Nate, I am embarrassed to say that's the first time I have watched you give that talk. As you know, I couldn't make it (or was advised not to go) because I was still in the oil industry. But after being contacted by one of the directors for ASPO-Ireland on suggestions for a speaker, I gave them your name. Thanks for making me look smart. :-)

I hope I do as well at this year's ASPO Conference.

A very insightful presentation. I think that I actually learned something - thanks.

Astonishing job.

Although I was familiar with almost all your graphs and concepts, they work really well linked together. Thanks a lot. It was most certainly worth the time watching.

Keep it up. I'm sure TOD is proud of you - as it should be.

Sorry Nate, you seem like a really a good guy, so I'm really sorry to say this, but your view of cognition is so biased by western economic philosophy it is quite frustrating to listen to you.

There are so many objections I have, I can't even begin to address them. Here are just a few points.

1) There are other "big picture" views of cognition in which emotional parts of the brain regulate the "cognitive" parts of the brain in a more symbiotic relationship rather than the "either, or" scenario you present.

2) Normally functioning humans are quite capable of regulating (for example) their food intake. Breakdowns in that regulatory process are a) NOT the norm (morbidly obese Americans are still a minority) b) often traceable to other emotional issues.

3) You sneak in many evolutionary "just so" stories. One struck me for the pure inconsistency of your arguments: You said: Homo sapiens sapiens evolved in a time of scarcity (I'm roughly paraphrasing you here) and then proceed to basically say that we're unable to plan for the future. Well, how did our ancestors survive? In my evolutionary "just so" story, they survived by planning for the future in times of scarcity. Just because Americans are unable to plan for the future does not mean that humans as a whole are unable to plan for the future. Consider the possibility that this phenomenon is driven by social cognition, rather than anything inherent in the human brain.

4) Reasoning biases are NOT proof of anything. a) Reasoning biases are not robust and highly representation dependent. IIRC there was a study recently published (I'm talking last 20 years) in which people were asked to make probability judgments based on provided percentages (in one condition) and based on set representations e.g., one in ten people blah blah blah (in the other condition). Subjects in the "set" condition did just fine. Reasoning biases are just as likely a subset of a much broader phenomenon related to specificity effects and corresponding "failure to transfer," which have absolutely nothing to do with our reptilian brain and have everything to do with cognitive efficiency, nothing more.

5) There is no conclusive evidence of "selfishness" or a "selfish gene" that drives the bizarre, twisted logic of economics, and from which most of your reasoning about cognition seems to derive.

I could go on and on. Please, read outside of your field a little.

If anyone wants to download his slides, they can be found here

http://www.aspo-ireland.org/contentfiles/ASPO6/3-3_ASPO6_NHagens.pdf

This was a really enlightening talk, a lot of themes have been put together beautifully. Been following the oildrum for months now. This is my first post and i'd like to thank all the people who've taken the time to contribute and enlighten us on such an important issue.

I would like to ask about the implications of peaking oil production on Africa? So far much research has been done on the consequences to Europe, Australia, North America. What sort of economic/ political scenarios do you see taking place? Many Thanks again.

Nate,

Interesting food for thought thx. Maybe our relative rather than absolute prosperity will help us during the decline. e.g. 'we've had to give up one of our plasma tv's but, hey, the neighbours have had to give up 2!' Declining slower than those around us becomes the trappings of the nouveaux riche :-)

Or even a war spirit of 'we're all in this together' where ostentatious shows of wealth are despised (it's a bit like that in the UK already).

tw

I've seen the charts several times now and would like to know why the Philipines ranks high on happiness scale when their energy use per capita is so low. Is this due to culture, political organization or is it biological? Has there been any comparative analysis conducted which could explain why this might be the case? Are there steps that we can take as a society to keep our happiness high as we decrease our energy use?

Thanks for posting this, Prof.

Nate's presentation is a great summary of some of the things that make us hominid and even more particularly human - in ways that we often forget.

The challenge is accepting this, understanding parts of lower level cognition, and planning as if it is real and influencing our lives, whether we want or not, is the key.

But alas, delaying gratification esp. in a society of constant sensory bombardment, fairly long time horizon required for thinking and creeping uncertainty is very hard, just as Nate so eloquently put it.

But one must start somewhere regardless of how hard it is. Otherwise one just worries for nothing, or alternatively forgets and does nothing.

Great video - a real keeper. Will be posting this to a lot of my friends.

Another quick comment - thx for the net energy curve. It looks worryingly steep already but what would it look like if you plotted net energy available to net oil consuming nations (ELM) - are we into a cliff-edge type scenario? Every time I start getting more positive about the transition I see something like this and think instead about buying up more tinned food!

rgds

tw

I like the discussion on the psychology of denial, delayed rewards and evolution. The peak oil phenomenon has now become a psychological problem, first and foremost, now that the broad outlines of the geological problem are well understood. We need more discussion of this topic and fewer graphs, perhaps.

Excellent presentation, thank you for the link.

Regards,
Nawar

I'll add in my kudos to Nate on that great talk.

And I'll add this, just discovered on Google video (more Nate), which looks like a good way to introduce people to PO without the "Run for your lives, the sky is falling!" approach:
http://video.google.com/videoplay?docid=-8980485670494666459&hl=en

Nate: Good speech-very entertaining.

Great wrap:

Plot a course for the rest of your life to be happy. Everything else falls into place.

"Baa, ram, ewe. To your heart be true." Timeless, cross-species advice. While I very much agree with it, perhaps it could be too easily interpreted as "party on". I'm pretty sure that's not what you mean.

I was frustrated by the slides. Someone upthread posted a link to readable versions. Can that link be moved into the top story?

cfm in Gray, ME

Nate,

I think your general statements are true, but society isn't really homogeneous, so the problems of "comparative status" etc apply to some people more than to others.

The research institute Sociovision had a closer look to these social patterns and created the graph of Sinus-milieus (very well known at least among marketing professionals). If you click on the map you see the pattern of consumer classes, which have a quite different mentality and behavior. As far as I remember (and somewhat simplifying) the typical consumption-addicted mentality is mostly pronounced towards on the lower left corner, whereas in the upper right corner many people are interested in new ideas, including post-materialistic attitudes and probably include most of the "greens" and "peakists". And Sociovision does see several encouraging trends, which might lead to a more sophisticated and resilient society.

You ended your speech saying that everyone in the audience should change their lifestyle. But this can only be a first step, which probably most of the peak-aware people already are working on.
But the real important challenge will to achieve that these "green" ideas and actions become mainstream.

So far I see three possibilities: Leadership, grassroots movement or crash change.

1. Leadership
There is a good historical analogy to the irish elk you showed on your slides: The gondolas of venice. Originally these were built all sorts of colors, as the Venecian nobility tried to beat each other with an exuberance of pomp and size - just like modern men with their SUVs. But in 1562 the Senate of Venice, led by Gerolamo Priulis brought this unbridled addiction to pomp to a halt: According to a new law only a specific design of slim, black gondolas was allowed on the waters of Venice - such as we know them today.
You can imagine that this radical step, which was certainly extremely "unpopular" among the nobility, needed a really strong leadership. I still hope that one day there will be someone who can trigger the awareness of the masses - like what Al Gore achieved concerning global warming.

2. Grassroot
It is well possible that among the national governments nobody has the strength to tell the "inconvenient truth" of PO - and to push through the necessary measures: Politicians want to be elected. And to get elected telling inconvenient messages is generally less appropriate than telling sweet lies - as long as these lies aren't debunked. This is where a growing grassroot movement might take charge - those crazy guys from the upper right corner of the Sinus milieus slowly encroaching upon the entire society. They may not even change the general direction of politics but also achieve that an owner of SUVs living in a suburb is considered "lame", whereas a member of the "new urban society" riding a bike or driving a smart has a "sexy" image.
You think this is impossible? I'm not so sure. History has several precedences, when such radical 180° turns both in politics as well as in society were achieved by grassroot movements. One example is the vietnam war, which lost more than just its "sex appeal". Or the complete turnaround of societies in former east block countries. I know only a bit about how the movement in the GDR got going and little about the vietnam movement got going. It might be interesting to learn more about the mechanisms behind them.

3. Crash change
There is a third scenario, which I'd call crash change, perhaps a native speaker can find a better wording for it.
This one is not led by humans but driven by nature: Sooner or later it will be impossible to ignore that there is a resource issue, as it is simply there - clearly visible as price tags shining from each petrol station, on food bills etc. To a certain degree this is already happening, but the issue is still rather low on the agenda and there are still people who openly claim that there is no need to worry. Some of these stakeholders will still do so when the oil price is much higher (just like the still existing deniers of climate change)- but from a certain point on this won't be considered "political correct" any more.
In this scenario it is for sure that politics and society will change - because there is no choice: Wasting resources will be simply too expensive. But as there is no time nor money left for increased efficiency and alternative sources in this scenario saving resources means abdication: Less travelling, less comfort, less food - certainly the scenario with the least "sex appeal". This is how the people of New Orleans learned that the laws of nature are not negotiable. Let's strive that the rest of our planet can be spared from this lesson.

Wow. This further strengthens and fleshes out my view that we have watched PO play out on Wall Street along lines that are very sociological and psychological. Small counterpoint: global market centers like Sydney and London, which have longer and more sustained histories with mining and extraction companies, have cultures that were and remain much less obstinate in the face of PO. Your average money manager in London and Sydney has likely been much more exposed to the realities of commodity supply and demand, and the tediously long times it takes to bring on supply. They are also more likely to have a degree in science, or to have been exposed to economic theory that is less cornucopian.

In contrast, because of a generational cycle that I mark as starting with Paul Volker's success against inflation, US financial culture is uniquely vulnerable to misunderstanding our current moment. A 25 year bull market in bonds and other financial assets is precisely what led the street to spend the first half of this decade financing houses and consumption.It was not until early 2006, for example, that the editors of the Wall Street Journal called a meeting with their reporters, and acknowledged that the paper had completely missed the move so far in the decade in Oil and commodities, having ceded the entire story up that point to the FT of London. When a particular culture is oriented in a certain direction, the trance is pervasive and total. Everyone participates. This is a huge cycle that drove everything, and especially the orientation of MBA programs. From the ashes of the last commodity boom, we planted the seeds of a generation fated to be unable to understand the current shift. The Julian Simon generation, if you will.

G

Nate,

What a great talk, thank you for giving me another piece of the puzzle.

RE: "Also, I skipped a whole 2 minute part on sexual selection and mate choice in humans."

Is there video out there with you giving this info? Or perhaps you could post a link to one of your writings, thanks again.

I believe Irish Elk, like other deer, have antlers and not horns.

the only premium in future prices vs september delivery of futures on the nymex is the cost to store the commodity, which is why peak oil is not reflected in 2016 prices. Think about it - if the price of oil for 2016 delivery is $400, then hoarders see the market will trade at higher prices in 8 years, and so these guys will just buy the barrels now and keep it in a warehouse - but enough hoarders would jump in to make the september 2008 delivery not that much less than the 2016 delivery. This is why all graphs of oil futures roughly match. Another way to think of it: I could purchase oil for september delivery and then resell the barrels for 2016 delivery, and keep them in nebraska until delivery, and so a price diff of $120 and $400 with a cheap storage cost means a ton of profit. But there is no free lunch, esp. not in commodities.

However, many people here may be very surprised to hear that oil options (special contracts for futures) writers have indeed taken peak oil into account - in fact, many of them for 2012 require oil to be above $300 in order to make any profit at all! My broker also found that 2016 options are break-even only on $500 oil.

wonderful presentation nate.
really helped me take in your work- which i carefully read here; but so helpful to see /hear it/u.

i like 'we are addicted to the 'services of FF'. i think add in the ' leverage/power' of the footfeed [petal to the metal]; the mouse click, etc.

As u say we controlled that chunk of power/resources - ah the rush!

Nate, great presentation. You mention in your closing comments that "financial capital could be supplanted by built capital, social capital," etc. Are you aware of any papers that look at various societies (and composite cultures) and their capacity to handle dramatic change? It would very difficult to quantify "social capital" as the level of subjectivity in analysis would be almost impossible to avoid but I imagine one could do a fair study of past events if nothing else to bring the question to the fore.

My fear is that the United States, being the most culturally diverse (the giant "melting pot") coupled with its broad emphasis on the individual over the whole, is the least capable of the industrialized nations, from a social capital standpoint, to handle resource depletion. Most neighborhoods in America are ethnically segregated (by choice) and it has been shown that mixed neighborhoods do not really integrate. While an external event like 9/11 can serve as an incredible unifier, resource depletion is likely to bring out the worst sort of "push comes to shove" anarchic tendencies as communities "band together" for resource grabs and power consolidation.

More homogeneous cultures like those of Japan and Iceland might stand the best chance of peacefully adapting to resource depletion.

Nate,

Hope that in the last year you've gotten wise to the problems with the energy pay back of nuclear power. I realize that you were looking at biomass as the alternative but it would be better to look at things that are getting going now such as wind. There, we are certainly doing better than fossil fuels.

Chris

Great stuff as usual Nate.

I think a three hour documentary on your ideas/thinking would be riveting rather than boring; when can we see it, clocks ticking.

All the Irish elk females wanted was a successful male elk to make strong babies. But the trouble is, each male elk would try and mate with you, even though you want the strongest. They'll all say they're good, but how to choose? You want a sign of fitness you can't fake. So, big strong antlers.

That they became extremely wasteful wasn't an accident - it says "I'm so strong I can have these useless enormous gigantic antlers". Telling the male elk that they should have more sensible antlers because of the waste that will get them in the very long term (and for thousands of years, has gotten them mating rights) is not going to work. Similarly the wasteful consumption of resources in our times - cars with big engines, fancy clothes, a big house, wasteful consumer life.

They all say - how could I afford this if I was poor?

Now, imagine if the Elk had evolved the intelligence to devise a system of credit to allow them to buy better antlers - you could impress the females then pay the bills? That would probably have been a successful strategy too.

Having people face the reality that they are living beyond the planets energy means is like trying to talk an elk down into economy sized horns. They will rightly worry that some other big horned bugger will do it anyway, and get all of the females!

Given a slow selection pressure on them, female elk would have still preferred the bigger horns, but the elk they belonged to would have died and horn sizes would move downwards.

How could have the elk have started a fashion trend of smaller horns? How can females judge which males are best? You'd have to come up with another unfakeable game, but this particular method of judging wasteful allocation of resources to a trophy worked for her mother and grandmothers and so forth up the lines.

Back to humans - what about girls who were conceived in the back of fast cars with loud engines? Their existence proves the signal of gas guzzling V8s is evolutionarily successful - how much advertising airtime will we need to convince them bicyclists are sexy?