Reuters ran this headline of his speech: "Greenspan: Oil Supplies To Grow," http://money.cnn.com/2005/05/20/news/economy/greenspan_oilstocks.reut/in...

Yet as is usual for Reuters, nowhere in its article is there a quote of Greenspan saying what the headline purports. As we know, for oil supplies to actually grow, current discoveries must make up for both depletion and increased consumption, which they aren't.

What we've been witnessing is the usual cajolery by those in positions of power to talk prices down. There was another important item from Greenspan that goes counter to the White House: Getting China to revalue its currency will do nothing to solve the country's debt problem. Now, that's a big black eye for Bush as he's busy trying to paint China as the root of the problem, http://www.businessweek.com/ap/financialnews/D8A74KKG0.htm?campaign_id=a...

Generational divide?

I have started to talk to various people in my social circle about the high gas prices. There is a clear generational divide in my sample. The older generation (Over 50) remember the last oil crises of the 1970s, but they just assume oil is a political issue (ie we just need to convince the Saudis et al to pump more).

Those under 30 (including myself) see oil as something that probably will not be around for the rest of our lives and as such are very interested in knowing when the alternatives will start to arrive.

Forget Social Security, I think the younger generation is more interested in knowing how we are going to drive to the grocery store in 20 years than how much we are going to collect from the government in 50 years.

Glenn

Glenn,

Most of us won't be driving to the grocery store 20 years from now, we'll be walking. For that to happen, however, we're going to have to seriously rearrange the layouts of our communities.

Glenn -

I appreciate your remarks - my son has echoed them. The good thing about our latest generation is that you guys are skeptical of the MSM and Gubmint, the two colluding sources of disinformation.

YOUR generation is going to have to supply the alternatives. Your generation will have to move from the middle of the road to the sustainable, low-energy side. The older generation simply cannot comprehend the problem. They have no reference point, and they have traditionally looked to the government for solutions. The government is ignoring this one, as it has the potential to bring down those who push this negative view and reconstructional agenda.

They don't call Alan Greenspan 'Mr. Magoo' for nothing. He was also called the biggest (republican) political hack in Washington, by Harry Reid. And it's doubtful that Greenspan would do or say anything to damage his legacy during the last year of his tenure. On the other hand, perhaps he does not really understand what lies ahead.

Bob Hoye, a respected market historian and analyst, authored an interesting article yesterday.

http://www.safehaven.com/article-3095.htm

Title: The Next Recession Has Started

'Synopsis: With the concept "Peak Oil" being such a fad these days, it was tempting to call this review "Peak Commodities And Earnings". This is not to imply that the world is about to run out of commodities, but that industrial commodities have set a cyclical peak in price.'

If true, then the high inventories are likely to keep a lid on oil prices for some time. Perhaps the fad of Peak Oil has also reached a short-term peak, and we'll find ourselves sliding down the right side of the POF for a while.

Contrasting this recession view, the business people I talk to on the golf course tell me that things are still humming along at a high level, no slowdown in sight.

Hi Glenn,

Here are a few items for the older ones in your circle: http://biz.yahoo.com/ap/050521/world_forum_oil.html?.v=6
http://www.reuters.com/newsArticle.jhtml?type=businessNews&storyID=8565200
http://www.gulf-times.com/site/topics/article.asp?cu_no=2&item_no=35940&...

I find it very helpful to ask people if they've ever been to a ghost town, or at least know why a ghost town is a ghost town. I give them some time to think, and usually you can see the "light" go on as they get the connection. If not, I provide a prompt in the form of a question: Isn't another term for oil Black Gold. After that, I've yet to meet anyone who doesn't then see the light.

Well, as we slide into the Memorial Day weekend and the start of the driving season in the US we will see how this gambit turns out. We will see if everyone pumping flat out during the slack second quarter, gave us enough of a running start at the third and fourth quarters to get us through the year.

We will see if the build is equal to the surge. And if it gets us by, we can look forward to trying to repeat the process again next year. Except next year, depletion will have taken a bite out of production capacity. And there is some question as to whether new capacity will offset this bite. There is a term for that state of affairs.

The Globe and Mail is starting a seven part series entitled:

How Oil is Changing the World

http://www.theglobeandmail.com/

Registration required. For those who may not want to register, you can go to:

http://www.bugmenot.com/index.php

and obtain a logon and password.

Here is the URL for the story. I didn't need to login
http://www.theglobeandmail.com/servlet/story/RTGAM.20050519.crudehomeptr...

On car-buying patterns, in Thursday's Christian Science Monitor -

Can hybrids save US from foreign oil? Red-hot demand for Priuses causes doubters to take second look
(here)

Re: Glenn's post

I was raised by a depression era pessimist. I remember well my father going on about the end of cheap oil in the 70's. (He's a metals mining process engineer).

I wonder how many of us who were raised by the children of the depression have this same belief that our future is not secure (in retirement, with global warming, and, now, peak oil).

On the other hand, boomers seem to be the most optimistic (in my ciricle). A friend (in his mid 40's) sent a message about the gas boycott that was aimed at this week. He received many skeptical emails, one friend bragging about his V-8 SUV, and then joking about burning 100 dollar bills with his cigars. The attitiude seems to reflect Greenspan's, that this is just a speculative spike, and soon everything will return to normal -- so consume away, there are no consequences "Deficits don't matter"

Here's a quote from the Globe&Mail series: "Mr. Huber says, wasting energy should be a virtue, not a vice, because the faster we use it up, the better we get at finding new supplies, and the less our economy depends on energy." This guy, Huber, is the co-author of a book, "The Bottomless Well." http://www.theglobeandmail.com/servlet/ArticleNews/TPStory/LAC/20050521/...

This dude sems to think that the bitumen (oil sands) present will make Canada the next Saudi Arabia. But, the process used to make the bitumen usable consumes emense amounts of natural gas: "If SAGD [Steam Assisted Gravity Drainage] were to ramp up production to 3,500,000 barrels of bitumen per day, it would take 80 years to produce 100 billion barrels. SAGD requires a huge amount of natural gas and the economics of SAGD are predicated on low gas prices. The 3,500,000 barrels per day production would consume 7 billion cubic feet of gas per day. For comparison, Alberta’s total current gas production is 13 billion cubic feet per day and declining. If all the current recoverable remaining established gas reserves in all of Alberta were dedicated to SAGD, there would be enough gas for only 17 years of SAGD production at the rate of 3,500,000 barrels per day." http://www.eub.gov.ab.ca/bbs/documents/submissions/BitumenGas2003-06/Gia...

Feasta has an item on this issue: http://www.feasta.org/documents/wells/contents.html?one/panel1.html

I'll continue to read the Globe&Mail series, but initially it looks like little more than a massive tout for bitumin extraction, especially since the areas they propose to explore ignores the immediate crisis of NG decline--an area I closely questioned in an email I sent them.

I often wonder what will happen in the surburbs when the crisis hits. Because the suburbs will feel it first but much of the wealth is concentrated in the suburbs.

Most of these communities are, of course, not built for walking, or even efficient public transportation, and the displacements that will necessarily result from permanently higher gas prices will be utterly catastrophic.

The wealthy will undoubtedly weather the situation just fine; but the middle class will be hit hard and the poor even harder. Undoubtedly we'll end up with even more income stratification even if the upper whatever percent lose their shirts in the resulting fall, because those of us below will lose our pants and shoes as well.

Yes, and most suburbs—those without the infrastructure to operate with little automobile traffic—will likely become ghost towns, as karlof1 suggests.

You know every time I check in on this list I get depressed.

jwb

jimbo -

Chin up, dude!! This is the shot at making the world a better place for your kids! This is the convergence of bad historical decisions and their demise. It is the chance for us to make something that is better.

Sure - it isn't going to be all fun. But whatever we do on this planet, we cannot take it with us. The Egyptians tried that, and now we have their stuff on world tour! LOL!

Everybody that survives the coming squeeze will be changed, and our children will be better off if we work to make it a reshuffle rather than a rebuild.

Make a difference - one day at a time, one person at a time... Pull together, not apart.

J--Perhaps it will be better for our kids; certainly it will be better for the world. But I can't help but think that things will get a lot worse for us before they get better and that things won't get better for us for another century or so. Maybe, just maybe, things will be better for our chidren's children's children.

See, the problem as I see it is that we've been taking a disproportionate share of the world's resources and, as that draw equals out, most of us are necessarily going to see a decrease in our standard of living even as the standard of living of the world rises. But of course that standard of living will still be miserably low, and ours will be dragged down to it.

So barring some wort of miracle, we're headed back to the 19th century if not to the middle ages, where the separation between the haves and havenots will only yawn wider and wider until somebody figures out how to make money by paying the new underclass sufficient wages to buy the products that the underclass makes.

Yes, it happened earlier in this century; but it was helped greatly by the rather sudden emergence of a relatively cheap and standard supply of energy and an ability to distribute products efficiently over rather large distances, which allowed national (but also international) markets to form. The question is: will we be able to do it again?

If not, I fear we're headed toward rule by the new global aristocracy of the world's great capitalists.

So, yes, I remain pessimistic.

jwb

jimbo -

What we are about to be forced to do is to cease "striving after wind", to put it biblically. The entire economic model is doomed - we cannot live in an eternal state of growth. This is the shift that will be forced.

I do no think that this will happen right away - but it must happen before society can really become sustainable.

The population will need to be downsized - make sure your genes are in the pool!! That is all any man can do towards the far future. In the interim, change to something you can sustain, no matter what happens. It is doable - I promise. And it is much more rewarding.

There are two excellent pieces in Bill Totten's blog

What is civilization
http://billtotten.blogspot.com/2005/05/what-is-civilization.html

and

A Collective Manual-in-progress for Outliving Civilization
http://billtotten.blogspot.com/2005/05/in-wake.html

Another interesting link from there is
The Lessons of Easter Island
http://www.primitivism.com/easter-island.htm