxury” in the government and samurai class. Others sought the overthrow of the Tokugawa and espoused the political doctrine of sonnō jōi (revere the emperor, expel the barbarians), which called for unity under imperial rule and opposed foreign intrusions.
The bakufu persevered for the time being amidst growing concerns over Western successes in establishing colonial enclaves in China following the First Opium War of 1839–1842. More reforms were ordered, especially in the economic sector, to strengthen Japan against the Western threat.
“I am certain if I did some research I could find scores of short lived koombaya periods through history…. look at the natives of north america… ”
Yes indeed, look no further then the N Z Maori. When they arrived there were large flightless meaty birds (high energy source). PARTY PARTY PARTY!!! Until they were gone, then it was fern roots, tribal war and turn the competition into droppings!!
Somewhat thematic.
One of Jared Diamond’s books (Guns Germs Steel … or Collapse… can’t recall) leads off with a description of a south seas Koombaya village of farmers (might have been New Zealand)
Archaeological evidence at the site (smashed skulls and other evidence of extreme violence) indicated that another tribe armed with the latest technology had attacked the farming community and bashed in the heads of a large number of men …
Good incentive to evolve, isn’t it?
“As for Edo life not being very appetizing for a modern American or European or Japanese.”
The shogunate executed criminals in various ways:
Boiling
Burning
Crucifixion for killing a parent, husband etc.
Decapitation by sword
Sawing
Waist-cutting (cutting the person in half). The Kanazawa han coupled this with decapitation.
https://en.wikipedia.org/wiki/Criminal_punishment_in_Edo-period_Japan
I could see how living as a peasant in an Orwellian feudal state would not appeal much…
I am sinking your life-boat by piling on a whole lot of dead bodies Don….
Fast Eddy
People who refuse to look and learn won’t make it onto the lifeboat.
Don Stewart
I used to think there was a life boat…. but the facts dictate otherwise…
The life boat is Koombaya…. it does not exist.
Not sure how many times I have to point this out before it registers:
1. When fossil fuels stop 98% of all farmland on the planet will be useless. It will be dead soil. 7 billion people will be hungry – if you are tending your tiny plot it will be torn to pieces — if you have animals they will be slaughtered and eaten. No Life Boat
2. When the grid goes down there will be no way to cool spent fuel ponds. They will explode with the impact of 10s of thousands of nuclear bombs… and they will spew radiation for decades. No Life Boat
So feel free to ignore the facts and post organic farming tips and more on the koombaya land known as Edo — which to me looks more like a Taliban-style state than anything Joan Baez would sing about….
Whatever rocks you (life) boat….
““Cutting back” means laying off trained workers – Thus, companies will do almost anything to keep employees.” This may be true for the oil companies themselves, I don’t know. But much of the oil company work is contracted out and this expenditure is cut very hard and very quickly. Having worked for a contractor in oil exploration I know that the oil companies do not consider the probable future lack of expertise and equipment when/if there is an upturn in business. And I am talking about very hi tech expertise and very expensive equipment being laid off. They expect the contractor companies to be turned back on again like a light switch. As for the welfare of contract workers – are you kidding!
You are probably right in the United States. I was talking to some people in China, involved with the PetroChina operations. They do more things for themselves and they were concerned about keeping the staff they had. They were also very aware that the workers needed jobs, and the community needed the workers with jobs. They did mention the possibility of reducing contractor use, so that they could keep their own paid staff.
In the US, I know the rig contractors have been laying off employees. I see Nabors has laid off 12% of its staff, which isn’t a whole lot, considering. http://fuelfix.com/blog/2015/03/03/nabors-cuts-nearly-3500-jobs-as-u-s-drilling-takes-hit/#29649101=0
Shlumberger has been laying off quite a few of its workers. http://www.oaoa.com/inthepipeline/article_b934e00a-e54c-11e4-8bea-9b738189070e.html
I think you are right Trevor.
It’s not as if laid off skilled oil workers will have a lot of options in other industries… certainly not with the salaries paid in the oil industry…
I suspect that if the call came with a job offer with a solid salary there would be no problem finding qualified people
No quarrel with Gail, FE, etc., about the “deflationary spiral”, etc.
On the subject of the “Green tech will save us” paradigm, the piece below says lithium prices have been holding up, lately — but, how long can that go on?
Quest to Mine Seawater for Lithium Advances
Predicted lithium shortages are leading to novel technologies for recovering the element, now found mostly in salt lakes in South America.
By Richard Martin on June 8, 2015
http://www.technologyreview.com/news/538036/quest-to-mine-seawater-for-lithium-advances/?utm_campaign=newsletters&utm_source=newsletter-daily-all&utm_medium=email&utm_content=20150610
We have to have a whole economic supply chain in effect to make the recovery method work. I suspect it will take a lot of energy somewhere along the line–making the membranes, for example. The cost seems likely to be high.
Gail, I think there’s a typo in Required Oil Prices:
“Required Oil Prices
Many people believe that low prices started in late-2004, when oil prices dropped below the $100 barrel level.” I think you meant 2014?
I fixed it. Thanks!
“Workers are on average producing less oil per hour worked. In theory, they should be paid less, because the value of oil is determined by what the oil can do (how far it can move a vehicle), not how much labor was required to produce the oil.”
i.e: “What the oil can do” is the same as saying “oil’s own labour value”. The labour theory of value still holds true, so long as we recognise that oil (and other forms of energy) are a form of labour and should be valued as such.
I guess the value of oil is proportional to the net energy (or “net labour”) yielded by its production (taking into account the different qualities of human labour v. oil labour or “intelligent” energy v. “inanimate” energy).
I agree that human labor and oil are closely related, and it might be reasonable to value oil in some way similar to human labor and to animal labor. In fact, companies try to keep their total energy costs down (human and oil and electricity). If oil costs rise, they seem to lay off humans and substitute more automation using electricity.
That seems counter intuitive, I would have thought that as oil prices declined, they would lay off workers in favor of automation. Rising oil prices could encourage more human labor to do some tasks.
I also expect that as oil declines, there will have to come a point that demand will push prices for oil higher.
We are totally dependent upon OIL to survive, it grows our food, transports it, cooks it, it heats or cools our homes, it’s medicine & modern hospitals, people will pay what ever they must to maintain access to OIL & the necessities of life that it produces.
Governments won’t allow extractors to slack on their efforts to produce OIL no matter what it costs, but even so there will be limits to what we can pay for oil.
Governments will be forced to ration in order to keep enough supply to fuel their militaries, guns & grain will be first in line for fuel. If the oil extracting states are thought to be holding back their “production”, they will find many guns pointed at their heads.
But guns cannot stop the decline, & our civilization will still collapse.
Resource wars will just speed up our collapse.
I suspect that resource wars will actually be a palliative measure in the end. Reducing 7B by over 90% won’t be easy, no matter how we do it. Not that said wars will be in any shape, manner, or form “equitable” to those subjected to them, of course.
Human labor is generally quite a bit more expensive than fossil fuel labor or labor by electricity. (That is why levering with fossil fuels works.) When oil prices go up, manufacturers are looking for places to bring total costs down. Cheap electricity (powered by coal) is what backs up automation. In some sense it is a human energy to coal shift. And of course there is the shift of production to China, where wages can be lower (because of coal powered infrastructure) besides electricity coming mostly from coal.
Gail, terrific stuff as ever. I think you might have a typo – “Many people believe that low prices started in late-2004” – should be 2014?
I got it fixed. Thanks!
Looking for the statistical review 2015 from BP, that should be out today, saw below letter from the European majors stating that they are supporting a carbon tax (or price) :
http://www.bp.com/content/dam/bp/pdf/Press/paying_for_carbon.pdf
With things like (cut and paste doesn’t work), second paragraph :
“growing the share of gas in our production”
Like if that was intentional …
I downloaded the new BP data right now. It will be interesting to see what they have to say.
Gail, you were in China recently. Did people know about the oil supply, geological and environmental problems in the Bohai Bay area? I have done some number crunching in my latest post
10/6/2015
China’s offshore CNOOC started to peak in 2010
http://crudeoilpeak.info/chinas-offshore-cnooc-started-to-peak-in-2010
More on China’s brewing catastrophe: http://www.zerohedge.com/news/2015-06-09/sick-man-asia-chinas-looming-health-disaster
China hasn’t made a concerted effort to ramp up healthcare the way it has housing and factories. I don’t know about the particular issues there, but they certainly getting a lot of elderly people for the young people to take care of.
Thanks! I saw your post. I didn’t talk to anyone about offshore oil supply, I am afraid.
Hi Gail OFWorlders…
Follow this formula
Energy crisis triggers a financial crisis which in turn triggers an economic crisis, leading to a social and/or geopolitical crisis. It’s a physics thing.
Now let’s see how this plays out in reality, the reasons why and what’s at stake…
QE4 and war is coming that much is absolutely certain. On the geolpolitical front, Obama at the recent G7 lovefest took direct aim at Putin given his personal investment, pride, prestige into the 2018 World Cup to pacify the domestic population. With Obama losing on mutliple battlefields of late he’s now goading Putin into a direct fight, quite literally poking the enraged bear. You never poke the Russians, ever…period. Expect hell to be unleashed within Europe if the WC is stripped from Russia and I do mean hell on earth. It’s likely coming anyway but even more so because unsuprisingly enough the only nations that can host the 2018 WC if it’s not Russia is guess who? Yep the US, UK or Germany. The US is going for 2018, the UK will certainly get 2022. Here’s a great article verifying my early suspicions, FIFA is way more than corruption, it’s being exploited by the empire masters for global political hegemony and to kick the enemy where it hurts.
“The tricky politics of ditching the Russia and Qatar World Cups”
http://www.theglobeandmail.com/sports/soccer/the-tricky-politics-of-ditching-the-russia-and-qatar-world-cups/article24884323/
Then when done with that, here’s one of the greatest articles I’ve ever read re: the importance of the Eurasian Empire and why from those wily old foxes, those British strategists, masters of empire building, “he who controls this massive Eurasian internal landmass controls the world engine.” The US and maritime nations are doomed.
http://www.commondreams.org/views/2015/06/08/geopolitics-american-global-decline
I’ve always said the world will not collapse in unison and I’m being proven correct. This is about the collapse of the US hegemon and the rise of the Eurasian empire.
Discuss and debate as ever…
The Qatar WC 2022 is toast given they’re an easy target for Western frustrations, but you could find Qatar retaliates with the gas weapon.
My call is Russia will keep the WC, check the betting odds.
Qatar odds on favorite they’re getting stripped. All those wrokers will have died in vain.
I am not clear on how Qatar would retaliate with the ‘gas weapon’
Do you mean they would stop selling gas into the market?
Good luck with that.
There is no way in hell the Qataris would be allowed to pull their energy off the market — the Khalifias would be Saddamed/Gaddafied/Assaded in a heart beat…
The CIA would remove them in a heart beat — they’d be arming Islamists (as they are in Syria) who would slit the throats of every member of the family.
What you are suggesting is that the world plays by some sort of rules — that these minnow countries actually are independent.
If you do not have a nuclear arsenal you have zero independence… the best you can do is kiss the ass of someone with said arsenal — as Syria has done with Russia…
And even then that is no guarantee — because as we are seeing with Syria the US will go to extreme lengths (even gassing women and children and blaming Assad) to get him out
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
Qatar will take a kick in the mouth and happily wipe the blood off the boot. Because they know who runs the show (for now…)
The fact that FIFA is corrupt is of course well-known. The NSA monitors everything so they would have specific details….
So why does the FBI suddenly go after FIFA?
Of course this is part of the US vendetta against Russia.
And since I benefit from the US not losing to Russia and I have no interest in having a Russian (or Chinese boot on my neck) then I hope my dog wins this fight. And I do not care what he has to do to win — because the other side will do absolutely anything to beat my dog.
There are no rules in the jungle. There is no mercy. There is no room for Koombaya. If a lion does a Koombaya he’ll get his throat torn out by a hyena in a second.
Kill or be killed. Yoke or be yoked. (nuke or be nuked….?)
Well my focus now is across food, energy, water security intelligence, a defacto Peter Thiel “Palantir” but focussing further upstream on energy, finance as opposed to downstream across economy, social, geopolitics.
But whilst we’re on the downstream stuff, I think I was likely wrong about “Op Jade Helm” being a response to internal US threats. I suspect it has something to with the preparation for unprecedented external threats ISIL is directing at the US. They’ve stated they plan to out do 9/11 on the nuke front, so seeing their gains, the fact that they’re clearly not “JV team players” as Obama wrongly suggested, the fact they have the manpower, billions of $$$, rogue agents in Pakistan with ties to nukes, logistics via drug smugglers into US SW region to pull it off, I believe this is why the Pentagon is sending unprecedented military hardware as powerplay defending US territory. Multi-agency taskforce ops across multiple SW states. Look at the concentration of forces, all where drug smugglers operate. ISIL have warned they will do this and take advantage of the chaos on those borders. That threat has to be taken seriously and it is being taken seriously, but it’s also spooking the populous suspicious about motives who may not have a grasp about the complexities of geopolitics.
Here’s the Qatar FIFA, energy link. http://www.voanews.com/content/is-world-cup-game-over-for-qatar/2813591.html
“The U.S. and Qatar are allies in very practical and substantive ways,” said Charles Untermeyer, who served as U.S. ambassador to Qatar for three years under President George W. Bush.
“No. 1, U.S. energy companies such as ExxonMobil, ConocoPhillips and also some subsidiary firms have very strong contacts with Qatar,” Untermeyer said. “Second is the fact that there are six U.S. universities in Doha in Education City; and the third is the presence of a very important military base, Al Udaid, which is a Qatari base but used by the United States since the mid-1990s.”
It’s all starting to make more sense as red warning signs flash across the 5 domains
Just as Bin Laden was a tool created by the US to fight the Russians in Afghanistan so too is ISIL a creation of the CIA to serve various purposes — including to frighten the big Ram Tough gun-toting Americans into submission.
http://www.zerohedge.com/news/2015-05-23/secret-pentagon-report-reveals-us-created-isis-tool-overthrow-syrias-president-assad
http://www.zerohedge.com/news/2014-09-22/what-iraq-thinks-it-obvious-everyone-isis-creation-united-states-and-israel
http://www.zerohedge.com/news/2015-06-08/ex-us-intelligence-officials-confirm-secret-pentagon-report-proves-us-complicity-cre
I don’t believe the US “intentionally” created ISIL, I do however believe Western forces spearheaded by America created the conditions for ISIL to thrive. Bush and Co smashing to pieces Iraq in the first place which was a continuation of his father’s policies, followed by Obama’s strange “lead from behind strategy” spearheaded by UK & France re: Libya to remove Daffy Duck, whilst pulling out of the ME to pivot, twist turn to the samba towards Russian/China, sending confusing messages to friends, enemies alike. He’s even admitted he doesn’t really have a ME strategy blaming the Pentagon for the chaos.
That said ISIL do believe in the strict interpretation of Islam, sharia, caliphate which Obama refuses to consider as being true so he’s completely delusional. I also believe the CIA have aided “what they consider” more moderate Islamists which possibly sympathise with ISIL the more extreme version of Islam, whether that’s out of fear or something else, who really knows, it’s so incredibly complex on the ground in Iraq, Syria, Libya, Afghan, Yemen and the region as a whole.
Don’t forget the Saudis, Turks, Qataris are also involved and they’re not working closely with Obama, they’re now operating independently.
ISIL has always existed – in one form or another — under one brand name or another.
Our policy has always been one of divide and conquer.
And it has been applied superbly in the middle east. Does anyone think the fellas who drew the lines in the middle east after WW1 were no purposely stuffing shia and sunnis together into the nations that were created?
ISIL is simply the continuation of this great game. You want Assad out — no problem – just encourage his enemies and provide them with the weapons…
I do not think the Saudis (or Turks or any other countries) are not in lock step with the CIA.
If they were then it would be a simple matter of informing them that the US has decided that they will back their opponents (divide and conquer)…. in fact if one of these puppet regimes even made the slightest move to go against the US … the Americans would definitely find out (see NSA…) and they’d put the word out to the enemies of the House of Saud that it’s ok to take a shot at them…
And the House of Saud would quickly come to their senses — and understand that they are nothing without having the US on-side.
And when told to jump they’d ask how high.
Because they will have seen this video https://www.youtube.com/watch?v=IB8NH_cwt1A and they have no desire to have a dagger up the arse… (or a noose around the neck)…. much better to play ball and ride about in a limo …
I suspect that any American president who refused to jump would be shown this video https://www.youtube.com/watch?v=iU83R7rpXQY
You should read the recently declassified Defense Intelligence Agency document from 2012 which stated that arming the rebels was likely to create a group like ISIS, and that we should go ahead and do it anyway because such a group would be geopolitically useful for the US when it comes to strangling Assad. And we went ahead and armed the rebels. Even if creating ISIS wasn’t the intent of our actions, we sure as hell knew that it would be a side effect. I’m guessing somebody in the CIA/DIA/Military thought that we could control such a group.
As-Safir said Prince Bandar pledged to safeguard Russia’s naval base in Syria if the Assad regime is toppled, but he also hinted at Chechen terrorist attacks on Russia’s Winter Olympics in Sochi if there is no accord. “I can give you a guarantee to protect the Winter Olympics next year. The Chechen groups that threaten the security of the games are controlled by us,” he allegedly said.
Prince Bandar went on to say that Chechens operating in Syria were a pressure tool that could be switched on an off. “These groups do not scare us. We use them in the face of the Syrian regime but they will have no role in Syria’s political future.”
http://www.telegraph.co.uk/finance/newsbysector/energy/oilandgas/10266957/Saudis-offer-Russia-secret-oil-deal-if-it-drops-Syria.html
Of course the Saudi’s kiss the ring of the owners of the Fed (the real power in the world) … so this chap was just passing along a message from his bosses….
http://www.globalresearch.ca/logistics-101-where-does-isis-get-its-guns/5454726
Fav quote:
The lessons of history however clear they may be, appear to be entirely lost on an either supremely ignorant or incredibly deceitful troupe of policymakers and news agencies across the West.
Fast Eddy, you have it exactly right.
Well I can tell you first hand the US is being sidelined as Israel, Saudi Arabia, Qatar, Turkey, Jordon, Egypt join forces under the Sunni block to take out Hezbollah, Assad & Iran aka the Shia. What Americans, CIA, Obama does quite frankly is completely irrelevent right now, no one really cares anymore. Bush goes in and smashes up the place for oil, Obama retreats just as fast leaving a power vacuum handing the ME on a plate to Iran.
I should know I’m living on the ground in one of these nations as preparations are going down as we speak.
“Israel/Saudi alliance now public”
http://www.jpost.com/Israel-News/Israel-Saudi-Arabia-admit-secret-diplomacy-for-first-time-405123
“Turkey asks Hamas to cut back anti-Israel activity”
http://english.pnn.ps/2015/06/10/haaretz-turkey-asks-hamas-to-cut-back-on-anti-israel-activity/
“Israel Plans to Evacuate 1 Million Lebanese”
http://www.israeltoday.co.il/NewsItem/tabid/178/nid/26744/Default.aspx
“Turkey to send ground troops to Syria”
http://www.todayszaman.com/anasayfa_turkey-to-send-ground-troops-to-syria-opposition-deputy-claims_380043.html
“Iran denies troops deployed in Syria”
http://www.dailymail.co.uk/wires/afp/article-3118349/Iran-denies-troops-deployed-Syria.html
Israel, Saudis, Qataris, Egyptians, Jordanians, Turks have come to the joint conclusion that the US can never again be trusted with the ME and over their dead bodies and powerful militaries will Iran be allowed to take control, so Sunni block regional players are now taking control of the neighborhood, the CIA doesn’t even factor into the equation.
The US/UK/EU are now spectators as the ME enters it’s 1914 WW1 & 2 period, this time it’s 2015 and regional WW3.
Plus we have Washington, Moscos, Beijing at each other’s throats over Ukraine & South China Sea.
Moscow has been asked to stay out the fight in the ME, as has the US.
I agree that the US is a wounded bear — and that it is increasingly having difficult holding empire together.
However that does not mean countries like Turkey, Saudi Arabia etc… are able to act independently.
Pick your poison — you kiss the ring of the US or you kiss the ring of the Russians or Chinese…
You go with one of the latter if you have determined the US is on the wane and there’s a new kid in town.
Changing allegiances just means you serve a different master.
And making the change can be dangerous to your health — a wounded bear is more dangerous than a healthy bear — ask Mr Assad about that….
The chief failure of that analysis is that it is still deeply wed to the quaint idea of nationalism. Why, for the love of Dog, would any transnational bank, oil company, or other major international corporation possible give a sh!t about which “country” it was domiciled, exchange listed, conducted operations, and/or the national composition of its workforce?
The only losers in such a contest are the state sponsored politicians, militarists & bureaucrats who are deeply invested as members of a specific “team” which is playing the game directly.
Never forget the essential imperative of all life forms, the power principle. It transcends allegiance, historical alliances, and convenient accommodations. Why are the smartest people the most transient? Because it makes not one whit of difference **which** horse one is riding, as long as its the strongest horse. Send one off to the knacker, and acquire another – no sentimentality required.
The author, like so many others emotionally damaged by perceived injustice, professional slights or lack of recognition, are still defined by their country; only in these cases the contra sense by gleefully predicting & watching its comeuppance. But for anyone with a clue, it simply doesn’t matter.
As civilization comes full circle, we simply return to the state of the earliest proto-humans fighting over scarce resources. Do you want to be one of the fighters on the front line, or the tradesmen/money-changers doing business with whomever leaves the coliseum alive?
Good point, but isn’t “nationalism” at this late stage just considered to be either US or pro-US?
The US, as any self-respecting Republican capitalist will tell you, has proudly morphed into a “global entity,” capable of imposing its will anytime, anyplace, and against anybody at its whim.
Nationalism itself might be obsolete in the service of Capitalism, but only because it’s found a global hegemonic sponsor in the US.
If genuine low cost producers still have reserves, the sensible thing for them would be to stop producing. Since they are monetarily sovereign, the loss of revenue means little because the CB can still pay for whatever the nation needs. They can sit on their hands until the situation is more favourable for them, whenever that is.
There is no point in doing that – nor will any country be allowed to do that — you either pump the oil or you will be ousted in a coup and someone willing to pump the oil will replace you.
No country is an oasis — if you hold your oil in the ground that does not stop the global economy from collapsing around you — you need BAU to get that oil out of the ground — you need machinery, spare parts, finance….you also need a market for the oil.
If BAU goes all that goes — and your oil will stay in the ground regardless of how high or low the extraction costs are
How do they get their market share back again, especially if they lose staff members?
I am not convinced that printing money (or simply adding more debt) does much for long. The countries will be importing all of their food and all of their other goods, with essentially nothing to pay for them. If people are laid off from work, they will not be able to pay for the food and other goods. Oil is the economy of these countries.
John, they could use current income to install energy extenders, PV, nuclear. Even if it does not solve the problem it could leave them as the last nation standing, a better position to be in than at the mercy of the last nation standing.
Sheik Yamani said in[2000] “30 years from now there will be a huge amount of oil – and no buyers’
Oil will be left in the ground. he said. The stone age didn’t end for lack of stone. Imply what you will from that.
He probably meant months — but said years — so as not to frighten the flock
The stone age ended because of too many people, and diminishing returns with respect to using hunting and gathering to get enough food for everyone. They were also running short of easy to obtain stones of the best types, such as flints and obsidian. They no doubt had diminishing returns there as well.
We are running into diminishing returns with respect to obtaining oil, as again have too many people for resources. The Sheik probably was right, at least with respect to the oil being left in the ground.
I have always wondered how quickly the stone that was used was regenerated by plate tectonics, volcanic eruptions, etc.. I suspect that on a global scale, it is much faster than stone age people used it, but not on a regional level. There are many places within 100 miles which have tons of knapable stone, and a few places which have enormous amounts of obsidian.
It may have been regional issues. Also, regeneration is pretty slow. I know that David Montgomery in Dirt: The Erosion of Civilizations talks about an inch per 1000 years or regeneration, but with variations based on rock type, IIRC. I know that places like Greece that had a lot of erosion earlier still are lacking for good soil levels.
The flip side is that erosion can expose new stone to be worked. I’ve seen landscapes change during my lifetime due to erosion, and not all of it was man caused. The flip side is that, if things are eroding that quickly, and we still have features like mountains, the various kinds of rock are being made that quickly, but not necessarily at the same places and same time. It’s geologic time meets the size of the earth, both of which we can only understand on an intellectual level.
The Stone Agers could continue to an agricultural society. What can we do?
Wish I knew. Perhaps one of the approaches that some group is trying will work.
Gail,
I have seen nothing to convince me that humanity is going to do anything other than march straight off the cliff.
“The American way of life is not up for negotiations. Period.”
~George HW Bush.
You don’t get voted into office by telling people that the future isn’t going to be as glorious as the past, you get voted in by telling people that you’ll make it better for them. You get called a nutjob otherwise, or get told “well, you just don’t understand the issue” when you start laying facts down to prove that maybe you’re not crazy. People don’t want to believe, so they’re going to keep on marching. Some people understand, and they’re doing what they can, but it is not going to be enough for most.
The thing is …. we either grow or we collapse into a pre-history state with no energy other than that from burning wood, manpower, or enslaving animals … and men…
So Bush is right to say what he said (well he was of course told to say that by his masters – the owners of the Fed).
Trying to tell us to stop growing is like trying to teach a dog not to eat.
Expansion of the species is in the DNA of every single organism on the planet.
John Doyle said:
“Sheik Yamani said in[2000] “30 years from now there will be a huge amount of oil – and no buyers”
That is what we have been claiming for some time. The Etp Model indicates that passed the energy half way point of 2012, or 70,000 BTU/gal of API 37.5° crude, that demand would never again equal supply. The long term trend of crude prices will be down:
http://www.thehillsgroup.org/depletion2_022.htm
The oil age ends not for lack of oil, it ends when producers can no longer make money producing oil. That results because of declining affordability for the end user. The value of oil is going down because the energy it can deliver to the end user is going down. That is going down because the energy to produce it is going up. Its total energy is fixed by its molecular structure. Thus its price will go down along with its energy delivery capabilities. We predicted the 2014 price decline over a year ago based on that analysis.
We think that the Saudis have been aware of this for a long time. It makes no sense to cut production when prices can’t go up (at least not very far). Cutting production would only result in shortages. Prices are capped by consumer affordability, and that is declining!
http://www.thehillsgroup.org/
I agree!
Hi Gail , do you have any data or graphs showing the historical percentage of energy costs versus world gdp over time ? . I think that world GDP is currently around 70 trillion US and total world debt is around 200 trillion , would be great to see the proportion of energy , cheers
This is a chart that I probably am not supposed to post online–it is only available from an unpublished academic article (not my academic article, either).
The long term energy share of GDP has been going down and down. In my view, what is happening is that we have been getting more and more efficient at obtaining energy products over time, so that we have been able to get ever larger quantities of energy products with ever-smaller shares of GDP. Recently this has turned around, and this is very bad for the economy, because now we are getting less efficient at obtaining energy products. The economy needs a rising total quantity of supplemental energy products to leverage human labor. As we become less efficient at obtaining these products, we have a huge problem getting enough of them.
Dear Gail
I posted this link under your last article:
https://www.youtube.com/watch?v=g-CkZY-bTqQ
Skip Laitner says that the efficiency with which energy is transformed into useful work has increased from 2 or 3 percent in 1900 to 15 percent today, in the US. Western Europe is currently around 18 percent. So, over the 20th century we experienced a very large increase in the ability to do work with a given amount of energy. Plus, we produced a lot more energy. So the amount of work per capita could increase dramatically. Which drives incomes.
In addition, for a chart which starts in 1300, the efficiency of things such as charcoal production becomes important. Some of the stuff I posted about Edo Japan makes the point that charcoal was a very inefficient way to work metals. Charcoal did become more efficient, but I suspect that the real big advance in efficiency came with the substitution of fossil fuels for wood.
Don Stewart
Gail
Also consider the centuries long increase in both energy and the efficiency with which the energy was turned into usable work, and the increase in incomes in the industrial world.
Now suppose that both the amount of energy and the efficiency ratio have flatlined, with the result that incomes do not grow. But the Central Banks, having swallowed neoliberal Economics hook, line, and sinker, perceive that we have a shortage of money. So they proceed to print by the bale. Who benefits? Very likely not the workers who need to be able to convert energy to work in order to earn a living. Probably not the companies who use energy to do useful work…but their CEOs may very well benefit from financial manipulation of earnings per share.
If net energy is declining (as BW Hill suggests) and productivity is not increasing, then incomes must fall.
Don Stewart
A lot of the money ends up in bank accounts of the very rich, not doing much of anything. It is likely to disappear before they actually are able to spend it.
I’d suggest that where reference is made to “increases in the money supply” a better description is “increases in the debt supply”. Money is inert, but debt attracts interest. The difference is significant.
It is the gains in final output that drive the growth in the economy. Some of these come from efficiency gains; some of them come from using more energy per capita. The increase in the transformation of energy to useful work from 2% or 3% to 15% is a “hard act to follow”. If we want corresponding growth in final products now, we have to keep making huges gains in efficiency growth and growth in energy use. An increase from 2% efficiency to 15% efficiency would by growth by a factor of 7.5. IF we try to do that again, we need to get to 112.5% efficiency. That is clearly not going to happen. Another diminishing returns issue.
I think you are right too about in efficiency (or at least output) coming with the substitution of fossil fuels.
Don Stewart said:
Skip Laitner says that the efficiency with which energy is transformed into useful work has increased from 2 or 3 percent in 1900 to 15 percent today,
Thermal efficiency is a function of temperature: T2-T1/T2 , so it is not surprising that efficiency has increased. Hydrocarbons burn at about 1400 deg F; wood at about 700 tops. That is why nuclear plants are less efficient than coal plants, or natural gas. A lot more of their heat goes into the river. Engineers have been working on increasing the working temperature of power plants for a 100 years. Cutting the compression ratios on IC engines has reduced their temperature differential, thus their efficiency. To reduce nitrous emissions they increased CO2. Some days you can’t win?
PS T2 and T1 must be expressed in Kelvin, or Rankine. Absolute temperatures scales.
It’ll be interesting to see if the G7 follows through with their intentions of becoming fossil fuel free by 2100. None of us will be around when future generations get there.
Rodster, it will be FF free or burning LOTS of coal. If it is coal the environment will be saturated with mercury. Even the elites will be suffering IQ damage. Maybe they can use regular chelation treatments to try to stay ahead of the mercury poisoning.
The EU should be fossil fuel free in the next year or so …. as will the world… once the collapse hits and the oil stops — and the trees are burned up to provide heating and cooking fuel…
Russians just announced closing the Ukraine leg of their EU bound gas network by the end of 2018, while the NorthSea stuff is falling and LNG is likely to stay expensive. That’s granting roughly 3years to those EU fools to act and build connectors to that Greek/Turkish border station hah..
I am afraid that the world may be people-free by 2100. In that case, the world will be fossil fuel free.
Reminds me of the George Carlin line, “pack your s*** folks, your going away. Maybe you’ll leave a little plastic behind, maybe”.
Love it! One for my quotes database.
While low populated western countries can feed and power themselves with renewables many of the oil producing countries have too many people to do that. While we can reduce our lifestyles they have no options.
As Gail points out it takes lots of oil to build nuclear power plants. Who is best situated to build nuclear power plants? The big oil export nations of the middle east.
KOOMBAYA ALERT!!!! We have Koobaya off the port bow captun…. it looks like a man dressed in baggy clothes with many tattoos and long matted hair banging on a drum… and proclaiming solar panels will save the world…
Arm the fasers Sooo – loooo —- FIRE!
Replacement of oil by alternative sources
While oil has many other important uses (lubrication, plastics, roadways, roofing) this section considers only its use as an energy source. The CMO is a powerful means of understanding the difficulty of replacing oil energy by other sources. SRI International chemist Ripudaman Malhotra, working with Crane and colleague Ed Kinderman, used it to describe the looming energy crisis in sobering terms.[13] Malhotra illustrates the problem of producing one CMO energy that we currently derive from oil each year from five different alternative sources. Installing capacity to produce 1 CMO per year requires long and significant development.
Allowing fifty years to develop the requisite capacity, 1 CMO of energy per year could be produced by any one of these developments:
4 Three Gorges Dams,[14] developed each year for 50 years, or
52 nuclear power plants,[15] developed each year for 50 years, or
104 coal-fired power plants,[16] developed each year for 50 years, or
32,850 wind turbines,[17][18] developed each year for 50 years, or
91,250,000 rooftop solar photovoltaic panels[19] developed each year for 50 years
http://en.wikipedia.org/wiki/Cubic_mile_of_oil
Renewable energy ‘simply won’t work’: Top Google engineers
Two highly qualified Google engineers who have spent years studying and trying to improve renewable energy technology have stated quite bluntly that whatever the future holds, it is not a renewables-powered civilisation: such a thing is impossible.
Both men are Stanford PhDs, Ross Koningstein having trained in aerospace engineering and David Fork in applied physics. These aren’t guys who fiddle about with websites or data analytics or “technology” of that sort: they are real engineers who understand difficult maths and physics, and top-bracket even among that distinguished company.
Even if one were to electrify all of transport, industry, heating and so on, so much renewable generation and balancing/storage equipment would be needed to power it that astronomical new requirements for steel, concrete, copper, glass, carbon fibre, neodymium, shipping and haulage etc etc would appear.
All these things are made using mammoth amounts of energy: far from achieving massive energy savings, which most plans for a renewables future rely on implicitly, we would wind up needing far more energy, which would mean even more vast renewables farms – and even more materials and energy to make and maintain them and so on. The scale of the building would be like nothing ever attempted by the human race.
In reality, well before any such stage was reached, energy would become horrifyingly expensive – which means that everything would become horrifyingly expensive (even the present well-under-one-per-cent renewables level in the UK has pushed up utility bills very considerably).
http://www.theregister.co.uk/2014/11/21/renewable_energy_simply_wont_work_google_renewables_engineers/
http://techcrunch.com/2011/11/23/google-gives-up-on-green-tech-investment-initiative-rec/
After seeing references to the claim “Renewable energy ‘simply won’t work’: Top Google engineers” several times, I went to the original article by the google engineers. http://spectrum.ieee.org/energy/renewables/what-it-would-really-take-to-reverse-climate-change
But the engineers did not say that it was impossible to replace our current energy with renewables, but that renewables could not get cheap enough to convince utility operaters to close perfectly functionable fossil fuel plants fast enough to avoid CO2 levels that commit us to “severe climate change, with all its dire consequences:”.
Somehow their statement “Trying to combat climate change exclusively with today’s renewable energy technologies simply won’t work; we need a fundamentally different approach.” got shortened to ‘renewable energy technologies simply won’t work’, which is not at all what they were saying.
That is not to say that renewables are the panacea, just that we should drop that one false meme.
Sorry Jim but that is EXACTLY what they said:
Renewable energy ‘simply won’t work’: Top Google engineers
Two highly qualified Google engineers who have spent years studying and trying to improve renewable energy technology have stated quite bluntly that whatever the future holds, it is not a renewables-powered civilisation: such a thing is impossible.
Both men are Stanford PhDs, Ross Koningstein having trained in aerospace engineering and David Fork in applied physics. These aren’t guys who fiddle about with websites or data analytics or “technology” of that sort: they are real engineers who understand difficult maths and physics, and top-bracket even among that distinguished company.
Even if one were to electrify all of transport, industry, heating and so on, so much renewable generation and balancing/storage equipment would be needed to power it that astronomical new requirements for steel, concrete, copper, glass, carbon fibre, neodymium, shipping and haulage etc etc would appear.
All these things are made using mammoth amounts of energy: far from achieving massive energy savings, which most plans for a renewables future rely on implicitly, we would wind up needing far more energy, which would mean even more vast renewables farms – and even more materials and energy to make and maintain them and so on. The scale of the building would be like nothing ever attempted by the human race.
In reality, well before any such stage was reached, energy would become horrifyingly expensive – which means that everything would become horrifyingly expensive (even the present well-under-one-per-cent renewables level in the UK has pushed up utility bills very considerably).
http://www.theregister.co.uk/2014/11/21/renewable_energy_simply_wont_work_google_renewables_engineers/
http://techcrunch.com/2011/11/23/google-gives-up-on-green-tech-investment-initiative-rec/
And you get two for the price of one today:
Replacement of oil by alternative sources
While oil has many other important uses (lubrication, plastics, roadways, roofing) this section considers only its use as an energy source. The CMO is a powerful means of understanding the difficulty of replacing oil energy by other sources. SRI International chemist Ripudaman Malhotra, working with Crane and colleague Ed Kinderman, used it to describe the looming energy crisis in sobering terms.[13] Malhotra illustrates the problem of producing one CMO energy that we currently derive from oil each year from five different alternative sources. Installing capacity to produce 1 CMO per year requires long and significant development.
Allowing fifty years to develop the requisite capacity, 1 CMO of energy per year could be produced by any one of these developments:
4 Three Gorges Dams,[14] developed each year for 50 years, or
52 nuclear power plants,[15] developed each year for 50 years, or
104 coal-fired power plants,[16] developed each year for 50 years, or
32,850 wind turbines,[17][18] developed each year for 50 years, or
91,250,000 rooftop solar photovoltaic panels[19] developed each year for 50 years
http://en.wikipedia.org/wiki/Cubic_mile_of_oil
Funny that you continue to link to secondary sources instead of their own article.
What they actually say is that renewables cannot get deployed fast enough to reduce atmospheric CO2 to 350 ppm.
In http://www.google.org/energyinnovation/The_Impact_of_Clean_Energy_Innovation.pdf
they state: “By 2050 innovation in the modeled technologies alone reduced GHG emissions 55% and 63% when combined with policy, while continuing positive economic and job growth. This analysis indicates that aggressive clean energy innovation could simultaneously help address the US’ major long-term economic, environmental and security goals.”
If that equals ‘renewables won’t work’ what do you require to consider that renewables do work?
Replacement of oil by alternative sources
While oil has many other important uses (lubrication, plastics, roadways, roofing) this section considers only its use as an energy source. The CMO is a powerful means of understanding the difficulty of replacing oil energy by other sources. SRI International chemist Ripudaman Malhotra, working with Crane and colleague Ed Kinderman, used it to describe the looming energy crisis in sobering terms.[13] Malhotra illustrates the problem of producing one CMO energy that we currently derive from oil each year from five different alternative sources. Installing capacity to produce 1 CMO per year requires long and significant development.
Allowing fifty years to develop the requisite capacity, 1 CMO of energy per year could be produced by any one of these developments:
4 Three Gorges Dams,[14] developed each year for 50 years, or
52 nuclear power plants,[15] developed each year for 50 years, or
104 coal-fired power plants,[16] developed each year for 50 years, or
32,850 wind turbines,[17][18] developed each year for 50 years, or
91,250,000 rooftop solar photovoltaic panels[19] developed each year for 50 years
http://en.wikipedia.org/wiki/Cubic_mile_of_oil
Won’t work – too expensive — not possible …
All of the above…
Have a read of Gail’s articles on ‘renewable energy’
If ‘renewables’ were the answer — when why this?
http://reneweconomy.com.au/wp-content/uploads/2014/04/bernstein-energy-supply.jpg
And this
The German Solar Disaster: 21 Billion Euros Burned
http://www.thegwpf.com/german-solar-disaster-21-billion-euros-burned/
Spain’s disastrous attempt to replace fossil fuels with Solar Photovoltaics
http://energyskeptic.com/2013/tilting-at-windmills-spains-solar-pv/
But Jim — I did not say I would be the one holding the gun…. this is the type that will be doing the killing
https://hiphopandpolitics.files.wordpress.com/2009/09/blackwaterguy.jpg
I’d like to think that some of my recent posts are worthy of the hall of fame… I particularly like the one referencing BC Hydro outages …. that was a google search right up there with Maradona’s ‘hand of god’ world cup goal – no?
I could depart and leave this board to turn back into a Koombaya-fest with discussions of the wonders of solar panels and soil nutrients…
But that would be a shame
Because Gail puts such tremendous effort into the articles that appear here (that go right in one eyeball of the Koombaya Krowd and out the other)…. that it would a shame to leave her and the various other contributors who ‘get it’ floating about in seas of cognitive dissonance.
Therefore I shall remain. And I shall continue to be the guy who shows up at the Koombaya Party where everyone is dancing about under the stars banging on bongo drums — and pisses in the fire…
If you want to disagree then you best come armed with some facts — because tossing out insults is what people do when they are proved wrong and will not admit it… (or are too thick to comprehend that they have been proved wrong). — such behaviour is very shall we say….. Palinesque….
Fast Eddy says:
June 23, 2015 at 12:56 am
Your post of 12:56 am has no connection to anything I said. I made no reference to guns, or any suggestion that you should stop posting. I did say that the words of the engineers themselves were a better judge of what they believed than some reporter’s interpretation of those words.
Further, I did bring facts to the discussion. You chose to ignore them. And I repeat, I am not claiming renewables are the answer. I am just showing that the “Google Engineers Show renewables won’t work” is a false meme, and a distortion of what the “Google Engineers” actually said.
This is what they said:
Even if one were to electrify all of transport, industry, heating and so on, so much renewable generation and balancing/storage equipment would be needed to power it that astronomical new requirements for steel, concrete, copper, glass, carbon fibre, neodymium, shipping and haulage etc etc would appear.
All these things are made using mammoth amounts of energy: far from achieving massive energy savings, which most plans for a renewables future rely on implicitly, we would wind up needing far more energy, which would mean even more vast renewables farms – and even more materials and energy to make and maintain them and so on. The scale of the building would be like nothing ever attempted by the human race.
In reality, well before any such stage was reached, energy would become horrifyingly expensive – which means that everything would become horrifyingly expensive (even the present well-under-one-per-cent renewables level in the UK has pushed up utility bills very considerably).
And it does not matter what they said — because most of us on this site already knew this long before they said it. What I am wondering is why Google had to waste close to 1 billion dollars finding this out…..
A 10 year old could be made to understand that solar energy is pointless and cannot exist without the coal and other fossil fuels that go into making them
Gail has written at least 3 good articles on this. If you want to keep pounding the koombaya drum then go somewhere where others will dance to your beat….
It really does get tiring having to argue with people who refuse to accept facts.
Any fuel that is not cheap, cannot power the economy. The amount of energy a person or business can afford is inversely proportional to price. If the person or business has $100 to spend, and the cost is $1 per unit, the person or business can afford 100 units. If the cost if $5 per unit, the person or business can afford 20 units. If the cost is $10 per unit, the person or business can afford 10 units. It is the units of energy that do the “work”. With less energy, there is a big problem. Fewer goods can be manufactured; goods can be transported fewer miles; less food can be grown; fewer antibiotics can be made. When we have a system where we have to repay debt with interest, “less” is a big problem. Even with a system where people expect a fair return on their financial investment, “less” is a big problem.
Looks like Paul’s off his multiple personality drugs again… 🙂
Too bad WordPress lets you type in just about anything for a login.
The problem with that idea is that those so called “renewables” are just as dependent upon fossil resources as a SUV.
None of these “renewables” can replace themselves using the energy they can produce. Their energy can’t mine the ore, smelt it into metal, power the machines needed to form the components or power all the other energy hungry, high tech processes needed to produce these devices.
Solar cells, wind turbines are just another way of making a profit from the oil age.
Increased amounts of fossil resources would have to be consumed to manufacture these “green” energy devices, adding even more pollutants into the atmosphere to produce these intermittent, expensive non renewable devices.
They cannot power our future.
The only truly renewable energy we will have available to us in the future IF we can survive climate change, will be what we had before, muscle, wind, falling/flowing water
& the technology needed to run a low energy civilization with them.
Good to see someone is in touch with reality….
However these facts will, as usual, be ignored by the Solar Power Groupies.
An interesting summary by Roger Andrews on Energy Matters (Euan Mearns’)
http://euanmearns.com/the-difficulties-of-powering-the-modern-world-with-renewables/#more-8912
I agree, it is very good. It is not easy to integrate intermittent renewables in any quantity in the grid. Demand response and batteries are not up to the task of offsetting the changes. Expecting fossil fuels to follow the pattern of the intermittent renewables adds a huge amount of wear and tear to the fossil fuel powered electricity sources.
You forgot direct solar. (Photosynthesis)
Hi sheilach2
I’m BW Hill, part, and party to The Hills Group. We are a group, tribe, batch of consulting engineers, and we run the site below on the side:
http://www.thehillsgroup.org/
As engineers we get paid to solve problems that others can’t figure out. So, we get into all kinds of areas of research. As to your post above I am quit impressed. Your extent of knowledge seems to be very wide. Would you be so kind as to give me a little information as to your background. If you don’t want to make it public you can send me an email in the comments section at the site above. If you wish, in exchange, I’ll happily send you a copy of our study.
Thanks
Biomass. Not at the scale proposed by BAU, but certainly at a significant level. Where I live (PNW U.S.) there is enough hydro for electricity, and enough NPP (net primary productivity) to produce considerable quantities of biofuel. Enough to keep the turbines going for a while. Copper and other metals would be longer term problem, but there’s so much of it lying around in all our consumer crap we could recycle for years. Lots of things would stop moving (the end of most traffic and planes! Blessed silence!), but we would still be able to function at some level, including production of enough food not to starve en mass. Providing space for some sort of transition. That’s one possibility, anyway.
While many around here think I’m a “doomer” because I cite Gail, Peak Oil, Tainter, etc.,I find your (Shiela, and Fast Eddy’s) scenarios to be overly and unremittingly grim and at the extreme of the range of likely scenarios, at least for where I live. You might as well think the methane release is going to turn us into Venus. What do you suggest; we all go out and shoot ourselves right now?
And BTW, we have solar panels. Payback 5 or so years with the subsidies. So what if they’re useless if the grid fails; we’ve got a few years to go and will thereafter have more resources (money) to do other things if the failure doesn’t happen until after 2018 or so.
“there is enough hydro for electricity, and enough NPP (net primary productivity) to produce considerable quantities of biofuel. Enough to keep the turbines going for a while.”
How do you maintain the grid > manufacture and replace busted components — get people into the remote areas to service the network?
What happens when a turbine busts? Where do you get the lubricants for the turbines?
You neglected to mention your host Gail in the same group as myself and Sheila… her comments are what opened my eyes to the realization that this is a hopelessly grim situation….
As for solar panels — they won’t save the world but if anyone makes it through they could make life a little easier until something busts…
We have enough infrastructure locally to maintain at least a significant part of our hydro grid. In fact, it would not be difficult to split it into a series of smaller grids (Seattle, Tacoma, SnoPUD, LewisPUD, etc. Those systems were largely built when physical access was much worse than now. Clearly, most available biofuel would need to be allocated to maintenance and other system critical tasks (no personal transport across town–take a bike, walk, or don’t go). This is not a third world country without hoards of engineers, many machine shops and labs in all sorts of technologies, etc. I suspect that with care even large turbines can function on vegetable oil based lubes (see http://www.machinerylubrication.com/Read/28510/vegetable-oil-properties). I acknowledge it wouldn’t be easy, but in times of crisis people can do amazing things.
You’re right, I did not include Gail. I’ve been reading her astute writings since she was at TOD, and I do not find her (quoting myself) as “unremittingly grim” as you.
FYI, the life I have left (I’m a healthy 64.8) is largely dedicated to raising awareness in this neoliberal American BAU drenched boom town (Seattle, Washington State) that we need to plan for what’s coming. Increase resilience–maintain industrial capacity (it grates when machine shops are sold and shipped to China), use petro resources to construct geothermal district heating (cf. http://www.bullittcenter.org/2012/07/24/ground-source-heat-pumps-at-the-bullitt-center/), promote organic (non petro based) agriculture, promote urban food production (the quantity of fruit that can be produced here is amazing–dry it up and eat all winter). Generally slow growth in urban core to stop increasing burden on infrastructure we cannot even afford to maintain. Etc.
You must have missed the engineer with long experience in this area who posted on this site a couple of months ago responding to someone who suggested that hydro plants and the grid that shifts the electricity to where it’s needed could be maintained post collapse…
I can’t quote him verbatim but in a nutshell he stated that this was utter bullshit… that people have not a clue as to what goes into maintaining these plants and that there is no way in hell they can be kept online once BAU and the supply chains bust.
http://freedomforce.com/wp-content/uploads/2015/02/power-grid.jpg
“promote organic (non petro based) agriculture, promote urban food production (the quantity of fruit that can be produced here is amazing–dry it up and eat all winter). Generally slow growth in urban core to stop increasing burden on infrastructure we cannot even afford to maintain. Etc.”
Come now – that is already being done. All you have to do is buy everything you consume at Whole Foods.
Oh what’s that you say — you don’t have a $5000 per month food budget? Well — neither does 99% of the world (that’s the problemo with your suggestion — which on the surface sounds wonderful — but does not hold up to scrutiny)
The Green Brigade spews out these radical ideas like a landlubber spews vomit on 30 foot seas… oh let’s just go back to growing organic food and we would all be healthy and we’d be saved!
We have already done the organic thing — and Malthus had a little to say on where that was going…
If the Green Revolution had not happened we would have collapsed decades ago — before we got to 7 billion people… (some might argue that would have been a good thing)
But hey — we’ve got our 7 billion.
And there is no going back to growing organically — without starving most if not all of the 7 billion… because the soil is DEAD. When you farm industrially you render the soil useless for growing good without years of organic inputs (all good green brigaders are aware of this when they make the claim that we could return to organic farming – no?)
Here’s a real world solution for the green brigade – tell me how you like it.
Since 98% of the farmland is ruined — we need to kill 98 out of 100 people on the planet in an organized manner — because if we just let nature take it’s course we will have chaos — and we could end up with everyone dead.
So we need to choose who lives and who dies… to be fair I suggest a global lottery.
We’ll call it the Koombaya Lottery….
I can hear the yammering nay-sayers already…
But in Washington and Oregon (at least) the Public Utilities Commission Act requires that Public Utility Districts be operational without support from external utilities. They are required by law to be able to be isolated from the grid,
I would love to be on PUD power! They are governed by a local commission who oversees their operation.
Of course, they will suffer the same problems as the larger grid when it comes to buying spare parts, etc. But that would not stop a “Transition Town” sort of situation from setting up a PUD and making plans for maintaining it apart from the West Coast Intertie. (Note that the West Coast of North America is not connected with the rest of the North American grid.)
What they theoretically can do, and what will happen are likely different. I expect quite a lot of cutting down trees for heat. Where all the food will come from is less clear.
Trees…. fresh cut trees will not burn…. fall-downs are no good either….
So what will people burn to keep warm? What will they burn to cook food (not sure where they will find food to cook …. but anyway…)
Old car tires? Wood from house frames? Plastic bags? I assume they will burn just about anything that will burn — billions of people will use up just about everything in short order… then what?
I’ve stored at least 4 winters of good seasoned hard wood and am chainsawing up 10 big trees that I will leave to season…. I can’t imagine splitting all that wood using an axe…. even when I was 20…
Our winters are mild and last only 10 weeks or so…. nothing like winters in Europe, UK, northern US/Canada — and much of Asia…
Keeping warm in the cold — just another one of the many things that we make assumptions about — but when one really thinks about it — this is a monumental problem.
Dried fallen sticks seem to work, but there aren’t a whole lot of them. It takes daily gathering to get enough, very often.
I’ll come down and harvest those “useless” panels from you when the grid goes down… by horse cart, if necessary.
The only useless part will be your grid-tie inverter. There’s still a whole lot you’ll be able to do with battery-backed PV, or even current sunlight PV.
I believe there are hybrid grid tie systems that have an off grid battery system that becomes a substitute grid. The charge controller uses the grid to charge the batteries and switches to the panels if the grid goes down.
I am not sure if any group can really feed and power themselves with renewables, but I would agree that the low populated western countries are in better shape to do so than the oil producing countries of the Middle East. None of us as a group are adapted to using the resources close at hand–Cubans didn’t even eat fish, for example. Most of us have no idea how we would life without banks and fossil fuels. I don’t really think renewables add very much to the total, except perhaps temporarily for the homeowner who is off grid, and has solar PV on his roof. Low tech windmills are probably useful too.
Dear Gail
As for being ‘off grid’, one of the biggest hurdles a family faces is cooking fuel. Some women in Africa walk many miles each day looking for firewood to cook.
Here is an interesting kick-starter which just got funded:
https://www.kickstarter.com/projects/707808908/gosun-grill-a-break-through-solar-oven-that-cooks
The company makes and markets solar cookers in both the North and the South. In the North, they promote the product as a very cool way to make the hot dogs after the soccer game. In the South, they market the product as a good way to avoid burning wood for fuel. In their work in Central America, they found that it was important for the families to be able to cook after dark. In the tropics, the sun goes down at 6pm pretty much year round, and it is not terribly practical to cook beginning about 3:30 or 4:00. The company came up with a ‘battery’ which uses phase change materials, which retains the heat from mid-day until the family is ready to cook after sunset. I read an exchange about ‘how many times can the ‘battery’ cycle’, but didn’t come away with any clear ideas. It may be for a very long time.
This product does, of course, use metals as reflectors. Nevertheless, if the product works as advertised, then having one of these may be a very good thing to cope with collapse of the utilities. If the ‘battery’ lasts a very long time, it might become a family heirloom.
Don Stewart
Great device as long as you have SUN!
I would love to see these spread out to where women have to walk miles to get fire wood. This would save them that trek, save trees, eliminates having to breath in cooking smoke improving their health, cooks their food better & cleaner than a fire but how can it cook chippaties? That ubiquitous flat bread so common in Asia?
This wouldn’t work where we have long, sunless winter days & this device is also a child of the OIL age but with care, it should last a long time.
I wonder how scalable the idea and how long the over lasts. In the long run, we need a truly renewable solution–one that works by burning sticks or some such thing.
Burning wood for heat and cooking is only sustainable if your climate does and continues to support trees, and people harvest them slower than they grow back. Lots of areas in Africa have problems with harvesting too much wood, which helps spread soil erosion and desertification.
Forget the battery, just cook in the day and eat cold food in the dark.
A reasonable rule-of-thumb for most temperate forests is “a cord of wood per acre per year.”
Renewables are very regional as well. Lets say you are near seismic fault, volcano, you can easily run diesel co-generator on some of the less/non sulfuric gases, similarly good spots with 365/y solar insolation due to prevailing weather patterns, or hydro etc. But for baseload energy of global civilization with 7B+ not so much..
What would you use to lubricate the moving parts in the generator?
Vegoil can do in a pinch, and a drying vegoil (like linseed oil) can stretch other oils. With a simple centrifuge, you can clean and re-use old oil, too.
Not that I’m saying this is a long-term solution. I’m just making the case that a slow crash is possible. It would be nice to have a couple decades of vegoil-run diesel before going back to oxen carts. 🙂
Vegetable oil in an engine? Surely the high heat would break that down in a few minutes and your engine would be seize up for good.
Somehow I find it difficult to imagine that there will be operational vehicles for very long post-collapse.
From Wikipidia, Castor oil has better low temperature viscosity properties and high temperature lubrication than most vegetable oils, making it useful as a lubricant in jet, diesel, and racing engines.
Nothing like the smell of a two-stroke racing motorcycle engine using castor oil.
Great for shaving, too! (Not that I’d know… had a beard since 16…)
Castor oil is what causes soap to foam. We use about 8% in our regular soaps, but we’re working on a “shaving bar” soap that would be 20%.
It will grow in Canada in frost-sheltered areas. I’ve been looking for seed.
Although we currently use palm oil and coconut oil for our primary fats, we’re working with local suppliers to make soap based on beef tallow and pork lard.
None of this stuff is rocket science. Get a printed copy of the Foxfire series, and prepare for the past. And learn to make products local people will need.
You do know that Robinson Crusoe was fiction?
There is no way in hell anyone is going to keep a motor vehicle operating on vegetable oils.
Try putting castor oil into the brake line of your car. Or the transmission.
Perhaps in the fairy world of Koombaya this can be done… but in the real world which is governed by physics … this will not work.
Feel free to prove me wrong by operating a vehicle for more than 10,000 miles on nothing but inputs from your garden.
Well, that’s a pretty high standard.
But we’ve done a lot of the preliminary steps to be able to do such a thing. If you will supply us with a grant equal to the difference between using cheap fossil fuels and vegoil, I’ll run for 10,000 miles. Only problem is, that would take about five years at the rate we drive! In the meantime, we’re ready to switch over as soon as it makes sense to do so.
Pardon me for calling you on your obsessive negativity, but those who say something cannot be done should not interfere with those who are doing it.
Used olive oil cut 50-50 with cleaned used motor oil worked well in a test I did.
The only reason vegoil is not used is price.
Why not just flip over completely now — that way you can experiment more extensively and fix the burned out parts while BAU is functioning… and try other natural lubricants
I am no mechanic but I do know that there are many other specialized fluids that go into making a vehicle work properly — brake fluid… tranny fluid…various greases… many of these need to function as hydraulics… I very much doubt olive oil is up to the task.
Not even sure what the point of having a vehicle would be — the roads will be in pieces after the first winter…
Some good quality mountain bikes would surely be more appropriate?
Gail, you know that we have been feeding & powering ourselves with renewables for millions of years.
The renewable energy we used was of course our muscles & fire, later came animal muscle, then water & wind power to power machinery.
The Romans weren’t hunter gatherers, & they were far beyond the stone age, they had an advanced civilization & if we can survive climate change, a future civilization could be similar to what ancient Rome had but without the bronze or brass, steel & iron would be rare.
The real problem we face isn’t just the decline of our primary energy source & overpopulation, the oil we have been burning for the last 200 years has poured mega tons of C02 into the atmosphere acidifying the ocean, warming it & the atmosphere destabilizing the climate to one hostile to our existence.
The oceans are warming, fetid with pollution including radioactive pollution from Fukushima, it’s more acidic, dead zones are growing, the pacific ocean is dying & the bodies of once living creatures litter it’s shoreline.
Our warming planet is also destabilizing methane in the arctic, the ocean shelfs, permafrost & the great tundras of Siberia where methane craters have been blasted out of the once frozen earth there.
If we have started a runaway greenhouse, we will be unable to stop it until it runs out of methane & by that time, our planet could be a hot, lifeless wasteland with only our ruins testifying that at one time, an advanced civilization existed here until they destroyed themselves & their planet.
Too be they couldn’t have seen earth before we evolved, what wonders of living things they would have seen!!
In the light of this possible runaway greenhouse, the end of oil will be but a blip in history, a runaway greenhouse will be the end of us & all life on our planet..
Indeed — this peak oil conversation may be made moot by that little fact… there is also the issue of not being able to keep spent nuclear fuel ponds cooled…. which would almost certainly lead to an extinction event.
Earth has rebalanced its climate before, and will do so again. The species on earth that are dominant will no doubt change. Humans may well not make it into the new mix of species. On the other hand, humans seem to have made it through the last ice age fine, so maybe human will do all right with changing climate. We would be about due for another ice age, if it weren’t for global warming. If it is not one version of climate change, it is another.
I am more worried about civilization collapse. If this happens, it is not even clear that humans will be around long enough to see very much of the climate change.
Humans can deal with cold much better than with heat.
We cool ourselves by sweating but if it’s hot with high humidity, that doesn’t work & if we can’t find a cool place to shelter in, we die.
Cold can be tempered with fire, clothing, shelters but heat?
Without airconditioning, humans will be exposed to temperatures beyond what they can endure, how can you cool off if there is no escape from the heat? How can you cool off when your sweat just runs off your body without cooling you, sweat has to evaporate in order to carry away your excess heat.
Even living underground won’t help, we can’t grow our food underground, we can’t raise livestock underground, how would we feed them?
A hot climate will kill our most productive food crops, wheat, rice, oats etc are temperate climate crops, too much heat fries them.
A hot climate is also a drier climate, droughts & heat waves will become more widespread as earths temperature rises.
How well will our domesticated animals cope with the heat? Hot cows & chickens don’t produce much milk or eggs when they are heat stressed.
Our warming climate is also negatively affecting the trees, their dying from drought, & heat, heat stressed trees are beetle bait, beetles flock to weakened trees because they are less able to defend themselves with sap, a drought stressed tree produces little sap.
IF we have set off a runaway greenhouse, we will be unable to adapt to temperatures that will rise over 50C & keep on rising & without OIL, we won’t have airconditioning to help us cope, we will die of hyperthermia as will billions of other living things.
We can cope with ice ages, we cannot cope with a runaway greenhouse.
Overly optimistic predictions of oil production might also be attributable to the ‘goal-seeking’ behaviour of the various institutions to keep the dream of economic growth forever alive…
aka – Wishful thinking….
I agree. Everyone wants things to be good in the future–politicians, the people who elect them, businesses making cars, etc. Even if people knew the truth, no one would let them print it.
We are living in age where a dominant country with global seigniorage priviliges can willy nilly re-shuffle hundreds of billions in fictious backdoor debt buyback programme, yearly. The rest of the world seems seemingly unconcerned, while it is trying slowly to prepare alternative global financial structure, direct intercurrency swaps etc. The dominant arrangement will eventually crack, but not the exact minute before the major stakeholders deem it finally appropriate to their own interest. For instance, is China ready to risk fallout of US bound exports in %% y/y, very likely not now, but perhaps being more ready in few years time can ditch the improverished US consumer for good, mainly in the junk trinket segment, which is increasingly abandonign anyway in search for more higher end products. Similarly, the EU is increasingly able to place more of its luxury exports and joint ventures in Asia, so they can drop one day the US market for good, should it be necessary move. In the same vein, are the Gulf states feeling emancipated enough to drop the US and western security alliance today? Quite likely not now, although some remarkable shifts are poping up, like determination to diversify from US hardware only into mix of EU and asian, even russian made one. Besides it’s open secret that e.g. Saudies do own nuclear arsenal (with limited delivery technology i.e. not instant global reach) via their Pakistani proxy etc..
Simply, the players are frantically positioning, yes, but still lot of money and luxury life to be burned in the process, no rush. Some series of events could speed the events up, but the first order of ruling is can kicking excercise (“..stability..”) and that’s what’s on the agenda for some more time..
What good do undeliverable nukes do for KSA? My view is there are only three nuclear weapons countries China, Russia, and U.S.. Everyone else to a vassal to one of these patrons. Only the three are truly sovereign.
As to non club countries using nukes the agreement used to be they would be sanctioned by harsh nuclear counter strike coming from the patron whose vassal was attacked. If it was a strike against one of the three it would be total nuclear response against the aggressor (i.e. down to melted sand).
no. there are 4.
usa
rus
chi
dprk.
Israel.
But Asia is no better off than the US — Japan is totally screwed… China not far behind…
I don’t have answers on all of the geopolitical stuff. We run the risk of our situation unraveling fairly quickly, once some part of the “chain” breaks.
That is, of course, unpredictable. My only advice is that you know what the likely targets near you are, and have a good idea of what the fallout patterns are. Then you can decide if you would rather be at ground zero or if you can make it somewhere where the fallout isn’t going to be an issue.
If we do go to war, and I mean a real total war, this is one of the few times in history where the idiots who start it might just be right when they say “it’ll be over by Christmas!”
I see one scenario that I don’t see mentioned. Sunken costs can “go away” in bankruptcy.
If, as Gail points out, the marginal cost of producing a barrel of oil is $30, but debt service and sunken costs make the “real” cost of production $130, one could declare bankruptcy and “walk away” from those costs, and then begin producing oil for $30.
I forgot to mention that, to employees, life goes on as usual in a bankruptcy.
Creditors and investors get screwed. That may mean that credit and investment is difficult to get in the future, but if a Gordon Gecko “chop shop” buys the bankrupt company, they can simply operate it on its new, deflated value basis, and make tons of money.
This would not be the first time something like this happened. The housing crisis of 2008 resulted in a “debt jubilee” of sorts, as perhaps a million or more houses’ values were “reset” through default. The sellers could not service their debt, but the lucky buyers had no trouble servicing debt on the new, improved low price.
I “like” your way of thinking. Most of the old rules and good manners will be dropped into the dust first, because there is so much blood remaining to be sucked out of the system.. Simply extrapolate the post 2008 non-sence into roughly 2030, i.e. cashless society, omnipresent jackboot and thought control for the system owner class, reduced standards of living – consumption for the unwashed etc. There is way to much “creative” action ahead of us.
World, I am afraid you are correct.
I am surprised about the coordinated global roll out of the cashless society. There really is a level of global governance that we worker bee do not see.
Yes, it does seem odd that, assuming those with the money are aware that life is going to get a lot simpler, they’ve gone from trust in government to trust in microscopic bits of spinning magnetic material.
When the disks stop spinning, what happens to the money that is embedded in them? Virtual money without electricity ceases to exist!
The US has gone on a big push toward “electronic medical records”. I expect they will also be a problem.
Gail, when this disks stop spinning those who are healthy will still be healthy. Those who will die without treatment will die.
The shareholders are already own zip. This analysis/newsletter from the CEO of Peyto just prior to the oil crash (so based on $90 wtic) showed US shale E&P shareholder were effectively down to 5% equity – assuming prices don’t change.
http://www.peyto.com/ia/pmr/20140803PMR.pdf
And they did! To the downside. Obviously, new buyers will not obtain the BK assets for free, but understand the point you are making.
From another viewpoint, billions of capital are already gone – in the form of natgas, and now oil, selling under the full cycle costs of production. Transferred from investors to the consumer, spurring demand, locking some relatively fixed/fixed demand sources on artificially low costs.
All the while, E&Ps are working thru the best parts of the plays – which they have zero’d in on these past couple years.
The go-forward/sunk costs decision making has been going on for years – just slowly bleeding out equity – enabling drillers to continue the same production growth focused behavior with OPM.
As someone long 2019 natgas futures, I look forward to the consolidation, decisions based full cycle costs and the marginal MCF (from Barnett or Hanynesville) setting the price….as US demand growth starts up – as the driller move to less economical areas of the plays.
Thanks! Figure 4 is the article you link is certainly scary, especially if prices are down now. I take it that you were getting the 5% equity ownership (before prices dropped) by subtracting the 95% ratio shown on Figure 4 from 100%.
I have doubts that the system is going to hold together well enough that 2019 natural gas futures will work out as planned. It certainly would be beneficial for extraction if prices could rise to a higher level.
Of course,not planning on holding until 2019. Current $3.40 price for natgas in 2019. Please.
That price is more likely the result of E&P distressed sales, ‘sharks’ suppressing the longterm curve to hurt E&P asset valuations/borrowing bases, and/or the industry’s interest in keeping the perception of low price/long term.
Those distant prices have very low volumes so it would not be difficult to do. Or…we have some magical technology on the way that will drastically lower the costs of getting natgas out of rocks.
$3.40 to $5 is not unrealistic/probably conservative. That’s a 47% gain.
But that’s not an apples-to comparison given the avg. SP500 co is levered 2:1 and many of the E&Ps much higher. 2:1 leverage in futures would be almost 100% gain….vs. investing in one of these flea-bitten, debt-ridden E&Ps?
When is 2019 natgas going over $5? 6 months, a year, never? Who knows. I am at a loss on the business/economic case for it falling. Lots of ‘market’ reasons – infinate – but can never bet on those. Much prefer to bet on things way outta whack, give them time to run, and hope they don’t take long to get in line w/ (my understanding) of business.
2019 natgas fell a dollar with the Saudi move….which i believe will help 2019 natgas for several reasons (consolidation, banker-imposed restraint, less excess capital enabling go-forward decisions)
….plus more data out on the plays in the mean time (BEG/UT and Hughes/PCI) showing there is not as much cheap stuff as advertised; and more getting on the carbon bandwagon.
I agree with you that the system is shaky. But not counting on a catastrophe, just more ‘printing’ with each sign of weakness. Just one of three methods to help make all the debt less onerous.
“I forgot to mention that, to employees, life goes on as usual in a bankruptcy.”
Unless the worker’s retirement benefits are wiped out in the bankruptcy.
True, that.
But I’d say it’s better to have it explicit, than the current situation where none of us really have any retirement benefit security, anyway. I’m supposed to get social security in three more years, and I just read the mainstream media that new claims are causing the system to break down. Of course, I never thought it would be there when I got old enough, but now the MSM is acknowledging that!
My “retirement benefit” is to make sure I’m useful enough to young people that they will want to keep me around.
“Of course, I never thought it would be there when I got old enough, but now the MSM is acknowledging that!”
Also keep in mind that if an R is elected prez, the retirement age for social security will probably be increased. The number I have heard is 69, which of course doesn’t sound as bad as 70, a year later. But just try remaining employed to that higher age. Physically it gets harder and employers really don’t want people working for them in the twilight years, let alone 69. You could be self employed but who wants to work to almost 70? In France they went berserk when there was an attempt to raise retirement above 60 to 62. Good for the French for revolting.
This will not help. If I understand Gail right, we need people to have more purchase power to keep commodities up. Taking away social security would work the other way, right, or am I missing something?
I’m waiting for my mandatory pension funds to be released before we get the announcement that our pensions are being invested in the bonds of insolvent countries (as has happened in Spain….) — I’d much rather use that cash at Wally World buying shovels and fixing up the homestead!
There are different forms of bankruptcy. In some, the assets are auctioned off to the lowest bidder, and the same type of operation doesn’t even go on after the bankruptcy. It would depend on where prices were relative to costs, as to whether it makes any sense to start over.
I expect that there would be very little of the extremely low cost oil, but I could be wrong. There are all kinds of details about lease payments, government royalties, and other payment streams that might need to continue. I would need to do some research.
Yes it seems like there could be many financial tricks like bankruptcy to keep the can bouncing further down the road.
I know the official stats are wildly optimistic and its a complex brittle global system rapidly running out of everything except waste and greed.
But isn’t it just possible that our timing could be a bit off and the PTB will be able to continue some semblance of BAU at ever lowering levels for maybe 5, 10 or 15 additional depressing years.
I don’t see insolvency as the trigger — because so many entities are beyond insolvent yet BAU continues…
I see the deflation as the likely trigger… propping up the stock market with buy-backs does not create jobs… and when there are no good jobs created people don’t consume much…
We can roll out endless financial gimmicks but if there is no real growth then at some point we get the deflationary death spiral.
I think we are approaching that moment.
Corporate earnings are dropping — global GDP is weakening — of course all stats we get are lies so the situation would be much worse than even the worst case articles the MSM is feeding us.
Someone posted an excellent article yesterday about the deflationary pressures on groceries… that is a canary in the coal mine…
Guessing the world’s central banks will not say, ahh shucks, deflation you win, and watch asset prices fall, pension funds default, etc. The CBs are buying assets now directly and indirectly. So many things they could do to devalue paper. Result – given wages cannot keep up given excess labor – is stagflation, whether it gets labeled/measured as such – more work to obtain less stuff – so some stuff gets eliminated/reduced more than others. Essentials like food and energy will out perform. In fact, food/energy prices and/or bond rates will likely be the negative feed back that causes the CBs to back of the peddle….resulting in a deflationary collapse.
I don’t get the deflation argument; it’s entirely dependent on functioning markets. Why were decisions made to intervene/corrupt pricing mechanisms back in ’08? Because anyone with a clue within the governing class knows two things:
– peak oil is a physical reality
– the global economy is oil based
So, since the PTB knew the jig was up back in ’08, why would they allow markets to function (ie allow deflation to occur) now? The answer is they won’t, but even worse, we’re nearing the next milestone in the long process of unraveling civilization: a return to actual physical control.
If you think it through, it would be entirely trivial to execute a 10:1 devaluation. Issues as far as food supplies, etc could easily be handled via pricing controls, rationing, regulations (eg limited driving days, etc), and other standard emergency measures.
Effective propaganda programs would make sure the message was driven into everyone’s head that these steps were necessary and beneficial for the common good. Who’s gonna complain? Sure, a few ‘wing-nuts’ going on about personal liberty, functioning democracy and all that other radical sh!t, but the vast herd simply want their bellies full and the TV entertaining.
What I don’t get, however, is the constant complaining. I thought everyone here were supposed to be amongst the brightest & most informed? So, if you know what’s coming down the pike, whose fault is it if you don’t capitalize on future events?
Everything you have is worth 90% less, when what most people have of value is overpriced assets, is trivial? Especially when you consider that those people are also THE most influential people in our society? I’m not sure I follow your reasoning.
B9K9 — perhaps you can advise how one would capitalize on future events.
I have not thought much about this because I don’t see there being much of a future when the global economy collapses and the oil stops flowing.
Do you suggest buying farmland? Guns? Canned food?
Come on James, you’re one of the brightest posters here. Move beyond rote economics and focus on the politics of control – Maslow’s hierarchy of needs for the PTB. What does it matter if **all is lost** as long as state power (and associated perks) remains intact?
The only way deflation would be allowed to occur is if it presented a better alternative for exposing & deploying the iron fist. Now, I admit that could be a possibility, but it then gets into murky waters of game theory. No, on second thought, it’s way to risky of a gambit. A collapse of the existing banking system which finances the police state would be entirely too dangerous a gamble.
Inflation can always be handled via price controls, rationing, etc.
B9 — I get the sense that you see what is coming as just another big event in history — like WW1 or 2 —- that after the mayhem we will be back on track — that the PTB will re-assert themselves as has happened in the past.
I do not think you can look at history to predict what is coming. This time is different — absolutely completely different.,
This is nothing less than a global apocalypse we are facing.
We are looking at a world without energy. We have burnt it all up. What is left we will be unable to extract — because even now we are reaching the point where much of it cannot be extracted even with technology and finance.
This is profoundly different from any other major disruptive historical event. This is not the 1700’s — this is not the 500’s — because no matter how bad things might have got in those periods we still had an abundance of energy ahead of us…
We are going to be thrown back into a pre-history period. Without absolutely not a clue how to survive in such a situation. We will be 7 billion starving hordes.
This well and truly is the end of civilization — and if this is not an extinction event — those who do survive will be living a very primitive existence.
And the PTB will be the head of the village and his cronies.
I am not sure I understand what you are proposing. People own all kinds of houses, vacant property, farmland, and factories with high values. How would their values be reduced? How about values of shares of stocks?
Would it only be the depositors in banks who get their deposits cut back, or would those who had outstanding loans get their loan obligations cut back as well?
My understanding is that if banks have problems (because of derivatives or because of defaulting loans), it would be depositors who would get their deposits cut back. Everything else would stay the same. Inflated assets like stock prices and land prices would remain the same, and loans outstanding would remain the same.
Thanks WWW, downward pressures on groceries is well worth watching.
One man’s costs/obligations are just another man’s income. Try again.
True, but in the case of tight oil speculation, most of it would come from people who already have plenty.
I suppose some poor lower-middle-class schmuck could be putting his 401(k) into some mutual fund that is speculating in tight oil. But I’ll bet most of the tight oil money is coming from people who can best afford to lose it. Come re-join the muddle class, folks!
You’re right. Most of the tight oil money is no doubt coming from the “middle class’s” Wall St. managed retirement funds, although I doubt seriously they’ll take kindly to the news that they’ve lost it all. In fact, the total dissolution of what remains of the American “middle class” is what will likely set off the final panic, especially given that their debt levels are also the highest.
I agree that those grass and stick houses look really beautiful. The people who live in them have a good life. Wasn’t there an article in a recent National Geographic written by some American who spent time with hunter gatherers in Africa. Bottom line – he liked it.
Where I am there was a perfectly functioning culture living as hunter/gatherer/traders for a long time until we Europeans came in and totally ruined everything.
So why can’t we go back to that? Climate change, Canfield oceans, drought, storms the size of continents (says Hanson), firestorms, sterile soil and ruined ecosystems. The folks in those huts can’t continue their lives in 50 degrees C. We’ve destroyed our habitat, like the mutant species we are. The worst thing is that we’re going to take all the rest of the species with us, except for perhaps extremophile microbes.
Elephants stand by the bones of those of their family members killed by humans and cry for hours.
The reason we can’t easily go back to that is because we have 7 billion people now — we have destroyed the soil in most places — so when collapse hits we will be falling off a 1000 metre high cliff…. I am not sure anyone comes out alive…
We also have 4000 or so nuclear fuel ponds that need sophisticated cooling systems to keep working — otherwise they explode like tens of thousands of Chernobyls/Fukushimas
Does anyone think that people living in straw huts will be able to keep those beasts cooled?
I guess it’s curtains for oil.
Leslie
That is definitely a concern.
That may be good news.
Leslie
It is hard to imagine from what perspective. The end of the oil age is bad news for the vast majority of humans who cannot survive without oil-dependent infrastructure, and bad news for the biosphere. Nuclear power stations will go unmaintained and sewage untreated. Desperate humans will burn what wood they can to keep warm and wild animals will be eaten as supplies of livestock dwindle. The loss of global dimming from (mostly) sulphur emissions will likely add more than 1°c to global warming almost overnight. Personally I am hope that the oil-age lasts for as long as possible.
There are so many other potential sources of cheaper and less harmful energy sources that it boggles the mind that we are still using oil fuels. Infrastructure will have to change for sure but I don’t buy the speal that oil is the only game in town.
Leslie
“Many other potential sources of cheaper & less harmful energy sources.”????
Could you please name just one of these cheaper, better energy sources?.
I am aware of water power, wind power, even wave power but these are static sources of energy, useless for transport, heating your home, growing food or providing the electrical energy for even one diode.
Muscle power & chemical reactions are portable but very limited.
How far can you power a vehicle using vinegar & baking soda?
I know of no energy source that can provide us with electricity after oil, coal & natural gas is gone. All devices that can generate it are dependent upon fossil resources for their manufacture, repair & replacement.
So swo8, please name just one source of inexpensive, environmentally friendly source of energy???
Listing “Gluteus maximus” as an energy source doesn’t count. ;^ )
“There are so many other potential sources of cheaper and less harmful energy sources”
Can you provide details of the various options?
Elon Musk is working on fuel cells that will store any excess energy produced at time when it is abundant from solar, wind etc. He is alwo working vehicle that don’t use fossil fuels. Talk to him.
Leslie
You appear to want to not face facts http://davidstockmanscontracorner.com/tesla-bonfire-of-the-money-printers-vanities/
I think I’m the one with the open mind.
Leslie
That’s sorta like saying, “Personally, I hope I suffer with cancer for as long as possible” — which does seem to be what most people do at the end of their life!
Each moment we spend in overshoot is going to make the transition that much more difficult. I would rather we came to our senses, and began ramping petroleum down as quickly as we can.
In either the “Wile E. Coyote” scenario (a.k.a. “Strapless Evening Gown” scenario — no visible means of support), or the “cold turkey” scenario (as envisioned by Fast Eddy, et. al.), it seems there will be maximal suffering.
I think only the self-disciplined slow-crash scenario holds much hope for the least harm to the most organisms, largely because it would show a consciousness shift in the Earth’s dominant invasive species.
Buddhists say, “Pain is. Suffering is optional.” Only through a consciousness shift will suffering be held at bay.
In a slow-crash scenario, normal attrition could almost do the job. We baby-boomers are going to have to willingly, joyfully give up a decade or so of low-quality end-life, hooked up to machines or locked-down in nursing homes. Is that so bad a thing?
I know this is a big ask. And it isn’t going to happen for everyone. But we, here, could give it a chance, and possibly spread the meme further.
Except it’s mostly true.
Fact is, most of us don’t believe in any prospective transition phase anyway, because either we A.) don’t believe in peak oil in the first place, or B.) believe the transition will be painless regardless, because “technology,” or C.) are simply an average world citizen, where the average vicissitudes of daily life are more than enough to worry about, and don’t really consider anything deeper than that, or D.) have studied the current predicament extensively and decided that it’s simply intractable, and decided that the best path forward is best summed up as “every man/woman/family for themselves, let’s use it all why it’s still available.”
I honestly don’t think there’s any “slow crash” options left at this late date, and I think that the most “rational” option still available – and the one I believe our elites have already considered and selected as well – is option D above.
Of course the “suffering” will all still be individual, just as it always is, but I’m always amazed that people think this will be in any way different from their own inevitable death anyway. When will the world end from yours and my perspective? When we die, of course. Same as it ever was.
Agree — we have already lived through the slow collapse phase — the first real shoe dropped when the US peaked in the 70’s…
We really got underway when oil started to climb over 35 bucks in 2001 or so…
And the acute phase began when oil hit $147 triggering the financial crisis…
And based on the response to this — absolutely monumental levels of money printing — 0 and in many instances negative interest rates —- ramping of stock markets — combined with the Orwellian levels of lies coming out of the Ministries of Truth (‘when it is very bad – you have to lie’ — well this must be really really really bad based on the lies) …. we are definitely in the dying days of the fossil fuel age…
The candle is flickering… the hurricane is building…
Jan – I quite like being able to use a washing machine to clean my clothes… I like having a fridge to keep food from rotting — a stove to cook food on demand — I like fresh coffee — I find shovels very useful — and it’s nice to be able to buy lumber to make my raised beds — I also value my truck that allows me to go to Wally’s World …. I like being able to go to a dentist and a doctor … I am not keen to be cutting down trees and splitting the wood with an axe…
In short — BAU is for the most part awesome.
There are reasons why farmers embraced BAU — farming without BAU is backbreaking work involving very long hours.
Now BAU is of course unsustainable — but I don’t really give a damn — because we are way beyond the point of no return on this…
We are in the slow crash phase — have been for 15 years or so.
But at some point this will stop being slow motion — the financial system will snap — it absolutely has to — because we either grow — or we collapse…. that is an immutable law.
So unless you think money printing is a perpetual motion machine — then you have to accept that the ban-daids will eventually fail and the beast will bleed out.
We are getting closer — deflation is real — corporations are failing — growth is falling off… in spite of the central banks throwing everything at this.
When this goes most people are going to die. Possibly everyone. Those that survive will live bleak existences.
Your points are valid if a soft landing were possible — where BAU slowly degrades in a manner similar to the Roman Empire.
But I cannot see how that is possible.
Our world is a completely different animal — it is extremely complex — it is globalized — and it is 100% based on a single resource – cheaply extractable oil.
And as I think we all agree — we are out of the cheap stuff.
And we are hanging on at the cliff’s edge by our fingernails….
I think I am with Harry on this one. Being in overshoot is better than being dead. There are not too many of us are out on our own islands. Not all of us are up to trying to beat the odds.
Unless you have children whom you want to have some of what’s left.
It’s simple calculus. The area under the curve is the same, whether you consume it all in one big spike, or spread it out over the future.
I do have children, but no grandchildren–none of my children are married. I am not sure I could do anything about spreading out what is left for very long.
Unless my children are truly interested in working on taking care of themselves, and learning all of the details that go into that endeavor, there is not a whole lot I can do. Even if they did work in this direction, I don’t see any guarantee.
I did not mean to make it personal, Gail. I should have said “unless one has children.”
I, myself, have none. But I interact with children and young adults on a daily basis, and I’d sorta like to leave something behind for them, instead of use it all up.
In my view, once the system breaks, the oil, coal, and natural gas, nuclear, and electric grid are gone. There isn’t any more or less left, based on what we use now, or how many wind turbines or solar panels we add. It just goes from what the number was one day to zero, not too much later because employees can’t be paid, or spare parts aren’t available, or because of some other problem.
About the only area where what you do makes a difference is on how you treat the soil and the resources immediately around you–wildlife, for example. If you subject the soil to erosion, or treat it in such a way that there are added salt deposits, that is a problem. Killing off wildlife (including fish) could be a problem as well. Polluting the water with metals and other harmful substances is a problem as well. These are the kinds of resources that our children and grandchildren will have.
I don’t even think that climate change is much affect by what we do. The biggest thing we could do for climate change is not have children (or grandchildren). In fact, that would tend to help energy issues a bit as well. Adding wind and solar PV to the grid is generally counterproductive. It ramps up coal use now (and thus pollution), with too little benefit before the grid crashes to even pay for the increase in coal use.
Also, adding debt tends to raise coal, and oil, and gas prices and thus raise output, and keeps the system going longer. If you want to put off collapse, charge your credit cards to the max, or go take out huge student loans. (Actually, I don’t, but that is the theory.)
” I don’t even think that climate change is much affect by what we do. The biggest thing we could do for climate change is not have children (or grandchildren).
I think your wrong about climate, the warming climate will change everything.
We have been pouring mega tons of C02 into the atmosphere by burning fossil fuels, the planet is warmer as is the ocean which is also becoming more acidic & lower in O2 because of US.
We can and are changing the climate to one hostile to our existence.
This heating up of our planet seems to have destabilized methane in the arctic & ocean shelfs. Methane is a greenhouse gas 24 to 200X as potent a greenhouse gas as C02.
IF this release of methane has gone exponential, then we and all we cherish & love will DIE.
This planet will continue to heat up until all of that methane has been exhausted but by then this planet will be a dead, hot wasteland filled with our ruins & the billions of bones of the living things that once existed here.
There might have been a slim chance to save our planet IF we immediately stopped all burning of fossil fuels, but we won’t will we.
The planet will continue to heat up until all of us & most life on this planet is dead.
By burning hundreds of millions of years worth of ancient sunlight in less than 200 years, we have changed the climate & we will not survive this change.
Its too late for not having children or grandchildren to make any difference now, no “leader” will cut fossil fuels enough to make a difference because our existence is too dependent upon these resources, no matter what we do now, collapse is certain, the death of this planet caused by our burning of fossil fuels is almost as certain.
I didn’t say that warming climate wouldn’t change the future–just that what we do is not going to make much difference because we are so close to the crash. Also, there really isn’t a lot of way to cut back without causing the economy to collapse. In fact, it is collapsing anyhow.
I think this statement is nonsense-“The planet will continue to heat up until all of us & most life on this planet is dead.” The earth has handled other problems that are equally bad or worse in the past. Even as the sun has heated up, it has not overheated, relative to what life could support. It has gone through countless changes in climate. It will go through many more.
The area under the curve is not the same — because there is no curve.
When the financial system fails the energy resource graph stops – it doesnt gently slope downwards … it simply stops.
The resources will still be there — but it is a bit difficult to extract oil or iron or copper when you do not have the high tech machinery to do it.
Therefore we might as well gorge at the buffet — while there still is a buffet.
a few words: I believe there is no going back nor plan B that could save our way of life, but I am reluctant to believe that this is the end of course there is hope involved but is in the edge of things when we create knowledge. If we were facing a diferent threat with the same outcome, (increasing catastrophic volcanic activity for instance). we would stop wasting resources and face that problem at hand even if we were not able to fully counter it…
I recall this premise: “if we were able to know the date when we are supposed to die caused by the combination of factors out of our hands and those decision we take using our free will, would that mean that by unconciusly accepting that alledged day we are causing our own death”.
Death is unavoidable however if I had the option to take decisions that would bring the best of me while living before reaching that day I would choose to take those decisions, maybe something greater tha myself could come out of that additional time.
Civilization is not facing death yet, we still have our sun (energy) we still have our planet (resources) we put ourselves on this peril we can get out of it, but we have to pay for our way of life and the decision of those who preceded us, moreover untill we are able to harness more eneregy and extend our finite world gifts wisely managed we should recognize our mistakes and use that chance we have using our free will.
There are clearly good things that can come out of what we do. We can bring joy to others. We can help protect the natural resources.
Maybe. Maybe not. I used to look forward to the end of the oil age, but that was before I realized that my income and my family’s well-being depends on oil to a large degree. And I’ve been working on decoupling both from oil for more than a decade. Even if I had everything on my check-list complete (off-grid home, agrarian lifestyle, income stream twice-removed from oil/gas production) I wouldn’t wish for a sudden end to the oil age. The wake up call for me was the affect that the last year’s falling oil prices have had on our local economy, which is heavily weighted towards oil and gas manufacturing. Over two months, manufacturing companies stopped hiring. A month later, the lay-offs began. Another month later and the local real estate market failed to wake from its winter slumber. Recently, the construction industry has slowed as well, as clients cancel work. The economic malaise is slowly spreading to areas further from oil and gas. My suspicion is that it will spread farther than most of us would suspect.
The truth is that few of us are ready for the end of the oil age. Even those of us that feel prepared could be in for a surprise.
But on the very long-term, 50+ years, I’d agree that it may be good news.
Are you from Alberta? If so I can understand you consternation. We have no control over what the Saudis do so we had better start to move in another direction. Too bad the Canadain Prime Minister has put our eggs in the oil basket because alternatives are the way to go. Think of it as a stimulus to move in other directions.
Leslie
Correct. East-central Alberta. And I agree that another direction is required. I’d just prefer that it take place over a couple of decades. The changes that have taken place in our town over the last eight months happened far too quickly for any kind of cushioning effect.
I agree that the present oil situation has happened all too fast. The Saudis have taken it upon themselves to dump their oil on the market and we have no control over that. It is a wakeup call and things will definitely be tough for the transition. It will take decades to get off oil completely.
Leslie
Don’t be so pessimistic. We’ll be off oil in months or perhaps a year or two.
When the global economy collapses the oil will stop flowing pretty much over night — because without a fully functioning BAU fossil fuel extraction cannot happen.
The Green Groupies can rejoice — clean air has never been so near — only problem is that without oil we don’t eat… we don’t have jobs … we don’t have electricity….
It will be what is known as a Pyrrhic victory.
We don’t have jobs right now. Governments are more concerned about maintaining the infrastructure than energy independence. As I said earlier this isn’t going to happen overnight.
Leslie
You are going to need a lot of luck with alternatives. For one thing, they depend on fossil fuels. For another, they are expensive and don’t directly replace oil.
Being among their ranks, I propose a short version of OFW for Dummies:
BAU depends on ever increasing debt (aka money supply) to keep its Ponzi scheme going. Nearly all our lives depend on this Ponzi scheme for their existence. If the Ponzi scheme stops we perish. Unfortunately, the Ponzi scheme requires the continued and escalating destruction of the biosphere–by which I mean soil, water, forests, species, etc. Getting off the BAU grid tends toward flawed assumptions of grid independence. But the more people get off the BAU grid, the sooner that grid crumbles (through lack of demand perhaps), and the sooner most of us will fall. Statistically speaking, no one is prepared for when BAU stops rolling.
Maybe it’s dummy thinking to believe there’s a way out of this paper bag, but I remain uncertain of that.
There is always a way out of this mess. It would be better to initate it ourselves rather than have it thrust upon us.
Leslie
Nature has a way of fixing this mess. I am not sure we have much of a choice on timing–it seems to be very close at hand. I don’t see how our initiating it makes the situation any better. The “solution” seems to be a whole lot less people–maybe none at all. This is not a very appealing solution.
I probably should be writing some simpler posts.
It is awfully appealing to believe that all we have to do is “walk away from fossil fuels” or “adopt renewables” to save ourselves. Alternatively, all we need to do is conserve oil–buy a Prius or electric car.
We can’t tell ourselves stories that don’t have happy endings. So it is convenient to make up stories that are appealing, but are basically nonsense. We have political parties that are devoted to the idea of figuring out paths to “happy endings” to sell as possibilities to citizens.
My favourite party is the Green Party.
Their main platform the reduction of carbon emissions so as to stop climate change.
I hear them on radio programmes all the time pounding this drum — but they never explain how we can reduce emissions without collapsing the global economy (which would mean on Prius cars and iphones for them…)
Does anyone know their plan?
Do they believe we need to burn up all the coal on the planet in order to generate the electricity that would be used in manufacturing billions of solar panels and batteries?
Where do the raw materials for this project come from?
I’d like for once a radio presenter to ask these questions…. but of course they won’t — because the sheeple need a happy story….
If you take their story away from them by pointing out the lack of logic…. they can get quite upset…
I was having this discussion with a Green family member a couple of years ago and I asked them exactly these questions…. the person got quite upset saying I think I know everything and that I am so negative… and went off in a huff…
People do not want the truth. They really don’t…..
So, they figger’d you out pretty quickly, then, eh? 🙂
Like I said… most people tend to react badly when irrefutable evidence is presented demonstrating that they are wrong…
I normally do not confront people on such issues because there is no point — however on this forum — where truth is what I am after —- I don’t care if I ruffle feathers….
In fact I purposely try to ruffle feathers hoping that this will drive the posters of endless drivel off to Chris Martenson (I wonder if Pete EV is over there…. seems he must of tired of having his Tesla delusion shattered …. or perhaps he is spending his days stoned on Xanax as he deals with his burst koombaya world…)
(Perhaps I should ask Chris for a fee for every new customer I send his way!)
The problem with digging heels in when faced with evidence that disproves one’s position — is that one fails to learn…
It is kinda like a donkey banging his head against the wall even after you tell him it’s just a quick spin to freedom….
I like to think that when I am presented with solid facts that contradict my positions — I do the 180….
B9 will attest to that….
And I have readily admitted to making a number of serious mistakes with regards to the present situation.. including believing hydro power would be available post collapse… at one point I believed that solar power was an alternative to fossil fuels… the list goes on and on….
I primarily have Gail’s outstanding articles for correcting my misunderstanding of the crisis.
But as I see it… very few people are hear in search of the truth….
They are more like the family member who when told the truth have a tantrum …. or simply ignore it and continue to pound the koombaya drum.
Fortunately there are enough true thinkers here that the white noise of endless koombaya is tolerable.
I will have to admit I have a problem with the Green party for the same reason.
I saw a good cartoon today. A father is reading a book to his son in bed. The caption says, “But the third little pig used renewable energy.”
Best to indoctrinate at a young age!
We all eat for a living.
To the extent you can make your living feeding people, you’ll have a job as long as there’s people, particularly if you can feed people with the lowest possible carbon footprint.
And if the population crashes to the point that food is plentiful for the survivors, no worries, right? 🙂
Food production and supporting food production is where I am headed. But it’s a tough, or maybe that should be ‘risky’, industry to break into. A steep learning curve, for sure. If I hadn’t bought land nearly a decade ago and started messing around while I had a steady income, getting started in agriculture would be a dicey proposition.
And if the population crashes to the point that food is plentiful for the survivors, no worries, right?
I’ve always wondered about that proposition. Imagine yourself out in the woods with all you needed to eat (magically!) and basic shelter, but with NOTHING else and only a few companion humans to keep you company, each with their own dramas. Now imagine no modern hygiene conveniences or medicines. NONE! No soaps, no moisturizers, no toothbrushes, no toothpaste, no razors, no antibiotics, no creams, salves, or medications of any kind. No fresh water other than what you could suss out on your own. No band aids for every little scrape and cut. No toilet paper to wipe our fat, white, butts. No more fabrics to replace those we have once they run out.
And those are just the most obvious things we take for granted every day!
Exactly.
I’ve suggested that people try going a weekend without electricity or a motorized vehicle… just to get a wee taste of what is coming…
Want a bigger taste — try that in winter….
Then remember — when you turn the power back on — in the near future when you flip the mains…. you’ll get a ‘click’ and nothing more.
So there you are in the dark — the only food you have is what is in the cupboard — and the looters are coming — and 911 is just another 3 digit number of no use
Rather daunting isn’t it?
It sounds like you’ve never been a Boy Scout, or studied any survival training.
A lot of people would be comfortable out there in the woods. A lot of people do that sort of thing for recreation, even!
Besides, I reject the notion of many on this list that all of a sudden, nothing will be available. We make our own soap. A discardable, recyclable stick is a toothbrush. I know dozens of local native medicinal plants, including potent antibiotics. We make our own creams and salves.
This is only a big deal to those who cannot survive it.
Can you tell Cascara from Symphoricarpos? Better figure it out, because one makes you crap and the other makes you vomit. (If you need to do one of those, you generally don’t want to do the other.)
Get off your duff and learn this stuff! Or throw up your hands in self-fullfilling prophesy and cry, “We’re all gonna die!” That is arguably true for the subset of humanity who would rather whine than do something.
99.9% of the people in the western world would launch into a panic if the electricity went off … and almost none would have the slightest clue how to survive in the wilderness.
I know a cop who regularly goes off into the bush in Canada with next to nothing over a few days as a challenge…
The biggest problem he encounters when heading into the bush? Mosquitoes and black flies. He brings repellant… been there done that and I understand where he is coming from
Of course he doesn’t go into the bush overnight in the winter… that is sure death.
I would rather be dead than rooting around in the bush being bitten to pieces by insects… scrounging around for berries — and freezing my ass off in cold weather…
Comparing this to boy scout camp is absurd.
No food won’t be plentiful for the survivors because the means of producing that food will have been destroyed in the chaos as people fight to find anything to eat, including your seed corn & domestic animals.
IF there are any survivors that can survive the resource wars, diseases, food riots, water riots, deadly governments who will be killing their own people to remain in power & IF global warming doesn’t kill us all, what’s left will be what ever the people couldn’t eat or catch to eat during the collapse.
Party now, there might not be a “tomorrow”.
Sorry, I just can’t live like that. Hope it works for you.
Albert Einstein said, “You can’t solve a problem with the same kind of thinking that created it in the first place.” I choose to be as little a part of “the problem” as I can. “Party now” seems to be the entire reason we’re in this mess, no?
The future has always been an illusion. A meteorite could drill you through the head the next instant. So do the best you can in the instant that is now. Lather, rinse, repeat.
“Party now” can have many interpretations & it doesn’t necessarily mean go wild with spending, getting drunk, etc, party now can also mean don’t put off until tomorrow what you could be enjoying today.
Take that drive or a bus to a park, beach, take a bike ride, if your able, inside the park to better enjoy it’s features.
We are running out of time to “party” live it up, enjoy life, smell the roses, try to forget for a moment what lies ahead for many of us, perhaps.
Can we really KNOW what our future holds until it has arrived?
I think it is possible — preferable, even — to find enjoyment in everyday activities.
One can find enjoyment in planning and building an electric fence, for example, that will operate off a small solar panel for many years to come, no matter what the world does.
If the world goes to hell and you survive, then you’ll have a functional pasture. If business as usual survives, then you’ll have a functional pasture. I prefer either of those to a walk in a park or a week in Bermuda.
Before enlightenment, chop wood, carry water. After enlightenment, chop wood, carry water.
As long as the battery holds out, the fence will work 24/7. Once the battery fails, you will have a fence that works while the sun shines. It seems like that would present a problem.
Electric fences are like laws. You aren’t guaranteed a shock if you break the law, but the penalty is severe enough to keep you from breaking the law.
I’ve had a fence down for days, and the animals dutifully stayed inside.
A fence that only worked when the sun was shining would be a reasonable fence.
Once the fence is down for two months, and new animals are born, I expect memory of what the fence used to do would face.
That’s when you get out the wedges and start splitting rails.
Kids and bucks don’t respect electric fences. Does will sometimes stay within the line even weeks after the fence wires have been taken down!
Another good technique are “fedges,” or fences made out of hedges. Many plants that bear edible fruit make good fedges, although I have yet to plant any.
This is utter hypocrisy.
We all use the internet — we all use the roads — we all buy stuff in shops…
It doesn’t matter if one blows through 10k a year or 150k — you can drive a jalopy or a Ferrari – it doesn’t make much difference..
Unless someone is living in a shack in a remote place completely disconnected from BAU then you are partying big time. You are part of the drunken energy binge
I suggest your state-of-mind would be much better if you would battle your proclivity for black-and-white thinking.
There are many shades of grey in the Universe (not to mention colour!), and you are missing out on myriad possibilities by only seeing black and white.
What you imagine, you can strive to achieve. If you cannot imagine it, of course you can never have it.
Jan Steinman
A thousand years ago, a Japanese woman named Izumi Shikibu wrote this poem:
Although the wind
blows terribly here,
moonlight
also leaks between the roof planks
of this ruined house.
Don Stewart
Reminds me of Leonard Cohen:
Although there is much calling us to despair, we live in exquisitely interesting times!
Or, as Rumi said, “Sell your cleverness and buy bewilderment.”
Or, as Bo Diddley said, “It ain’t what you don’t know; it’s what you know that just ain’t so.”
Rather than black and white I prefer 1+1=2…. it does not = 4 or 5 or 2.7… it =2.
That is how straight forward this situation is.
The global economy needs cheap oil to continue — we are out of that — therefore it cannot continue… it cannot stumble along or gently wind down… it will stop on a dime at some point…
As Gail has pointed out the financial system is what goes — and when that goes everything goes.
Food production stops — oil production stops — the world basically stops.
From what I gather you disagree — based on nothing more than wishful thinking…
The other big difference is that you see this as an adventure — something to look forward to — like an outing with the boy scouts
I find that just a little bit disturbing — you can’t wait for billions to starve, suffer and die?
Your commentary smacks a little of a messianic vision — where the evils of the world get wiped out and we start again — and this time around we will somehow change our nature — we will live sustainably…
We have never lived sustainably … we have always increased our population when there was abundance… and that has always lead to war and violence.
That will not change. If anyone makes it through this the same violence will manifest itself.
We are by far the most violent species the planet has ever hosted…. that is not going to change.
An Apocalypse is coming. And some people just can’t wait.
I’d give just about anything to be a fly on the wall post collapse to have a look at those for whom collapse can’t come soon enough.
You’re making stuff up about me. Please stop.
You can make up whatever you want about the future of the world, but please do not put words in my mouth. I’ve been working on this for over twenty years. It is not “wishful thinking.”
I rather fancy your doomer outlook to be wishful thinking on your part. Which is the greater evil, wishing for a reasonable outcome for some, or wishing that all perish in agony?
Wishes and words have power. Use your power carefully.
Now who is making thing up?
I have stated endlessly that I am infatuated with BAU — I am having a love affair with BAU (don’t tell my wife!) — I love the fact that this morning I turned on the heat as it is a frosty morning — that I will jump in my truck and go down to the shop to sort out a wet back and choose a hot water tank — I think I will also have a second cup of coffee made from imported beans…
No – I absolutely do not want the Apocalypse that is coming.
You on the other hand can’t wait for the adventure. As you state you have dedicated (wasted?) 2 decades of your life to ‘the adventure’ — an adventure that is guaranteed to be a nightmare.
And because you have basically spent this long preparing I can see how you would disagree with anyone who throws a wrench in the works suggesting that the post collapse world you have been preparing for is not going to be quite what you expected. When the Emperor is revealed to have no clothes it is a shock…
I on the other hand am enjoying the last years of what is sure to be a premature death.
But only after I, for a short period of time, went down the doomsday road believing that if I had a remote permaculture operation in place I could live in a Koombaya world of organic vegetables and the joy of a long day in the field.
I soon realized who I wrong I was because…
– such a life is brutally hard — even if one were 25 years old
– no medical care – no electricity – just brutal endless drudgery
– the constant threat of violence
– a failed crop and starvation
And I also realized that when 7 people have no food — and they will have no food — the first place they’d come looking would be the small organic farms. They will kill and eat everything that moves – farm animals – wild animals – pets — and probably other people. They will destroy the forests for fuel.
The of course I stumbled upon the fact that spent nuclear fuel ponds are an absolute nightmare – each pond has the potential to extinct life on the planet — and there are thousands of ponds — and I see no way to manage them.
And I realized — these trips to Wally’s World are pointless. The odds of surviving this are slim and probably none.
I still go to Wally’s but more because it makes me feel as if I am doing something — but deep down I recognize how the futility of it — even if I do make it through I am certain to wish I did not… I have no desire to suffer like a medieval peasant…
I prefer the party to continue — because what comes next is not doomsday… not collapse… what comes next is an Apocalypse (soon).
But I do like to grow my own food and I do enjoy the rural life…. so here we are….
There is at least a chance that folks working hard at farming will be successful. Lets give them the benefit of the doubt.
I can agree with that — as I am pursuing that option as well…. but the odds are massively stacked against a positive outcome
Small towns are your best security. There will not be anymore syrupy “corrections” – the hangman’s noose following the lash.
All presuming the mob is contained within the metropolii.
For most people — the hordes are less than a tank of petrol away…
it is rather amusing that the organic farmers speak of what kind of animals are most appropriate for the post collapse world.
As you point out — and I have mentioned in the past — the first thing that hungry people are going to eat will be domesticated animals — cows, pigs, chickens…. dogs, cats…. of course when famines hit in the past people also frequently ate people…
You make some good points.
Most people are rather sanguine about what the end of growth and the end of fossil fuels mean…
The seem to forget what even a minor recession looks like — they don’t seem to make the connection — not sure why.
They will get it pretty damn fast when they experience what you have experienced only a whole lot worse…
When things start to unravel they tend to do so quickly — and unless they are stopped with policy… they snowball.
That is the reason Keynes’ policies have been so fashionable — I believe this is because there were and are necessary.
Governments must step in when the economy falters — particularly in a complex globalized economy — because if they allow market forces to play out — and we risk not recovering from the prescribed purge…
If a key player such as a large bank — were allowed to fail — we are at risk of the house of cards falling.
Unfortunately this is the system we have — and we have no choice but to kick the can with Keynesian policies…
Of course such policies eventually push on a string rather than kick a can …. as we are about to find out.
Jan said: (pronounced “Yon” right?)
“Before enlightenment, chop wood, carry water. After enlightenment, chop wood, carry water.”
The Tao of Canada:
In summer, chop wood and carry water.
In winter, chop water and carry wood.
Love it!
But we’re in the “tropics of Canada,” where Canadians tired of winter go to die. In winter, chop your hydro bill by burning your furniture, divert water away from your basement. In summer, chop down wood around your house to keep it from burning down, and there ain’t no water. 🙁
LOL!
Depends on whether you want the current system with banks and electricity to keep on going. It will be somewhat tough going without things like paying jobs and bank accounts.
There are a lot of people who are doing it right now. The current system is full of pitfalls. The Banks are sticking it to us and so are the governments. The electrical system is archaic . You’d be surprised at how many people are out of the loop at this point.
Leslie
They won’t be “out of the loop” for very long. All you folks who are off the grid today should also now be aware of just how fossil fuel dependent those devices are.
True independence means you don’t need outside resources to survive. You must be able to provide for all your NEEDS in your immediate neighborhood, only non necessities should be imported.
Living off the grid using high tech devices will only last as long as our current civilization, when it falls, & it will, you will be unable to maintain that system.
Better be prepared for an alternative way of living if you want to keep on living.
Completely agree.
I looked at kitting out with ridiculously priced solar gear and rejected the idea as a pointless waste of money. All it takes is the failure of a single component of the system and say good-bye to your electricity.
I’ve decided to focus on things that have fewer moving parts — wetback fire – better insulation — a better garden set up — extra tools…
I don’t think you mentioned solar power. There some very clever people out there that are doing some fine research. One being Elon Musk, CEO of Tessla. I’m sure there are many more out there too. As long as Big Oil is in charge this research is hampered. There are even possiblities of harnessing the atom in a more sophisticated way then the present nuclear powered stations. Right now those nuclear reactors are just heating water to turn a turbine. – very primitive. Yes indeed there is a lot of potential and now we should see this as an opportunity to develop and encourage new technologies.
Leslie
Solar power in particular is dependent upon the concentrated energy contained in fossil fuels!
You can’t run a clean room on solar energy, you can’t mine the materials, refine them, manufacture the components, maintain or replace those solar cells without access to a high energy, high technology civilization & solar energy, wind turbines cannot produce the level of energy required.
Temporarily, solar panels can produce enough electricity to power a home off grid but of course many “attachment’s” are needed for those solar cells to produce useful energy, wire harness, voltage regulators, batteries, fuse boxes etc etc & solar energy cannot produce enough energy to replace itself.
The materials needed for producing solar cells is also scattered, some materials are rare & mass amounts of ore must be processed to obtain the needed material. You can’t do that with solar energy either, you need a liquid fuel with a high energy density.
Alcohol fuels have half the energy of petrol per unit, biodiesel takes as much energy to produce as can be gotten from it, that’s why we don’t hear much about “green” fuels anymore.
.
Our future will indeed be run on the suns energy, the current energy from the sun but it won’t be powered by “renewable” “green” energy like solar cells or wind turbines.
We will have to return to human & animal muscle power, water & wind powered machines, sail boats & organic farming but first we have to survive climate change & that is unlikely given the evidence we have accumulated.
Methane is now rising exponentially, C02 is over 400 ppm & rising. Scientists say that is was the massive outgassing of methane that was the primary killer of the end Permian extinction event.
We seems to have released the methane beast again.
Solar power is harnessing the energy from the sun. No fossil fuels needed. Yes, I agree, it is going to take a lot of research and innovation. Those are jobs that our economy desparately needs. Organic farming is a good move forward. Factory farms have issues. In fact our move away from fossil fuels will have a good impact on the climate. There’s going to be a lot of effort in the transitioning but we can do it.
Leslie
“WE CAN DO IT”
Sung to the tune of koombaya’ (we can do it my lord… we can do it…. we can do it my lord… we can do it….)
It is up to us.
Leslie
‘We are the world’
Someone ring Geldof …. he saved Africa [:)] — he can save the world…. he just needs the right lyrics… and we can help…
So not “Fast”. This isn’t going to happen overnight. In 1973 we experieced an oil crisis but that didn’t last so we jumped back on the band wagon. Now seeing the effects of climate change things have to be taken more seriously.
Leslie
Yes — we need to burn billions of tonnes of lignite coal so we can cover the Gobi desert in solar panels so we can stop climate change.
LOL! Unfortunately, it does take a massive amount of coal to make solar panels. In fact, our demand for solar panels, and the debt needed to buy this solar panels is part of what helps keep the price of coal up, and helps us extract more coal now. The CO2 savings we get in the future is speculative, relative to a model of what we would have spent in the future to produce the same electricity with coal or natural gas.
If we can’t keep operating the grid, we may end up with a lot of stranded solar PV. (Maybe there will be enough handy people to figure out how to use them. There won’t be inverters or backup-batteries for them, so they will provide electricity while the sun is shining that is electrical, not heat. (You could get heat energy directly, with solar thermal.) It is not clear to me how much help this will be. Anything with a motor will need an inverter to work, so they won’t be useful for refrigerators or power saws. They might power light bulbs, while the sun is out–interesting, but not too useful. Perhaps I am missing something. Perhaps they would be useful for keeping people’s cell phones charged, if there are cell towers are working to transmit the signal–a big if. They also might work with any remaining portable computers. Once their batteries are gone, I expect they would not work very well either. A cloud going over would be a “big deal”.
Where are you getting your information from?
Leslie
In Koombaya land solar panels grow on trees — no coal involved!
http://media3.s-nbcnews.com/i/newscms/2014_43/728456/141022-etree-7a_157116a93810d4c0961242acb9923a2a.jpg
It doesn’t necessarily have to be solar panels made in that way. Research is needed for sure. That would get all those physicists who driving taxis doing actual work in their field.
Leslie
Musk is so clever — he’s figured out how to turn lead into gold!
Tesla: Bonfire Of The Money Printers’ Vanities
The trouble with the money printing madness in the Eccles Building is that it generates huge deformations, misallocations and speculative excesses in the financial markets. Eventually these bubbles splatter, as they have twice this century. The resulting carnage, needless to say, is not small. Combined financial and real estate asset markdowns totaled about $7 trillion after the dotcom bust and $15 trillion during the 2008-2009 financial crisis.
Yes, the Fed has managed to reflate this cheap money bubble for the third time now, but the certainty that it will splatter once again is not the issue at hand. What gets lost in the serial bubble-making process of modern central banking is that vast real resources—labor, capital and materials—- are misallocated owing to mispricing of stock, bonds and real estate during the bubble inflation phase.
During the bust phase, of course, these excesses are written-down on financial statements and often liquidated entirely on an operational basis. But that’s just the problem. These bust-phase corrections amount to deadweight losses to the economy—-a permanent setback to growth and societal prosperity.
The Wall Street casino is now festooned with giant deadweight losses waiting to happen. But perhaps none is more egregious than Tesla—–a crony capitalist con job that has long been insolvent, and has survived only by dint of prodigious taxpayer subsidies and billions of free money from the Fed’s Wall Street casino.
Not surprisingly, the speculative mania on Wall Street has reached such absurd lengths that Telsa is being heralded and valued as the second coming of Apple and its circus barker CEO, Elon Musk, as the next Henry Ford. Indeed, so raptured were the day traders and gamblers that in the short span of 33 months between early 2012 and September 2014 they ramped up Tesla’s market cap from $2.5 billion to a peak of $35 billion.
That’s a 14X gain in virtually no time—-and its not due to the invention of a revolutionary new product like the i-Pad. Instead, we’re talking about 4,600 pounds of sheet metal, plastic, rubber and glass equipped with an electric battery power pack that has been around for decades, and which is not remotely economic without deep government subsidies.
Beyond that, the various Tesla models currently on the market carry price tags of $75k to more than $100k. So they are essentially vanity toys for the wealthy—–a form of conspicuous consumption for the “all things green” crowd.
TSLA Chart
TSLA data by YCharts
But notwithstanding all the hype on Wall Street, there was nothing remotely evident in its financials that justified Telsa’s $35 billion peak market cap. Net sales for the LTM period ended in September amounted to $2.9 billion, meaning that speculators were putting a silicon valley style multiple of 12X sales on a 100-year old industrial product; and one sold by a fly-by-night company distinguished from its auto company peers, which trade at 0.5X sales, only by marketing hype and a high cost power plant that could be made by any of two dozen global car companies if there was actually a mass market demand for it.
Needless to say, Tesla’s meager LTM sales were not accompanied by any sign of profits or positive cash flow. September’s LTM net income clocked in at negative $200 million, and operating cash flow of $150 million was dwarfed by CapEx of $700 million.
Unless you are imbibing in the hallucination-inducing Cool Aid dispensed by Goldman Sachs, which took this red-ink machine public in 2009 and has milked it via underwritings, advisories and early stage investments for billions, Tesla’s valuation was patently absurd. Yet the gamblers piled-in based on the utterly improbable assumption that oil would remain at $115 per barrel for ever; that a mass market for electric battery autos would soon develop; and that none of the powerhouse marketing and engineering companies like BMW, Toyota or even Ford would contest Tesla for market share at standard industry profit margins.
The truth is, there is massive excess capacity in the global auto industry owing to government subsidies and bailouts and to union protectionism that keep uncompetitive capacity alive; and that chronic condition is now especially pronounced due to the wildly soaring growth of unused production capacity in China. This means that the global economy is literally saturated with expert resources for auto engineering, design, assembly, machining and component supply.
Consequently, if a mass market were to develop for battery powered vehicles these incumbent industry resources would literally swarm into Tesla’s backyard. So doing, they would eventually drive margins to normal levels, sending Elon Musk’s razzmatazz up in the same cloud of smoke that has afflicted many of his vehicles.
These is no reason to think that any long-term mass market player in the auto industry could beat Toyota’s sustained performance metrics. In the most recent period, its net profits amounted to 7.5% of sales and it traded at 11X LTM net income. So even if you take as granted the far-fetched notion that in a world of $2-3 per gallon gasoline——-which is likely here for a sustained duration—-that a mass market will develop for electric battery vehicles, Telsa would still need upwards of $50 billion of sales at Toyota profit rates and valuation multiples to justify last September’s peak market cap.
So let’s see. Tesla’ CY 2014 sales totaled $3.2 billion, meaning that you would need to bet on a 16X gain in sales over the next few years and that today’s rag tag start-up manufacturing operation could achieve levels of efficiency, quality and reliability that it has taken Toyota 60 years to perfect. Yet take one hard look at Tesla’s historical financials and it is blindingly evident that there is no reason for such an assumption whatsoever.
In fact, Tesla is not a Toyota in the making; it is a Wall Street scam in plain sight. It has been a public filer for seven years now, and here are the horrific figures from its financial statements.
Since 2007 it has booked cumulative sales of just $6.1 billion, and that ain’t much in autoland; it amounts to about one week of sales by Toyota and two weeks by Ford. Its cumulative bottom line has been a net loss of $1.4 billion, and the losses are not shrinking—-having totaled nearly $300 million for 2014 alone.
More significantly, during its entire seven years as a public filer, Tesla has failed to generate any net operating cash flow (OCF) at all, and has, in fact, posted red ink of $500 million on the OCF line. During the same 7-year span ending in Q4 of 2014, its CapEx amounted to a cumulative $ 1.8 billion.
So go figure. Combining OCF and CapEx you get a balance sheet hemorrhage of nearly $2.4 billion. The real question, therefore, is not why Tesla was worth $35 billion, but why it wasn’t bankrupt long ago?
The answer is that it was and should be now. Tesla would not have even made it to its Goldman-led IPO without a $500 million bailout by Uncle Sam. That the hard-pressed taxpayers of America were called upon to underwrite a vanity toy for the wealthy—–and one peddled by a serial milker of the public teat—is surely a measure of how deep crony capitalist corruption has penetrated into the business system of America.
But even these egregious windfalls do not begin to compare with the gifts showered on Elon Musk by the money printers in the Eccles building. Tesla has stayed alive only because it has been able to raise billions of convertible debt in the Wall Street casino at yields which are the next best thing to free money. In short, it has been burning massive dollops of cash for years and replenishing itself periodically in capital markets which are rife with momo speculators flying high on cheap carry trades and the Fed’s buy-the-dip safety net.
During the spring of 2014, for instance, it raised $2.3 billion of 5- and 7-year money at interest rates ranging between 25bps and 125bps. That’s right. This company is a red ink spewing rank speculation, but the money printers have enabled it to raise cash that costs virtually nothing on an after tax basis. Call it free money for the Telsa bonfire of the vanities.
True enough, these miniscule interest rates were attached to convertible bonds—-so supposedly the “upside” justified giving a proven red ink machine free money. Yes, and the strike price on those converts implied a market cap of about $50 billion!
In truth, Tesla’s true losses are even greater than its accounting statements suggests. For instance, it has booked upwards of $500 million of revenue and profits owing to ZEV (zero emissions vehicle) credits. The latter were invented by Al Gore after he finished inventing the internet, and amount to nothing more than bottled air—-clean or not.
Also, Tesla’s affluent customers pocket about $10,000 per vehicle of Federal and state tax credits, meaning that taxpayers have fronted another $500 million or so to stimulate Tesla sales.
Finally, Tesla’s marketing machine has even converted itself into a repo man for the wealthy. That is, Tesla guarantees a large share of its customers that it will buy back their vehicles at no loss after three years.
So how does it possibly make a profit deploying this blatant free rent-a-car gimmick? Ask its accountants. In their wisdom and clairvoyance, they have undoubtedly assumed that the residual value of these vehicles will be levitated by the same juice which fuels Tesla’s stock price.
Yes, Tesla is a bonfire of the vanities. In due course, the bubble will collapse and billions will have been wasted—-much of it with taxpayer money—on things like its imaginary gigafactory in Nevada. But that’s what happens when central bankers destroy honest price discovery and turn capital markets into a gambling casino.
Oh, yes, and the whole “green” story is a crock, too. Eric Peters lays that out in chapter and verse below.
http://davidstockmanscontracorner.com/tesla-bonfire-of-the-money-printers-vanities/
Tesla is — excuse the language — a crock of shit.
Just like anything solar is a crock of shit
Subsidies are a big part of the Tesla business plan I understand. It is hard to have subsidies without a fossil fuel economy.
Governments are also subject to strong lobbying by big oil. A lot of good ideas have been squellshed in favour of Big Oil.
Leslie
Getting along without jobs? Getting along without government and police departments? Getting along without water supply? Getting along without banks? Most of them are just a bit out of the system.
Even something like this is plugged into BAU
http://nomadicalsabbatical.com/wp-content/uploads/2012/11/Manila-Slums.jpg
This what truly unplugged from BAU looks like
http://www.we-traveler.com/africa/wallpapers/africa-village.jpg
Let’s go and get some lessons on sustainable home building!
“Where are you getting your information from?
Leslie”
Leslie; the problem with PV is two fold.
One there is no sustainable way to store the energy derived from PV. None. Nada.
Two PV is inherently a DC device so our AC society is one step removed.
I however am a big fan of solar. Passive solar. A well designed passive solar house is a amazing thing. Unfortunately glass tends to be fragile.
“The Banks are sticking it to us and so are the governments.”
Im not sure I would make a distinction between the two as you do. We are sticking it to ourselves by our radical overpopulation of the planet. If I was to fault the entity you mention it would be of their endorsement of endless growth. Endless growth is a very popular idea. I would opinion that all of your posts support endless growth in one way or the other Leslie.
Well bovine2, I’m married to a radiation physicist and have been privy to a lot of discussions among other physicists. Three of our children are electricians. I am aware of solar energy being DC and there are converters for that to AC.
I agree with you that both the Banks and the Governments are sticking it to us.
I also agree with you on the population issue. Many years ago there was a book called “LImits to Growth” and they were right on the mark a long time ago. You can equate limitless growth to the “greater fool” theory.
Governments want you to believe that there is no alternative to oil because they count on political contributions from Big Oil. What they didn’t take into account was the Saudis. They are a lose cannon and we have no control over what they do. Obviously the government doesn’t want to stop the dumping of the Saudis cheap oil over our expensive oil.
It is a wake up call for us to look into other avenues of energy.
If we start now we can transition if we don’t it’s going to be even rougher.
Leslie
I would agree that endless growth is our big issue. Nature’s way is natural selection–parents having far more children than will live to maturity. We have chosen to circumvent this systems, by using supplemental energy to supplement our human energy. In fact we have adapted to it–we need to cook part of our food, and we live in parts of the world where we could not live without supplemental energy. If we try going back to true renewables, we are likely to burn down all of the trees, given our huge population today.
This IS really beautiful, and it WOULD behoove more of us to learn to do it.
http://www.we-traveler.com/africa/wallpapers/africa-village.jpg
We must not buy into the mind set that there is only one way out.
Leslie
Don’t let em get you down too far Leslie. In most cases those who claim there is absolutely no surviving the peak oil and subsequent economic collapse only feel that way because they themselves are so heavily invested in it. In their own way they are 100% correct and what will survive will be so different that for all practical purposes they are correct.
I noted a discussion about fences. While Gail is correct the solar fences will not last long in the scheme of things I would also point out that an end to cheap fossil fuels would in itself negate the very need for fences. The only reason I have fences is to keep my flock from straying into a road and getting hit by a vehicle. Other than the rams of course and I don’t use electric for them, they would ignore such a feeble attempt to keep them penned in anyway. Without a fence my flock would never venture any further afield than maybe 100 yards and would always come back to the barn in a hurry when something spooked em.
There is absolutely no denying the fact that everything we do, have or use today is dependent on fossil fuels but that doesn’t mean there aren’t other ways. If there were not other ways we would all be hunter gathers today yet. All that fossil fuels do really is increase the carrying capacity of any given area, be it 20 acres, 100, 10,000 or the entire planet.
In the end I think many of the complete doomers may be surprised at just how much they can get done or do without the constant distractions that fossil fuels bring with them.
As for food there is so much edible matter that literally goes to waste out there. Again while they are very knowledgeable in fossil fuels and all it effects and touches the total doomers know little about subsistence farming and literally nothing about small scale farming as it is truly almost a lost art these days. In fact every aspect of survival after peak oil is almost a lost art from food production to metallurgy and all points in between.
I would invite them to not only visit a small farm a time or two but take two weeks off and spend that time with pre-oil re-enactment group who are doing their thing.
The answer to our survival is not in the future. It is in the past.
Being the granddaughter from a farming family, I really appreciated that. I remember it well how they managed and this can indeed sustain us. But I also believe that there are still many technologies to be discovered and developed. Hopefully, we will take the lessons learned from the fossil fuel era and do things in less damaging manner to our planet.
Leslie
YES!
The oft-repeated challenge to go without electricity for a week happens nearly every winter here. We aren’t even terribly inconvenienced. It takes some extra work, and should the outage go longer, would take even more work, and should the outage become permanent, would take even more work.
But calamity? Sorry, no. We just crank up the wood stove and carry water from the stream.
The end of civilization is a process, not an event. Of course, there are no guarantees, but stay one step ahead on the process, and the odds will be on your side.
Hooray! That’s what I’ve been saying for twenty years.
You won’t have to worry about fences because when 7 billion people have no food — and they WILL have NO food — one of the first things they will kill and eat will be the easy targets — cows, sheep, horses, chickens, dogs, cats…
Try cutting off from BAU for a few days — no shops — no electricity — no washing machine — no lights — no fridge — no internet … no tv/radio …. boil your water on the wood stove… cook on that stove….wash clothes by hand…
Tell us how you like living in 1880 — perhaps we could do a reality TV show on this — I have not had a TV for years but I’d definitely dial in to this one to watch how a doomsday prepper reacted to the reality of life without BAU — that would be nothing short of precious!
Of course nobody takes me up on this because they cannot actually believe that one day they will wake up and BAU will be completely over…. they calm themselves with the belief that collapse will be gentle… like a feather floating to the ground…
Like the Nearings they will believe they can stay partially plugged in — pick and choose as they please..
So why try this experiment…. limited BAU will always be available… (and they conveniently ignore the food and security issues…)
Or perhaps nobody tries this because they realize that this will pierce they cognitive dissonance shield and drive home the message that life without BAU is bleak — it is absolutely horrible…
It will be especially horrible for those who are into their 60’s… this will be a young man’s game…
Ya know I ran the numbers on the so called golden horde that some claim will come for my livestock and food stores. I used the St. Louis Metro area and by the time I removed the invalids, very old, very young, statistical obese and those with other handicaps and spread the remaining population out into the countryside of Eastern Missouri I think I came up with a looting horde density of 1 person per every 640 square acres of land. That was also not removing Women from the statistics but including them as equal opportunity looters and assuming there are no sheep who would rather lay down and die than attack another human or steal. Think those types don’t exist? Well I think many a mass murdering tyrant has proven they do.
The cities will prey on themselves long before they make it out into the countryside and most of them can’t walk a mile to kill a squirrel as it is anyway. Not even an organized army can live off the land looting and pillaging while fighting what makes anyone think a bunch of starving city dwellers can?
Thanks for that!
The “Doombaya” types are so fearful. I can’t live like that.
Consider also that an expanding sphere requires ever greater numbers to achieve the same density (“square law”). If you are 10 kilometres away from a population centre, you’re going to have 1/4 the number of looters that you would have if you were only 5 km away.
The “Doombaya” sorts don’t seem to have much in the way of practical skills. They claim to be farmers, then it turns out they’ve been paying local indigenous types to farm for them — folks who will quietly disappear into the bush in any crisis.
I call for a truce. Don’t tell me I can’t do what I’m doing, and I’ll quit saying how silly it is to assume there is only One True Version of the future.
Thanks!