[Graeme]

Tipping Point: Near-Term Systemic Implications of a Peak in Global Oil Production - An Outline Review

The credit crisis exemplifies society's difficulties in the timely management of risks outside our experience or immediate concerns, even when such risks are well signposted. We have passed or are close to passing the peak of global oil production. Our civilisation is structurally unstable to an energy withdrawal. There is a high probability that our integrated and globalised civilisation is on the cusp of a fast and near-term collapse.

As individuals, and as a social species we put up huge psychological defences to protect the status quo. We've heard this doom prophesied for decades, all is still well! What about technology? Rising energy prices will bring more oil! We need a Green New Deal! We still have time! We're busy with a financial crisis! This is depressing! If this were important, everybody would be talking about it! Yet the evidence for such a scenario is as close to cast iron as any upon which policy is built: Oil production must peak; there is a growing probability that it has or will soon peak; energy flows and a functioning economy are by necessity highly correlated; our basic local needs have become dependent upon a hyper-complex, integrated, tightly-coupled global fabric of exchange; our primary infrastructure is dependent upon the operation of this fabric and global economies of scale; credit is the integral part of the fabric of our monetary, economic and trade systems; a credit market must collapse in a contracting economy, and so on.

feasta

[centralstump]

Tipping Point: Near-Term Systemic Implications of a Peak in Global Oil Production - An Outline Review

The credit crisis exemplifies society's difficulties in the timely management of risks outside our experience or immediate concerns, even when such risks are well signposted. We have passed or are close to passing the peak of global oil production. Our civilisation is structurally unstable to an energy withdrawal. There is a high probability that our integrated and globalised civilisation is on the cusp of a fast and near-term collapse.

As individuals, and as a social species we put up huge psychological defences to protect the status quo. We've heard this doom prophesied for decades, all is still well! What about technology? Rising energy prices will bring more oil! We need a Green New Deal! We still have time! We're busy with a financial crisis! This is depressing! If this were important, everybody would be talking about it! Yet the evidence for such a scenario is as close to cast iron as any upon which policy is built: Oil production must peak; there is a growing probability that it has or will soon peak; energy flows and a functioning economy are by necessity highly correlated; our basic local needs have become dependent upon a hyper-complex, integrated, tightly-coupled global fabric of exchange; our primary infrastructure is dependent upon the operation of this fabric and global economies of scale; credit is the integral part of the fabric of our monetary, economic and trade systems; a credit market must collapse in a contracting economy, and so on.

feasta

And then I read something like that and want to curl up in a ball.

[eastbay]

I didn't read it.... just the linked introduction, but wow. I want my mommy.

[mcgowanjm]

I read it. Front to Back. It's basically what us Dirty Fuckin'
Hippies combining Limits to Growth with PO with Complexity/Dragon King Outliers have been saying since 9/11.

For instance, why massive deflation is upon us:

We just went thru Hyperinflation-of debt. This ended December 07.

We are now here:

At this moment, increasing concern is being expressed over the risks of sovereign, commercial property, and credit card defaults. If we assume that as time goes on the implications of an energy withdrawal become clearer to some potential creditors, one might expect rising interest rates, loans having shorter terms, and eventually the absolute refusal to finance most loans. Why lend more to someone who will not be able to repay the loans they already have outstanding? Eventually, it will be clear that almost all debt outstanding cannot be repaid, except in hugely devalued money.

If a small percentage of people in an economy cannot service their debts, their secured assets may be taken. This is necessary to maintain the banking systems viability. Likewise, a nations standing within the bond market is dependent upon it striving to repay its debts.

Bank intermediation, credit, and confidence in money holding value is the foundation of the complex trade-networks upon which we rely. The financial situation described will expose what heretofore has not been a problem; the mismatch between our dependencies upon globalised integrated supply-chains, local and regional monetary systems, and nationalised economic policy. A complete collapse in world-trade is an extreme but not unlikely consequence.
The failure of production within the economy will mean that almost all income is absorbed by food and energy, but there will be little income to pay for it. Importing energy, food, and inputs for the production process into a country will only be possible by exporting something of equal value because running trade deficits is based upon credit. Monetary opaqueness may mean that barter, hard currency (gold, oil, grain, wood, My Edit- Land ) may be used to settle accounts.

$29.75 crude by Xmas.

[patience]

This is gonna suck, big time. It is really poor timing for me to be getting old right now. Yeah, I got preps, but that ain't enough. Life will get a lot more difficult.

[Loki]

The report looks like it's worth reading despite being a bit heavy on the unnecessary jargon.

Credit forms the basis of our monetary system, and is the unifying embedded structure of the global economy. In a growing economy debt and interest can be repaid, in a declining economy not even the principal can be paid back. In other words, reduced energy flows cannot maintain the economic production to service debt. Real debt outstanding in the world is not repayable, new credit will almost vanish.

This is a very interesting insight. Peak Credit!

We outline the implications for climate change. A major collapse in greenhouse gas is expected, though may be impossible to quantitatively model. This may reduce the risks of severe climate change impacts. However the relative inability to cope with the impacts of climate change will be much greater as we will be much poorer with much reduced resilience.

I don't see this happening at all. On the contrary, we will ramp up coal production and extraction from tar sands and shale. And we'll inject this stored carbon into the atmosphere with no regard whatsoever to climate science, as we are doing now. Burn baby burn!

This may even allow our economy to continue to limp along for another decade or three before out of control climate change slaps us down for good.

[vtsnowedin]

Peak oil
Peak credit
Peak government spending
Peak population
Peak food
Peak water
Peak green house gas emissions.
All inter connected and fast approching. Which one will cause the government to throw in the towel?
Will it be just one or the combination of all the above?

[Ludi]

If we don't blow ourselves up in nuclear war, than PO may be a blessing to the planet and its other lifeforms.

But not (after a painful period of adjustment) to Homo sapiens sapiens?

[Sixstrings]

I didn't read it.... just the linked introduction, but wow. I want my mommy.

Again, I'll just point out that when people talk about "collapse" it's just a more dramatic way of saying "we're gonna be poor! omg!"

That's what's in the cards for this nation, folks.. we just may have to live the way the Cubans do, or the Ecuadorians, or for some it may be as bad as the slums of Rio de Janeiro. We're just gonna have to man up and deal with it.

The impoverishment of our nation sucks of course, and it's a reason to be politically involved. But it's not the end of the world.. billions live in material poverty right this very moment. And so I can't help but find it sort of selfish and self-indulgent when we (me included) wring our hands over "collapse." We should at least be thankful to have been lucky enough to have had what we've had for so long. Most humans on the planet never had and never will have as much as we Americans.

And, even if we do end up as piss-pot poor third worlders we should still feel grateful -- because that will mean the third worlders of today will be dying from mass starvation. That's a pretty grim bright side, but it is true that there will always be people worse off than Americans.

[Graeme]

I applaud freedom of speech. That's why I posted this. I think this article describes one extreme of a spectrum of possible futures. It's interesting to see how people react to this post. Some accept it without question - and want to curl up or ask for mommy (tongue in cheek).

I really like this quote from Carhole, and I'm going to repost it here:

Peak Oil can only be a real phenomenon because either (1) oil is finite and must eventually decline, or (2) demand for oil will peak due to the development of alternatives. But Doomerism interprets the idea of peak oil as an utter certainty that the world will eventually run out of cheap energy and thus civilization (and population) MUST collapse.

But such a prediction can not be made with any certainty at all because the world's possible futures are so fantastically chaotic (in the sense of Chaos Theory). You cannot KNOW for certain that there will not be energy developments such as a LIFE (fusion) reactor, or that oil derived from coal or shale or oil sands will NEVER be economical, or that nanotechnology will not yield thin film solar technologies, or that many other energy developments will never be successful. You can only dream that there will never be alternatives.

[Ludi]

Again, I'll just point out that when people talk about "collapse" it's just a more dramatic way of saying "we're gonna be poor! omg!"

Which for some of us means "I'm gonna be dead! omg!" because we won't be able to afford healthcare.

Oh well, at least a bunch of other folks will be dead too. There's the bright side.

[Loki]

You are not reading him, jargon nonwithstanding. He says over and over that complex systems collapse--industrial, financial, social--in the absence of new energy necessary to pay off old debt. This goes for construction and maintenance of equipment. There will be no heavy infrastructure for tar sands, even coal production

Yes, that's a good encapsulation of his argument, and I hope he's correct, but I think he may not be. The EROEI is positive for tar sands and shale, and I suspect the same is true of liquid coal. It will be environmentally catastrophic if we burn these fuels, but we will do everything we can to do so once cheap oil goes the way of the dodo. It will be a combination of big business and big government, as usual, so free market principles (not to mention ecological rationality) are largely irrelevant.

I see a misconception repeated often: that because coal preceded petroleum in the industrial age we will return to coal as a primary energy source in the future. On the contrary. current coal production depends on petroleum.. The good coal is gone. Today's coal is low quality, seams are diffuse and dispersed and requires mountain top removal etc. It must be shipped many miles by truck and train to cities and suburbs. That all requires an intact infrastructure which he does not see.

Historical symmetry has nothing to do with it, I just know we have quite a bit of coal left in the US and the political, economic, and technical infrastructure to mine and burn it. Ditto with natural gas.

You honestly think we won't extract and burn every last hydrocarbon molecule we can? I hope you're right, but I fear you're not.

[vtsnowedin]

I didn't read it.... just the linked introduction, but wow. I want my mommy.

Again, I'll just point out that when people talk about "collapse" it's just a more dramatic way of saying "we're gonna be poor! omg!"

That's what's in the cards for this nation, folks.. we just may have to live the way the Cubans do, or the Ecuadorians, or for some it may be as bad as the slums of Rio de Janeiro. We're just gonna have to man up and deal with it.

The impoverishment of our nation sucks of course, and it's a reason to be politically involved. But it's not the end of the world.. billions live in material poverty right this very moment. And so I can't help but find it sort of selfish and self-indulgent when we (me included) wring our hands over "collapse." We should at least be thankful to have been lucky enough to have had what we've had for so long. Most humans on the planet never had and never will have as much as we Americans.

And, even if we do end up as piss-pot poor third worlders we should still feel grateful -- because that will mean the third worlders of today will be dying from mass starvation. That's a pretty grim bright side, but it is true that there will always be people worse off than Americans.

Ludi has this right. We are not going to be poor we are going to be dead. Americans do not know how to be poor and will die off for lack of essential survival skills while the downtrodden third worlders will continue on as usual. The poor in America survive by dealing drugs and stealing other poor peoples welfare checks. The ones getting checks can't really be considered poor by world standards but they are totally dependent on them. Take that welfare money out of the local economy and no one will have a clue about what to do next.The riots and looting will only last until there is nothing left to loot, perhaps about three weeks. The poor farmer in East Miserystan will bury the child that dies this year from famine and next year will have another and try again.
I'm reminded of the Vermont native that was asked how he made it through the Great Depression. What depression? was his reply.

[Cog]

I spent a couple of hours last night reading the entire article. He makes a compelling case that the integrated global economy represents a box in which there is no escape but collapse. We don't manage it, it manages us. You can reach a point in complexity that is not of a conscious design by humans but one in which we all function until one of the underpinnings of that system is disrupted.

His metaphor of a flight of birds that do not make conscious decisions on their flight direction, but rely on inputs from their neighbors to create something unique and self-reinforcing. Such systems of complexity are prone to any small outside force to create a collapse in the system.

If you are looking for good news in the article, you might want to go elsewhere. His point that collapse not only will happen but must happen is not for the faint of heart. He does not believe in power-down per se since he believes that any change to our complex global system will cause it to collapse. He does believe in individual decisions and localization to minimize the damage though of collapse.

[Ludi]

Others also think collapse is inevitable: http://tobyspeople.com/anthropik/2006/0 ... index.html

[mcgowanjm]

I applaud freedom of speech. That's why I posted this. I think this article describes one extreme of a spectrum of possible futures. It's interesting to see how people react to this post. Some accept it without question - and want to curl up or ask for mommy (tongue in cheek).

I really like this quote from Carhole, and I'm going to repost it here:

Peak Oil can only be a real phenomenon because either (1) oil is finite and must eventually decline, or (2) demand for oil will peak due to the development of alternatives. But Doomerism interprets the idea of peak oil as an utter certainty that the world will eventually run out of cheap energy and thus civilization (and population) MUST collapse.

But such a prediction can not be made with any certainty at all because the world's possible futures are so fantastically chaotic (in the sense of Chaos Theory). You cannot KNOW for certain that there will not be energy developments such as a LIFE (fusion) reactor, or that oil derived from coal or shale or oil sands will NEVER be economical, or that nanotechnology will not yield thin film solar technologies, or that many other energy developments will never be successful. You can only dream that there will never be alternatives.

The problem with Carhole's quote is this: 'since we don't
know, then collapse is just a possibility.'

Here's Carhole's 'Leaders' in action:

The U.S DoE expects that the largest increase of production will need to come from within the United States : a 1.8 Mbpd boost over 8 years (from 2007 to 2015) that would equal to more than a quarter of the present U.S oil production. Since the early 70’s, U.S oil production has been steadily plummeting.

top-15-liquids-producers-and-their-prospects-eia-aeo2009.1269555858.JPG

This huge U.S liquid fuel production increase should be achieved through what Glen Sweetnam described as “the ethanol ramp-up” during the round-table, according to its
transcript.

I'm trying to think of analogy's/metaphors that match this.

Something akin to triangulation of navigation of a spaceship to Mars using astrology comes to mind.

With the Cognitive Dissonance shown by our 'Leaders', Collapse of the Most Complex
Civilization in History is a given.

[mcgowanjm]

On ramping up the ethanol to 1.8 Mbpd.

As the disaster that is our 2009 Harvest unfolds this goal
will be disappearing like smoke.

I just found out (thru my RuralElectric Journal of all places)
that AR crop losses were $397 million. ... state economists estimated Mississippi's crop losses at $485 million. ...
www.reuters.com/article/idUSTRE5AB4EK20091112

Louisiana must be close to same.

Arkansas'
Top 5 agriculture exports, estimates, FY 2008
Rank among states Value
million $
1. Rice 1 918.1
2. Soybeans and products 9 806.8
3. Poultry and products 2 508.9
4. Cotton and linters 3 473.0
5. Wheat and products 18 275.8
Overall rank 11 3,216.1

And BTW, good luck with finding wheat in AR in July.

Well over a 10% loss whereas you're USDA has ALL THREE
states down for the Second best Harvest of ALL TIME.

Nogger's Blog(UK) has just informed me that INDIA's
Punjab Wheat storage system is non existent. India
has no stockpile that's edible for humans.

China's Wheat Stockpile is nothing but numbers in a book.

But we're not going to collapse as the World finds out that
there is no grain surplus anywhere. And the US is ramping up
ethanol production to 1.8 Mbpd as we speak.