A question came to mind: Is oil depletion really the problem, or is it our (USA's) notion that we have the right to however much of any resource we covet?

Good question, Karlof, although I don't think you need to restrict it to the USA. The industrial world (with a few exceptions like Cuba) has never experienced anything but growth for 150 years, with a few blips like the 1930's to temporarily upset the trend.

We expect never ending growth, and we demand it. Political parties would fail if they encouraged a no, or slow growth policy. So democracies like ours have the growth mode built in. And the dictatorships in large countries like China and Russia are forced to keep up, because of the pressures to remain competitive and to be seen as world players. The growth in the military in the USA would by itself be enough to force countries like China to keep expanding. And of course, the 2008 Olympics provide China another big reason to grow rapidly - they need to look good for their coming-out party.

Where will it end, and what will the end look like? My view is that we are on track for a grinding recession/depression. The realization of peak oil will come in as a whimper, not a bang. Markets and economies will react by naturally slowing down. Politico's will then pound the table for new energy sources, encouragement for conservation, greater partnerships with Canada, Russia, Iran. But these measures will not be enough, because of the enormous requirement for fossil fuel energy to drive the economy. Hence, a long-term gradual erosion in standards of living, to an economy in which people will need to gradually increase spending on the bare necessities of life.

I think the populace will slowly, but ultimately realize the peak oil situation, and finally understand that depletion is THE problem. Until then, you have a point: Americans will think they have the right to covet the remaining resources. Let's hope that we don't nuke ourselves before reality sets in. That would be the ultimate Survivor series.

An explanation to my thinking. In 1890, the Census Bureau announced that the Frontier was now closed--there would be no futher expansion of the US Empire. This item was used in a major speech by the then obscure historian, Fredrick J. Turner, at the Chicago Fair in 1893. Shortly thereafter, the USA embarked on its program of overt overseas imperial expansion capped by the "Open Door" policy announced in 1898 as we made war with Spain. I see Peak Oil in the same light as the closing of the frontier, with our wars on Serbia, Afghanistan and Iraq as the response to keep the door open. As in the past and current cases, the elite needs to pursue economic expansion in some form to maintain and increase its wealth and hold on society.

Agreed, the elite (including the politicians) need economic expansion to keep the debt ship afloat. The game is built on debt, which in turn is dependent on continuing growth. When growth turns down (as it will under peak oil) creditors suffer, and since many of the elite are creditors (as is the U.S. and most western governments), they are bound to be hurt financially.

I do recommend that people try to eliminate debt as oil and gas reach peak because asset deflation will be the ultimate fate in the resulting recession/depression. Energy and food prices will explode higher,and as a result, housing and car prices will fall hard. Since homes and new cars are generally financed with debt, these 'assets' will not hold their value. That's an understatement - many of these assets will collapse in price, to the point where people just leave them behind for the creditors to reclaim.

Karlof,

Energy depletion and the growth of energy consumption are indeed an issue,

look at Chap 3 of Bill Catton's book "overshoot"
http://billtotten.blogspot.com/2005/03/dependence-on-phantom-carrying.html
http://www.press.uillinois.edu/pre95/0-252-00818-9.html

Also check out
http://billtotten.blogspot.com/2005/03/malthus-more-relevant-than-ever.html
and
http://billtotten.blogspot.com/2005/03/overshoot-in-nutshell.html

Don't worry guys. Several gulf states are putting billions into new infrastructure.

http://news.yahoo.com/s/ap/sea_horse_island

G.
Not much different than
http://unplanning.blogspot.com/2005/04/gambling-on-future.html

Rajiv,

As I'm sure you can see from my posts, but let me reassure you, I'm very aware of what I call the Fossil Fuel Boom and Bust. As a student of Imperialism in general and the US Empire specifically, I wanted to look at the issue from a different perspective. And I did visit Totten's blog as suggested and found it full of interesting items.

Here's another question: Has anyone ever heard of Sir Halford MacKinder and know of his work?

For Dilbert, The USA ceased to be a creditor nation during Reagan's first term and is now the largest debtor nation, requiring an infusion of over 2 Billion dollars a day to remain "solvent." In this regards, I find Bush's proposal to destroy Social Security of interest for what isn't being said about the USA's longterm financial health. Given the trust fund's collateral, and Bush's description of it as meerly "IOU's," what chance does it have of fulfilling its duty if GDP growth turns negative from 2010 until an equilibrium is reached, however long that takes? For me in the discussion of Social Security's future, the Fossil Fuel Bust is the dog that didn't bark.

I have no idea where everybody is in their personal plan, but Dilbert is right, as is karlof. If you haven't eliminated your debts, then you are looking at potential problems with inflation or with deflation. Either way, debt will cripple you in a declining economy, as it would hobble you in a static one.

And our nation, federal, state, county, municipal - all are built on bonds, or promises of repayment from future expansion. When growth ceases, repayment options disappear, and taxes will inevitably rise to try and maintain solvency. Our profligate governments will pass the burden on to us, as if we made their bad decisions. Which we did, by simply maintaining apathy. That is the point at which the people may unite, and simply let the old regime fail. But I am uncertain that there are enough people who "get it" to let that happen. The sheep seem to outnumber all other species in America.

That a major default is on the way is not in doubt. It's just a question of WHO is going to hit the skids first, and then the rest will slide in behind them. But in all cases, it will be the rich (corporations, government, gazillionaires) attempting to hold on to their wealth that slow the changes. We must facilitate these changes to get our childrens future on track as soon as we can.

Certainly, bond payments have great potential to strangle local communities hit by falling revenues as the economy shrinks. In my community, we are currently facing this very question as we decide how to fund the state mandated expansion of our water treatment plant, whose price tag of almost 5 Million is a very large sum for a community with fewer than 400 permanent residents. At the same time, funding issues provide an entry for the discussion of Peak at the community level and a great teachable moment that shouldn't be missed.

Karlof's comment that: "Given the (Social Security) Trust Fund's collateral, and Bush's description of it as meerly IOU's what chance does it have of fulfilling its duty if GDP growth turns negative..?" is interesting.

The liberal bloggers make the case that Bush's goal re Social Security is to begin the process of dismantling it completely. The Repugs, say the bloggers, have been waiting for this opportunity for 60 years, and the goal is to reverse all the social programs established by FDR and other democrats.

And the Bush comment that the Social Security obligation by the government is merely an IOU speaks volumes. After all, the treasury bonds and bills held by China, Japan, etc. are no different than the SS bonds and bills. Bush would never say 'merely an IOU' to the Chinese bondholders.

Indeed the U.S. is a serious debtor nation to China, Japan, Europe, and the Social Security Trust Fund, among others, as Karlof points out. My comment earlier about being a creditor was related to being 'lender of last resort' for big borrowers such as General Motors (currently) and past problems such as Chrysler in the early 80's, the thrift crisis of the early 90's, Long-Term Capital Management in 1998.

When the delation associated with Peak Oil kicks into high gear, the federal government may be required to bail out many financial institutions, especially those with ties to the housing market (like the government sponsored agencies Fannie Mae, Freddie Mac) and any other institution considered 'too big to fail'.

At that point, the feds may be printing 'helicopter money' and a fast but short bout of hyperinflation would result. At the end of the process, when a wheel-barrel full of money won't buy a loaf of bread, for example, debts will likely be repudiated and standards of living permitted to drop to natural levels, levels far below what we enjoy today. A scenario like this is probably a long way off, but it is possible if serious planning, including population downsizing, are not promoted by our governments. What will it take for our leaders to recognize the coming disaster?

Getting back to the current debate about Social Security in the context of diminishing energy supplies, Karlof asked the question "what chance does it have of fulfilling its duty if GDP growth turns negative..?".

The issue of the Social Security trust fund being there for future generation pales in comparison to the issue of Peak Oil. I don't think the Trust Fund will exist for anyone unless a replacement for oil and gas is developed by 2030. And converting the existing Trust Fund to private accounts, and mandating that in future individuals must invest the social security tax on their own behalf, won't be of much use in a deflationary environment - seriously negative returns would be commonplace.

I don't think there's anywhere to hide from Peak Oil except to get out of debt, downsize, become self-sufficent, and save money or buy precious metals or other non-indebted stores of value. In deflationary periods, cash will be king.

There is no hiding, and Dilbert is right concerning the basic steps one can take individually.

I might also add that if you are wondering what else you might do, think about part-timing doing something constructive and sustainable as a second income.

Become an expert in gardening, and try to find some cheap land where you might raise veggies. Cities have right of ways that you can lease for little or nothing. And I assure you that if you become adept at raising something 100% organic and then approach your local merchants with it, they will prefer you. Chain merchants will not, and supporting them will not help you.

If you need a tax write-off, open a hardware store which deals specifically with the do-it-yourself of alternative energy stuff. It may not mak money now, but in a few years...

Become the solar water heater expert - everybody can use this.

Convert your car to all electric, and then embark on doing it for others as a way to make additional cash. When they see you driving yours, I asure you that the idea of no gasoline bill will appeal. And with the auto consumer used to paying $25-50K for a car, the conversion price of $10K would be welcome. (and this is a 50% margin).

By trying to think about how to sustain and make money, you will discover that there are a lot of people who may not know of the movement, but are easily converted. Everybody wants this, but they feel caught on the treadmill. It should be our job to give them options and a way out.

Isn't this a contradiction given that the whole concept of getting more is at the root of our troubles?

karlof, you got to go to work with the tools you got. You dance with the girl you brung...

Everybody wants a nice planet, but they also have to make a living. Right now, money is still the means to everything you do not make yourself. It is the only means to own land, which is required for anything.

So what I am suggesting is that we shift money making to something that helps the power-down we have got to face this generation or the next. I was taught that you lead by example, not by ordering others to do what you think best for them. So my approach is simple - I am changing the way I live.

I have raised bed gardens, we can vegetables, water catchment system, solar water heating, simple high MPG low maintenance vehicles, bicycles, etc. All the neighborhood kids come to my 'worm farm' and use them for fishing. My neighbors want to know why I have these old VW's. They see my gardens, and before long they have a few too. Next thing you know, they are asking me how I get them so green and big.

I view myself as ready for whatever comes. It is my duty to try and educate others. I honestly like helping them understand and change, and it makes us all better neighbors. This isn't an academic exercise for me - it is my life, and I am having a ball!