[teotwawki]

You know it is nearly game over when financial people talk the peak oil talk better than peak oil people themselves...

http://www.gmo.com/websitecontent/JGLetterALL_1Q11.pdf

The purpose of this, my second (and much longer) piece on resource limitations, is to persuade investors with an interest in the long term to change their whole frame of reference: to recognize that we now live in a different, more constrained, world in which prices of raw materials will rise and shortages will be common.

Rapid growth is not ours by divine right; it is not even mathematically possible over a sustained period. Our goal should be to get everyone out of abject poverty, even if it necessitates some income redistribution. Because we have way overstepped sustainable levels, the greatest challenge will be in redesigning lifestyles to emphasize quality of life while quantitatively reducing our demand levels. A lower population would help.

I believe that we are in the midst of one of the giant inflection points in economic history. This is likely the beginning of the end for the heroic growth spurt in population and wealth caused by what I think of as the Hydrocarbon Revolution rather than the Industrial Revolution. The unprecedented broad price rise would seem to confi rm this. Three years ago I warned of “chain-linked” crises in commodities, which have come to pass, and all without a fully-fledged oil crisis. Yet there is so little panicking, so little analysis even. I think this paradox exists because of some unusual human traits.....

http://www.gmo.com/websitecontent/JGLetterALL_1Q11.pdf

[dolanbaker]

Also discussed on theoildrum http://www.theoildrum.com/node/7853

[teotwawki]

Ultimately he believes the US stands to benefit the most from this, or at least suffer the least. You know he talks about the dangers of human optimism and yet at the very end he just couldn't help himself.

[pedalling_faster]

Also discussed on theoildrum http://www.theoildrum.com/node/7853

that was a good article.

the Oil Drum is having an Archive-Fest.

2005 through 2010, sorted by author. i started downloading it, 726 MB so far.

http://www.theoildrum.com/node/7191#more

[dolanbaker]

Ultimately he believes the US stands to benefit the most from this, or at least suffer the least. You know he talks about the dangers of human optimism and yet at the very end he just couldn't help himself.

To a certain extent, he's correct, The US still has plenty of oil and other resources, if used intelligently they could be self sufficient and ride down the declining supply for a couple of decades before having to do anything drastic.

It's us here in Europe who will be in a much worse position.

[Novus]

It could have benefited the US in some ways but the American mentality of a non-negotiable way of life won't allow it. The last domestic resources are being used to prop up business as usual. Reinflate the housing bubble. Stimulus to build more highways. Bailouts for billionaires on wall street. More cheap loans to keep people shopping at Walmart. We are mortgaging the future to pay for present excesses.


If things were allowed to unwind in 2008 or better yet in 2001 the US might have been able to survive this through continuity of government. New Deal 2.0 might have worked if the focus was on renewable energy like wind power and geothremal. A national moratorium on the construction of single family homes would have been a good start on unwinding suburbia and revitalizing small towns and cities with walkable communities where you didn't need a car just to pick up some milk. Instead we got a bailout of GM and more BAU. We decry spending 10 billion on Amtrack but have had to bail out the airlines not once but twice in the last decade at the cost of almost half a trillion.


When will the cost of continuing BAU become too much and when that does come to pass there will not be enough to cover the transition to America's post hydocarbon age. It has been leaked FEMA has acquired 20 millions coffins for the coming mega collapse. Honestly I don't think it will be enough.

[Pops]

To a certain extent, he's correct, The US still has plenty of oil and other resources, if used intelligently they could be self sufficient and ride down the declining supply for a couple of decades before having to do anything drastic.

It's us here in Europe who will be in a much worse position.

Not pickin on you DB, but I disagree.

The US may own the land the oil is under but the oil corporations decide who to sell it to, and that is always the highest bidder, at least for now.

Right now our inland oil is slightly cheaper, but that's just because the pipelines to get it to the coasts aren't yet complete, hang on, it will be on the world market in a year or so.

Remember, during the famine, the Irish starved while grains were being exported from Ireland.

[dolanbaker]

To a certain extent, he's correct, The US still has plenty of oil and other resources, if used intelligently they could be self sufficient and ride down the declining supply for a couple of decades before having to do anything drastic.

It's us here in Europe who will be in a much worse position.

Not pickin on you DB, but I disagree.

The US may own the land the oil is under but the oil corporations decide who to sell it to, and that is always the highest bidder, at least for now.

Right now our inland oil is slightly cheaper, but that's just because the pipelines to get it to the coasts aren't yet complete, hang on, it will be on the world market in a year or so.

Remember, during the famine, the Irish starved while grains were being exported from Ireland.

If the Export land model is anything to go by, even KSA will cease to export by 2030 so you could be right in that respect. Assuming that China survives and recovers from the economic collapse that many expect in the next couple of years, they are likely to become the largest consumers of oil on the planet. You're saying that the US will export to China, over supplying it's own citizens, that's certainly possible if the debt continues to rise and becomes unpayable by conventional means. That could happen in about 20 years time.

Edit to add:
The point is, could the government get away with exporting that oil without riots!

[Novus]

+1 The 2000's (oughts?) was the final death spasm of the American lifestyle. It could have been so different. We might have invested in the post-carbon infrastructure, walkable cities, electric freight and passenger service, recycle suburban structures/auto property into real towns and farms. Instead we blew it on more McMansions, big-city skyscrapers, airports, and roads. What a tragedy.

What really gets me is that we have not learned anything. Still building highways and airports and McMansions on farmland. Now we are on the precipice again looking at $4 gas and out of control food prices while a second great recession is set to begin before the first one even ended. Things will continue as they are until it can't and then we won't. That will be the downfall of America.

[Pops]

The point is, could the government get away with exporting that oil without riots!

Yeah, that is the big question, how does depletion affect our entire system of ostensibly "free" markets? I started a thread a while back about nationalization, wondering how long it will take for all countries (including the US) to deem oil a strategic resource requiring complete control - in whatever fashion.