My Daughter

My Daughter
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Saturday, February 26, 2005

Resource Wars

Made in China used to be a joke. Not anymore. China’s share of our trade deficit was $162 billion dollars in 2004. Wal-Mart and Target are their main American outlet stores. The products are American factory quality (we moved them over there, remember?) and very affordable. China not only sells us our toasters and undies, but it also lends us the money to buy those Wal-Mart goodies on credit, refinance our homes, and fund our government debt. They even buy a portion of our home mortgages via Fannie Mae. Gulp.

China has joined the United States and Japan in developing strategic petroleum reserves, and is aggressively securing energy and mineral resources world-wide, particularly in places that cause much consternation in Washington: Iran, Venezuela, and many conflict ridden states of Africa, not to mention, our own backyard of Canada. In 2004, China's oil consumption increased by 40 percent, to 6.5 million barrels a day. U.S. domestic demand is 21 million barrels a day. U.S. demand is increasing by about 500,000 barrels per day per year. China's is increasing by about 1.5 million barrels per day per year.

In the not-too-distant past, China was viewed as an ideological opponent, not an economic competitor. Today, that is a much different story and challenge. With continued population growth and economic expansion in the developing countries like China and India, it doesn’t take a rocket scientist to realize that the demand for resources will soon exceed supply. It’s quite apparent that many of the poorer countries will get the short end of the oil supply and other commodities. It’s also goes without saying that the United States or China will not get all the oil they require either.

With only a small fraction of its poverty ridden 1.3 billion population just now getting their first car and refrigerator, it is highly unlikely that the rest are not going to develop a taste for the American way of life also. In 2001, the Chinese purchased 2.2 million cars. By 2004, its internal automobile market exceeded 5 million. In the next 15 years, China's car market is expected to surpass 20 million, exceeding that of the United States. Thus, we are left with the beginning of a scramble to secure a supply of energy to meet this demand. This can only lead to confrontation and resource wars. For further reading on the ominous portents of awakening a sleeping giant, try Bill Ridley’s article, China and the Final War for Resources .

Friday, February 25, 2005

Steering the Energy Economy

Global society is in the grip of a system of economic and political power that views human suffering and impending environmental collapse as incidental to profits and costs. In the abstract from the book, Winning the Oil End Game, we find the following quote, “The route we suggest for the transition beyond oil will expand customer choice and wealth, and will be led by business for profit.” Big business supports a strategy that integrates techno-fixes to displace oil by using oil twice as efficiently, substituting biofuels, saved natural gas, and hydrogen.

Sounds pretty good on the surface until you consider it addresses the symptoms rather than the disease—all in an effort to perpetuate the American love affair with the automobile and the truck. It does not address conservation, necessary lifestyle changes, mass transit, population reduction or many other reforms that are part and parcel to sustainability. It falsely assumes that increases in efficiency will not be abused by more use-Jevon's Paradox. It is a blueprint to maintain the status quo, profits, and to pacify the masses. It fails completely to address the underlying causes of the energy crisis. Flat earth economics that believe in infinite growth in a finite world will not lead us to a sustainable future.

Governments need to invest massively in energy conservation and renewable energy technologies and building design, by diverting tax breaks and subsidies from, in particular, the fossil fuel and nuclear energy industries. However, former Energy Secretary Spencer Abraham called yesterday for a doubling of U.S. nuclear power by 2030. In the US, construction of some 100 new coal-fired power plants is now in various stages of development. SUV’s and Hummers continue to plow the motorways at 80 mph. Suburbia continues its' sprawl. While no single energy source is ready to take the place of fossil fuels, their diminishing availability may be offset by a regimen of conservation and a combination of alternative energy sources. This will not solve the problem, however. As long as population continues to grow, conservation is futile and the use of any combination of resources that permits continued population growth can only postpone the day of reckoning.

My view is that the best response to peak oil is to change the American way of life. This will certainly mean more walking and cycling, and less driving. There will be reduced sizes of meals, houses, and cars. We must learn to do with less, not more. Sustainability in the 21st century will entail finding a fine balance with nature that allows for the longest existence of mankind at a level of equity and dignity befitting our species. To help preserve our ecosystem is our duty, and responsibility, as stewards of the earth. If we don’t help steer the direction of our energy economy, our children, and the generations beyond them, will no doubt sit in judgment of our failure to read the writing on the wall, especially knowing that we chose to look the other way.

Tuesday, February 22, 2005

The Train To Nowhere

In many countries, oil has produced wealth and prosperity devoid of the effort that connects people to reality. This is the situation in many of the Persian Gulf countries where about half the population is now under the age of 15. In the next few years, these children will become reproductive adults, swelling the population with a baby boom like we experienced here in the US during the 1960’s. In spite of the recent surge in its oil income, Saudi Arabia continues to face serious long-term economic challenges, including high rates of unemployment (14% or greater), one of the world's fastest population growth rates (2.4% per year), and a very restless, young, and impatient citizenry. $100 billion dollars a year in oil revenues and they can’t make a go of it? Sounds like trouble just waiting to happen to me.

The United States is routinely criticized by the rest of the world for its’ profligate use of energy, albeit to fuel an economy upon whose success the rest of the world is also manifestly dependent. “If the US sneezes, the rest of the world catches a cold.” Alan Greenspan, in an effort to rein in some of that excessive “success” and stave off inflationary pressures, has actually fueled inflation by raising interest rates. Having interest rates so low for so long has now sparked a new rush of credit expansion with hopes of locking in those “45 year low” rates. Portents of hyperinflation, especially in the face of $50 barrel of oil once again.

Most consumers have only a limited, almost cavalier interest in energy efficiency, security of supply, and economic indicators. And they have come to expect personal convenience and unlimited commodity availability, and expect governments and business to handle those “other” issues for them. As this crisis unfolds, there will arise technological optimists who will assure us that human ingenuity will find technological solutions to our resource shortages. Technological optimists are usually not biological or physical scientists and do not harbor a grounded notion of “limits.” But politicians, business people, and a scared public tend to be eager disciples of these technological cornucopian optimists. And if all else fails, there will be the rapture, won’t there?

Right now, it seems the US economy train is running on a hope, a wish, and two fingers crossed behind the back. The curtains are drawn, the party is on, the engine has a new head of stream; all is well as we race toward a stark new reality awaiting us at the peak of the oil production curve, not the bottom. That is the irony of peak–oil.

Monday, February 21, 2005

Apathy Weds Pollyanna

Americans are now beginning to pay the price for sleeping through history classes, ignoring important information in the alternative media and neglecting to participate in their own political process. Apathy is no longer an adequate term of description for the steady erosion of the public’s involvement in the political life of the United States. I find it quite remarkable that we live in the largest non-participatory democracy in the world.

Traditional forms of party politics, political values and identities have little purchase on an evidently disenchanted public. Popular mistrust of authority is confirmed by the growing alienation of people from the system of elections where a significant proportion of the electorate believes that voting is a waste of time. And in light of this, I find it quite disturbing that it remains so—for it is not in people's nature to be long content with their condition.

But we are ignoring our influence on our destiny with our apathy, and we do so at our own peril. Over the years, we have amassed evidence pointing to a powerful “Pollyanna principle” — that people more readily perceive, remember and communicate pleasant information, as opposed to the unpleasant. Positive thinking predominates over negative thinking. In recent research, it has been further discerned that there is a tendency toward “unrealistic optimism about future life events.” Researchers who study human thinking have often observed that people overestimate the accuracy of their beliefs and judgments. So consistently does this happen that one prominent researcher has referred to this human tendency as “cognitive conceit.”

Sure, we all have things to be happy about, but there seems to be a huge amount of self-delusion and denial going on as well. We stand at the dusk of oil-based civilization, and the U.S. is preparing for the approaching night by extending its military might throughout the world and instituting a police state at home. Does no one care? Have we become so overspecialized that we no longer even address our own future? Have we all become ostriches with our heads in the sand? Are we engaged in a morbid self-aggrandizement of importance in our dominion over all things? Or is it a sullen acceptance—a kind of last call for humanity?

Never forget that the iron law of oligarchy always obtains; few people will always run everything, no matter what the institution or what the country.”
—James Madison

Saturday, February 19, 2005

Our Unreasonable and Uncertain Future

Change. The only constant is change. "Change is inevitable, except from a vending machine." We have heard this many times before. But, as a species, we are reluctant to change, even in the face of reams of empirical data showing we must. It would seem that most of mankind are just as unconscious of what they do while awake, as they are of what they do while they sleep. How do we tap into a "Think Ahead" philosophy that draws on hard-earned knowledge and experience to help anticipate what's coming and prepare for it?

Last weekend, I assisted with a viewing of “End of Suburbia” at our local library. We had a fair attendance and no one left during the presentation. Afterwards, we had a Q&A session where most people still remained. (If you haven’t seen this video yet, it is quite compelling, no matter what your world view.) A man in the back of the room stood up and asked, “Well, what do we do, then?”

I responded that we must prepare to pay a whole lot more for our energy and that the long-held beliefs about infinite growth will soon be laid aside. I opined that we should make every effort possible to get out of debt, make a concerted effort to constantly and consistently reduce our energy consumption, find a job closer to home, walk & ride a bicycle more, consume locally, and seriously consider whether our current occupation even has a future in a post-peak oil world.

The man responded, “What you are asking us to do is unreasonable!” “Most people cannot do these things you say!” My response was that this overwhelmingly demonstrates just how serious the coming crisis may be. We must start preparing now for this change in our lifestyle. Most certainly our government is not.

We have two factors driving this demand for change: Geological forces over which we have no control (peak oil production) and an exponential growth in energy consumption in countries like China and India. The average American consumes 25 barrels of oil a year. In China, the average is about 1.3 barrels per year; in India, less than one. The challenge is huge. For China and India to reach just one-quarter of the level of US oil consumption, world output would have to rise by 44 percent. To get to half the US level, world production would need to nearly double. That's impossible.

The only viable new source of fossil fuel energy lies buried in the minds of western industrialized consumers. First, we can tap the waste of energy through conservation efforts; although much of that agenda has already been undertaken during the 1980’s following the “political” oil crisis of the 1970’s. The easy fixes have been implemented; the hard choices are what remain.

Once the growing population consumes our conservation efforts, the pie will get smaller and our slice commensurately. We will have to learn to make do with less starting now, continuing into the foreseeable future. Our energy source then will come from a reduction in our standard of living, perhaps mirroring that of the third-world. What seems unreasonable now will soon become of absolute necessity. These changes will bring with them increased unemployment as millions derive their livelihood from the wanton waste and consumption of our industrial society, which is wholly dependent on cheap, readily available fossil fuels. There will be a return to manual labor, smaller de-centralized communities, and a return to the not-so-distant time when everyone was dependent upon his or his own productive skills for the necessities of life, rather than the “marketplace.”

What concerns me is how society will react to these changes. We will not go quietly into the dark night. It just won't seem reasonable.

Friday, February 18, 2005

Peak Oil and Western Civilization


I was pursuing a textbook the other day. The chapter outlines followed as such:

Prehistory to 3200 BC
· 1,000,000 to 35,000: Hominids
· 35,000 to 10,000: Paleolithic Period
· 8,000 to 6,500: Neolithic
· 3,500: Early Urban Societies

Mesopotamian Roots: 3200-465
· 3500-1100 BC: Mesopotamia
· 1100-465 BC: The Fall and Rise and Empires

Mediterranean Period from 2900 BC to AD 400
· 3500-550 BC: Mesopotamia and Egypt
·
1950 BC-AD 70: Ancient Israel
· 559-465 BC: Persia
· 2900-430 BC: Greece
· 753 BC-AD 1453: Rome

Medieval from AD 400-1500
·
500- 1000: Dark Ages
· 1000- 1350: High Middle Ages
· 1350-1500: Late Middle Ages

Early Modern from 1400 to 1789
· 1400-1550: Renaissance
· 1517-1598: Reformation
· 1600-1700: Baroque
· 1700-1789: Enlightenment

Late Modern from 1789 to 1989
· 1789-1848: Age of Revolutions
· 1848-1914: Age of Liberalism
· 1914-1945: Age of World Wars
· 1945-1989: The Cold War

The message I took away was that historians measure civilizations by the art and science that they produce. The term "Western Civilization" was, in fact, invented at the beginning of World War I in order to create the perception that Americans share a common culture with its European allies. Almost as soon as it was invented, the term began to be used in the pessimistic context of civilization decline, as in Oswald Spengler's The Decline of the West (1918). The notion of Western Civ. is also tied to the notion Christendom and ownership of Greek philosophy and its interpretation in Roman culture. For Americans in the first decades of the 20th century, Western civilization was principally the ideas of liberty and individualism, institutionalized in liberal democracy, free markets, constitutionalism, and the rule of law.

The triumph of such ideals and the lack of any powerful ideas opposed to Western civilization have caused many contemporary historian to declare the post-cold war era as the end of history. This notion was popularized by Francis Fukuyama book The End of History and the Last Man (1992). The only history paradigm that raises objections to Western Civ. today is Multiculturalism, Cultural Studies attacks of Western Civ as ethnocentric.

Academics have used the metaphor of a torch or knowledge, passed from the Greeks to the Christendom of Europe then to America. The torch of knowledge is a symbol for Reason, Rationality, the foundation of the Arts and Science of Western Civ. To extinguish the torch is to enter a dark age where religion and superstition reign supreme. Keeping this torch flame alive is a matter of passing our cultural and scientific values down from generation to generation. Whether we recognize it or not, such metaphors shape not only our arts and sciences, but our government and economy as well. With the exception of Cultural studies, or postmodern theory, the war of ideas raging beneath the surface of our social institutions is fought over the persistence of the torch or the continuation of Western Civilization.

The peak of world oil production poses (obviously) a threat to our system of government and our economy. However, the idea of "Peak Oil" also poses a deep threat to the idea of Wester Civ. Peak Oil may then threaten the intellectual underpinnings of liberal democracy, free markets, and ultimately western individualism. Western Civ may once again be viewed in the context of civilization decline, but this time the civilization is closer to home.

We can expect to idea of "Peak Oil" to be picked up by Western Civ's academic enemies. We can also expect a backlash against the forces of cultural studies as relativist and lacking moral values. Many people feel a great uneasiness when they think about Peak Oil and related topics. This uneasiness isn't simply a fear of material loss, but rumblings at the foundation of Western Civilization.

Resource wars and oil competitions have already begun to take shape. However, a parallel war of ideas takes places underneath the surface. It is this war of ideas that will ultimately shape the future of world history over the next hundred years. If the values of western individualism prevail our government and economy will be eventually replaced by some kind of post-oil capitalism and democracy. However, the uneasiness that we feel stems from the realization that this is not the only possible future. Remember, history is written by the winners.

Thursday, February 17, 2005

Dream the Impossible Dream

Social Security & the 2nd Bush Term

If you saw President Bush's state of the union address, or have watched any American news recently, you know that the President has hitched his second term wagon to the future of Social Security.

He has since spoken widely on his agenda for reforming Social Security making it very clear that this is a major priority for his administration.

Among other proposed changes, Bush wants to see up to 10% of individual accounts represented as stock market investments with some degree of individual choice. US citizens would then make decisions about where this 10% of their Social Security account was invested, from a set of allowed choices.

Fine... sounds reasonable.

In choosing Social Security as a cornerstone platform, the Bush administration is staking it's reputation and influence in a variety of other interests, on successfully negotiating for Social Security reform. It is interesting as a choice for Bush, since this topic is regarded by Washington insiders as almost taboo. Known as the "third rail" of American politics, a comparison to the electrified 3rd rail some trains use, as certain political death for candidates foolish enough to challenge the system.

Indeed, given the scope and danger of Social Security reform to politicians, it seems almost counter-intuitive to pursue such an agenda.

Which makes the obviously serious push from the White House for reform, stranger still.

It's tempting to assume it's just a lame-duck agenda from a second term President with little to lose in the coming battle. But considering the President's staff of well informed and savvy advisors, it seems an unreasonable choice to make unless there was some looming crisis.

Economists have weighed in since this agenda emerged from Washington with mixed responses, but certainly in agreement that if our economy performs well, then any problems with Social Security are many decades away.

A US President's first term of office, is mostly about earning a second term.

But second term Presidents look to how history will view their contributions.

If Social Security's fate is indeed married to the US economy, as must be obvious to the Bush team, then I conjecture that this administration believes the US economy will falter inside this time frame. Otherwise, why bother making a stand for Social Security reform today?

It is a bit of a coincidence that the timing of this reasoning is consistent with some predictions for global hydrocarbon peak.

But if you believe ASPO is correct, and oil & gas will peak within a couple years, then securing the future of Social Security would be a very prudent step to take, and would certainly reflect well in future history books.

The President who saved Social Security right before the economy crashed... priceless.

Wednesday, February 16, 2005

When the chips are down

Peak Oil theory isn't really a theory.

Almost no one denies peak oil theory, since oil is, for all practical purposes, a finite resource. And that once the world passes the halfway point in global hydrocarbon production, energy gets more expensive as supplies drop.

The only real disagreement is the timing... when is the midpoint of production?

It's like the old joke, where a man asks his wife if she would sleep with another man for a million dollars. After she says yes of course she would, he then asks if she would sleep with him for $1?

"No!" comes the passionate reply. "What do you think I am?"

To which the husband responds, "Well, we already know what you are, now we are just haggling over price."

Since it's a foregone conclusion that at some point oil supplies will begin to decline, and prices rise, the real concern becomes, "How will the communities of the world respond?"

Absent a miracle in energy emerging, the competition for the remaining oil becomes more fierce as supplies dwindle. We see this competition heating up today, as global powers compete for oil contracts.

We are left to speculate how the nations with military power will respond as things get dicey.

As the situation becomes desperate, can we seriously expect restraint from countries faced with devastating social conditions?

World wars have been fought for less...

When the chips are down, do we really expect the powerful countries of our world to "band together" and share the remaining resources evenly?

Or is it more likely that nations will use whatever advantage is theirs to secure energy supplies?

Especially for countries which have experienced little real hardship for generations, will the pampered children of rich nations accept poverty and hardship without a fight?

The reaction of the US after 911 is a case in point.

A few thousand people die in a terrorist attack; fear & panic sweep the country. Fast forward to today with 2 countries invaded, hundreds of thousands of dead. All this while poor nations lose millions of lives to starvation, poverty and war.

What happens when our hydrocarbon chickens come home to roost?

Is there even any doubt?

Monday, February 14, 2005

The last 15 minutes

Clues abound these days that oil's not well in paradise.

A daily barrage of information seems to confirm the notion that we have indeed burned through at least half of the really high quality oil endowment of our planet.

Can any of you imagine any oil supplier in the world intentionally holding back production at today's prices? It's billions of dollars...

Recent announcements of new oil finds are lackluster when compared to the giant finds of the past decades. Not even close to offsetting depletion rates in existing wells.

Mankind has never used more oil in a single day... than we did today.

Major oil companies are investing billions into more exotic recovery strategies including tar sand, deep water, & coal gasification among others. Would they really spend so much on these less profitable resources, unless they knew conventional oil was set to decline in volume soon?

Growing numbers of scientists, researchers and authors warn of of the impending train wreck as oil supplies begin to shrink.

Saudi Arabia does not allow outside conformation of their reserve volume and condition... why?

This year the summer driving season should serve as a barometer for Saudi Arabia's ability to increase production as they claim. This next July, if oil prices climb up from $50 per barrel to $60 or beyond, it's a fair bet it's because they lied.

As pointed out by Matt Simmons, when Saudi Arabia can't pump more oil... then growth is over. There simply won't be enough oil to supply the market, and prices will begin rising continuously.

Just as we have seen the last 18 to 24 months.

If this reasoning is correct, then the peak production of conventional oil may be upon us. If we have been using oil energy for 100 plus years so far, then in about 15 minutes we will silently slip over the top of the curve, and into depletion.

Andy Warhol said everybody is famous for 15 minutes.

Enjoy your fame.

Wednesday, February 09, 2005

Squanderland vs Thriftville

In the post-peak world, I see two distinct camps of thought: Those who want to consume as before, and those who wish to find stability. The first group will be the capitalist/economist type, forever-looking for new ways to exploit the environment based upon the economic mindset of supply/demand. They are always quick to adopt solutions that are brilliantly successful and perhaps understandable in the short run, but that fail or else create fatal problems in the long run, i.e., the current plethora of ills. The second group will consist of those who realized that it was the mindset of the first group who got them to post-peak, although they had little choice as to whether or not to participate, and most did not know it was a path that led down a dark one-way alley.

You can solve most problems with enough money, energy, raw materials, and time, but you cannot solve an energy crisis by using more energy, more materials, and less time. This is what the cornucopians believe. Energy is a unique commodity. It takes energy to do anything. And since you can’t create it, or destroy it, you had better make good use of it when you transform it from one form to another, as you are going to lose some of it in the process.

I see a two-fold, actually a three fold approach. We need to move toward renewables; that is a given. But if we do so without a drastic change in consumption, we will overshoot—if we haven’t already. In other words, if you are starving, eating the remaining food faster won't save you, it will hasten your demise. Non-renewable resources should continue to be used, but at a declining rate equal to the creation of renewable substitutes. And lastly, there can be no possible solutions to the world's energy problems that do not involve stabilization of the world's population.

If we can have $55 a barrel of oil on the speculation of a shortage, imagine then what the price of a barrel might be when we do have real shortages. Since we have done little to nil to prepare for the coming oil shocks, we are completely reliant on increasing our supply of oil to power all of our transport needs, our food production, our manufacturing of goods and 40% of our total energy needs.

I keep coming back to a question that appears to be tugging at more minds, and with more urgency, every day: What if the die has already been cast? Suppose for a moment that we have passed the point of no return, and that some form of collapse is now already in the cards. Nothing new, you say. But I look at this in a way few have considered: As the reality of oil depletion goes mainstream, the direct use of available oil resources for energy consumption may well take precedence over their indirect use to produce another form of energy, whether it be wind or nano-technology. And, of course, a fascist government could ration what we can have, so they have enough to wage war to get more.

Or this: The Islamic fundamentalists are becoming savvy to the notion that if you want to hit America or the West, you go after the oil, which, of course, is right in their backyard. The market today cannot sustain any loss of production or supply. Some have likened this new terrorism to a “shadow OPEC.” The control of oil doesn't rest in the hands of the OPEC or the free market, but in the hands of the guerrillas who can stop the flow—and knock the needle out of the junkie’s hands. Anybody ever seen a junkie in need of a fix?

Authors note: My title was inspired by an article by Warren Buffet, entitled, The Mercantilist’s Tale.

Peak Oil as a Social Movement

Save the whales. Save the rainforest. Integrate out schools. Ban Abortion. Stop AIDs in Africa, teen pregnancy, frivolous lawsuits. Legalize it. Ban gay marriage. We get the idea.

Like it or not, social movements or "causes" are an important part of our political landscape. And perhaps it is wise to recognize that the creation and promotion of a cause is one of the most effective ways to initiate grass-roots action.

The meme of the "cause" is pervasive as is the justification "it's for a good cause." While a cause can never exist in the abstract, there are some simple paterns which mask the fact that the problems behind the cause are usually very complex. Some have gone as far to say, "I will fight for the cause" or "die for the cause."

A cause should have a succinct and easily measurable goal. The cause should also present two and only two sides to an issue. In many cases the anti-cause is a straw man present only to motivate. The meme of an anti-cause is often very helpful in nurturing young causes. When it's tough to say what you're for, you can at least say who you're against.

What is the largest obstacle to the formation of a organized collective response to the problems of peak oil? The cause. Social movements need a cause to form around.

Given the size of this issue (PO), it might appear surprising that so few people have devoted themselves to forming social movements in response. One reason for the limited success of groups like PeakOilAction, PCI, and Community Solution is that lack of a clearly formed "Peak Oil cause."

If I donate time or money to one of these groups, how do I know that my contribution will "further the cause?" Why else are thousands of people devoting their lives to the elimination of ATM surcharges, Animal Testing, and email SPAM, but only a handful of people have taken up the peak oil cause? What do these problems have that is lacking from peak oil?

Solutions for one. Hope. It must never be suggested that all of our 5K walks, charity auctions, and scholarship grants fail to cure cancer. Cancer will be cured, and every little bit helps the cause.

The concepts of Die-Off and Crash are powerful psychological factors hindering the emergence of a peak oil cause. These are concepts any future peak oil social movements would be wise to downplay, whitewash, and then give to the anti-cause.

Other than the near-universal cry for better reserve data, and the vague notion of sustainability, there are few positive goals that peak-oilers wish to move towards. Does peak oil even need a social movement? Perhaps our post-ironic culture is too numb with cynicism to respond to anything other than fear.

Let’s give credit where credit is due. From abolition to suffrage, social movements have had their share of success, so the immediate reaction of many people is that peak oil needs a social movement. However, such successful social movements may have only resulted in changed laws. Changes in attitude and behavior take more time.

In fact, I would wager that there are many people watching this issue from the sidelines, waiting for the right cause to come along. We'll want a simple cause with some guilt-free catechism. We'll need the Yellow Lance Armstrong Bracelet of peak oil, something that says "I know" and "I'm doing my part." It’s for a good cause after all.


Monday, February 07, 2005

The Year in Review

In many ways 2004 was a watershed year, in that many milestones were reached in the unfolding saga of peak oil and gas. It will be a year known for record-high oil demand, as China and the US competed for incremental supplies. This last year has also seen real oil prices not only top $40 a barrel consistently, but also rise to $55.67 in October. This was the year surging prices forced Americans to focus on a problem that has been building for years.

Simply put, the world’s thirst for oil is perilously close to overtaking the global energy industry’s ability to satiate. And of course there is the “terror premium”—the cost of Iraqi pipeline disruptions; Venezuelan political instability; Nigerian labor strikes; etc. Heretofore, the whole concept of peak oil had been relegated to late night chat room discussions and the obscure writings of some retired geologists.

All that is changing as peak oil theory goes mainstream. The June 2004 cover of National Geographic was entitled, “The End of Cheap Oil.” The Fall 2004 Issue of Yes! Magazine was titled, Can We Live Without Oil?

A plethora of books have been written on the subject this year, including one of my own, Madmen at the Helm. A consistent scenario, of almost every writer I have read, spells out a world of far more expensive energy and an end to suburbia-type endless growth.

Once upon a time, there was an instance of long-term planning that might have made all the difference, and it was perhaps our one chance in history to find sustainability and environmental balance with regard to energy use. This took place during the Carter era, where a choice by the US to wean itself from fossil fuels was abandoned, thanks to Reaganomics and “morning in America.” As a result, economic crises and resource wars are now virtually assured for us and the future generations to come.

China and India have become global energy players, with China increasing their oil imports 43% over 2003. They are building a new coal-fired power plant every two weeks, while jetting about the globe seeking to land sweet energy deals to feed the hungry maw of its expanding economy. They are building cars, trucks, factories, hospitals, office and apartment buildings stretching skyward at a pace that has left the United States in the dust.

November’s Hurricane Ivan damaged platforms and pipelines in the Gulf of Mexico, some of which are not likely to reopen anytime soon. The Gulf is now producing only 73% of the 1.7 million barrels of oil it normally pumps each day. With less crude to distill, America’s oil refiners have failed to keep heating-oil stocks at last year’s levels.

Leading oilmen gathered late October in London for the “Oil & Money” conference, an annual expense-account jamboree fiesta often preoccupied with the industry’s woes. This year, though, the tone was cheerful. Jeroen van der Veer, head of Royal Dutch/Shell, reassured his audience that Americans are “still driving their SUVs to Wal-Mart”. Royal Dutch/Shell, of course, has had a rough time this year due to a scandal involving exaggerating their oil reserves by 20%. Lord Browne, the boss of BP, gave a sunny speech insisting that without petroleum “the world would be a dark, cold and miserable place.”

It would be easy for me to look back on 2004 and recall all the new words and butchering of the English language by George W. Bush, but I will stick with his most apropos statement.

“We need an energy policy that encourages consumption.”

Graduation Day?

"The debate continues to rage over the future of our energy supplies. When is the peak of hydrocarbon production? Can alternative energy sources replace the one's we use today? What are the consequences of depletion? Who will be the next American Idol?"

The answers are unclear, and our future uncertain. Much depends on our collective circumstance, and the opportunities available to us. But our choices count as well; how we seize the opportunities afforded us.
Sounds like the basic theory of evolution. Species, which take advantage of opportunities, prosper by these choices, and push themselves forward into the biologic future. Of course we have lost more species than have survived. Meaning most species fail evolution's test eventually, yielding to more successful varieties.

Even our world economy, systems of government, & personal relationships follow a similar pattern of development by domination. We view this as a natural, and even beneficial process, and accept its authority in almost every facet of our daily lives. Competition makes us stronger.

If this theory of forced development through competitive selection holds true for the smallest example, perhaps it also holds true for the largest ecosystem we know, our universe.

We would imagine any planet in the universe which is capable of supporting life to share certain characteristics, as well as differing wildly in many ways. For an evolving world, the emergence of the "tool maker" means the resource clock starts running. From this point on, a species building on it's previous success begins the common process of exploiting naturally occurring resources as it becomes more advanced. This presents a common problem for our tool building cousins; resource depletion. It is difficult to imagine any species continuing down the path of the toolmaker without the necessary resources.

So perhaps, just as we see in the evolution of terrestrial species, the same applies for the development of species on a universal level. For all we know life, basic life, is quite common out among the stars. And absent the overt signs of intelligent life, perhaps intelligence is more rare. For advanced toolmakers, like ourselves, the challenge becomes less one of technical advances, and more about how we cooperate. After overcoming the natural world of it?s birth; having learned the skills to master it's own environment, surely the next measure of this species is it?s ability to manage these resources for it's own ultimate benefit.

So is the mastery of ourselves the ultimate challenge for a species? Are there more advanced species out there waiting for us to "grow up"? From a universal perspective, humanity is like a single species on earth, competing for it's place in posterity through natural selection.

Like a sophomore college student awakened from sleep, only to realize that final exams are halfway over, are we in a mad dash to graduate or fail a process we scarcely knew was there?

Life is precious, and we regret the loss of any species. But just how upset are we when we lose a species or two? (I think we lost a couple while you read this)

Perhaps humanity falling isn't the great tragedy it seems from the inside.

It is said that good fences make good neighbors.

Maybe the universe is waiting for us to become good neighbors, and space is the ultimate in good fences.

Saturday, February 05, 2005

Peak Oil and Morning in America

The passing of the Age of Oil as we have known it, like the passing of any large idea, will have its recognizable effects, both immediately and over time. One reason we pay so little close attention to the sphere of energy production is that it has always been there and many of us presumed it always would be. As it disappears, its primal importance will be much clearer—in the same way that some people think they have put their parents out of their lives only to learn differently when the day comes to bury them.

There is sadness, or a shame really, of realizing how much more we could have done. We, all of us in the overly-developed countries, have participated in something of a binge, most of a hundred years of seemingly limitless prosperity and ease. We may have had some idea that it was a bit of a binge and that the earth couldn’t really support it for long, but aside from the easy tradeoffs, we didn’t do much to stop it. We sure didn’t turn our lives around to stop it, and we don’t want to change. This tidal force of biology continues to drive us, even when we know (as no lemming can) that we are seriously screwing up. I think our shame is the result of knowing we have so cavalierly defaced and marred the earth in the process, and most assuredly compromised the future of the generations to follow. The Indian never trusted the "White Man," as he appeared to the Indian as quite presumptuous; a quality they never fathomed. How could anyone presume to improve upon Nature, much less, out live it?

“The white man seeks to conquer nature, to bend it to his will and to use it wastefully until it’s all gone and then he simply moves on, leaving the waste behind him and looking for new places to take. The whole white race is a monster who is always hungry and what he eats is land.”
—Chiksika, elder brother of Tecumseh, March 19, 1779

Of course, all white men are not like that, but enough of them were that the Indian could not know differently. If the mass of man can think of a plausible or even implausible reason to discount peak-oil, he will. When Ronald Reagan ran for president against Jimmy Carter in 1980, he made his shrillest attacks on the notion that we were living in an “age of limits.” The energy crisis of the 1970’s was interesting; for a brief moment it actually unnerved us. But our tentative move towards alternative energies has always been half-hearted. By 1987 Americans alone had spent more than a hundred million dollars on leaf blowers to blow leaves rather than rake them. Even though the shadows are lengthening, to the over-leveraged, debt-encrusted ChinaMart shoppers, it somehow still seems like “morning in America.”

Thursday, February 03, 2005

Epistemology and Peak Oil

We rarely change each others minds with persuasive arguments or even with concrete evidence. Nonetheless, I like to consider myself “peak oil agnostic” and open to new arguments and theories, provided they have supporting evidence.

Like any scientific theory, peak oil can never be totally proven or disprove. If world oil production begins to decline, despite high prices, then such events will just be considered evidence supporting the theory. If world oil production then declines again the following year and declines again the next year, that's just more evidence. Nothing is ever proven. At some point, we can expect the evidence that we've past peak oil would become so overwhelming that most people would have no choice but to accept it. However, one could say the same about the overwhelming evidence supporting the theory of human evolution, and we all know how controversial that theory remains.

One the other hand, what if world oil production declines, and then rises again? If non-conventional sources take over or if new oil formation begins to replenish reserves, we must consider this evidence against the theory of peak oil. If such events occurred again and again, then enough evidence would mount to defeat the theory of peak oil and perhaps replace it with another model of oil production.

Today, there is evidence supporting peak oil, such as the bell-shaped curve of U.S. oil production in the lower 48 states. There is also evidence against peak oil, such as the continual growth of reported reserves in many nations and major oil companies.

The line between legitimate evidence and conjecture blurs when one takes the actions of other people as evidence of what is in essence a geological theory. For example, does the U.S. military presence in the middle east constitute evidence for peak oil? In such cases our actions become evidence of an a priori peak or perhaps a hidden agenda kept from public scrutiny.

A stricter constructivism would one to dismiss peak oil as simply a fictional model. Peak is reach exclusively by social consensus and our notion of geology is yet another social construct. A more pragmatic constructivism may acknowledge that peak is “false but useful.” If peak oil helps people explain the world they live in, then it doesn’t matter whether it can ever be matched to an external reality.

A more contemporary, even postmodern, epistemology might view peak oil as meme, an organism with its own agenda to grow and spread. Instead of assuming as traditional
epistemology that people carry the idea of peak oil, the peak meme will define and create new social groups. The knowledge of peak then becomes an agent shaping our collective minds with a will of its own.

How do we know when to believe in peak oil? Perhaps there is an element of faith. For the agnostics like myself, I remind you: believe half of what you see and none of what you hear.

A Culture of Quantity to a Culture of Quality

Predicting the future can be an express ticket to the Hall of Fools, but here’s my best shot based upon a lot of reading and just common sense. What the public certainly doesn't understand about the world energy situation is that we don't have to run out of oil and gas for life to turn upside down in this country. All you have to do is squeeze the supply, jerk the price, and all the systems and sub-systems we depend on will de-stabilize creating a domino effect that will clatter its way through our entire economy. I don’t believe you have to be a cynic or a "pessimist" to recognize this. It would appear patently obvious

Since our economy at any given moment consists of sixty million people scurrying to the next ‘blue light special” to buy goods on credit made by people 12,000 miles away, we can expect some pretty far-reaching consequences. From what I have read, we are going to have to give up suburbia, Wal-Mart, and industrial agriculture. We will have to live locally in a way that does not require us to drive cars all the time. We will have to grow more of our own food closer to home.

Small-town America will find themselves miles away from essential goods and looking forlornly over their shoulders in the direction of where Charley’s Hardware store used to be before Wal-Mart came to town. There will be an extravaganza of default and repossession of homes and property such as the world has never seen before. With the recent easy and low credit access, people have been induced to trade in the equity value of their homes for lump sums of cash to buy SUV’s and other “toys.” We can assume that some of them are already in trouble with credit card debt. Connect the dots.

We will need to downscale everything, especially agriculture. It will be one of the first systems to fall apart in a world of higher-priced and less reliably available energy, and when it goes down people are really going to suffer. We need to change directions in a big way; from competition to cooperation, and from profitability to sustainability. Think outside the box; try to think of ways to not use more resources. It seems that when the production of large sheet glass coincided with the availability of cheap energy, architects forgot where the sun was.

A lot of jobs and vocational niches are going to vanish—forever. Every “leisure oil use” activity and all their associated industries and jobs will disappear over night. It won’t be just about paying more for gas and using less as a lot of people think. Post-peak oil prices will start a pandemic that will spread throughout our economy like a wildfire fanned by a strong wind.

Expect large-scale unemployment and a drastic drop in wages. In China today, $.64/hr in a factory is about average compared to $21.00/hr in the US. Get used to the idea. In world of greater resource scarcity, the salvage of existing material is going to be a huge business. A lot of the retail of the future will consist of recycled refurbished goods. I can see the railroad system of the US replacing the long-haul trucking system; more efficient and you don’t need “tires.” We will look back at the 20th century as the “Age of Manufacture.”

The biggest question about these massive changes is how much disorder will attend them as nations jockey to contest resources. The downscaling of America is our agenda for survival in the 21st century. It implies a lot of difficult adjustments and even hardship, but we just may find a culture of quality and purpose in a world where a culture of quantity once ruled.

A Peek of Peak

Big thunderstorms down here in Southern Texas today.

I just now came back on-line after a power outage... and it got me thinking.

The lights flickered for a moment, and the power was gone. "Great, Oil really has peaked, and now I'm screwed," I chuckled.

No lights, no TV, no computer, & slowly rotting food in the fridge. And very quiet. Only the storm could be heard. No commercial jingles, or incoming mail... nothing.

I looked around my home at the valuable stuff I have worked so hard to acquire, now a useless pile of expensive paperweights. All the sleek black units, and clever computer devices, even my big TV sat mute, in an almost deafening roar of silence.

I'd make some breakfast, but the microwave and electric stove won't work. No bother... I'll grill some steaks on my barbecue grill and all is well. A little charcoal and lighter fluid, and poof! I'm on my way. Breakfast is served.

So I'm crouched over my grill, listening to the sounds of the storm across the lake when it hits me. This image of myself, huddled around a burning pile of coal, grilling raw meat as the storm rages all around me. The street lights are off. I hear sirens in the distance. No news... No phone... I forgot to get gas yesterday, but now the pumps won't run. Up & down the coast where we live, no lights burn, no music plays. People wait in anticipation for the power to return. No one stirs.

I went from techno-crusader, to coal burning savage in about 1 second flat.

How unique and insignificant, and strange and precious this life we live. Balanced on a knife's edge between two such extremes.

"I once had a dream; but that dream is now gone from me."

And then the lights came on...

No Hydrocarbon Left Behind

In our never-ending quest for energy to fuel the economic growth of our world, inventive humans have explored & exploited a wide variety of power sources.

The most successful of these endeavors are unquestionably hydrocarbons.

From coal & shale, tar sands & heavier bitumen, even bio-oil & methane deposits, (& plain old oil of course), the race is on around the globe to secure & develop these resources. Thousands of feet under water; locked in frigid arctic environments; strip mining the land; So devoted to the wealth of hydrocarbons, no stone will remain unturned.

Makes crack look like decaf.

Humanity seems determined to release every molecule of sequestered carbon we can find, and damn the consequences.

We hit the energy jackpot with oil over 100 years ago, and have proceeded to spend this wealth with ferocious abandon. Always with our eyes on the future, and in spite of the mounting evidence of depletion, it's always the same: What has oil done for me lately?

So, we scour the planet for this carbon energy which has skipped our species to the front of the line.

But as we reach a time of maximum production of these resources, it's becoming clear that our hydrocarbon party will begin to wind down.

Remember the childhood game of musical chairs?

All the players circle a ring of chairs while the music plays, and when the music stops, everyone sits down. Only each time, one less chair is available than before, and those left standing are out of the game. Players jostle each other for the remaining chairs. On & on until only a single chair remains.

So as our species plays musical energy, some of the players see where this is leading.

No more chairs for me.

Like the ghost of hydrocarbon past, come to show us the error of our greedy ways, depletion has become the Dickens of our time. But will we listen to the ghost of hydrocarbon to come, when he shows us our possible future? Will we ignore this wisdom until it's too late, or wake from our slumbering ignorance with fresh new eyes?

Will mankind ever emerge from our fitful youth and accept the plain truth before us, or will we simply make sure no hydrocarbon is left behind?

Wednesday, February 02, 2005

Energy Illiteracy: An Obstacle to a Sustainable Future

As mankind continues to try to maintain the status quo, and energy consumption continues unabated, the question of peak oil occurring sooner, rather than later, seems almost assured. In the end, this question of disruption may be the most crucial of them all; for it is not simply change that affects us, but the rate of change—how quickly and easily one way of life is exchanged for another. A swift, chaotic shift in our energy economy almost guarantees disruption, uncertainty, economic loss, even violence. By contrast, were we able to somehow manage a gradual phase-in over time, we might be able to adapt and cope to these changes without a socio-economic upheaval.

Americans, it seems, have an insidious disease that is pandemic across the country—energy illiteracy: most of us have no idea whatsoever how our energy economy works, much less are we able to discern with any degree of certitude, when it is beginning to unravel. Beyond the price of gasoline and maybe heating oil, most consumers understand very little about the energy that they use. It is taken for granted. Few can say how much energy they consume in the course of a day or a year, or where it comes from. In fact, most people feel that most of their electricity comes from hydroelectric dams, when, in actuality, it is produced primarily by coal-fired and nuclear power plants with natural gas increasingly replacing coal.

Whereas residents of poor nations are acutely aware of every aspect of their energy use; every stick of wood, (sometimes carried for miles) and every gallon of cooking fuel is closely watched. Oil, in our affluent culture, has become an invisible commodity, something we vaguely understand as to be important on a national and international level, but something that doesn’t really affect our personal daily lives, except in the price of gasoline. This energy obliviousness helps explain why we have so often misspent our” efficiency dividend;” we make lights more efficient and we install more of them. Gas mileage improves and we build bigger cars. These mindsets help make it clear why, despite great improvements in energy efficiency, demand continues to spiral upwards. No matter how efficient we become, we must somehow alter the historic trend whereby any gains made through energy efficiency are more than wiped out by a corresponding increase in overall energy consumption.

As energy historian Vaclav Smil points out, “whatever the future gains may be, the historical evidence is clear: higher energy efficiency of energy conversions leads eventually to higher, rather than lower, energy use.” This is also known as “Jevon’s Paradox,” so lucidly explained by my colleague in a recent post.

As a possible catalyst for the next energy economy, conservation finds itself in an awkward position; caught between its great potential for saving energy and the obstacles facing it, ranging from consumer ignorance and prejudices, to a market and political system that still assigns greater value to producing energy rather than trying to conserve it. It is awareness of these stark realities that often gets me the label of doomsayer. I just cannot foresee any viable way to overcome these ingrained obstacles and make that all important transition to a renewable energy world without chaos and economic collapse. And even post-collapse, there will be a predominant will and desire to once again try to rebuild the “empire” of old. There is an old saying, “The definition of insanity is trying the same thing over and over again and expecting different results.”

The set of possible futures includes a great variety of paths. But the possible futures do not include indefinite growth in energy nor physical output. The only real choice is to decrease energy consumption to sustainable levels by choice, or to let nature force the decision through lack of food, energy, and materials, or through a severely compromised environment. I’m sorry to say, that many of those choices have already been made for us, due to inaction on our part, many, many years ago.

Tuesday, February 01, 2005

Alienated From Nature

I have lived on this planet for nearly 54 years. Much of that time has been spent observing and protecting nature, and having a great respect for the intricate complex web of our environment. On one hand, to many it has been a great party; but is that all man will ever be able to say of himself? He partied well? Face it, we found a “stash” of easy, cheap-oil, party material in 1859, and we have been living it up ever since, ignoring the consequences with an utterly cavalier attitude that I have found repugnant and unbelievingly short-sighted.

One evening in Yellowstone National Park, where I worked as a park ranger, I was having dinner at the Lake Hotel; a magnificent old framed structure that was built in 1892. Most of the conversation seemed to be steeped in how far and how fast the diners had come to be there. Few, if any, seemed to be concerned one way or another about what might be out there in the wild expanse of protected wilderness. But is it any wonder, really, when you stop to think about it?

Our civilization has grown increasingly alienated from the processes of nature, and therefore hardly knows where to begin thinking about the likes of ecology, much less the consequences of environmental degradation due to the use of fossil fuels and the technology that came with them. To most people, the park experience is enjoying some scenery, gawking at a few geysers, roadside stops to set to Kodak the often seen elk or bison herd, and dealing with crowded campgrounds and slow motor homes. In fact, it is viewed much like a trip to Disneyland, where wild animals should be kept locked up if they are dangerous.

Now, don't get me wrong. I'm not saying that no one cares about the wilds of Yellowstone. Of course they do. But of the three million plus visitors to Yellowstone National Park each year, the vast majority of them see the park through their windshield in about four hours. Cars and motor homes clog the roadways. By ten in the morning, all of the campgrounds are full, every day. Conversely, if you go more than a quarter of a mile off the road, you are alone.

I guess the point I'm trying to make is that the American citizenry's conscious relation to the park is woefully inadequate to insure it's long-term protection, much in the way that it is inadequate to truly comprehend the ramifications of peak-oil. Yellowstone, to continue to be Yellowstone must be appreciated as more than a place to go camping, fishing, and rollerblading. Think about it. Do you really know what must be preserved and how to do it? If Yellowstone was kept safe and nice, it would cease to be the place we set aside to preserve. After all, Yellowstone didn't require any human guidance to become what it is before the ignorant intervention of mankind. This same kind of ignorance of the natural and physical world is going to plague us with the crisis of peak-oil, and thus, finding a sustainable solution.