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To Forbes - A Gentle Cough of Correction at TOD's End
Posted by Heading Out on July 21, 2013 - 5:08am
Forbes recently issued a commentary on the closing of The Oil Drum, which deserves some rebuttal, since, as with many stories on the "Peak Oil" topic, it conveys too many incorrect statements and false assumptions.
Just over eight years ago I became irritated by several articles in the Main Stream Media that were clearly technically wrong. (My academic research includes many years of making holes in geological media, an interest that began with my doctoral work in the late 1960’s). I began writing about some of the misconceptions in regard to the approach of Peak Oil in a blog I was writing at the time. Shortly thereafter I agreed to join with Kyle, who was then writing his own blog, under the nom de plume of Prof Goose, to jointly create the website The Oil Drum.
In the beginning, Kyle handled the site management issues (a task he later passed on), and my main contribution has been the intended one of writing on the more technical sides of the situation. This was particularly the case during the events surrounding the Deepwater Horizon disaster, where readership of TOD rose to around 60,000 a day. But writing for a site that began to achieve some technical credibility had its drawbacks. Very early on I got into the habit of referencing almost every fact I cited, given the questions that arose whenever I appeared (at least to my audience, but also, at times, in fact) to misspeak. Working for the site has made me a better writer, but it was clear almost from the start that the two of us could not sustain the interest that the site very quickly drew.
Over the years I felt very fortunate that Kyle went out and found funding, and innocents willing to carry the burden of editing the increasingly large talent of folk that were kind enough to contribute to the large interest that the site engendered. The site was fortunate to attract some really perceptive folk, and if I hesitate to name them it is only from the fear of missing the odd one and causing offence to people that I have acquired great respect for over the years. Many of those now have their own sites, and so TOD acted in some small way as an encouragement for that effort and to broaden and grow the community that is concerned about the coming point where the production of oil, at a reasonable price, will be unable to keep up with demand and the unpleasant consequences that will then arrive.
I was watching the hearing before the UK House of Commons Science and Technology Committee this past Wednesday on the public understanding of climate. In response to a question, Ralph Lee of Factual, Channel 4 and David Jordan, Director of Editorial Policy and Standards for the BBC pointed out the difficulty in sustaining the level of stories on Climate Change, because of the need for these to generate significant new material to justify publication. They noted that repetition of the basic information, beyond a certain point, was counter-productive. So it is with the Peak Oil story. The facts, in neither case, change, but the amount of new information while accumulating (vide the superb work that Leanan has done with Drumbeat over the years) is often repetitive or confirmatory of earlier stories and thus harder to turn into interesting and exciting new material. There are developing stories that justify continued interest in the topic, but the slow pace with which some of the stories unfold make it difficult to sustain interest.
The transition of Egypt to an importing state for example, revealed in the Energy Export Databrowser figure shown a few weeks ago illustrates a growing problem that their new government must address, but it can only be covered a few times before interest wanes.
And this holds true for many of the topics covered in the past years. The perceptive articles written at TOD on Saudi Arabia by Stuart Staniford (who now writes Early Warning), Euan Mearns and with JoulesBurn’s images from the satellites showed how Ghawar was in significant decline. But there are only so many photos of oil rig sites in the desert that can be made interesting. Aramco are switching to the heavier oils offshore. Manifa has just started new production and Safaniya is being expanded. These are needed to offset the permanent declines in production from the older fields, but again, other than chronicling these steps it is hard to sustain interest in an inexorable process that takes years to play out and where the route to Peak Oil is following along many of the predicted lines.
Even drawing back the curtains of hype over the Bakken and Eagle Ford production, which Rune and Art have so ably done, can only be written about at a certain low frequency before folk see it as repetitious.
Much of the story of the future supply will, in my view, come from activity outside the United States. There will always be a need to update activities in and offshore Alaska, and in the US shales and other formations where future production will have to come from, but as we are likely to see by the end of this year, the gilt on that gingerbread is very thin. Thus the posts that I have been writing recently (and which will continue on Bit Tooth Energy – my own home site) will likely focus on the situations abroad, such as the Middle East, where the political upheaval has a much greater potential to disturb overall global supply than the changes in the US. Similarly Japan is moving toward a more militant attitude as China moves to extract fuel from disputed fields in the East China Sea. This however, again, is a potential tragedy unfolding in slow motion.
At the beginning of the year the EIA were predicting that gas prices would fall this year and pundits that suggested that gas prices would stay down after the recession still appear with regularity to quote their lines of optimism, even as gas prices stay stubbornly high and potentially may rise through the rest of the year. Why is that? Well the OPEC nations need a certain level of income and adjust their production each month to help sustain prices – something these optimists seem unwilling to recognize.
The problem, however, is that if global demand rises at (for the sake of discussion) 1 mbd a year, then a point will be reached, fairly soon when increasingly this OPEC supply becomes no longer capable of filling the demand. Prices will then rise again, balancing supply against those able to pay for their demand at that price. Stating that this is not going to happen because "a way will be found" is to remain an ostrich.
No, gentle readers, the closing of TOD is, in my opinion, based on a deliberate but IMHO faulty management decision made in that group a couple of years ago. It was predictable at that time, but it has nothing to do with the coming of Peak Oil, and is not even symptomatic of much of a delay in that arrival.
And with that off my chest I will return to writing about the evolving problems. My hope at the founding of TOD was that it would chronicle the events through the Peak, it got to nearly the Peak, though I don’t anticipate that this will be a pleasant story beyond that point. But, that coverage will now shift to being only at a new location at a time chosen by the TOD editors.
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Sorry to hear about OD closing. The fact is that the mainstream media doesn't do oil depletion. Their personality/make-up just doesn't fit with running an article like that. That said, I have seen some more articles about depletion recently. The simplest response to oil depletion is increased railway and trolley tracks to move stuff around. The other fact is that with it becoming a game of musical chairs with one less chair to the monopoly personal transportation oil-feast the gap between the rich and the poor will increase as James Kunstler picks up on.
Yes, the "news" is always blaming short term incidents like unrest and protests as the main cause of oil price increase, but will usually never talk about how North Sea production is half of what it was in 2001 or Alaskan oil production being 1/3 of what it was back in 1988. Never will we hear about huge oil fields in Russia or Saudi Arabia being injected with steam and nitrogen or even sea water. Never will we hear about decline in Mexico, Brazil, Australia or Indonesia. The market is getting narrower, and the news is clinging to the shale "revolution" completely ignoring the fact that shale will never be able to replace 75 mbpd of conventional crude.
A reason to keep TOD alive; for the thousands of Joes like myself (more every day?) who are beginning to ask themselves basic questions... "What does sustainability really mean?", "Are there limits to population growth?", "Why are they drilling for oil two miles below the ocean's surface?", and so on.
This is a unique site and will never be replaced.
Regards, Matt
PS. My only gripe is a listing in the blogroll, "Die Off". That heading is a bit of a turn-off. Could it be changed to something a little less extreme? :)
"My only gripe is a listing in the blogroll, "Die Off"."
Jay Hanson's 'dieoff.org' was one of the first and most venerated sustainability sites, and, in case you haven't noticed, we are party to an ongoing massive die-off, globally. Not sure how you sugarcoat that. His was the first site I remember that stated outright that human population must be reduced dramatically; the only solution to what ails the planet.
I suggest everyone go to dieoff, open the "Old Dieoff Index", and read every article there.
Jay Hanson's site was my gateway to the peak oil movement back in 1998. Jay then set up the energy resources mailing list that brought together a very interesting group of energy experts.
The site has a lot to say about our current predicament, despite it being unpalatable. Human extinction is on the table as a possibility, and a large dieoff is all but certain.
I'm forever hopeful my fellow Joes & Janes - those who may in the near future have a, "hey wait a minute" moment - might stumble across this site. In my mind, a link (on show) that says "die-off" might certainly appear a little heavy for the newbie and I'd be disappointed to see any new traffic (like myself) turned away on such a simple thing, when there's so much here to learn.
FWIW, I'm pretty well entrenched in the doomer camp these days, but sometimes a little sugar can be a good thing... ;)
Cheers, Matt
I don't think Joe was saying the *content* over at dieoff.org was extreme, just the *name*, keeping in mind that the vast majority of the public is not PO or population aware. When you have a docile and willfully ignorant public easily duped by corporate/cornucopian propaganda and their own confirmation bias, marketing your message is at least as important as accuracy.
There does seem to be a risk that climate change will make the world's environment inhospitable to humanity.
But Peak Oil causing a massive dieoff? That's highly unlikely, unless it simply provokes an irrational nuclear war.
Wind, solar, nuclear - these are all workable sources of energy. To argue otherwise is highly unrealistic.
TOD stagnated, as far as I can tell, because of this fissure between realistic analysis and deep pessimism. Pessimists will group around places like Dieoff, and be even more heavily self-selected for an unrealistic group consensus. That's a path to depression and bad life choices (like subsistence farming, and selling all your investments).
A collapse in agricultural productivity wouldn't cause a massive die off?
Are you aware that agricultural production is heavily dependent on oil?
That's the simplest link between peak oil and a massive die off. Something's gotta give in there, or else we have all electric tractors, trains, grain dryers, etc. etc. etc. Possible, but not in large scale existence yet so far as I know.
Anyways, this has been hashed out elsewhere.
I somewhat agree with your last paragraph, but not wholly.
A collapse in agricultural productivity wouldn't cause a massive die off?
That's what worries me most about Climate Change. PO, not so much.
agricultural production is heavily dependent on oil?
It's not. Small tractors can go EREV. Seasonal machines can go to synthetic fuel and biofuel. Transportation to market can go to rail and local electric trucks. These things would be slightly more expensive, which is why we don't do them now. Of course, if you include the costs of pollution and security, FF/oil is substantially more expensive already. But, farmers are a bottom-line kind of group.
this has been hashed out elsewhere.
You would think. It's been discussed many times, but never resolved. I suspect that's the great failing of TOD: this kind of thing never went to resolution. There was no generally accepted standard of evidence, no organized way to come to a consensus. Just endless, repetitive, often circular arguments.
Do the math. The farmers own costs are going up due fuel increases which cut into their already thin profit margin. Lenders are cutting back for the same reason, they see reduced net positive cash flow. Could even be relatives showing up at the door further increasing the burden.
Where does the farmer get the capital to make these expensive reinvestments? If we accept the premise investment capital is a consequence of excess energy production, net energy is falling precipitously driven by the mantra that has put all of the U.S.'s eggs in the fracing basket, where does the capital come from?
So Mr. The Substitution Effect Always Prevails Economist, when do the the higher level laws of fundamental physics and thermodynamics enter the analysis? (It has only just become apparent why my Econ pros didn't like all those engineers in their classes, we tended to see the Emperor had no clothes).
I like Kunstler's writing and polymath synthesis of the facts, but I tended to be a little skeptical of his World Made By Hand outlook. However, in the scenario outlined above, this is the likely ending. Those relatives showing up at the door would substitute the FF equipment with the newest biomachinery on the end of shovel and hoe.
Not much of a substitution effect for the technologically advancing society.
. The farmers own costs are going up due fuel increases which cut into their already thin profit margin
Actually, farmers are doing very, very well. Most of the price increases have come from higher demand (including ethanol), and farmer's proft margins have gotten quite fat. Most have the money. Of course, as always, there's a minority of (mostly smaller) farmers who are having a hard time.
Higher food prices are good for farmers. Remember, they're net energy exporters.
In fact, low food prices drove a lot of farmers out of business in developing countries. Low food prices were bad for developing countries. A long period of low prices, and now more normal prices, are a bad double whammy.
Could even be relatives showing up at the door further increasing the burden.
In the US, at least, you're thinking of the small farmers who are not representative of the vast majority of the industry, output-wise.
If we accept the premise investment capital is a consequence of excess energy production
Where does this premise come from? Clearly, the creation of physical capital requires an energy input, but I'm not sure what "excess" means in this context.
net energy is falling precipitously
No, it's not. Net energy for fossil fuels is falling slowly, but wind in particular is very high EROEI.
Mr. The Substitution Effect Always Prevails Economist
I wouldn't say they "always prevail", but they certainly can in this case. If the Koch brothers don't stop it...
when do the the higher level laws of fundamental physics and thermodynamics enter the analysis?
Which ones? The 2nd law? How does that apply to an open system with 100,000TW pouring in continuously?
Kunstler's writing and polymath synthesis
Now I see part of the problem. Kunstler is a decent writer, but he's no engineer or energy expert. When challenged on his credentials, he admits to being an entertainer.
Interest in Egypt, at such a strategic location with an oil flow of almost 4 mb/d through the Suez canal and the Sumed pipeline will not wane. There are too many problems there. I have covered these in 2 posts on my website crudeoilpeak dot info.
Even after having read all the arguments why the Oildrum is closing, it is still a mystery to me why this is happening. Under the global crude oil production plateau of the rest of the world (excluding the US) we have so many oil peaks in countries and whole regions like South East Asia - where the Australian government for example expects an Asian century to unfold.
In the worst case Oildrum editors have fallen victim to the very propaganda of the oil & gas industry we try to debunk.
The Oildrum was never a site with a focus on daily news but rather long term trends.
But Matt, right there you've misread or misrepresented what HO said. He didn't say interest in 'Egypt' would wane (though it will certainly be trumped by bigger brushfires as they happen, like all news), but he surely seemed to be saying that writing about an angle like Egypt's change from Oil Exporter to Importer is the kind of story that doesn't tickle the public's ear enough to keep such stories afloat.. not unlike the fate of the Oil Drum, as it really IS hard to make a lively story out of this point of calm before the storm (as I see it..) , when it looks so much like any other 'calm' the unconvinced have seen. Tough plate to keep spinning, with all that friction in the environment.
I think the ending of TOD is a bit ironic, maybe even perverse, but even so it makes sense. I don't claim to know about the actual coming 'sinking'.. but in a way, I think we're on the stern of the Titanic in a magnified moment when it's just sitting there, bobbing gently. Everybody who's made it onto the fantail railing knows that big things are happening, but there's probably not a lot to be said to each other by then..
One sign of a job well done is you make yourself irrelevant. Humbly, this was always my long term goal in the edification of PO.
We trade wisdom for good looks. Mission accomplished, look to new challenges and horizons and hold that bit of humble pride dear for the small or grand part you may have played in diverting potentially much worse outcomes.
This is not a funeral but a passage. Notice all the MSM that is not only noticing the end, but taking some time and print space to write about it.
The plant that tries to live forever grows hard, disfigured, and brittle. The beauty in nature grows, blossoms, and spreads is seeds.
How is it that fact repeated often enough becomes "counter-productive" and yet lies repeated often enough become truths? With the closure of TOD the fact repeater will go silent, but the lies will keep being told until they're Truth.
Well, based on that premise, I guess all my local news coming out of Denver is super productive. No worry here about covering climate change or global warming too often since it is not covered at all. Much less Peak Oil. Despite all the wild fires this year in Colorado, nary a word about climate change as even a possible cause.
Frankly, I have found that those people who have been repetitive like West Texas or even Rockman have been the most productive. Because even those with a lot of interest in the subject find it helpful to have the concepts drilled home, no pun intended.
It is not so much the lies, although they are important, but the complete absence of giving a rat's ass about global warming, peak oil, or any of the other truly existential issues of our time. Much more important to cover the local and national murder scene. And even those stories aren't put in a context where we could do anything about them.
The media fails on all counts although I must say they do a pretty good job covering the trivial issues surrounding what we call entertainment.
The beginning of the end, for me, however, is when some of the better commentators started leaving the site. That is when I mostly lost interest although I still checked in from time to time.
Regardless, I still hate to see the site go.
I'm sticking to my working hypothesis concerning the "news" etc. Nationally and globally TPTB are desperate to maintain BAU, this is "Plan A". Like a financial system which is propped up solely by "faith", loss of it will bring it all crashing down into a future well envisioned by Jim Kunstler. There is no "Plan B"...
You are spot on IMO. And, their petulant insistence on maintaining BAU will cause the fall to be somewhat more abrupt. Still, it looks as though things are about where one would expect. Demand for oil, and its use, is already beginning to decline in the developed countries. As price continues to rise, we can see this as necessary. What is truly weird is the efforts at denial.
But then we are talking about addiction here. And, denial is typical.
It would be nice to have TOD around to allow us all to commiserate; it is not to be, though, and now instead of belonging some sort of PA (petroholics anonymous) we will have to wing it.
One day at a time.
Craig
I see old people picking stuff out of garbage cans all the time. This is in a former wealthy socialist welfare state. It was all propped up by copious amounts of imported oil.
On a side note, the number of old people is getting larger too.
Actually that could be a *good* sign --old people are finally getting into recycling!
More likely it is a cause of this
http://www.guardian.co.uk/society/2013/jul/25/labour-investigation-death...
It seems the actuaries are beginning to notice that BAU is not BAU.
I believe it's the nature of the lie that's important here.
For instance "There's a nuclear program in Iraq, and we know they are harbouring Al Quida terrorists, so we have to invade" doesn't require the listener to do anything, and he can't do anything to change the situation until the next election. Responses like mass protests actually reinforce the lie to the political base of the liars. The logic of their base is "if what the protesters said was true, the government would have to change, eh? But it didn't change, so the government position must be right." Plus the play on patriotism and national pride, the countering of which would require you to change the minds of the jingoistic and the really stupid.
Whereas our "truth", "Something really bad is going to happen at some point in the near or mid term because of Oil depletion, and we should prepare for this, but we're not sure precisely how" doesn't have a call to action or a built-in constituency that can't be dissuaded. The scope of what should be done- renewable energy, reduction in car size and use, public transit, population reduction- where to start? And don't forget that even if we had the political will and started immediately, there's an excellent chance we're already too late.
The repetition isn't about changing minds, it's about keeping your base intact and on message. Our truth is unsaleable. Of course, their truth, "We want to illegally and unjustifiably invade Iraq for geopolitical strategy reasons" is equally unsaleable. Perhaps we can learn from this. Maybe what we need is a really good lie:
"New studies show that using too much gasoline leads to erectile dysfunction and hair loss, so the government, in your best interests, is raising the CAFE rating to 75MPG."
That's right-those a-holes in SUVs are why your hair fell out. (And that poor bugger over there who can't get it up...don't want that to happen to me.)
Of course, we'll need a whole lot of lies...
-Lloyd
Of course, there is the problem that nature will eventually immutably assert itself.
We needn't worry about the lies becoming truth, but
I do foresee some big 'surprises' in store for those that choose to ignore the abundant facts pointing to the changes ahead.
I want to thank you for all your insightful work over the years.
Thanks Heading Out!
A hearty Thank You, Heading Out, from me too, on your contributions to the dialog.
Yep. Reading HO was always a blast. For periods I have only read the DBs and HO's articles.
Thank you very much, HO, and all other contributors, I very much enjoyed MOST of them through the years (Leann), Rockman is cool, too.
Sad to see sight closing down.
I respect a lot of the work done here at TOD and by HO, but I guess I have a hard time believing TOD needs to close because we are running out of things to talk about and stories are becoming too repetitive. If that is the case, then the global warming sites should be shutting down (just more melting), as well as the politics sites (just more elections), etc.
If anything the subject of energy is becoming the more interesting than it ever has been- we are in the midst of a great energy transformation that is producing a vast array of interesting stories- Germany's solar push, Arctic drilling, second generation wind turbines, China's giant oil grab and nuke build out, new nuclear power options, algae and biofuels experiments, energy that reduces CO2 emissions, PO as it plays out in Egypt, Sudan, Mexico, etc.
Listen, if TOD is closing because people are tired or want to move on, I perfectly respect that. But its not because PO or energy issues are becoming less interesting or more repetitive- just the opposite.
If people are tired or want to move on the obvious thing to do is to ask if there is anyone who wants to share the burden/take over. Has anyone here received such a request? Another alternative is to merge it with another organization.
Those who want to are being encouraged to try new blogs and sites to fill those great shoes.
I just signed into Ghung's Yahoo Group 'TODregistry', which has the usual Yahoo conversation tools, but is there with the intention of giving us a chance to keep our names and contact in another spot as well, and possibly to share the news when something is coming together at a place that might fill the bill. http://groups.yahoo.com/group/TODRegistry/
I've been a little curmudgeonly about Zurk's comments lately, but gladly encourage anybody to join in over there and see if that grows into a 'new TOD' .. and I've been chewing over what to do next.
As they said in LIFE OF BRIAN,
"Something's ACTUALLY HAPPENING Reg!"
"Right!This calls for immediate discussion! "
I agree with you, C8.
pasttense, people volunteered to take over the site. The owners refused explaining that they have an obligation to all the past posters to maintain the integrity of the site. They do not want someone gaining control who seeks to profit from the members or to destroy TOD's reputation. If they hand it over, then they lose control.
It might be easier to simply say something like...."Peak Oil is here; now. Our mission has been accomplished by helping to provide the information and resources that will help individuals understand and adapt to further Peak Oil events as they unfold".
It sounds better than, we are closing, too many articles are the same, interest has waned, etc.
Interest hasn't waned and there is much more to accomplish. Perhaps this (TOD closing), will provide the impetus for others to move forward. I know I will do my best.
Thanks HO
Paulo
Dunno if that would make much difference. "Just goes to show how much in denial they are."
I have been a member for a while, but rarely post, and have learned a great deal. This place will be sorely missed. I will miss it.
That original work by Stuart, Euan Mearns and JoulesBurn Ghawar was astounding, demanded my attention, and forced me to learn more about oil production than I will ever need to know.
Having said all that: TOD made a mistake. It forbade passion. We are killing the planet. We are chopping down tropical rainforests (having liquidated out own), we continue to slaughter baby tigers, and we have brought beautiful planetary system to its knees. The very cold cool analysis (Stuart et.al. above) that intrigued and energized me is never the end-all, not personally or in aggregate.
Each of us is obligated to act for our passion
or we are half people. I believe that "us" includes any/all institutions, including academia, conferences, associations, and blogs. During the Vietnam War many colleges were forced by their students to take stands, print missives on the war, or at least alter policy to allow protest. That was never a mistake. Not for the college or its administration. They did the right thing and were rewarded finally. Unless capitalist pressure to profit intercedes. That become apparent. Things do fall apart.
But anyway. Thanks again for all the hard work. You will be missed.
I agree about the benefits of TOD. But it is not a mistake to focus on the facts and let the passion find other outlets. I think Heading Out has it right. We are talking about a process that is occurring over decades. Neither passion nor repeating the facts can be sustained in a constant form for decades. I would argue that the biggest difficulty for TOD was that the people with the most passion are the ones who expect an apocalypse in the near future. Their voices easily become the most obvious and their soon-falsified predictions are often used by cornucopians to discredit the people who are working hard to get their facts right.
Technological changes, economic changes, and political changes are very hard to predict. Geology and the laws of thermodynamics are certain to have the last say in human oil production, but technology, economics, and politics can produce unpredictable fluctuations that last decades. Forbes declares that technology has repealed peak oil. On the time scale they care about...getting rich this decade...they may be right, or not...we don't know whether the global economy can support oil that costs $100 per barrel for even a decade. But we know for a fact that they are wrong in the long run. The price of energy will eventually be equal to the price of renewable energy because the price of fossil energy will continue to go up as the low hanging fruit is used up.
Of course, if you include all of the costs, renewable energy is already cheaper than fossil fuel.
Sorry to hear you're closing. I've been negligent in contributing and reading the site.
I'm reminded however of a biblical parable--the parable of the maidens.
Peak oil has taken longer to get here than expected, but the way things are looking the downslope may look more like falling off of a cliff as geopolitical conflicts get in the way of production.
Good luck to you and thanks for all the hard work you did.
don Henry Ford jr.
Yes - HO - a hearty thanks.
There are a few things I have always looked for in addition to the Drumbeat:
My Sunday tech talk from Heading Out
Summaries from Rockman and Westtexas.
Global production graphs from Darwinian.
My Monday rant from Kunstler.
My Thursday morning exploration of ideas from Greer.
But I have to agree with several other of today's comments. This is not the time for TOD to fold their cards and leave the table. We are now entering the second half of the age of oil. It will be the story of a lifetime.
(Apparently the mods deemed the considerable effort I put into writing this comment not worthy of publication in the World Oil and Gas Production Forecasts post below, so I will try posting it here and see if it gets through.)
If you walk around outside you’ll see birds chirping, trees whispering, kids laughing, people driving around pretty much like normal. It looks just like it did in the 1960’s, except we have computers and nicer looking cars and TV’s now, and the smog is better. What’s so different about today that provokes Chicken Littles like me to scream that the world is about to end?
The answer to this is that our entire financial system, and its history going back at least 100 years, has been predicated on, and driven by, perpetual economic growth. That is what provides value to money. Money is literally created out of future debt, going out all the way to the 30 year Treasury Bond. People historically bought those bonds because they were reasonably confident that the economy would grow at a rate roughly equal to the bond coupon, FOR THE NEXT 30 YEARS. This growth would allow the governments and corporations that people (and other countries) bought the bonds from to be able to pay up for the next 30 years. This is what greased the wheels of the economy and provided investment incentives for all of the industries and parts of the economy providing jobs for workers. In the 1960’s, money worked, because the economy could grow.
But in 1970 the US hit Peak Oil. As a result, its economy should have begun declining because it couldn’t grow anymore. But it didn’t decline, at least to the degree one would have expected. Why not? Because there was a fundamental change to the monetary system. In 1971, the US defaulted on its gold convertibility and the dollar became a fully debt backed fiat currency. Those systems are dependent on perpetual exponential growth and they invariably, 100% of the time, blow up in hyperinflation. How did the US avoid that catastrophe? It (militarily) enforced the dollar as the world’s reserve currency, that’s how, which extended the US empire around the world and forced other countries to sell their resources (oil and manufactured gizmos) to the US in exchange for pieces of paper. That was a fundamental system change in 1971.
This only worked for a while, until what happens with all debt backed fiat currencies happened – runaway inflation. In order to keep the bond vigilantes at bay and prevent a runaway monetary collapse, in 1982 the Fed increased interest rates to about 20%. This “destroyed” the economy, but the alternative was hyperinflation which would have destroyed it as well. Back then, the economy could weather those high interest rates without completely collapsing because it wasn’t over-leveraged. And more importantly, the US still retained the world’s reserve currency, so it could run a perpetual trade deficit and CONTINUE GROWING – using other countries’ resources, who hadn’t yet hit Peak.
This 1982 shift in interest rates was another fundamental system change. Since then we have had no system change; we’ve had 30 years of the same ol’. Over this period, interest rates have gradually and steadily declined to basically nothing today as the hollowing-out US economy increasingly depended on credit money and consumerism, and its overseas military enforcing the trade deficit, to maintain GDP growth. Along with this, systemic leverage has increased – they all go hand in hand.
Now, the whole world is at Peak Oil (coal and gas may have a couple more decades), and it can no longer grow. Correspondingly, the monetary system is ceasing to function. We are now looking at another imminent system change. Interest rates cannot go any lower, government debt is spiralling out of control even at these low rates, and the financial system is beyond insolvent. Over the last few years, real buyers of US Treasuries have been declining to the point that the Federal Reserve is now openly buying about 75% of them I believe – this is direct monetization of debt, and it’s increasing exponentially. Why would anyone buy a 10 year bond returning 2% when the increase in money supply from Fed debt monetization results in a real inflation rate several times that? The monetary base has quadrupled since 2008.
There is now no “productive” monetary asset left that can provide a positive real rate of return, absent central bank manipulation of select markets, at the expense of others. Not stocks, bonds, or even cash, because deflation is being held at bay by Quantitative Easing. Because the economy can’t grow anymore! We’re at Peak Oil. Duh! How can anyone seriously expect a consistent rate of return on their investments when the real world upon which those investments are valued isn’t growing?
There is absolutely no way interest rates could rise to 5-7% without totally destroying the current financial and monetary systems; there is just too much astronomical debt in the system and hundreds of trillions of $ of interest rate derivatives. The only way we could return to a 7% interest rate environment would be if the current monetary system collapsed and we got a new one flushed clean of debt – in other words, all the savers out there would lose their savings, because on the other end of every dollar or bond saved is a debt that cannot be honoured. To all the baby-boomer nest-eggers out there expecting to retire on their stocks and bonds – I’m sorry to report to you that it will not happen. You have been duped into participating in yet more ponzi scheme RRSP’s (in Canada) or 401K’s (in the US). You are going to lose your life savings. Any residential real estate you own will get clobbered, because we all know what happens to real estate when rates rise… The economy cannot possibly grow to provide value to your (debt-based) investments that you believe represent real wealth.
Anyone who casually looks out the window and concludes that what is going in society now resembles anything close to historical norms is in for a big surprise. Look what’s happening to the gold market – the privately-owned Federal Reserve seems to be about finished selling off the American citizens’ sovereign gold, as China, India, and pretty much every other country besides N America and Europe is voraciously buying it up at these ridiculously low manipulated prices designed to provide one last desperate gasp for the US dollar. Once the gold is gone, the dollar will be rejected in international settlements, the US will no longer be able to import almost ½ the oil it consumes, rates will rise, and it will descend into darkness. We can only hope that Bernanke and the banksters still have a shred of decency left in them and have kept a small hoard of gold with which to back a new currency with – but I doubt it.
The system WILL end, and it will not end with a whimper. No statistics will be needed to determine when that transition happens. All this talk about whether total global oil production is up or down a smidgeon based on how such and such entity interprets density or energy content differences between NGL’s and crude, etc. etc -- it’s all just statistical noise. It’s good for showing how we are approaching PO and why the global economy cannot continue to grow, but it isn’t PO. When PO happens, there will be no doubt in anyone’s mind that it is here.
While it’s easy for those who understand how the system works to identify that we’re near the peak of the greatest ponzi scheme in the history of the world, it’s much more difficult to predict when it will crash. We are up against VERY powerful forces who will do whatever it takes to preserve BAU... until they can’t anymore. It will not end until the world ends, at least “the end of the world” as we know it. Those in control will lose control when this happens, and the central banks are pulling one rabbit after another out of their hats to delay it. But they cannot violate the laws of physics and they are running out of rabbits, and all this is doing is further inflating the ponzi scheme which will make the inevitable collapse even worse, because every year that this continues, we are consuming more and more resources away at unsustainable rates, using artificially inflated dollars – resources that could otherwise be put towards developing renewable energy, and WOULD otherwise be left in the ground and extracted at slower rates in a normal interest rate environment – in other words, we’d be clearly beyond PO right now if it weren’t for central bank manipulation of the monetary system.
And the whole time up until the system crashes, those predicting this outcome will get ridiculed by those who don’t understand how the system works, who don’t see the fundamentals which undeniably point to an imminent “end of the world”. But when it does happen, those deniers will lose their shirts (like in 2008), and those who correctly position themselves will make a killing (like those shorting the stock markets in 2008).
And while it might be tempting for the Chicken Littles to do some “told ya so” ing afterwards, it will provide little satisfaction because it will be too late – the world will be on its downward spiral. And the naysayers taunting the doomers will mysteriously vanish into the woodwork, just like they always do after every ponzi scheme crashes.
The doomers WILL be vindicated, and I would hazard a guess that it will be happening fairly soon. But I am not a central banker, so I cannot predict exactly when. I hope this post goes into TOD’s archives as one of the last summaries wrapping the whole theme together, an attempt to bring the financial and energy systems together, something I wish TOD had spent more time focussing on when it was still alive. It’s given up having covered only half the story.
Hi Null,
FYI, I will be attaching your post in an email to my friends and family. It is a very good summary of our current situation and predicament and a fitting goodbye post to TOD!
Cheers!
Fred
Folks, I am just learning about PO. As a physician, I talk to my patients what I learn here. Where am I going to learn and find the truth? Our CORPORATE press is only interested in profit and selling ad . PO will depress their customers and viewers. Please try to keep OD available to all of us. Thank you so much for all your contributions. PO and OD never been boring.
Hi Ndlessani
Thanks for your post. I'm glad you share information with your patients.
You may have seen articles like these, which include studies by a few people who are also in the healthcare/medical field and are peak oil aware.
http://www.ncbi.nlm.nih.gov/pmc/articles/PMC2602925/
http://www.ncbi.nlm.nih.gov/pubmed/21778492
Am J Public Health. 2011 Sep;101(9):1587-97. doi: 10.2105/AJPH.2011.300123. Epub 2011 Jul 21.
Peak oil, food systems, and public health.
Neff RA, Parker CL, Kirschenmann FL, Tinch J, Lawrence RS.
Source
Center for a Livable Future, Johns Hopkins Bloomberg School of Public Health, Baltimore, MD 21205, USA. (Note: I left off the author's email, however, it's available.)
Abstract
Peak oil is the phenomenon whereby global oil supplies will peak, then decline, with extraction growing increasingly costly. Today's globalized industrial food system depends on oil for fueling farm machinery, producing pesticides, and transporting goods. Biofuels production links oil prices to food prices. We examined food system vulnerability to rising oil prices and the public health consequences. In the short term, high food prices harm food security and equity. Over time, high prices will force the entire food system to adapt. Strong preparation and advance investment may mitigate the extent of dislocation and hunger. Certain social and policy changes could smooth adaptation; public health has an essential role in promoting a proactive, smart, and equitable transition that increases resilience and enables adequate food for all.
http://www.kevinmd.com/blog/2010/05/oil-shortage-affect-hospitals-health... (A commentary.)
I would encourage you to contact others in your field- (or, myself, for that matter - although not in your field). Perhaps there might be ways to collaborate to reach a wider audience and focus on constructive policies and plans for what we face. When people collaborate, they can often do more. Also, there might be ways to have the scientific community, including the US National Academy of Sciences, weigh in, particularly with a study of impacts. Seems logical, at least. (www.oildepletion.wordpress.com).
For some reason, it's not only the corporate press that avoids investigation of "peak." Much of the alternative press also does this, along with the major environmental non-profits, as far as I can tell.
This situation can change for the better - that is, there are better approaches and paths to take, once the facts are acknowledged (IMVHO).
I think I can give a "cliff Notes" version... "Any civilization that bases itself on unlimited expansion of economies and (population to support it) is doomed to catastrophic failure". In the long term there will be that final fading "whimper", but a lot of very unpleasant "bangs" (as more and more fight over less and less).
I think I'll just leave TOD with a final quote from Han Solo..."I have a bad feeling about this".
Thanks for the summary of our situation, Null.
I don't look forward to "our" vindication.
I've read, but almost never commented here since 2008.
I have no technical expertise in this field.
I woud like to Thank Heading Out and all the other folks who contributed here.
I see Gail The Actuary's stuff in other venues now, too.
Nichole Foss has The Automatic Earth.
I make no pretense at any completeness.
I am grateful, and I'd rather we were all wrong, but it's global economic and population collapse, baking to death, or both, as far as I can see.
War comes in there with the collapse, maybe cyberwarfare shutting down the internet and electric grids, for starters.
I pray for peace and equanimity in these times.
Well, the thing is that there isn't any program in technical engineering on oil depletion. Perhaps there should be a program called "Softening the blow from oil depletion and pollution of water in civilisations based on mass production and mass consumption".
It would make for a nice university major. The charge would be 10,000 USD for a three year program. The proceeds would be used to pay for the con artist professors' personal vehicles and the expensive fuel while the suckers who sit in the lecture hall end up with personal debt.
Do you think I went too far by writing that ?
Awesome comment Null.
Hello NH, Thank you for such an amazingly succinct synopsis of what I agree is our financial situation. I"m printing this out so I can keep this at hand to re-read when I get mixed up by the mainstream 'happy talk' about how things are going. I recently sold almost all my stocks and am sitting out for awhile in "cash" - anyway numbers from the investment outfit on my statement. Too scared to be in the equity market or in the bond market at this point, watching the Dow make new highs day after day..... Yikes is about all I can say.....
If you followed this approach when Peak Oil (lite) had hit and the global credit crunch dropped the equities markets by 50%, you would have lost out on the recovery.
Don't let fear rule you.
Null:
One of the choices which was made and had a significant impact was to decouple the financial system from the physical world - Nixon took the USD, and thereby most of the western currencies, off the gold standard in 1971, right around US P.O.
(not that a gold standard makes sense, but perhaps not having the financial world in some way connected to the physical world makes even less sense).
Rgds
WP
My recollection from the times is that the OPEC oil price increase was in response to the rather arbitary increase in the US price of wheat. Can't find much analysis of that, but http://books.google.com/books?id=bZNSswYkAZwC&pg=PT127&lpg=PT127&dq=butz... is interesting.
Hi Null,
Thanks - well put. I really hope you'll write more.
re: "When PO happens, there will be no doubt in anyone’s mind that it is here."
Yes, while at the same time, it seems most likely to be manifest (as you say) as a financial/economic crises, rather than a fundamental "limits to growth" (esp. oil) reality. (In other words, peak oil being here may not be seen as that.) Which is a set-up for pitting people against each other.
So, this implies (to me) that the situation seen with understanding (IMVHO) provides a basis for approaches that can be "better" rather than "worst possible."
re: "...those who correctly position themselves will make a killing (like those shorting the stock markets in 2008)."
Probably no place to spend it, though.
re: "powerful forces."
Yes. Still, one can imagine...because it's true...some people correctly assess the situation (reference your post) and those can collaborate towards a better outcome. (In theory, I'm sayin'. In theory.) Also, people have learned a tremendous amount that can (in theory) be applied: in the fields of sustainability, human behavior, conflict resolution, etc. for example.
Is there a way to organize differently to deal with the de-growth shock?
re: "half the story." Agreed.
From my skimming of the previous articles on the closing of TOD (also possibly a dormancy, not closed forever) - it seems the editors of this site are open to suggestions (somewhat) (?) for...?
I'd like to see the second "half the story" - somehow, somewhere.
I read every word.
Now what?
The answer to this is that our entire financial system, and its history going back at least 100 years, has been predicated on, and driven by, perpetual economic growth.
Where does this idea come from? What school of economics teaches this, or would support it??
If growth disappears, why can't interest rates just be effectively zero? Keep in mind, the classic solution here is to maintain a low level of inflation (say, 2%) so that everyone is forced to keep their money in the financial system (or lose the value of their money).
An economy can be divided into goods and services. If growth in goods (commodity consumption) stops, why can't the services part of the economy continue to grow? We've already pretty much seen this in the US and most of the OECD.
Now, the whole world is at Peak Oil (coal and gas may have a couple more decades), and it can no longer grow.
Where does this idea come from? Why can't renewables replace fossil fuels for electrical generation, and synthetic fuels (using renewable power and seawater) and biofuels for the small portion of fuel consumption that needs liquids (pretty much aviation, very long-distance water shipping, and seasonal agricultural equipment)??
I've been pointing out that oil can and should be replaced for a while (on TOD for 7 years and 48 weeks). As best I can tell, TOD is stopping because this is very clear to some members of the group running TOD, and just doesn't make sense to others. They can't bridge this disagreement, so there is no way forward for TOD.
Go Tesla! Go Volt! Go....Leaf!
They can, but only for a little while, it can't continue forever because it violates the laws of physics for criminies sake!
it violates the laws of physics for criminies sake!
No, it really doesn't. How is a better quality car, manufactured with recycled materials and renewable energy, or better quality healthcare, eldercare, education etc prevented by the laws of physics?
Tom Murphy is beating a silly straw man. No one says that economic growth has to continue forever, especially in the form of goods.
In the shorter term, there's no particular reason that higher quality healthcare has to use more energy. The energy involved in quality improvement is in the design and planning process, which is pretty much brainpower - thinking hard doesn't really take much energy, and that energy requirement certainly doesn't grow over time.
Over time the output of goods has stabilized, and the energy inputs per unit of manufacturing output has fallen. Labor and energy move to producing services. Manufacturing value is flat, while services grow, and energy consumption is flat.
Not copying all the lyrics for fear of copyright takedown, but let us each take what comfort we can in the wisdom of Walt Disney's Jiminy Cricket
hmm. That's kind've fun, but I'm a little afraid you think that solving PO depends on wishful thinking.
It doesn't. It depends on political change. The technical solutions are there, but they're blocked by the FF industry, whose livelihood and profits would be threatened.
Does political change depend on wishful thinking? No. It depends on hard work. Have you given money to all of your representativs, and told them what you want??
Because Services is The Swiss Village where everyone does each others laundry. It is a null economy. As in physics, every transaction has some energy loss and increase in entropy. At some point new energy (goods) has to come into the system.
Not even Soylent Green can sustain a society.
That's what the sun is for: 100,000 TW of energy, every second.
Again, the important point here is that infinite exponential growth is, in effect, a strawman. Goods have plateaued in the OECD, and expanded services don't require more energy. Developing countries want more energy, but not an infinite amount. If you were to ask a conventional economist to project out 50-75 years, they'd be fairly clear on this point: growth in commodity consumption will level off.
One more time: infinite exponential growth is a strawman.
Are you hearing that??
I want to thank everybody who has been involved in the running of TOD over the past 8 years,
Leanan,
Art Berman,
Heading Out,
Rockman,
Rocky Mountain Guy,
West Texas, etc.
And if I've missed your name, I apologise.
TOD has been a tremendously useful one-stop resource regarding Peak Oil and Peak Gas, and it is irreplaceable. So I took the precaution, starting about 6 years ago, of copying all relevant posts as Word Documents.
I think that TOD was Just Slightly Ahead of It’s Time.
I am a geologist based in Calgary, working partially in international oil (and some gas) exploration, and simply do not have the time to make insightful comments.
Heading Out may remember a British TV program called The Troubleshooters, and if you’ve never heard of it, google it at http://en.wikipedia.org/wiki/The_Troubleshooters . I now have a job I really wanted back in 1971, Peter Thornton’s. Half my time is clearing up operating or corporate messes, and the industry is littered with them. The other half of my job is international exploration. I have followed TOD from (five countries’ names deleted), etc. Thank you all very much.
However, for once, my view of the world over the past 8 years.
Peak Oil and Peak Gas, a perspective from the 1970’s.
I started in the awl bidness back in 1973, working on the Mackenzie Valley Pipeline. Some of the GSC maps have my name on them. At that time, the concept of Peak Oil was similar to that of Continental Drift – remember, that idea had been accepted by the majority of geologists and geophysicists only for about a decade after nearly half a century of rejection, mainly from US and Soviet Union geoscientists (see Naomi Oreskes’ latest book). King Hubbert had wrung the alarm bell about Peak Oil, but global peak oil was decades away – in the 1970’s. Buzz Ivanhoe used to sound off on Oil & Gas Journal on an annual basis. The Club of Rome had just published “The Limits to Growth”, and again, the effect was going to be felt decades away.
Which is now.
Peak Oil and Gas, where we are now
I believe that we are on the Uneven Plateaux of oil production and of gas production. The era of cheap conventional oil is past – and this is where it will hit national and international politics hardest.
I suspect that forecast Canadian oil sands production may not reach the heights of 3 MM + BOPD forecast for the next decade – and this will hit the Alberta and Canadian economies and electorates very hard. Neither, especially the Alberta electorate and the Calgary Sun newspaper, are ready for it.
Global oil production will be sustained for probably more than a decade by the swing producers in OPEC, unconventional oil sands and shale oil. I expect major business wars over the rights to Iraqi oil, as Saudi Arabia increasingly will to focus on its own needs.
I am very concerned about the increasing demands for water required for unconventional resources and reserves, and I strongly suspect that this will be a limiting factor.
When the realities of peak oil and peak gas hit home, in the forms of ever increasing prices and increased unreliabilities of short-term and long-term supplies and the end of the eternal cornucopian future, then there will be a major political and intellectual revolution, particularly in those societies predicated on eternally continuing growth and improved well-being.
And revolutions are always violent.
The Export Land Model
One of the khe key intellectual contributions presented on TOD is the Export Land Model. More and more former exporting nations are unable to earn foreign exchange and have to rely on imported oil and gas for base-line and peak supplies. I refer you to the Energy Export Data Browser,
http://mazamascience.com/OilExport/
This will become accepted wisdom in about a decade, and history in about three decades.
Increased competition for international leases and discoveries, and for major companies with established reserve and production bases
There is going to be intense competition for physical and fungible resources. Oil will have a priority over gas, unless a gathering and processing and transportation system is pre-existing. Hence the Chinese colonisation of onshore Africa, followed to greater or lesser degrees by Malaysian, Indian, Korean and Brazilian companies, and local moneys, coming from companies that you have never heard of from Angola, Nigeria, South Africa, etc.
And god bless OPEC for simply being there and staying there.
Many Asian and MENA National Oil Companies are exploration risk averse.
There will be opportunities for juniors from Europe and North America and Australia to go exploring internationally, provided that they have war chests of at least $100 MM behind them. And they will be welcomed, slowly and carefully. The local bureaucracy will be exasperating, the red tape is being cut lengthwise, but there are good opportunities out there.
Regarding the competition, the national cultures of many Asian and MENA, inherent in the international operations of the NOC’s, do not reward failure – a D&A could be a career-ending move for a geologist, especially if it is an expensive offshore well. “Western” companies have different attitudes for risk – promote it, farm parts out, try and retain operatorship, and if it’s a D&A with no source rock, move on.
There are major opportunities, if you know where and how to look.
Part 2
Where to go exploring?
I’m not telling you.
However, I will comment on where not to go, from a cosmopolitan / international Canadian perspective.
Where not to go exploring
First, avoid the US, possibly excluding Alaska.
Don’t waste your own time and your investors’ money.
The two primary American problems are linked, their Freehold land holding system, and their legal system, which is derived from the British, and is aggressive and combative.
The Freehold system is a major cost in terms of legal costs, which are a landman’s wet dream, and in terms of time wasted. This has been pointed out recently in an Oil and Gas Journal of unconventional resources in Canada and the US, which states that Freeholders’ demands, compared to the Crown Land system in Canada, reduces US fiscal competitiveness.
On the other hand, I do not find the American environmental regulations unduly restrictive, compared to other countries.
However, another problem in the US is the layer upon layer of taxes, Federal, State, County, Town, etc., etc. Canada is much simpler.
It's too much like hard work for small rewards compared to the international opportunities.
So go somewhere more friendly, like the Norwegian North Sea, or Libya.
Secondly, avoid the Western Canadian Sedimentary Basin and Canadian Williston Basin.
The Canadian junior oil and gas sector has not recovered from the global financial and economic downturn. It was then dealt two more blows from lower Canadian gas and oil prices. The terrible Lac Megantic railcar disaster should in theory help push through the conversion of part of the TCPL mainline from gas to oil and the export of Western Canadian oil to the Canadian East Coast, but this is also facing obstacles from NIMBYism.
Investor interest in the sector has melted away.
But there was a prior structural weakness. The Canadian junior O&G sector mostly used the same model from ~1990 to ~2008. This was to acquire smaller non-core assets from the majors, work them up and increase production and reserves, and then flip them to the Income Funds and Royalty Trusts. It required reservoir geology and engineering skills, not exploration skills.
Eventually, this corporate model moved up the industry chain towards the majors, and several certain very large companies proposed to turn themselves into Income Funds or Trusts. Facing potentially huge losses in taxable income, the Federal Government of the day changed the taxation legislation and effectively put the Royalty Trusts out of business.
This had an immediate downward cascade into the juniors, which had immediately to find a new corporate model. The industry faced a major problem in the WCSB, which is a mature basin from an E&D perspective, having been worked over repeatedly. The industry, then faced another blow from the economic downturn, and is now struggling very badly.
Oil and gas exploration is a stock play as much as it is a technical reserve build-up play, requiring a continuous stream of good news to maintain momentum. Compared to the late 1970’s and early 1980’s, the industry does not have so great an exploration skill set anymore. Oil is found in the minds of men and by going out into the field and looking at rocks, not on computer-generated maps.
Thirdly, avoid unconventional oil and gas resources in Europe
“It’s new and bright and shiny and works in the North American basins and will be a panacea to the recognised decline in North Sea gas reserves and the reliance on Russian and North African gas exports”.
I strongly suspect that the shale oil and shale gas exploration and then development technologies will not be so easily transferred from North America to Europe. European basins are much smaller and much more structurally complex that North American Basins. They are unexplored for shale gas, and it is not yet known if there are any sweet spots, as in many but not all North American Basins. Additionally, much of Europe is very densely populated, and their NIMBYism is not irrational.
Fourthly, avoid the Former Soviet Union.
Corruption, Gazprom, corruption, oligarchs, corruption, changing laws post facto, corruption ... Been there, done that, seen the movie.
Fifthly, avoid certain other international countries famous for corruption and political instability
No names, no pack drill, but including the UK North Sea.
However …
The latest Japanese producing gas hydrate well …. A long-term hope.
The Last Word: The Resurrection, Yet Again, of the Mackenzie Valley Pipeline
This is where I came in.
Will it ever be built?
This project has been killed off and resurrected so many times, and some of the deaths have been self-inflicted by the northerners. I do not begrudge Judge Thomas Berger’s decision back in 1977, I think that he was totally correct to call for a moratorium on construction.
But subsequently, each time that it looked set to go ahead, another political or economic barrier came up.
And each time afterwards, the industry heaved a huge sigh of relief: “Thank god we didn’t build it! TransCanada would have gone bust!”
The latest deathblow to the project was the unconventional shale gas production boom and sale of the production at low prices. The low prices killed off the pipeline.
I think that it will start up again around 2018 to 2023, and this time it will be complete.
And this time the competition will come from Alaska ….
Again, thanks for everything to TOD.
It is a huge pity that Drumbeat and Heading Out's weekly techie papers, in particular, are shutting down.
The drumbeat has been recreated in an automated for at http://www.theplanetbeat.com ... youre welcome to try there and give feedback.
What do I see at your site which no one has refuted:
"Setting the Record Straight --A Gentle Cough
2013, July 19 - 5:50am — step back
Professor Goose responds to End-of-Peak-Oil celebrationalists here"
Heading Out (not Professor Goose) was the person who made this post.
By the way is Professor Goose going to make a comment?
Harry,
Like you I am a working geo, and have had limited time for posting on TOD. Also, not all employers are sympaathetic to sites such as TOD, so I have tried to keep a modestly low profile here. I agree with much of your comment. Regarding a couple of specific points:
Russia - While I haven't worked in the Former Soviet Union, some friends have, and everything I've heard agrees with what you have said. Corruption is rampant.
US legal system - Yes, it is derived from the British system. So is Canada's, is it not?
Alaska - One difference between Alaska and the Lower 48 is the system of land and mineral rights ownership. Up here the vast majority of leasing falls into one of three categories. Much prospective land is held by the State of Alaska (Prudhoe, Kaparuk, and their satellites are almost all on state lands), and the state is generally very receptive to oil development. There has been much discussion on TOD about the allegedly impending shutdown of TAPS, but that isn't going to happen anytime soon. There is still probably about a billion barrels to be produced at Prudhoe alone, and with modifications TAPS will continue to operate for many years to come.
The Native coporations (somewhat tho not totally analagous to your First Nations in Canada) are the largest private land holders. They are happy with development in some areas, others not so much. For example on the the North Slope the Arctic Slope Regional Corporation (ASRC) has been supportive of onshore exploration and drilling, including ANWR (should it ever open). However N Slope Natives generally tend to be very opposed to drilling in the offshore Arctic.
The other large holder of oil prospective land in Alaska is the US Federal Government. Dealing with the Feds can be a maze of conflicting regulations, and a tangle contradictory policies. The history of leasing and drilling in NPRA is a classic example. Did I mention ANWR?
You mentioned Alaska gas as competition to your Mackenzie Valley Pipeline. Maybe. Certainly building a pipeline down the existing TAPS corridor to a LNG plant in Valdez, using the Dalton and Richardson Highways to ease the logistics of construction makes some sense. Years ago there was a proposal to take Alaska gas east in an offshore pipeline to hook in to a Mackenzie Valley Pipeline. Who knows, maybe some day gas will travel from the Canadian Arctic though Alaska. However, I'm not sure that any gas from the North American Arctic will reach market during my lifetime.
Finally, there is possibility of oil production from the offshore Arctic. RockyMountainGuy and I had a number of debates on TOD about the oil potential from the Arctic. He seemed to be of the opinion that all of the offshore was gas prone with little oil potential. I beleive the evidence indicates that there is considerable oil in the offshore Arctic, at least in some areas. Apparently Shell thinks so as well. However, the technical and logistic challenges are formidable, to say the least. And the environmental consequences of a spill in the Arctic would be catastrophic. But the Russians are going ahead with Arctic exploration and developement, and if large enough reserves are found I think it will happen in Alaska and Canada as well.
It is hard to maintain interest over the longer period and the peak oil story will take a long time to play out. As a follower of the site for the last 5 years I can recall occasions when information was repeated but the story is evolving.
It just strikes me as a great shame that we are to loose this important resource (the oil drum) just as things are about to get interesting. Correct me if I am wrong but it appears to me that the North sea is entering it's final death throes just as Russia gets ready to roll over. We are almost at the point where enough time has passed to look at the data from the shale wells and see what the real production curve looks like.
The situation in India at KG-D6 has got to be worth comment as it must be the poster child for gas production collapse, following the halt of supply to all the power plants they have recently cut all supplies to the LPG plants so they are only supplying the fertilizer plants now and production continues to fall weekly.
The oil drum may be closing it's doors but the last person to leave may be spared the trouble of turning out the lights.
Heading Out,
thanks a lot for your information here as well as in so many valuable postings before (which made me now add Bit Tooth Energy to my rss feeds).
I think it is a quite bad idea to close down TOD now: We should be aware that this website not only was important about researching and exchanging technical information about peak oil (and peak fossil) but it was also one of the (if not THE) most important websites to inform the general public. Closing down this core site right now gives a terribly wrong signal to the rest of the world (general public, media, politicians etc.), which seems to be that the entire peak oil story is "over" now - because (due to the still very successful fracking hype) the "game changer" shale gas has proven the entire peak oil "theory" to be wrong. The editors may know all the facts that prove the contrary, but - believe me - Joe Average and average journalist just grasp such simple informations like "the main peak oil closed down" and draw very simple conclusions: Peak Oil - forget it!
Or what would you think would happen to climate policy if for example the IPCC closed down because climate researchers think the've found out the major details about climate change?
Or the same about nuclear research, genetics, ...?
I think that compared to running into this PR deseaster it would be a much better idea to keep The Oil Drum just as it is, because I am sure that no one will complain if the overwhelming splash of articles that appeared before will slow down to a trickle of just a few postings every few months.
This would even mean less work for the editors - and if even this is too much, I am sure that a solution can be found.
So dear editors, please think about it. Don't let TOD die!
Add me to the list of people who are disappointed in the decision to halt new activity at TOD. If for nothing else, the Drumbeat consists of one of the best collection of related news stories on a very regular basis which consistently generate a good deal of interest. The other technical articles are like icing on the cake. The combination of the two has me checking TOD once a day for news, so I will be sad to see it go.
Ironic that TOD seems to be closing because of what the editors judge as "peak TOD interest", because I simply don't see it that way. I feel like there must be some hidden story behind the decision.
IMO: Keep TOD going with the regular Drumbeat updates and other periodical in-depth technical articles you guys are so good at.
Just one Drumbeat a week, and one technical article a week would be good for me.
One of the things that is not transparent is the cost to keep TOD going and the funding sources. Perhaps those running the site simply got tired of running it. I can understand that because I am sure that a well managed site takes a lot of hours. Perhaps there should have been an attempt to create a model that would provide funding and an attempt to reach to others to see if anyone was willing to take this over, even if in a limited form, say, to Drumbeats.
Still very much in the dark about this and don't think it has been explained adequately.
As I log in to comment, after an embarrassingly long gap of inattention, I'm reminded that I've been a "member" here for seven years and twelve weeks. The velocity with which TOD infused me with knowledge and passion about "Energy and our Future" was tangible those first few years, and I carry on as best I can engaging and sharing with others.
It would be IMHO a positive move if there were an interim option for the future of TOD instead of a strict archive. With energy issues destined to define our future there will always be at least some measure of interest and content coming to the site. With oil kissing $109/bbl as I type I imagine site traffic has already ticked up unrelated to the coming announced closure.
But opinions are cheap and plentiful. The most significant thing I would want to communicate is a very heartfelt Thank You for sharing with me and ultimately changing my life and that of my family. Everyone involved has had a lasting impact around Peak issues AND created what I use regularly as THE best example of the positive potential of a free and open internet.
Thanks to Heading out and all the other contributors for all the truly eye opening articles over the years.
It has been obvious for awhile that something was a miss. What ever the managment decisions you refer to look to have played a part. TOD had been loosing to Many good conbributors for various reasons, Spam policy or what ever.
I dont agree that it was a lack of new Material. I think is a shame so many writers left to write their own Blogs, many of them good. I hope it was not egos, but Together you were Briliant.
The passing of the Oil Drum will leave me searching for the one unbiased site I could refere people to that were becoming aware af the trouble we are in.
I think shutting the site is a bad decision. If the owners are not intrested or do not wish to carry on they should look at some other way of keeping it alive. Pass the Batton to some body else and give them a chance and be proud of what you created. It may go in a direction you might not fully approve off, but freezing it as an archive does not do it justice.
Thanks I will miss it
Thanks to Heading out and all the other contributors for all the truly eye opening articles over the years.
It has been obvious for awhile that something was a miss. What ever the managment decisions you refer to look to have played a part. TOD had been loosing to Many good conbributors for various reasons, Spam policy or what ever.
I dont agree that it was a lack of new Material. I think is a shame so many writers left to write their own Blogs, many of them good. I hope it was not egos, but Together you were Briliant.
The passing of the Oil Drum will leave me searching for the one unbiased site I could refere people to that were becoming aware af the trouble we are in.
I think shutting the site is a bad decision. If the owners are not intrested or do not wish to carry on they should look at some other way of keeping it alive. Pass the Batton to some body else and give them a chance and be proud of what you created. It may go in a direction you might not fully approve off, but freezing it as an archive does not do it justice.
Thanks I will miss it
Long time reader; first time poster.
I created this account just to say THANK YOU to TOD and all the contributors.
You opened my eyes.
I presume there is a reason it has to end, but it seems a shame.
I agree, as one of many I am sure, who came to this site to benefit from the writing and discussion of men and women of vast knowledge and experience. I have learned so much about so many things. Trolls, idiots and buffoons not withstanding, this has been the most dignified and informative sites ever. I will be missing it.
Thanks Heading Out
I always enjoyed the Tech Talk posts
"Just remember this: if you decide you can't do it, the foul
scum who brainwashed him will win. In spite of everything, they win." Robert Heinlein, "Double Star"
If TOD does not continue to bring the whole truth about oil depletion and Peak oil to public knowledge, then they win. The business media like "Fortune" will win. The politicians who would rather distract their constituents from reality will win. The commodity traders who would like to throw dust in the face of the public interest will win.
I like to think of TOD as a large tasty and mature truffle that is ready to reproduce and release it's spores to the wind.
Time to go forth, be one of those spores and spread the truth far and wide >;-)
oh god, I like your style.. and it's a very traditional style too.
No... they will not win. In this case, rather, they too will lose. The only winning move is not to play the game.
"How about a nice game of chess?"
Craig
Why of course!
http://i289.photobucket.com/albums/ll225/Fmagyar/CoalPoweredDragon.jpg
We, the readers and contributors of TOD, have an obligation to posterity. We must bear witness on every occasion to the whole truth about our fossil fueled civilization and the limits imposed by nature. TOD has done that for almost eight years now. Truly it would be neglect of our duty to stop. What are the obstacles to TOD. If money is truly short, then how can TOD not be perfect for crowdsourcing? If lack of time, cannot site maintenance be delegated? If lack of interest, cannot fresh blood be found? Why must this worthwhile site be reduced to a memory?
To all at the Oil Drum thanks so much for your tireless efforts in bringing the facts of our unsustainable economy based in the false promise of unlimited, cheaply found carbon-based energy. I learned so much from all of you and will be sorry to see the site no longer active. I still refer to the articles and information so carefully collected and presented here and will do for as long as there is access to it. This isn't the end of the work here and I hope to see and read many of you on your own sites and around the blogosphere as long as that lasts.
As the gas station attendant tells Sarah Connor says at the end of the first Terminator: "There's a storm coming." - Yes, there still is.
Hi Dave,
Thanks for all your work - and for your post.
Could you possibly clarify:
re: "No, gentle readers, the closing of TOD is, in my opinion, based on a deliberate but IMHO faulty management decision made in that group a couple of years ago."
Is this a "faulty management decision" you explain in your post? (ie. what management decision, exactly?) Or, is that you wish to mention this, but not describe it?
I'm not sure how to interpret this.
re: "There are developing stories that justify continued interest in the topic, but the slow pace with which some of the stories unfold make it difficult to sustain interest."
Are you saying that the TOD folks decided to "mothball" (w. possibility of it coming back at some point?) the site because...
there is less interest in it? So, it is because because the number of readers or...posters...has dropped?
I'd like to understand better.
And finally...do you mean there is a connection between this decision (whatever it was) and the falling readership/poster-ship (if it is, in fact, falling). Question?
And...I guess (as an add-on)..."TOD's End"...or possibility of "hiatus" as I believe Leanan referred to previously? (Another question.) Thank you.
The structure of the site management was changed to an editorial board, with the requirement that posts need positive votes from three editors before they will be printed. The editor position rotated itself between members of the board, with the temporary editor being also responsible for encouraging outside contributors. I believe I have this right, but, though I could vote, I did not serve otherwise and am not totally familiar with the details of the process. The rationale was that quality was considered to be more important than popularity.
This requirement, and a hint that individuals only contribute at intervals (vide my weekly contribution) meant that there was less incentive to write the shorter but more frequent commentaries on changing events that, for example, I had written in earlier years.
How much money and technical resources are required to keep theoildrum going for the next 100 years? It will be easy to raise.
It's not a matter of money or technical resources.
Hi Leanan,
I'm grateful (beyond words) for what TOD has given me, including the discovery of people who - (sometimes? often?) - share a similar approach to exploring important questions.
I just looked back at Rembrandt's July 3 article, and here are what it seems to two reasons are:
"...due to scarcity of new content caused by a dwindling number of contributors. Despite our best efforts to fill this gap we have not been able to significantly improve the flow of high quality articles.
Because of this and the high expense of running the site..."
So, in my reading of this, finance/money is one reason (of two total).
Could you possibly explain a bit more what you mean by your reply above?
"We decided it's not worth the expense" is not the same thing as "we don't have the money for it."
I came. I read. I was transformed. For that I will be forever grateful.
Though undoubtedly the majority of us will miss this community, I am confident that the eight years of unique investigation in this forum will bear fruit in other forums and in hundreds of individual conversations as the laws of physics perform ever so predictably on the world economy in the coming years. Man, these are interesting times.
I have no further comment on the closure of this excellent classroom, but only a question: How do we readers of The Oil Drum intend to use what we have learned here? I for one, though only a novice in understanding fossil fuels and other sources of energy, will now take what I've learned about them and apply it to areas I do understand -- urbanism and land planning -- and, thanks in part to the influence of this site, feel it is now my duty to promote conservation, sustainability and adaptation until I leave this mortal coil. Admittedly, that puts me firmly into the Optimist camp.
Many, many thanks to all who made this site not just one of the highest quality sources of information, discourse and analysis in the world, but made it accessible to ordinary people through the professionalism of excellent web site governance. Energy is power. But so is information, especially from independent and such highly knowledgable and respected individuals. You have made it obvious that dialogue is essential to our survival.
With much gratitude ~
Meredith Botta
Vancouver
as the laws of physics perform ever so predictably on the world economy in the coming years
...ah there's the rub, the laws of physics offer anything but clockwork predictability for the future behavior of a system so loaded with randomness...the dies aren't just all rolling, they are tugging at and pushing on every other die in the system...and the behavior of some are even mysteriously entwined distance between them be damned...yeah I'll miss this site too
I heartily subscribe to your brand of optimism though, it at the very least is good for the immune system ?-)
Meredith,
I am also in Vancouver and would like to keep the conversation going offline. TOD lead me to join the Vancouver Peak Oil Executive, an ad hoc group in its day ( and we did get This Is Insane Day out of it thanks to Jon Cooksey and Vandy, youtube it).
In my current role I can turn my attention to local issues as I work with the major infrastructure daily. Urban, suburban, and hinterland dynamics hold my attention and I believe I have some cognizant rational to add to the discourse.
bigskygen at gmail dot com
"and environmental activists who cobble together misleading data and fright scenarios to justify costly policies that throw billions of public dollars at renewable energy schemes."
And thus any alternative is assassinated, it will be oil,gas and coal to the end of humankind. And so it will... :-(
RC
I think the truth hit me about a decade ago, when the term 'sustainable development' was the cant of the day here in the UK.
Any system which is not '100.00% sustainable' will not be sustained.
Maybe The Oil Drum has failed the 100.00% sustainable test, a little sooner than the rest of us.
First, a big thanks to all the work done on TOD. Since Katrina, TOD has been my main website (supplanting lwn.net). I'm going to miss it.
The most important thing for me has been tracking the symptoms of peak oil on TOD. We are producting a resource of increasingly poor quality. The poorer quality can be measured in two ways: 1) Less oil per effort as per the recent article "Production Per Unit Effort" whether this effort be counted in energy (EROEI), man hours, or processor cycles.
2) Increasing decline rates.
The decreasing quality of the resource interacts with economic production as Null Hypothesis has eloquently pointed out above. In the beginning I thought that peak oil was a problem of high prices (I invested in oil companies). I am now convinced that peak oil is a problem of low prices (I dumped all my stocks and now invest in permaculture as fast as my wife will permit). Production prices are currently rising faster than market prices. Historically, rising oil prices cause recessions. The interplay of rising production prices with tanking economies are thus the current symptoms of approching peak oil gleefully ignored by the above mentioned Forbes article.
In a recent comment it was noted (from memory) that over the last 10 years car sales have risen 6 times faster than oil production. This to me indicates that oil prices will soon be on the rise again. We will see how economies react.
Best regards and good luck to all,
Schinzy
I see the point of stopping but I really think that you all who have been instrumental in continuing to contribute to this are not aware of the spread of influence that you have had. I have suggested to over 100 people that they ought to check out TOD. The fact that Forbes is even AWARE of TOD means a lot. You may not know it now but TOD will live on.
be it hereby resolved
The current board/owners of TOD will continue to own the all material up through july 31,2013 and will maintain an archive site.
Any current board members are invited to continue with the new TOD2 site, either temporarily for transition, or permanently.
All of the valued commentators and contributors (VCC) from the archives will be ranked according to value to the site. Only the top say 100 of these will be offered to staff the new TOD2. The responding applicants are given priority by their ranked value to the site. We continue down the list until properly staffed to continue the site, albeit in a slightly changed format.
Of the essence is that new blood be brought in, with more recent vistas on the global energy situation and opportunities. New ideas. New energy. Slightly different direction. A revitalization of the community, not a revitalization of 'the site', nor 'the board' nor 'the content' is the priority.
There apparently is adequate or even plenty of IT expertise and capacity to host a second wave effort at TOD. Gratefully harness that, please.
The new board's first order of business is to answer the question what topics are most relevant for 2013 and 2014? to set policy for the most immediate postings, to keep things flowing, not going dark.
A deeper and urgent priority is to draft a set of bylaws that protect the site from corruption in any and every manner. This is always difficult to do without stifling innovation, when innovation is of the essence. Hopefully these bylaws will be approved by both the old board and the new board.
All of the unpublished submissions to TOD1 will be forwarded to TOD2, which TOD2 is free to select and post from time to time. The test for junk to be filtered out is falsifiability.
Each of the current TOD1 board members will retain the right to join the board of TOD2. A special power is granted them to weed out any malicious infiltrators (criteria declared in bylaws)
A greater appeal will be made to the VCC to volunteer in site tasks of culling the inbox, reviewing submissions, sorting, linking, and ranking materials, and other housekeeping tasks necessary to the quality of the site. A broader set of volunteers relieves the burden and keeps variety alive.
For VCC who want to help but cannot perform on a steady relentless basis, some number of rotation positions will be created, whereby one slot may be occupied by say 7, 4, or 12 persons, one for each day of the week, or each week of the month, or each month of the year, as they may choose.
An inexpensive marketing effort will be made to increase the links to other sites of likely interested readership. Special attentions will be made to reach the visitors/participants of quality necessary to constitute a great site.
The newbies shall be encouraged to do data mining on the archive and produce consolidations, digests, integrations and updates on that great body of knowledge for high utility in the future.
The elders are invited to provide regular context, both technical and historical for the key points of the day. Some retirees might be interested in becoming stalwarts of the site, to give their day more significance. Some of the spin-offs might be welcomed to fold back into the site to shine a brighter flame together than embers apart.
As with a parent child relationship, the child is sure to not turn out as the parents hoped, but will none-the-less surprise you. And if the old board wants to exhume the TOD1, they can't, because the world changed, and they can only be reincarnated into those changes, so will do best by joining with that new generation and enjoy a second childhood.
Theoildrum.com will immediately offer its Archive linked to TOD2. And TOD2 will always offer an immediate link to the Archive (pre august 2013). Mirror sites of each other?
Lulls come and go. Crises come and go. A valuable site such as this must be willing to ride out both and become an institution. Ask the readership what they most want to learn about, and stay abreast of it - fulfill a need.
There is at this time a sore need to demonstrate to our global selves that voluntary institutions work, are productive, are valuable, are robust, ae effective, and are competitive with the capitalistic hierarchical forms of commissioned institutions controlled by the wealthiest few. It is well worth the effort, just for this sake. And as our energy future is already a contest between the centralists and the cooperating individualists, this site is an able metaphor for that contest. Lets not give up too easy. Every time the people at large self-organize and provide a service to humanity, a hugely valuable and honorable deed has been done. May it continue and grow.
just an idea,
kindness