What Does "Peak Oil” Mean to You?

The “Don’t Fear the 2010s” article written by Nick Gillespie of the Wall Street Journal featured a section on Peak Oil and, after reading it, I found myself uttering the famous words of Homer Simpson: “Doh.” The article claims that "something always gets in the way" of peak oil, and since no clear peak has occured globally, Peak Oil is and will remain unimportant. Although early discussions about peak oil involved estimations of the actual date of the peak, today the discussion has transcended its past mathematical proclivities to include more complex (and more meaningful) issues. Let’s examine some of the more important insights to be gained from the discussion of peak oil.

1. Peak Oil is more about transitioning from a world with an increasing supply of oil to a world with a decreasing supply of oil, and less about the actual date of the peak.

Peak Oil as represented by the WSJ article diminishes the issue to a debate over a date. The more pressing question—the question most often considered here on The Oil Drum and within the Peak Oil community at large—is, “What does a peak in global oil production mean for economies and societies throughout the world?”

Oil is a non-renewable resource, which means that oil reserves began declining after the first barrel was produced. Over time, the combination of technological advancements and big discoveries allowed for the extraction of larger amounts of oil, but at some point oil production will peak and begin to decline. Numerous countries, including the United States, have illustrated this trend. So, if we know that at some point oil production will begin to decline, why deny the inevitable instead of preparing for that decline?

2. The important question is not “How much oil is left?” but rather “How much oil can be extracted at a significant energy profit?”

Howard Odum wrote in the early 1970’s that:

The true value of energy to society is net energy, which is that after the energy costs of getting and concentrating that energy are subtracted.

Net energy represents the energy that we use to power our vehicles, our hospitals, build our roads, fly our planes, etc. In the early 1900s, the U.S. was getting upwards of 100 barrels of oil out of the ground for every barrel used to get that oil (Cleveland 2005). Today, the estimates in the literature report that on average across the globe, 18 barrels of oil are produced for every barrel used in getting that oil (Gagnon et al. 2009). Despite the fact that today’s society produces vastly more oil than it did in the early 1900s, it is producing less net energy per barrel. This declining net energy is driven mainly by the fact that oil has become harder and harder to find and extract, and/or the oil that has been found is generally of lower quality. For example, Chevron’s Tahiti project cost 2.7 billion dollars just to construct. Meanwhile, Petrobras is hoarding deep water rigs to develop oil projects off their coast and BP discovered Tiber, another ultra deepwater field in the Gulf of Mexico. Each of these will have price tags comparable to Tahiti. The point is that it doesn’t matter how much oil these companies claim that they can recover, the question is how much of that oil will be gained at an energy profit (i.e. that left after accounting for the cost of extraction).

3. Increasing energy costs have preceded every major recession in the last 40 years.

Many believe that the current recession was caused, at least in part, by rising oil prices from 2004 – 2008 (Jeff Rubin 2008, James Hamilton 2009 (warning- pdf)), and although it is difficult to show statistically that action A caused action B (just ask the climate change people!), data show that oil prices and recessions are highly correlated (Figure 2). Over the past 40 years the same sequence of events occurred before each recession: a spike in the price oil, followed by an increase in the percent of GDP used to purchase oil, followed by a recession.

The WSJ reported that

Peak oil has been predicted with regularity for decades now and something always gets in the way: new reserves are discovered, prices collapse due to economic slowdowns…

Everyone agrees (more or less) that oil prices collapsed because of the enormous economic contraction that occurred in the summer of 2008. But are we really to believe that it is pure coincidence that the price of oil was at an all-time high when that contraction occurred? More to the point – despite a tripling of crude oil prices from 2004 - 2008, supply of conventional crude remained relatively flat, conditions indicative of peak oil. Focusing on whether or not the peak has occurred distracts attention from the main conclusion of the 2004-2008 period: we have entered an era in which the supply of oil is constrained. I contend that the WSJ has it backwards. The economic contraction did not prevent peak oil from occurring; rather, the peaking of global oil production was a main cause the economic contraction.

4. Oil is unique.

As Youngquist states, quoted in The Olduvai Theory by Richard Duncan,

There is no comprehensive substitute for oil in its high energy density, ease of handling, myriad of end-uses, and in the volumes in which we now use it.

Oil is a one-time gift bestowed upon the inhabitants of earth. There is no substitute at the scale needed, and there is certainly no alternative energy source that returns the same amount of net energy at the scale that oil is used. Technology is often touted as the means by which society will surpass its need for oil, but technology is NOT a fuel, it is simply a means by which we convert energy of one form to another, usually more useful, form.

Other people believe that coal or natural gas will solve our problems. In fact, the New York Times reported that the US has over 600 years of natural gas, but we need to ask the same question about these sources as we do about oil, namely, “How much is available at a significant energy profit?” There are other problems with natural gas and coal as well. Coal has pollution issues, including carbon dioxide. Natural gas is often thought of as the cleanest of the three major fossil fuels, but almost all unconventional gas, which makes up a large part of future United States production, is being produced in most new plays in the U.S. using a hydrofracking process that uses upwards of two and a half million gallons (pg. 58)of dirty water per well. This is not to say that drilling for oil is better than coal or natural gas, rather that pursuing coal or natural gas as a solution for dwindling oil supplies is likely to create other costly problems.

In summary, Peak Oil is not just about when, but also how we will wean ourselves from our reliance on oil. The above points represent some new ideas or directions for innovative thought and discussion. Most importantly, I hope they convey a message to the peak oil naysayers that whether the peak occurs today, tomorrow, or in ten years is not as important as how we reach the peak and how we deal with the ensuing decline.

All the signs of peak oil are there. The change happened 2004/2005 as can be seen in a link further down.

Peak oil hits first where companies have "pre-conditions" like high debt financing or embellished traffic projections, particularly in the case of road tunnels. Driver boycotts and community backlash are also factors, especially when other local environmental issues like the location of exhaust stacks, exit ramps and changed traffic management in surrounding suburbs play a role. Latest example from Sydney

Lane Cove Tunnel operator hits the wall

The owner and operator of Sydney's Lane Cove Tunnel has been placed in receivership, after creditors finally refused to grant another extension over the repayment of $1.14 billion of debt.

Peak oil = peak credit. See graph from Gail's slide show at the ASPO 2009 conference

How many years of falling supplies until we accept that oil peaked?

About three years after it opened at a cost of $1.1 billion, the 3.6-kilometre tunnel has proved a disaster for Connector Motorways, a consortium including Leighton Holdings, Mirvac and the Hong Kong billionaire Li Ka-shing.

The trio have already written off all of their investment in the project.

That will limit the appetite for other projects in RTA's wish list, like the F3-M2 tunnel - with a benefit cost ratio barely above 1

Submission F3-M7 corridor review: End of Freeways - the tipping points of Peak Oil and Global Warming

The receivership is a further embarrassment for the NSW Government, which has been dogged by other failed infrastructure projects such as the Cross City Tunnel.


How Cross City Tunnel Planners ignored peak oil

Large pension funds and toll road operator Transurban, which itself has been the subject of advances from Canadian pension funds, have been considered to be the most likely buyers of the tunnel.

That will be a tough nut. There is now the competing rail tunnel Epping - Chatswood in place so if we come into an oil supply emergency in an oil vulnerable country

Australia in last quarter of its oil age

with no Strategic Oil Reserve and a complacent Government

Report Card 2009 (part 1) - Energy Policy - Has the Federal Government prepared for declining oil production?

the quickest way to connect the North West of Sydney by public transport is a rail line on the M7/Windsor Rd - M2 to Epping station (Transperth model). So there is really no function for the Lane Cove Tunnel in that situation.

I predict that when there are diesel shortages, all buses on the M2 from the West will end at Epping station because there is enough capacity in the Epping-Chatswood rail tunnel towards the CBD. Dito for electric trolley buses because time and cost of installation will matter, nothing else.

‘‘Operationally the tunnel and Military Road E-Ramp are performing well with patronage having increased by almost 9 per cent over the past 12 months,’’

That will not last long.

What is the world prepared to pay for crude oil above 73 mb/d?

Australia's mineral export performance is closely linked with the destinies of China:

World needs to save at least 3 mb/d by 2020 for China to grow. Any volunteers?

Another potential acquirer could be Queensland Investment Corp, which bought a 25 per cent indirect stake in the M7 from MIG earlier this year.

Oops. QIC is already bogged down with the BrisCon share disaster 2008/09

They ignored these terms of reference:

Terms of Reference for Urban Transport under Severe Carbon Constraints

End of car culture in this decade

My 2 cents.
Folks, cope with situations when they demand it.
Perhaps we are asking too much, recognising the situation as essentially hopeless for most people would deny them optimism for the future.
Which is against human nature, 'good luck' is the most human of expressions.
It also justifies our continuing to intellectualise as the ship goes down;¬)

A desperate challenge might be exactly what people need at this point.

Politicians all promising us that there will be no new taxes, no sacrifice, no pain.

Fluffy Western Couch People will deny it vehemently, but I think they secretly want to give, want to sacrifice for something they can believe in, and they want it to hurt and to challenge them. There's just a little fear in the way.

Fluffy Western Couch People will deny it vehemently, but I think they secretly want to give, want to sacrifice for something they can believe in, and they want it to hurt and to challenge them.

Sorry, but many of these "Fluffy Western Couch People" are my relatives, and you could not have it more wrong. These are the self-absorbed, magical thinking religious nuts who think AGW and Peak Oil are liberal conspiracies, believe in abiotic oil, the Rapture, and agree with Cheney's view that the American Way of Life is "non-negotiable". They won't even support the idea of Medicare for all Americans or prohibiting insurance companies from denying people coverage for pre-existing conditions, much less paying for any of it.

These people will vote anyone out of office who tries to "challenge" them or demand any personal sacrifice --usually expressed as higher taxes. Count on it.

I know them too.

See, I told you their denial of it would be intense. But secretly (I mean even kept secret from their conscious selves), they know they've been spoiled rotten with Cheezits and 3-liter Cokes, and deeply dread that 'the right (but tough) path is someday going to find them'

I'm tellin' ya..

"Dread" would be the right word for it alright. I'm afraid these peoples' Id and Super-ego are acting in perfect unison to defend personal consumption and an economy of perpetual growth, while their (rational) ego basically does not exist.

There is no "shame" or "guilt" for them in leftist causes, such as overconsumption and overpopulation, because their worldview does not allow it. To them, Peak Oil, Limits to Growth and AGW are liberal-Marxist fictions, as the Bible clearly tells them to "be fruitful and multiply". (In the worldview of my crazy relatives) these are subversive constructs of the Godless Marxist Goddess-worshippers, who wish to replace worship of the Lord with Earth/Gaia, and seek to supplant a Christian U.S. with a Communist one-world government.

WASHINGTON — Sixty-five percent of Americans believe that the nation's founders intended the U.S. to be a Christian nation and 55% believe that the Constitution establishes a Christian nation, according to the “State of the First Amendment 2007” national survey released Sept. 11 by the First Amendment Center.

You keep going on about 'them'. Those who you say cannot be reckoned with. Fine.

There ARE people out there in the middle ground. In the grey areas. There are Christians getting active in a new 'Stewardship of Earth' perspective.

It's like we KNOW that it's going to go nowhere if we just get into more Abortion, Immigration or Death Penalty debates. There are people from divergent backgrounds (like here, for instance).. who have found some common issues that they are intent to make some headway on.

It's easy to discount the whole thing if you're just going to focus on the places where you are guaranteed to find obstacles.

As with Canoeing in rapids, you have to watch for where the water IS flowing, and not spend your time looking towards the rocks you need to avoid. You will be drawn towards your focus.


Problem is, people like my batshit crazy relatives ARE the "water" in your analogy --the vast majority of Americans, or at least the ones who most influence the decision making. You and I are the minority rationalists who are being swept towards the rocks of disaster along with everyone else.

I appreciate the frustration, but you need to hear the metaphor as I meant it.

I don't use the water to mean 'the flow of popular action', 'the tide of mainstream activity' or something. We (Here at TOD) are riding the 'Peak Oil Rapids', and that means finding the flows of 'right activity' where they exist or CAN exist, as small and challenging as those may be.

In that image, the majority of our culture IS the rocks, it is the dams, the things that won't flow where we want this trip to go. My contention is that there are necessary actions, like Solar Hot Water, or Local Agriculture, for instance, that will find adherents in unusual corners. Those are places that can aid this 'Flow'.. even if not done under the Peak Oil, or 'Resource Depletion' banner. It might be brought forward as 'No $$ to the Middle East', or 'American Heirloom Tomatoes, never touched by a Californian!', and it still may not be your cousins you'd tap to find something that can move.

But movement IS possible, and I'm just saying that when we focus on the 'Nascar Daddy' and 'Bible Thumper' stereotypes as if to prove that we can't make any progress, we're only devising a self-fulfilling prophesy of failure. It's obsessing on the 'can't'.. the rock that you are supposed to not slam into.


I just steer clear of people who are unwilling to address reality. I find this new strategy offers me more time to spend on constructive projects with people who are awake.

So how do you change paradigms? Thomas Kuhn, who wrote the seminal book about the great paradigm shifts of science, has a lot to say about that. In a nutshell, you keep pointing at the anomalies and failures in the old paradigm, you come yourself, loudly, with assurance, from the new one, you insert people with the new paradigm in places of public visibility and power. You don't waste time with reactionaries; rather you work with active change agents and with the vast middle ground of people who are open-minded

Donella Meadows: Leverage Points - Places To Intervene In A System

you come yourself, loudly, with assurance

Yeah, FM, that should get their attention!

Well I guess we could go to plan B, speak softly and carry a big stick... ;-)

For years I asked God to do something about my noisy neighbor with the barking dog, Joe Pesci straightened that c@cksucker out with one visit. It's amazing what you can accomplish with a simple baseball bat.

George Carlin on Religion

The funny thing here is, God said pray. But He also said go to those that have wronged you and try and work out the issue. If something bothers me about someone, I either go away from them so they don't bother me, or I go and try to make a friend of them and see if the issue is me and not them.

Proactive not Inactive. Peace not war.

When I see conflict I try to find a solution, Long ago I got the title from friends as being a Peacemaker.


I got Carlin's joke. It just struck me to say what I said. Sometimes humor makes you think of the other things that the jokes might pretain to.

God Loves the atheists just a bit more than they don't believe in him.

It'd be a joke you could tell a bunch of like minded friends, but it'd offend some people.

They always tell you that some topics aren't for polite conversations, Beer, Sex and Bibles.

Nice whoosh though, I've been up a bit to long I had to think what I'd said to cause it, I might still be wrong in what I am assuming.


The point you missed was that this was about making a joke about speaking loudly sometimes not having as much effect as having a stick. It was more about that then anything to do with religion.
It just so happens that that reference was part of a Carlin skit on religion...

BTW, to be clear I'm not talking a literal stick either. It's a metaphor for having power and being able to wield it effectively for promoting change. Could be something like high taxes, fines etc..

Religion is for a discussion on some other day.


Nice analogy but a very simple one at that. Life is a complex phenomenon that cannot be compared to "water", though I do get your "flow" and a general sense of the point you're trying to make :)

I used to actively participate in a regional "gardening" and "farming" club which discusses organic food and so on. These are folk that do realize one aspect of Corporate governance of food and want to make a change. However, when the topic of "peak oil" is introduced, though their "organic produce" is relatively better off than the fertilizer-laden food from factory farms, they still enter denial.

Again, from my experience of talking to various kinds of people about Peak Oil, I've observed this: Those who are "well off" deny peak oil. Even "atheists" believe in "Technology" to do miracles.

However, those that aren't well-off and/or are already near the "rocks" are looking for ways to understand whats in store for humanity at large. They immediately open up with questions abound (I've never seen them asking so many questions about _work_!) and the conversation heads in a good direction. The typical questions do come up about "alternatives" and even "bioethanol" but all that I had to do was point them to a nice lecture video on 2nd law of thermodynamics, a video on peak oil and 'lend' my copy of "eating fossil fuels" by Dan Allen Pfieffer.

As a Christian I was always taught that we are stewards of what we have been given. We were handed the keys and told to mind the store. It did not say anything about turning the place into a rotting sewer and calling that fine and good.

I am a Christian tree hugger, Recycle Reuse, Reduce, Rethink, Respect kind of person, and most of my family is as well.

Population overshoot and those kinds of topics were in my reading list as a teenager, at 46 now they still are.

I had a garden that out preformed most people's gardens long before I even knew the word Permaculture. We canned all the stuff we did not eat, and things we could not grow, we'd buy in bulk from farmers, and can it up.

Christians aren't all pave the earth, go out and populate till hell freezes over kinds of people. It is the most vocal groups you hear about that seem to push that kind of silly agenda. In my book they are treading alone the lines of being those False Prophets Jesus warned us about.

Be good stewards first.


waves to Jokuhl

Wow, tell it like it is - I love it harm! My concern is those self absorbed, magical thinking etc.'s are the type of people to support war vs. making any kind of change themselves. If these type continue to push the agenda to the far right, and with peak oil causing economic hardship, how can we not be headed for some future point where they all demand military action by what will probably be a pro-war president in 2012?

Sarah Palin leading the Oil Crusade. There's a wonderful thought.

Kunstler did say that he expected Americans to elect "lunatics," "maniacs," and "a cornpone Hitler" who will promise a return to "happy motoring" during the post-peak period. Sarah "Lady BlahBlah" Palin certainly fits the bill.

Yeah having her floating around is scary given my thoughts.

However I'd have to imagine that she would simply split the republican party not secure victory probably resulting in Obama winning a second term by default.

I'd argue that as far as I can tell he has done almost nothing different from GWB. I'd argue Obama has been a good little President and done everything he's been told to do.

As far as the banking industry goes I think the next move is fairly clear. The TBTF's are going to find out they are not too big after all.
The games with the TARP monies and the Fed probably pulling out of buying MBS's should set Citi and or BofA up to fail again. However this time Obama saves the day and breaks up the mean nasty banks.

However thats not whats really happening whats really going on is we are moving to the good bank bad bank plan. What will happen is these and other Banks will actually be broken up into good banks and bad banks with the US getting all the bad assets and a real TBTF monster powerhouse created out of the clean assets.

I continue to suspect GS will take over BofA and become Bank of America. Using the name plus large chunks of cleansed assets. And probably large chunks of Citi perhaps along with pieces of other Banks. They won't be the only one of course JPM will get its pieces etc. Basically all the value will be absorbed into a few existing banks with all the crap going on the government balance sheet.

Now on trick I'm thinking might well be pulled off is we have this huge backlog of foreclosures and bad loans building.

A way out of this would be for the US government to take ownership of all the bad assets and then resell them for pennies on the dollar back to the new true TBTF's. The Fed will do the same with its stinking pile.

Now suddenly these horrid assets have real value and once can guess they will be unloaded on the housing market with a vengence. Of course our new monster banks will eventually get the loans on their books but probably not the first round. These will be stuffed into FHA, Fannie Mae etc. And the banks get them later for pennies on the dollar only after the onslaught of foreclosed properties has abated.

For this to really work one has to suspect the new TBTF's will want to see a sharp rise in interest rates as housing prices crater to keep revenue up. Assume they are betting on housing prices falling by 50% or so then they want to see interest rates double where they are today before they actually take control of loans. Earlier loans they buy eventually at massive discounts and recycle these through foreclosures.

Assuming I'm right about falling home prices in general what eventually happens in time is that all the mortgages are now owned buy these new Monster Banks. As they move into this position they make mortgage debt immune from bankruptcy like student loans.

Once they get this they can if they wish rachet up home prices with easy credit terms but who really knows.

What matters is that even if the US's assets eventually lose a significant amount of value it does not matter as effectively all the wealth or value that does exist is owned.

For these monster players it does not really matter if the asset price is for a time very low as long as they take full control of all the assets. Eventually of course they are in a position to maximize income given they would by then have no competition I'd have to guess in general they would favor high interest rates and low asset values. The asset price bubble was only really needed since interest rates where falling. In the rising interest rate case it seems sensible that the asset price would be minimized and rates jacked.

Since they would probably now be operating in a world without significant fiat inflation i.e they get all the real money in the form of interest the bad guys if you will are quite happy to work in a deflationary or flat environment. Historically bankers have done very well even under gold standards. With mortgage debt made permanent they don't need to worry about defaults.

We will see what happens in the long run but short term I expect a game of good bank bad bank to be used to hide a significant consolidation of the banking industry. With Obama taking the role of Bank Buster to hide the truth.

RE: 1. Peak Oil is more about transitioning from a world with an increasing supply of oil to a world with a decreasing supply of oil, and less about the actual date of the peak.

The Discussion seems to always slip away from this first point, and devolve into further arguments about proving PO and EROEI, in order to get more people to 'join up' and work the problem with us..

I'm here (at TOD) because I accept the PO premise. Outreach and 'The Debate' has its place, but primarily, even if others are yet to be convinced, there are already a LOT of people in raw numbers if not in percentiles who do agree. We could be getting more actual prep done than we're accomplishing by mulling over this 'how do we convince them?' problem.

There are debatable technologies that seem to require further proving.. but there are basics like Solar Hot Water and Insulation/Weathersealing that are unquestionably effective and could keep us all well-employed for the rest of our lives.

Noah: "Riiight.. what's a cubit?"

Voopah, Voopah ..

God: "Noah.."
Noah: "Yes, Lord."
God: "How long can you tread water? Har, har, har!"

you are correct...a lot of people in absolute numbers now know about peak oil and have begun to get ready. The explosion of Transition Towns is one piece of evidence. And the slow but steady increase in registrations for the various preparation courses is another (I know my own are increasing and I'm guessing Sharon Astyk's are as well but I haven't checked).

Noah: And..and.. it's.. raining

The title of this article is "What does Peak Oil mean to you ?"...

-Since learning of and reading TOD 3+ years ago my response has been in 2 phases.

Can be summed up as OMG! So I spent most of this phase telling people and being dismayed at their lack of concern for TEOTWAWKI. I don't know whether it was their lack of concern or the things I saw happening in the future that was the most worrying. The main output of this phase was "Peak Oil Joining The Dots" in late 2007.

"Peak Oil Joining The Dots": http://www.megatrends2020.com/Peak_Oil__Joining_The_Dots.doc

Since I wasn't really getting anywhere in Phase1 and it was having a negative impact I began thinking of solutions for myself. I also learnt a lot more about what things would really benefit and -after the dust had settled on the stock market early last year (of course I was NOT invested in anything but Gold in 2008) launched into investing in a portfolio of stock assets that would do well during the upcoming Inflationary Energy/Commodity debacle that will unfold throughout the 2010s and beyond...

So the NOSH Fund (Nick Outrams Speculative Hedge Fund) was launched!

It consists of:

1KgGold in 2008 converted to
0.4Kg Gold in 2009+the following stocks;
New Gold (Gold, Silver, Copper)
Jinshan Gold (Gold)
Yamana Gold (Gold)
Silver Wheaton (Silver trading)
Thompson Creek (Molybdenum)
Moly Mines (Iron ore>World Class Moly mine)
Geodex (Molybdenum, Tungsten)
Trina Solar (Chinese mnft of PV panels)
Rubicon (World leader in Saphire substrates for LEDs)
SQM (Potash and Lithium)
China Energy Recovery (Energy efficiency) [this ones been a Donkey!]
Geovic Mining (Cobalt -batteries)
Ivanhoe Australia (Australian World Class Rare Earth deposit)
Lynas (Australian World Class Rare Earth deposit)
Avalon (Canadian World Class Rare Earth deposit)
Neo Materials (Rare Earth proccesing to form magnets)
Tenaris (Pipes for oil n gas)
Transocean (Deep Sea oil rig renter)
Flowserve (Infrastructure for supply of water, oil, gas)
Trigon Uranium

-IMO we are in a Secular Bull market for Commodities that will last at least another 10-15 years with a risk of complete financial collapse at some point :o)

-This portfolio is up 87% since last March.

-In general I have found it to be more 'fun' sitting on a mound of potentially worthless cash than worrying about things you can have little impact on. That's what Peak Oil has meant for me and I'm grateful for all contributers who have increased my knowledge and got me here.

Regards, Nick.

Edit: and to all the Doomer types I would say if you are so sure of humanities doomed future put your money where your mouth is and get to a place where you can have one last splurge before the final SHTF.

You have a lot of precious metals in this portfolio. Given its lack of industrial uses, don't you think it should be a smaller portion of your portfolio. In the more "doomerish" scenarios, do you really see people paying a lot of money for gold? I mean, sure, it will definitely outperform fiat currencies, but in the end, gold can't feed you or transport you or do anything truly valuable (for the most part, there ARE some industrial uses for it, but they don't drive the price).

I also think you have too much in the way of mining stocks, for similar reasons.

Seems to me you should put more money in companies like Transocean (btw I hope that by "renter" you actually meant "lessor") than in mining companies. If you want to play commodities themselves, I recommend crude and nat gas as opposed to gold (granted you would have to understand how to trade futures, as physical storage by individuals is practically impossible). You'll still get that inflationary hedge but with a more sound supply/demand dynamic (even though you may have peak gold, overall supply still goes up because oil is not physically consumed). I'd say, if you don't know about futures, then just do the gold bullion and then some energy stocks and maybe the occasional mining stock. My main point is that your portfolio doesn't reflect your worldview as accurately as it could.

Just some friendly advice from a finance professional...

" In the more "doomerish" scenarios, do you really see people paying a lot of money for gold?"

If you accept the more "doomerish" scenarios, why the hell would you want junk fiat money for gold? You bought the gold to get away from the money!

And therein lies the lunacy of gold bugging. Warren Buffet once said that he couldn't understand the lure of gold...you dig it out of a hole in the ground (the mine) to put it in another hole in the ground (the vault)...how is that somehow considered productive to an economy?


Thanks for the portfolio comments and yes you are both correct in that given a "The Road" type scenario Gold is just going to be another shiny bit of rock but we are a long way from that (decades) and IMO, if there is to be a PO Event, people will start losing faith in fiat currencies as governments print away... This is the ideal scenario for PMs to do well. Silver in the meantime also taps into the 'China Rising' play as do the REEs (overall REE is looking the most profitable so far on its potential green credentials and lack of availability in the West. I got 'lucky' to get into this trend early after reading some posts here in 2007/8 on China sewing up the market.)

The whole market is just a big Ponzi scheme anyway if you think about it...


Blimey Nick, you'll have to hope that there isn't some inscrutable trigger in the near future which sets off a sudden fast crash right away from high hitech society. Most of what you have there then wouldn't be much use. A lot of it would just be worthless paper notionally asserting your right to shares in enterprises which have just crashed into ruin, leaving no actually-realisable net worth. Despite all the endless discussion, we still have no real idea whether the near future might produce a big, sudden step down like that, or not. So good luck!

I prefer Dmitry Orlov's view: "There will be a mad shuffle to find safe havens for hot money, but none will be found. Investors around the world will finally be forced to realize that the best way to avoid losses is to not have any money to start with." (http://cluborlov.blogspot.com/2009/12/predictions.html)

I prefer Dmitry Orlov's view: "There will be a mad shuffle to find safe havens for hot money, but none will be found. Investors around the world will finally be forced to realize that the best way to avoid losses is to not have any money to start with."

A nice way to describe what I call rich mans inflation and poor mans deflation. Given the amount of cash accumulated at the top low interest rates and leverage there is a tremendous amount of hot money flowing around the world seeking yield.

The volatility caused by the flows power the flow of cash in a sort of perverse perpetual motion engine. Little lands in long term investments as fear keeps any of it from reaching the real economy.

As cash moves in and out of a market it moves up and down driving the flow of cash in and out.

At some point this dance will fail and some of the players will suffer huge losses but its hard to make the money simply disappear most of the time its simply getting redistributed amongst the players. A game of poker that never ends.

Sooner or later of course one of the players will pile on just a little to much leverage and the volatility will not go there way and wham down we go again.

Peak oil means that my "Golden Years" are not going to be anything like I envisioned. In fact there is nothing reasonable and rational that I have been able to find that gives me any reasno not tho think that it will SUCK big time.

It means that there is no chance of my children having as good a life as I had and certainly not a better one and that makes my future suck even more. (after all it's all about me)

Please don't any of you comment about how "just because you will all have less doesn't mean it can't be better" crap. In truth I can live quite happily at a very low level of simply meeting my basic needs, but it's not about that. It's about an entire developed and developing world population dealing with this reality and it doesn't look pretty.

Doomer out.

I would normally comment on this. Eeyores covered it for me, though. Sad to say.

lol, feel better now? ;-)

I can only speak for myself but for a while now I've been somewhat depressed especially when I have to deal with people who are in denial or insist nothing can be done etc... I'm still more on the doomer side than not and while I still think that because of being in population overshoot there will be much suffering ahead for many. I have hope that major paradigm shifts are coming soon.

I posted this the other day on a different thread but I think it really embodies what Peak Oil means to me, which is that we will be doing things very differently in the future than we are doing them now. So its time to give our imagination wings.


"People put limitations on their creativity, believing they have to rely on what they know and what they have done," Piccard says. He sees the Solar Impulse venture as a way to dramatically demonstrate that it's possible to make a sharp break with the past -- in this case, by showing that renewable energy can replace fossil fuel.
"A lot of industries say we have a society based on oil dependency, so let's continue. ... We know how to deal with oil. The result is General Motors and Chrysler going bankrupt. It's a typical example of people who did not make the turnaround early enough. If GM made engines with much lower fuel consumption, they would not have gone bankrupt."
"We have to get rid of certainties, habits, paradigms, common assumptions," Piccard says. "These are the limits to creativity."

Best Hopes for Paradigm Change!

Thanks, FM!
That's what I want to hear. There is a lot that is possible, and a lot for us to do, to try to bring the possible to bear.

All the people (here!!) who keep going 'You Can't', 'Forget it', 'Game Over' ... and act like they are the 'realists'.. it's exhausting, and as dark as things are and are going to keep getting, their predictions are more about fear than 'Hard, cold reason'


"Scott for scientific method, Amundsen for speed and efficiency but when disaster strikes and all hope is gone, get down on your knees and pray for Shackleton."

.. or for those who can stomach a little Ecclesiastes ('Ecclesiastes is just alright by me' as the Doobies used to say)

Whatsoever thy hand findeth to do, do it with thy might; for there is no work, nor device, nor knowledge, nor wisdom, in the grave, whither thou goest.

We keep saying we HAVE all these energy slaves, and yet it's also clear that WE are no less the slaves to this energy. Back to your oars, cretins, the Cap'n wants to go waterskiing!!

Back to your oars, cretins, the Cap'n wants to go waterskiing!!

Aye aye sir! Cretins help Cap'n with skis, then help him into the water, then cut ropes and row like hell away from Cap'n...

Cap'n last seen floating in water with skis sticking up, screaming for help as the sharks slowly close in on him.

you fella's got to quit picking on us Cretins. Dammit, we did not cause all these problems. Reminds me of a cartoon i saw many years ago. Two little one cell organisms talking to each other with a mushroom cloud in the background. One said to the other," ok, lets start over, but this time no brains. "

Started reading this site about 4 years ago. Quickly realized i was a Rube. Red it another year and decided i was also a Cretin. Decided i should join to protect the innocent and the sensitive. I don't play very often, but i am sensitive. (and armed, heavily) Be very careful!


God, I feel so insensitive.. what a boor I've been!

I'm with you Rube, and if you run short of ammo, feel free to call on me.

As a matter of fact I might just apply for membership in your clan, so long as i can retain my hillbilly redneck credentials-become a sort of dual nationality sort of character.

Seriously, some folks here do get a little stuffy and self righteous at times..

It is a seriousmistake to condemn others with less opportunity to have learned as much about the world simply because they have not drawn as good a hand in the game of life.

Nothing makes me want to kick somebody hard in the rear so much as when my target claims some sort of personal superiority compared to some other person because he is wealthier or better educated-in ninety percent of cases he started the race with a full lap head start in a two lap race because his parents were educated and brought him up in a better environment.He should be ashamed instead of bragging and going around preening his moral and intellectual plumage.

I'm reminded of the first paragraph of "The Great Gatsby"...

"In my younger and more vulnerable years my father gave me some advice that I've been turning over in my mind ever since: 'Whenever you feel like criticizing any one,' he told me, 'just remember that all the people in this world haven't had the advantages that you've had.'"

OFM: --Amen

Andrew: I forget. What did Nick's father do for a living? Or did Fitzgerald never tell us? And are the rumors true that the Green Light across the Sound was powered by a genuine John Galt perpetual energy generator? Thanks.
(left click on image to learn about the green light)

You do realize I just gave Cretins a whole heap of credit up there, right?!
Oh, never mind :-)

Sorry FMagyar,
told you i was sensitive and not very smart. I do love that little green picture above though. Please everyone click on it. "There are two kinds of people in this world. The kind who divide the world into two kinds of people, and the kind who don't."



Kind of like WATERWORLD meets DARK STAR

All right, bomb, prepare to receive
new orders.

BOMB #20
You are false data.


BOMB #20
Therefore, I shall ignore you.

Hello, bomb.


BOMB #20
False data can act only as a
distraction. Therefore. I shall
refuse to perceive you.

Ok, it's not really like that at all, but it IS doomerish, and they go surfing at the end.

Bob, both ideas are right aren't they: It's going to be very bad, and for the unlucky ones there's just not going to be a lot anyone can do, because there'll be so many, and the rest of us will be struggling like mad just to keep from joining them in the pit of ultimate ill-luck --

But --

Those of us who manage -- mostly be sheer chance, whatever prudent preparations we may make -- to stay alive and whole will be working and inventing and improvising and creating like mad.

I remember so many of my parents generation saying that the ultra-dark days -- for us in Britain -- of 1939-42 were some of the most exhilarating and exciting times of their lives, even whilst so much really bad shit was going on appallingly all around them, because they happened not to be consumed by that themselves (sheer luck of the draw), and there was also so much really good shit going on right alongside.

I'd be one of those "living with less is fine" guys...but that's just pragmatism anyway, an aside from the issues.

My perspective was like your at first, as I'd grown up with all the normal assumptions of linear progress and so forth, but I also grew up horrified at what industrialism and overpopulation have done to the world in my time. Peak oil means to me that the vast unstoppable machine of industrialism has brakes built in, and will possibly leave some of the world natural and wild. That's a big relief. And overpopulation too - there's a limit and that's good. I remember reading estimates of 25 billion by 2100 or so...now we will likely peak before 9 billion. That's a relief, though the character of that peak is unlikely to be.

Seems to me that we may peak in population before 7 billion, Daxr. We may have peaked already, in fact. Energy constraint is here. Food constraint follows at once and inevitably, I suppose. Increasing death-rate/declining fertility follow almost immediately from that. Just hunchin', but it feels likely.

World 6,798,131,101
04:48 UTC (EST+5) Jan 23, 2010


...and counting. I wouldn't be surprised either way, but I have to think that decline will be easier the sooner it comes, not that there is likely to be an easy way down for most places.

I see the onset of PO as being roughly analogous to the decline/end of slavery in the U.S. The bans on the importation of slaves in the early 1800's was like the plateau of oil production. The Civil War, ending slavery, was the South's last effort to preserve its way of life. This involved anger, denial, blame, moral debate, and ultimately, warfare. PO deniers remind me of Southern leaders, rationalizing their way of life while trying to hold onto something that they know is slipping away. In the Southern U.S., coal, oil, and the technology that they enabled eventually replaced/surpassed the slaves' productivity, allowing the "Princes of Industry and Agriculture" to return to their ways. This time it's global, and a solution has yet to present itself.

This involved anger, denial, blame, moral debate, and ultimately, warfare. PO deniers remind me of Southern leaders, rationalizing their way of life while trying to hold onto something that they know is slipping away.

Actually, there's quite a bit of overlap between today's Southern leaders and PO deniers. Not to say they're the *only* ones of course (plenty of Northern cornucopian magiacal thinkers), but a strong correlation.

Be real careful of your stereotypes. One of the primary thinkers mentioned in the article above, H. T. Odum had a pretty significant southern background. check his history. who was his father and what was he about. Think you will find some edifying things. No, we are just generally ignorant. You know, not edi-cated. but, we have been hardened by some pretty hard times and still have some of the skills that will serve us well in an uncertain future. Our leaders are for the most part, full of shit, but we like them that way, cause that is something easy to identify, by both site and smell. Where you from Harm? Lets look at the voting record of your reps.

My Southern roots go back over 300 years.

On one side I am a direct descendant of one of Daniel Boone's brothers. Several soldiers in Virginia regiments during the Revolution.

Another was expelled from New Orleans in 1800 for being/suspected of being an American spy.


Didn't mean to Southern-bash here. Nonetheless, it's no secret that "red" Southern states trend heavily towards right-wing demogogues and fundamentalist politics. I know there are rational people there b/c most of my family lives there (NC, AL, GA). And of course, there are also a lot of not-so-rational people.

Fyi: I live in the S.F. Bay area, though by local standards, I actually qualify as "conservative" on many issues. Just not liberal enough for Berkeleyites I suppose.

After today's Supreme Court decision, it won't matter what region you're from. It'll matter what corporation or industry you support.


This is defacto control of the election process as never before, where those corporations with the most money (energy and banks) will have over-the-top control of who gets elected. BAU will rule. Perhaps nothing....perhaps huge.

In the world of Max Headroom, the 80's Tv show, the News corporations were the ones that made the presidents. Everyone thought the show was tongue in cheek. But given recent events in say the past 10 years, you get the feeling that big money is getting itself loads of Government people into position.

It just plays into the hands of people like Alex Jones who has been yelling about big money taking over the world.

More power to the microbes.



Good to see you back in action here. You bring a clear and compelling perspective.

A gentle nudge in the direction of recognizing that it was the peak of net energy that actually is the deeper causal influence on our current economic situation. And the peak of net (distilled products less the energy invested, for complete EROI) precedes the peak of gross (barrels pumped) in time. Net energy started do decelerate perhaps as much as forty years ago or more. It may have peaked about thirty years ago. For the past thirty years or so, the world has been doing less work each year, producing less real wealth and repairing less existing infrastructure (adjusted for any efficiency improvements due to technology - but these have been relatively minor as compared with improvements made, say 50 years ago or more), while the financial faux wealth in paper form has soared distracting us from what was actually happening and creating this huge worthless bubble. Our real assets did not inflate in value in any real sense; if anything they deflated due to entropic decay. But we told ourselves they did. And we believed ourselves. We wanted to believe.

The rest, as they say, is history.

We need to return to Howard Odum's notion of the relation between the value of money and the emergy in real assets. We need to recouple the relation between money and real work/wealth.

Question Everything

PS. I'm back in the depths of day-to-day BS! How I miss my time at SUNY-ESF!

The Archdruid agrees with your analysis pretty exactly, George.

the finest, concise thoughts ever on this subject , by one of the greatest thinkers of the 20th century.


Couldn't agree more. Charlie Hall was one of Odum's PhD students, and I am a student of Charlie's! Have recently read about four more of Odum's books as a result of working with Hall.

For the past thirty years or so, the world has been doing less work each year, producing less real wealth and repairing less existing infrastructure

The build up of new wealth in China, India etc has been massive. You are cleraly wrong on the global level but parts of USA might have regressed.

Consider where the energy financing came from in China. Yes they have been on a building tear but at what expense and to whom. I submit that the same low energy lifestyle of the mass of the population that made them a good target for off-shoring manufacturing combined with decades of higher savings rates coupled with a much higher reliance on coal and new hydro projects have bought China much of that new infrastructure. But let's see how well they can maintain it. What happens now that they are becoming a net oil importer at high rates? Also try breathing the air in Beijing.

As for the world as a whole (not just China) I suspect you will find that after a spurt of building in various late 20th century 'miracle' economies, that on average the new building pace has slowed and the existing infrastructure maintenance is in serious decline. It isn't a global recession for nothing.

Also, the evidence suggests the US has regressed a lot. That is why there are so many shovel-ready projects for the stimulus package. This is most evident with respect to cities and states where many repair and improvement jobs have been put on hold for decades. Schools, K-12, are facing a massive repair and improvement requirement due to years of neglect. In more subtle ways, legislative defunding of public higher education, which was well underway for many decades prior to the current downturn, has left many (perhaps most) of our nation's best public universities with serious budget problems just to maintain the quality of education, let alone make improvements to meet the needs of society.

Shall I go on?

What you may be focusing on is the glitter of the newest high rise building project or new highways in small parts of Asian countries. But if you really dig deeply you will find that all of these 'image' projects have come at a sacrifice somewhere else, usually in the general public (the middle class in the US and OECD countries).

Nor can you count the typical statements about growing GDPs prior to the downturn. A significant fraction of GDP in OECD countries, and now in places like China, are a result of recording as profit the phony monies created by these financial high jinks instruments. The profits being reported on Wall Street right now are as real as the market value of houses were right before the implosion of that particular bubble. As we are seeing quite clearly right now, the level of a stock market bears no relation to the real wealth in hard assets and the welfare of the general populace. It is mostly just speculation.

Dig deeper Magnus. You'll find less than meets the eye!

Peak Oil is a marker in the growth dynamics of human civilization whose dynamics are invariant from those existing in ecological systems. I’m pretty sure that humans will fight over remaining energy until their own efforts are extinguished from lack of energy. Human populations have competed and will continue to compete for energy, rather than sliding into the cold, dark abyss. The human populace and representatives in politics are tribal animals and their behaviors are little different from Stone Age brutes conniving and plotting to come out on top in the distribution of the latest energy carcasses. The politician’s minions and supporters stand behind their representatives, knowing that if they win they will obtain a greater piece of the wealth. The politicians and their followers cannot overcome their own organic constitutions, which let them see reality only in terms of greater growth, wealth and expansion.

As the bones begin to show on the carcass, the competition and corruption will be magnified as people fill their compounds with wealth to endure a return to a different reality.

I am sure that some know that we’re setting ourselves up for a collapse of unimaginable proportions. To reduce our current population to somewhere near zero would require one Haiti size catastrophe every day for one hundred years. It is more likely that we will see more punctuated events, most likely famine spurred by warfare, climatologic, or geophysical events.

Peak Oil is not a little birdie whistling in your ear, it is one of the four horsemen shouting in your face, “IF YOU WANT TO LIVE, HEED MY WARNING!”

...most likely famine spurred by warfare, climatologic, or geophysical events.

Don't you think that the cause of famine might also be lack of fuel, water and fertilizer? IMO the warfare will be spurred by the famine! And that is the larger danger to our species. Since the carrying capacity of Planet Earth is probably about 1.25 Billion, and most folks are not just going to exit quietly, stage door left, hunger is going to drive unrest. To say nothing of the resource wars that have already begun.

Estimates of the earth's non-FF carrying capacity vary all over the map --even here at TOD. It's all about the assumptions we make.

Some estimates are as low as a few hundred million (the levels that prevailed prior to the use of coal), while some are as high as 3-4 billion (assuming that we all live more like Brazillians or Chinese than Americans or Europeans), and that we heavily develop nuclear power and renewables).

And then there's the problem of ongoing topsoil erosion, loss of biodiversity, increasing pollution and other side-effects of population overshoot -including AGW. These things tend to significantly reduce the earth's carrying capacity via environmental degradation.

We might arbitrarily pick a number somewhere in the middle range of the above --say 1-2 billion (at a significantly reduced standard of living), but even this depends upon some fairly optimistic assumptions about the earth's ability to recover from past human damage. My own wild guesstimate would be anywhere from 500 million - 1 billion, again assuming most people live fairly modestly by today's Western standards.

Well, I heard that FMagyar actually moved up to FLA because he was convinced that 'The planet can't support more than 7 Brazilian people.'

Is that "7 million" or just "7"? Even 7 million seems a tad low for as large and resource-rich a country as Brazil.

Damn jokuhl...thought you had made a good joke there. Now, with HARM's help, I understand you just can't count.

Three Brazilian Soldiers

Donald Rumsfeld is giving the president his daily briefing. He concludes by saying: "Yesterday, 3 Brazilian soldiers were killed."

"OH NO!" the President exclaims. "That's terrible!"

His staff sits stunned at this display of emotion, nervously watching as the President sits, head in hands.

Finally, the President looks up and asks, "How many is a brazillion?"

I'd say he was in good company ;-)

I thought that unit of Human Currency deserved a new variation.

But Rock is right. I gave up on counting.. it only made me madder.

FMagyar...oh, that's funny...so quit horsing around, back to our point, are you saying the earth could support at least a brazillion? :-)


Iteresting how we've been waxing "brazillion". Perhaps just a sign of our collective frustration over PO.

There...top that one. LOL

Brazilian waxing? Top, is not exactly the first thing that comes to mind, more like a bottoming out of sorts...ouch that hurt! Heh,heh!

Jim Lovelock reckons a few score million living round the shores of the Arctic Ocean by next century (a devastated remnant, in other words) because the Earth's climate has already begun its unstoppable state-switch, in his estimation, and that will make much of the currently-livable land-surface unlivable for humans. Enjoy life whilst we still can, he says.

famine spurred by warfare, climatologic, or geophysical events.

...if we're making predictions, historically the real heavy-hitter is disease, and usually follows famine. Or famine follows warfare, followed by disease. Look at the Black Plague, which followed the onset of the Little Ice Age in Europe, or the Spanish Flu after WWI, or (less well documented) the succession of plagues that swept the Roman Empire during its decline, very arguably beginning with crop failures linked climate changes in Africa and the Middle East.

Kind of like asking a lemming what that cliff ahead means to him - no way to know till you go over.

But like most people (and lemmings too I guess) "PO" reenforced beliefs I already held, namely that we are way too reliant on an infrastructure sustainable only via millions and millions of slaves.

Peak Oil to me is when the world can no longer increase the rate at which oil(crude and condensate) is produced.

When does this occur? What does this mean?

These two questions are what I worry about. Based on what I know I believe the most likely time frame for the "peak" was 2005. This timing means that "peak oil" can not be ignored or defered and that change needs to start asap. A key subquestion is how fast will oil production rates decline.

The only thing I am 100% sure about for meaning is that "peak oil" means change. Everything else is speculation which would be an interesting armchair discusion if I didn't believe in the 2005 date.

I personally believe that we will become poorer due to "peak oil". How much poorer will depend on the choices we make technologically and socially. Complete collapse and really massive dieoffs could potentially result if we make the wrong choices. Partial solutions include things like a nuclear program whether advanced uranium and plutonium designs or thorium designs and limited uses of biofuels. When I contemplate worst case scenarios I remember that In "The Coal Question" Sir Stanley Jevons could not see oil replacing coal.

Or perhaps what Dimtry Orlov wrote about AGW the other day on his blog sums up p.o. too ( http://cluborlov.blogspot.com ):

Our worst-case scenario is that our worst-case scenario is going to continue getting worse and worse.

I Love it!

I've never laughed so hard reading doomer comments. Keep 'em coming.

The ability to laugh at ourselves - that's got to be worth something in quality of life, even if we have to give up all the gadgets and burgers we thought we absolutely couldn't live without.

Ohhhhh no! You're not getting my burgers!

(you guys know that you just doomed all of the "serious" threads below :->)

Even ClimateAudit is getting worked up. They accidentally unleashed a post form someone that challenged the denier claims of Richard Linzen.

Over 300 comments consisting of gasps.

I don't have a link, but you need to get yourself several MRE style burgers in a can. They sell rather high, but have a 5 shelf life. I've been meaning to buy one of them and open it just to be able to know if they are as good as advertized, but at over 15 bucks with price and shipping costs, I've not made that much of an effort.

Ebay has them usually listed under the 'mre' catagory. I've been to several online stores that sell ration supplies and I am fond of the US issue MRE's, one of them sold the canned hamburgers.


PO to me represents a concrete exemplification of limits to growth and resource depletion. For many decades, limits have been crystallizing (e.g. read a few State of the World reports). Energy (in particular oil) ties all of these together into a converging web of crises.

Economists believe that substitution is a key market response to circumvent scarcity. And it has worked in the past. This same process leads in the end to simultaneous scarcity of multiple "substitutable" resources. That is, in a finite world, there are "equivalence classes" of substitutable resources. Market pricing in response to scarcity of one resource shifts emphasis onto others in the same class, giving the appearance of a pressure relief on scarcity. But reality will really bite when all of the resources in a class are scarce.

After I realized that high levels of government almost certainly know full well the predicament, but are either kicking the can down the road or are taking more cloaked actions (such as occupying Iraq), I concluded that action needs to be taken at a local level (community, family, individual).

It's all nice to pontificate, but what actions? My wife and I were already planning on some small scale farming. So we have been speeding up the process, and are moving soon to a small off-grid farm in a small community in which we know many people. Investing in things of real value (arable land, skills, hand tools, friendships). Restoring a neglected homestead (unpruned 100-year old and younger apple and other fruit trees, blackberries and trees growing in the fields, leaks in the house and barn,...).

What about convincing people we know? I don't try to convince anyone. First of all, the future is way too uncertain for me to advocate difficult life-changes to others. Secondly, unless someone is receptive to ideas, they won't accept or absorb. So I just try to present ideas at the periphery of their understanding. I initiated a Sustainability Task Force in our current community, and gave a presentation from the Post Carbon Institute on what the converging energy and climate crises may mean to municipalities. Lots of glazed/widened eyes. I think most just purged it, but one can only lead a horse to water.... Nonetheless, the task force came up with many recommendations to reduce carbon from transport, buildings, etc (which will help reduce vulnerabilities to energy scarcity). That said, most people I know are blissfully unaware of what's waiting just down the road and are far from connecting the dots (with the help of the MSM).

Peak Oil will happen in 2020.

The oil that is left to get out of the ground is about...20 Cubic Miles.


Peak Oil means to me that we are at or near peak just about everything, and very close to peak population as well. That might be still growing for a few years longer, but soon it will start to run into the minus column.

Where do I stand?

I have been involved in what some call Permaculture for longer than I knew what permaculture was, though I have not always lived the lifestyle, I have not been living high on the hog either.

I live with 2 other people (parents) in a home under 900 squarefeet. We grow a lot of our own food, recycle most things that we can and have been doing so for a very long time.

I have gained skills that you can't learn from books, even though I do have the books that contain them. I am over supplied with tools of many trades, and will hold on to them as a capital that can't be bought again.

Hopefully before it gets really rough ( Zombies at my door step ) I will have gone to where God wants me, I have faith in heaven, but not a heaven on earth. More like a nice vacation on earth.

I enjoy watching what other people are doing, via youtube and other videos and blogs about living sustainable lifestyles and teaching others how to live off the land.

In the end if the major die off happens before I am dead, I can help others get past it. If it happens after I am gone, good luck to those that are left.


I am a Christian and a Science Fiction writer, So far those two have not canceled each other out, though if you here a big bang down south, maybe I was wrong.

hate to use the same quote twice in the same week, but when it fits.

"If you've got to use language like that about a thing, it's ninety-proof bull and I ain't buying any!"
Big Daddy, "Cat On a Hot Tin Roof"

I didn't ask you to buy any.


What does peak oil mean to me?

It means the big party is near over. Meaning we could play, make mistakes, start over easy enough, buy whatever, go places, change careers, change relationships, get another degree, throw parties and talk about all sorts of trivial things.

Now it is getting more serious as we head downward towards the end of the party in this endless recession. What will occur in the collapse is chaos, but what follows won't be a party, but rather a gradual building back up but into a sustainable way of life by way of real hard work.

I wouldn't have missed living during the age of oil for anything, and I'll sure miss it when the big party is over.

Hey there, Earl. Good to hear your view, and I truly appreciate

What will occur in the collapse is chaos, but what follows won't be a party, but rather a gradual building back up but into a sustainable way of life by way of real hard work.

I am gradually acquiring tools - mostly hand powered, though I do have a power sawm joiner and drill press. Using storage batteries, solar charging and inverter I should be able to continue use of these, even after the lights go out.

Good luck in making it past the die off... hope to see you then. If not, I just hope you see my grandchildren!

Peak oil to me has not everything to do with production on a world basis, but the availability of the products in our local situation. Refineries (U.S.) are operating at a very low margin of profit. Supplies while above the 5 year average are still measured in days. If for any reason supplies of gasoline and/or diesel are unavailable for several days in a large metro area, that becomes Peak Oil for that area. Picture Boston or New York with no food deliveries for seven days. Picture people attempting to feed their families, commute to work or school. Stores depend on practically daily deliveries to keep shelves stocked. Gas shortages, food shortages could lead to panic. It is not necessary for world peak to occur for the U.S. to experience the effects of peak oil. The economic situation in this country is so fragile at the moment that we could experience Peak Oil light while the world still appears awash in oil.

What does peak oil mean to you?

The word “peak oil” was introduced by ASPO in 2001. The world oil production however, looks more like a plateau since 2004 and if Iraq is successful in developing its new oilfields and if there is peace in the Middle East, the production might stay at this 84-87 mbpd level or a bit more for a quite some time. This would lead to volatile but slowly increasing oil prices. The high oil prices have already and will continue to lead to a more efficient use of oil and a transfer to other energy sources. Countries, which today have a heavy tax on oil, will have better possibilities to handle the reduced supply and higher prices.

if Iraq is successful in developing its new oilfields and if there is peace in the Middle East, the production might stay at this 84-87 mbpd level or a bit more for a quite some time.

I hope this takes place... it is my "plan A!" OTOH, when the Iraqi fields start to fade, the rest of OPEC and the world is already in 12% depletion [my opinion - might be wrong] the fall will be so fast that I don't want to contemplate the consequences.

Plan B is Iraq is full of crap, not oil, and the fall is a bit more gradual, but much sooner.

Both plans lead to the same place, however. Now, if I can convince my idiot family that BAU ain't gonna keep up very long, maybe I can help guide them past the 'rapids' mentioned in the posts earlier.

Look for a new peak-oil panic the moment the world economy unambiguously recovers and demand rises. And after gas prices climb up to $4 a gallon before dropping again to $2.50.

I like this part especially. Given that the idea that if the prices rise demand will collapse and prices will collapse is now MSM perhaps people will finally consider the validity of this assumption.

We have seen steadily rising prices for years with no response from the supply side. Thus supply is increasingly insensitive to price which suggests we have peaked. The price is determined by supply in demand if a weakening economy supports 4 dollar or 8 dollar a gallon gasoline because supply is not there then it will be 4 or 8 dollars or some number.

There is no intrinsic reason esp as the economy shrinks for supply and demand to balance to some low price. The price depends on the balance between supply and demand not on the economic health of the economy.

Now it could work to balance at 1 dollar a gallon or .50 cents take your pick it all depends.

In particular if supply is falling faster than oil demand is contracting and most of the economic contraction is concentrated in the FIRE part of the economy or debt based economics the you have a good chance for high oil prices for a long time.

The initial collapse of the FIRE economy had a huge impact on construction which is where the FIRE and real economy interact deeply but this is a one time collapse. Further contraction of the FIRE economy has far less impact on real oil usage as construction rates are now so low that even if they fall by and additional 50% changes in oil consumption are negligible.

Other economic activities like shopping malls etc can suffer steep drops in profits and run in the red for sometime before finally dropping out and shutting down. For each mall shut in general customers have to drive a bit further to go to the remaining outlets offsetting to some extent the energy savings. And you have survivor bias as malls and retail outlets close the remaining ones get the traffic boosting sales and allowing them to resist longer.

For Real Estate falling disposable income and uncertainty will delay big ticket purchases such as houses, cars etc. Now that this is generally resale of existing structures the impact on oil consumption is much lower. We can assume this will result in falling prices however as real estate prices fall asking rents also fall freeing up significant amounts of disposable income for renters. A lot more people move to new rentals than purchase houses so overall I'd argue disposable income actually rises. And of course more people who are underwater will choose to walk away and stop paying their mortgage increasing their disposable income significantly.

Overall in my opinion if I'm correct and rising energy prices generally result in a drop in the purchase of big ticket items that require debt the actual impact on oil consumption is at first minor after construction has collapsed.

The problem is the way the system works people can effectively convert the nominal equity in existing structures to cash flow buy simply boycotting the purchase of housing or aggressively seeking cheaper accommodations. There is nothing to prevent this cashing out if you will that effectively converts the nominal equity or value of existing building into cash flow to buy other more needed items.

The bottom for rents is zero as the lowest tier either lives on the street couch surfs or moves in with friends and family as plenty of baby boomers are sitting on excess housing stock.

Lets say rents in a region fall from 1000 a month for a two bedroom apt to 500 a month this can by a tremendous amount of gasoline and food for a large number of people. And its enough of a drop to force rents down for everyone as people who rent can and will move to take advantage of such a drop.

For the US at least the focus has been on housing prices and homeowners and ignores the large number of people who rent and own their homes outright. 30% of housing stock is owned outright depending on the numbers today about 35% rent.

Thus 65% of the population has tremendous flexibility in devoting more of its income to higher fuel costs. If we assume default rates on all mortgages approach higher and higher numbers say 5-10% of outstanding mortgages. Next of course not everyone with a mortgage bought a house at the peak of the bubble many are seasoned 10 or more years with house payments well below existing rents.

My best guess is 75% of the population in the US actually has the means to endure higher oil prices without a significant change in consumption at the expense of 25% of the population or less that bought a house in the last five years.

So if one actually bothers to look at the demographics in the US it seems clear that a significant portion of the population can absorb much higher energy costs forcing the minority into default on their mortgage obligations and either increasing their purchasing power via falling rents or taking a generally unrealized loss in equity as outright owners with no intention of selling see paper losses.

Renters obviously are in the drivers seat as you face spiraling energy costs with people that actually own their homes our have had mortgages for a long time joining the party.

People with new mortgages that default also eventually can partake of expensive gasoline and overall have the highest boost in purchasing power vs those that choose to hang on.

At what price level does this dynamic begin to falter ?
Who knows we are not even close to reaching that point yet. Given the significant price inflation for real estate of the last several decades the amount of cash flow that can be redirected from paying inflated mortgages and associated rents to necessities such as food and gasoline is immense. It would take years before this situation reaches the point of diminishing returns and effective devaluation of equity by the population that can afford it no longer sees a boost in cash flow to cover rising commodity prices.

Thus once you assume a collapse of the housing and auto industry many Americans can readily afford much higher commodity prices and this does not even include a pull back in other spending.

Outside of housing the vast majority of goods are now imported from China so the brunt of the impact of a pullback in other spending will be felt in China not the US the fall in imports actually improves the balance of trade and strengthens the dollar.

Thus overall at the expense of people who have purchased a home recently the US economy is very resilient to rising oil prices and plenty of people are more than able to pay much higher prices for fuel. Others need only default on their mortgage obligations to compete and this simply enforces the cycle of falling rents and falling housing prices steadily strengthening purchasing power in general.

A related post on Calculated Risk.


Read that and explain how we won't be able to leverage falling housing costs to increase our purchasing power for commodities for a long time to come.

Of course we will just have to wait and see what happens but no doubt in my mind we have plenty of money to spend on gasoline now going into inflated housing costs.

And of course no sign of any impact of the current increase in oil prices on demand.


Again you can read it all at Calculated Risk.

For me at least the math is pretty obvious a sharp contraction in oil consumption in the face of rising prices simply is not a viable argument given the current financial situation.

The bottom for rents is zero as the lowest tier either lives on the street couch surfs or moves in with friends and family

On that note, anyone heard from fleam?

Yes, I miss fleam ! VERY good and useful insights, and an interesting person.

Best Hopes for Fleam,


As far as I know fleam is alive and well. But can no longer post here. Send me mail and I'll pass it alone to them.


mammel, you are one of the primary reasons i read the oil drum. Been at the hospital all day, and against the advice of my doctors have had a sip of elixier. gonna read your post more closely in the morning, because i know it has wisdom. Thanks.

Taxes are going to eat a big chunk of that income that is freed up, memmel. Even if the Republicans stop the top line tax increases, there are plenty of other ways the desperate states and counties will get it:

"A partial list of the various ways in which citizens of the US are taxed:

Accounts Receivable Tax
Building Permit Tax
Capital Gains Tax
CDL license Tax
Cigarette Tax
Corporate Income Tax
Court Fines (indirect taxes)
Deficit spending
Dog License Tax
Federal Income Tax
Federal Unemployment Tax (FUTA)
Fishing License Tax
Food License Tax
Fuel permit tax
Gasoline Tax
Hunting License Tax
Inheritance Tax Interest expense (tax on the money)
Inventory tax IRS Interest Charges (tax on top of tax)
IRS Penalties (tax on top of tax)
Liquor Tax
Local Income Tax
Luxury Taxes
Marriage License Tax
Medicare Tax
Property Tax
Real Estate Tax
Septic Permit Tax
Service Charge Taxes
Social Security Tax
Road Usage Taxes (Truckers)
Sales Taxes
Recreational Vehicle Tax
Road Toll Booth Taxes
School Tax
State Income Tax
State Unemployment Tax (SUTA)
Telephone federal excise tax
Telephone federal universal service fee tax
Telephone federal, state and local surcharge taxes
Telephone minimum usage surcharge tax
Telephone recurring and non-recurring charges tax
Telephone state and local tax
Telephone usage charge tax
Toll Bridge Taxes
Toll Tunnel Taxes
Traffic Fines (indirect taxation)
Trailer Registration Tax
Utility Taxes
Vehicle License Registration Tax
Vehicle Sales Tax
Watercraft Registration Tax
Well Permit Tax
Workers Compensation Tax"


That site claims that in 2005 54.4% of a U.S. resident went to taxes.

Ok time to bring out the social issues :)

Obviously your looking at one hell of a tax revolt and rejection of government pension plans in the near future. Or a collapse of the democracy. And yes I've left that out on purpose to focus on the financial side. But my poor people are not paying taxes no more than they pay them in any third world country. This means services such as garbage pick up, roads, sewer etc become iffy. Others that the community could provide if forced such as the enforcement of order ( not not law) and education and welfare in the sense of caring for the poor in a real community can be provided by the community itself.
Same with all kinds of services such as repair of existing infrastructure etc.

Sanitation is the big issue road degradation not so much as cars would be increasingly not used and community patch jobs/gravel works.

Its really hard to say what will actually happen on the service side obviously no big new public works and roads declining to gravel and bridges slowly failing but realistically we have so much pork now that we may actually keep surprisingly high levels of service.

But yes for all intents and purposes along side what I'm saying is also a complete rejection of our current state and local and even federal government in favor of a much smaller and probably lower service system with lots and lots of patch jobs.

But this has to happen. If the feds bail out all the states and local governments then the dollar becomes worthless and they fail anyway as no one will sell them anything using the Federal banknotes i.e the currency will be rejected thus of no use and the government collapse or they go insolvent and collapse. Same difference in the end just different route to the end point.
Federal take over does not work as same thing applies to the US Government indeed it will be forced to pullback.

Now of course this sets the stage for the collapse of democracy and some sort of authoritative government but the services still collapse even under such a move.

Tax revenues are obviously collapsing and our Governments are generally so deep in debt it makes the consumer debt bubble look small in comparison. I'm a bit surprised that they have staved off collapse so far but if you follow the news they are going down rapidly. Soon they will have no choice but to layoff large numbers of employee's and default on their pension obligations. Raising taxes won't do any good indeed it will hasten the process as it dries up disposable income and decreases home affordability even more. Once the government layoffs start then housing is collapsing in earnest as government employees make up a lot of the work force and of course tax revenue thus continues to fall.

Large parts of the coming downward spiral have nothing to do with oil prices outside of the only way that could possibly provide a way out would be a return to cheap oil and probably super cheap oil to subsidize growth. Medium priced oil is enough to ensure that growth remains impossible and thus the tax base will steadily erode.

Sure a lot of states will try and jack taxes but so what ? Its no different from increasing gasoline prices and simply steadily lowers the price of a home or auto I can afford.

And of course some states and governments in a bit better shape are going to do the reverse and lower taxes to draw in business and thus expand at the expense of other states and localities many ways to play this game as everyone is not at the same level. Texas for example will offer and increasingly attractive tax structure vs other states as it has no income tax. But we will certainly see at least relative tax havens pop up.

Just like you can't stop the collapse of housing there also no solution to this for governments and they are so indebted that they will hit the wall sooner than later in general acting to accelerate the rate of collapse.

They manage to somehow live another day without really addressing their problems so far but on the same hand the problems are also coming back faster and deeper than before so although they seem to have nine lives I have to guess 2010 will be the year we at least see some governments fall into the end game and become insolvent and effectively bankrupt. They may wiggle into 2011 but at some point they are going to start dropping.

And once one or two cities default on their bonds then thats pretty much it state and local bond premiums will rise and they won't be able to roll their debt much less expand it so once they start going down it will spread fast taking everyone down probably over a period of months as all cities, counties and states lose their access to credit. Then they finally will be forced to clean house.

Bailouts if they come simply won't do any good as once they start its everyone needing a bailout. I have to think that in this particular case even the US Government will recognize it cannot do anything to prevent the situation from naturally resolving itself.
Obviously if they start bailing out state and local governments everyone who has been spending like drunken sailors would take it to a whole new level and spend themselves to a bailout. I can't even imagine what they would do the states would make the banks look like schoolboys playing a mans game I simply can't come up with a good description orgy ? :). You can say goodbye to the dollar at that point and government bailout or not our interest rates will shoot sky high of course causing even more defaults.

Suffice it to say if we go there then we are toast soon after I think our leaders are greedy enough that they are not going to kill the golden goose while it still produces even if smaller players are wiped out. Obviously the powers of the Federal government would expand dramatically as lessor forms of government collapsed. In this case power is probably going to be the driving force.

Perhaps the Fed comes in and restores basic services to the thankful populace and they ignore the fact they now have a soldier armed with a M16 on every street corner with a lot lower service level.

This could very well be the way democracy falls in the US as elected officials are replaced with Fed appointed managers at the state and local level and congress becomes effectively blatantly bought.

My opinion is this is probably the most reasonable way that democracy will collapse in the US. Sure the Federal government is collecting less taxes technically but they have eliminated a hugh number of intermediate grafters creating a paradoxically more efficient system and probably actually collecting more total revenue at the federal level as the system is actually more efficient.

Graft moves to a whole new level as companies get contracts to provide services spanning several states thus it goes big league.
And the almost accidental dramatic increase in efficiency works to hide the overall problem for a time as local players are wiped out.

Basically your simply extending the current military-industrial complex to manage state and local governments. I'd have to imagine
that they would be forced to cramdown bond and pension obligations in the process no way are they going to be able to assume the debt at par thus it supports this sort of federalization as they have to let a significant amount of the debt default before they can even afford to do this sort of concentration. But they can readily go in and pay off at some percentage and take everything over. Whats interesting is this means that all state and local assets from buildings to parks etc would convert to the Federal government actually increasing its credit worthiness as it has a huge number of assets it could then privatize overtime. For the US Government done correctly its a huge influx of wealth and of course revenue flow increases the need for bailouts falls and they kick the can down the road a bit longer. Expansion of the now military police absorbing local police and probably adding more soldiers acts as a stimulus.

Anyway if I was going to bet on how democracy falls in the US this would be my top scenario. Thus you probably should watch closely to see how the Feds handle the coming defaults of State and Local governments if I'm right they won't lift a finger beyond perhaps some symbolic aid.

Many pessimistic articles make the same claim that rising oil prices precede every recession. They even site the same chart. When I study that chart I see flimsy evidence at best. It could easily be coincidental... the normal business cycle goes up and down every few years. I'm sure you could superimpose the same chart over sun spots, skirt lengths or butterfly populations and then conclude there is some (false) causation.

This chart? I suppose it could be sunspots behind the whole thing - that would make so much more sense...

Using housing bubbles as a measure of and underlying consumer price bubble.


One also finds a reasonable correlation between credit bubbles and follow on recessions.

For all intents and purposes recessions follow credit bubbles by definition.

It looks like we may have well reached the point that we can no longer blow another credit bubble esp given the epic proportions of the last one.

One of the fundamental relationships that has held for decades i.e the ability to inflate our way out of recessions via expansion of credit no longer holds.

Given this the value of the historical data literally from WWII forward in predicting future events is suspect.

Further back in time i.e the Great Depression we see financial bubbles overlayed on top of and expanding energy supply thus they are not all that helpful in predicting the future.

Going further back in time we have the transition from coal to oil and further the transition to coal. Before that we see colonial expansion.

Bottom line is we simply don't have good historical models that can be used to predict the future nothing really fits well enough.

One can of course make all kinds of models about the future but its fairly certain that ones based on inflation/recession dynamics are probably the least likely to be true. The best near term model is the Great Depression and that one has serious problems. But the assumption of extreme debt deflation seems to be the best esp longer term debt that was taken out in expectation of inflation being the norm.

As far as oil prices go what we have seen so far as a fairly steady rise in oil prices on average despite most economic indicators remaining very weak and obvious signs that the financial collapse is far from over and no signs of any sort of successful monetary inflation in site. Almost all the financial pain has been born by creditors in debtors with large amounts of credit and debt extended. And most of the losses have been notational in the sense they are balance sheet losses and asset devaluation.

Certainly people in all kinds of fields have lost their jobs and suffered loss of income but this loss is barely a blip against the balance sheet losses. Sure it sucks but realistically so far at least its the least of our problems.

This paper


Suggest that 2008-20012 will result in lost wages to the tune of 1 trillion dollar or about 250 Billion a year. Of course this should be heavily front loaded to 2008 not averaged thus a good bit of money lost via lost wages is already behind us.

Measured against a more sedate economy with normal levels of unemployment and wages aka non bubble years the losses are much lower.


Interestingly enough they show it back loaded yet it makes more sense that you should measure from a return to normal as you leave the bubble behind not continue to measure against the bubble years.
I would use a sliding scale measuring lost wages against a increasingly normal economy.


Given oil prices actually rose over 2009 despite the fact that lost wages and unemployment where climbing the relationship between oil prices and recessions was already broken at the depth of the recession.

Indeed given the inability to inflate the new normal if we get there would probably be closer to 8% for years to come. Basically these wages are permanently lost and need to be simply written down over time.

And so far we have seen rising oil prices and we have yet to even hit what I'd argue is a sensible new normal with unemployment hovering consistently around 8% and taking years to even get there.

This is what people claim will be a slow recovery but a L shaped recession is probably more correct.

Now if oil prices continue to increase well obviously inflation is impossible and we will see steady debt deflation and probably see expansion of government work programs to offset lost jobs.

Of course this will massively inflate the government debt already inflated to bail out the banks thus at some point interest rates will rise and the purchasing power of the dollar will probably fall this will of course increase the price of oil leading to even more debt deflation.

No on to the particulars of the demand side for oil well one has to wonder against this new economic back drop how much demand will change. Obviously more and more people will drift out of the regular economy and into the cash economy. Cash based jobs almost alway require your physical presence so your going to have to burn some oil to get there. How you decide to do that is really unknown.
My own experience living in poor areas is you tend to use taxi's when public transport does not work. Above this you use old cars and don't pay insurance etc and associated with this are effectively gypsy cabs where people give friends rides. Transportation costs of course make up a large amount of your budget but if you don't go somewhere you don't make anything. Better 1-2 dollars and hour net over transport then zero.

Here of course the economics during the Great Depression are useful.


In the US lets say gasoline is 8 dollars a gallon and you need one gallon to work odd jobs a day at say 8 hours of work then you need 1 dollar and hour to cover your gasoline and lets throw some inflation on top and assume your minimum is 2 bucks and hour for a net of eight dollars a day.

I'd argue thats a fair estimate of a modern super low wage where your profit is high enough to cover gas. Of course if you split the tank of gas carpooling then you do a lot better but you take what you can get. Days you can car pool or use other transport you do better days you can't you can't. Probably you ask a bit more say 3-4 dollars and hour for jobs where you can't split gasoline costs.

We can assume your on a significant amount of assistance getting most of your food for free and living as you can on the street at times etc.

The point is when push comes to shove as long as you can net a profit that can perhaps buy a bottle of booze or a small toy for your child then you can and will burn what ever oil you have to to make the net down to some pretty low numbers.

This is depression economics and you can see that as long as burning oil results in a net profit it will be burned regardless of its cost.
Thats not to say you don't do what you can to not burn the oil the good days are critical where your gas is payed for or you can split the cost as it helps on days where you have to make a choice of paying for gas and making next to nothing or nothing at all.

Now of course if you leave the US and take a look at third world countries its fairly obvious people make these sorts of choices day in and day out and as often as not they pay to make any money at all.

Until you actually remove gasoline powered transport from the equation completely i.e it does not matter what your willing to pay there simply is not gasoline around and thus its in a physical shortage people can and will demand it right down to the lowest rungs of the social ladder.

At the end of the day what else are you going to do ? Eight dollars is a lot more than zero.

I contend that Peak Oil is already part of history, with Oil Production not having kept up with Demand, Inflation or Global Population increases, since 2005.

Not only has Production not kept up, it has actually declined!

As Oil, which has been the major Enabler of Productivity & Economic Growth over the last 150 years, goes into Decline or Peak if you will, this will result in a series of price spikes, followed by falls in Economic Activity, as the trend gradually adjusts to a lower Global level of Economic Activity, including a reversal away from Globalisation & back towards the Local Economy?

Those looking for salvation from reported massive increases in Iraq &/or Brazil, I would say -
1) Iraq has had great difficulty in Producing 4 mbd, let alone the suggested 12 mbd.
2) Brazilian Production still has a long way to go before any significant levels of Production, it will not make up for Global depletion and the costs of this & other new fields will be very high.

Finally, other major factors will also influence events -
1) Population Growth
The total Global Population will continue to expand for around another 20-30 years, thus guaranteeing an extended Global downturn in Economic Activity, as the Declining Energy Supply will not allow Productivity to match the expanding Population.
2) Population Aging
The Global Population IS AGING and that will contribute towards a lowering of Demand for Oil and other Products & Services, over the next 20-30 years.
3) Debt
The Global Debt situation is already beyond control and has set the scene for an extended period of Deleveraging, following the excesses of the Baby Boomer Boom, which also ended around 2005.

However, this Global downturn will not be even, there will be winners & losers, as the with's will get & the without's will not get, their fair share.

What will all of this mean? -
1) More Local, less Global!
2) More for some, less for many! (sounds familiar?)
3) More Taxes for future generations, less than I had hoped for in my retirement & of other Boomers!

The main thing is to make the transition peaceful and avoid making the same mistakes made in the past!

I believe that peak happened in 05, and I was surprised to find out that this date is considered to be in the pessimist range. Now, in 2010, I am struggling not to be depressed about it. I am as prepared as I can be with skills, land, food sources, tools, whatever. However, it is depressing for me to see my kids considering having children and knowing how hard life can be, even when things are going okay. And yet I feel much joy in contemplating grandchildren. I have the toys already built.

I will finish building my house and provide a place for my children if they should need it. My family is everything to me and I am learning to live for the day and not fret. The day to day joys are becoming more precious and poignant.

It will mean a lot of pain and suffering, no doubt about it. As Tony Soprano says, "whattagonnado"?

Wake up tomorrow and keep on.

1.In my experience, events and consequences take a lot longer to manifest in the physical world than most folks expect, and then usually do so in a form that surprises.
2.economic reasons cause more people to change behavior, faster, than any other, unless there is a shock factor. That being the case, I have no problem slanting conversations to solving recessionary life situations toward preps- "quiet" life style, insulation, gardens, cutting back on expensive (energy-gobbling) vacations, etc. Planning for retirement is another tack.
3.We have to just keep walking the walk, ourselves, and with others who want to join us.
4.Local action is the best, with state level being about the biggest that will work in any real way. (Electing Brown in MA, for example.)
Forget bigger groups/offices- they will co-opt anyone who comes their way.
5.Walk quietly,look unimportant. In the times that are coming, targets may be shot, one way or another.
6. Question the utility of complaining about DGI relatives and friends- ranters waste valuable life and energy and create a lot of bad feelings. This doesn't build community.
7.Day by day, DO something to mitigate PO's effects in your own life.
Just my 2cents.

Asking the Wall Street Journal "what does peak oil mean?" is like asking the bad guys (the US military) in "Avatar" all about unobtainium. They`ll tell you how valuable it is and where it is.....the larger context really escapes them.

You are better off studying the peak oil message in a movie like "Avatar" which uses the phrase "energy flows" twice (in connection with the wisdom of nature as the Na`vi know it). There are plenty of useful messages about peak oil out there in the world, but the WSJ is in the business of providing intellectual support for the people who want to keep the oil-based economy going as long as possible.

Wow. The "Avatar" movie is having some deep rooted impact on how we all now think.

Today's New York Times has a story about how the Vatican views "Avatar".

I wonder how the Vatican views "Peak Oil"?

pi -- that was not the US military in Avatar. They were mercenaries hired by that nasty corporation. Just last night Cameron commented on that misinterpretaion. He said that, in fact, he was paying homage to the US miltary by portraying our hero as a former Marine.

BTW -- Cameron's brother, who works with him on some projects, is a former Marine.

In response to the observations in David's lead-in:

1. Peak Oil is more about transitioning from a world with an increasing supply of oil to a world with a decreasing supply of oil, and less about the actual date of the peak.

That's right, but the date of the peak is significant. The mass of the population won't accept Peak Oil until it's well behind us (It took about 8 years after Peak Gold for the market to accept that gold production had peaked permanently), and the heavy lifting in transition can't happen until most people accept it. There's only so much that Peak Oilers can do to prepare beforehand. We all know that BAU is unsustainable and that the markets are acting irrationally but, as JM Keynes once said, "The market can stay irrational longer than you can stay solvent".

We have organised ourselves to cope with Peak Oil resulting in high prices, through setting ourselves up in a villa unit in an inner city suburb, with excellent public transport and all facilities within easy reach (most of them by walking). I commute to my city job by bicycle. We have solar hot water & will be getting solar PV.

The doomer scenario involves oil not being available at any practical price, and no realistic substitutes, leading to economic breakdown. I don't subscribe to that, but if that happens, here in Australia would be a better place to be than the US. By that stage, I'll be retired on a defined benefit pension with a Government guarantee. And, since the public finances here are in much better shape than almost anywhere else on Earth (no Australian banks needed bailing out), my income is secure. I guess my biggest concern in that department would be what is going to happen to the health system when BAU has to stop.

As far as society as a whole is concerned, I believe that renewable energy (solar, wind, geo-thermal) can give us an energy budget that allows the people of Earth to maintain a civilised standard of living - and I'm very well aware that over half the population don't even have that at the moment. Getting there will involve massive social struggle, because the existing socially dominant class (the capitalists of currently industrialised countries) have their power deriving from the existing configuration of the economy. If we just sit back & let "the market" solve things, the rich & powerful will just end up richer & more powerful, while most of the rest turn into their peons.

2. The important question is not “How much oil is left?” but rather “How much oil can be extracted at a significant energy profit?”

17 barrels in 18 is still a significant profit. 9 barrels in 10 is fairly good. But if we get to 4 barrels in 5, we're talking about 20% of the workforce engaged in the energy sector, imposing a serious drain on the labour available for the rest of the economy. At that rate, we might find that $US300/barrel (2009 prices) is the maximum price that the market would bear before ceasing to use oil for energy at all - though there would probably be a significant lag between reaching that price and making the switch, since high oil consumption is embedded into industrialised economies and even urban geography.

3. Increasing energy costs have preceded every major recession in the last 40 years.

True, but that doesn't necessarily mean it caused them. They could both have been caused by a third factor.

In the case of the current GFC, the cause was a speculative bubble built on cheap credit. If there were to be a popular uprising that executed the people who caused it all, Alan Greenspan would be the first one to swing from a lamp-post*.

The Peak Oil connection to the GFC is that the sub-prime mortgages went belly up, thus triggering the chain reaction, when the US real estate market stopped going up. It was always going to stop at some time, but Peak Oil (via high petrol prices) caused people to decide that a house in the outer suburbs, where you have to drive to get anywhere, and drive a long way to get to work, wasn't worth the prices being asked. Once real estate prices stopped going up, the structure of sub-prime loans (low teaser rates, re-setting to much higher ones after a couple of years) was revealed as a time bomb. As long as you could flip the property at a profit before the teaser rate expired, you were set. Once you couldn't, you were done for.

4. Oil is unique.

Yes, it is. This is what causes me to say that Peak Oil means the end of BAU. It's not the end of civilisation, though, but the chance for a new beginning.

* Note: This is not my prescription for dealing with the criminals who currently rule every country in the world. I think that making them watch while the societies they wrecked recover &, in the circumstances, comparatively prosper is both more appropriate and stands as a statement of confidence in one's own vision.

More on housing and oil and whats next.

This is a great chart to put things in perspective.


Now assuming we are heading towards depression era prices for housing and given the length of the bubble even lower then we can expect housing prices to begin to bottom at around. 50k median vs the current 140k.

Now a 20% down 140k mortgage fixed at 5.1% or so is about 740 dollars a month.
A 50k mortgage similar terms is 276 a month or a difference of 464 dollars.

I don't have inflation adjusted wages back into the 1930's but.

Its a save bet that a fall in median wages by greater than 50% over the same time period would be difficult and we have minimum wage laws that will force business to pay relatively high wages.

So assume median falls 50% to right around 8.75 and hour.

Thats 1400 a month with housing costs at 276 that leaves over 100k a month for other expenses. Obviously plenty of room to buy very expensive gasoline even at the depths of a Depression.

Assuming 400 dollars could be allocated to gasoline at 10 dollars a gallon and a mpg of 30 you get 1200 miles of travel a month or 60 miles a day way over what most people would need.

At 20 miles a day for 20 days a month and 30mpg you need 13 gallons of gasoline or 130 a month at 10 a gallon or 260 dollars at 20 a gallon. You can simply assume a sort of worst case rule of thumb that gasoline costs would equal housing costs if you wish.

If one looks at rents not housing prices.


In 2000 at least they where about 600
Another more recent list.


Atlanta: $986
Austin: $907
Boston: $1,645
Chicago: $1,355
Las Vegas: $1,056
Los Angeles: $1,699
Miami: $1,368
New York: $1,751
Phoenix: $939
San Francisco: $1,810
Seattle: $1,211
Washington D.C.: $1,687

So what I'm suggesting is rents falling by about 75% and income by 50% with the difference going into rising food and fuel costs.

However you should look at a crashed housing market aka Detriot for guidance


Median Detroit, MI Rental Price: $750
Studio Rental Median Price: $500
1 Bedroom Rental Median Price: $550
2 Bedroom Rental Median Price: $640
3 Bedroom Rental Median Price: $790
4 Bedroom Rental Median Price: $850

However searching shows plenty of two bedrooms which I consider the minimum for a family of four living on minimum wage offered at less than 500 dollars and of course actually buying is cheaper if you have the cash. We can assume that median rents in Detroit will continue to decline over time approaching my lowball figure.
One has to imagine that Section 8 housing is probably whats supporting Detroit rents as federally subsidized rents are actually inflating values.


We probably will see similar programs for gasoline at some point for the poor subsidizing fuel costs either directly or indirectly.

But it probably won't make a huge difference overall.

Overall the result is that a family with a single income wage earner earing close to minimum wage and perhaps some secondary income can afford to spend quit a bit of money on gasoline as long as housing costs are at rock bottom prices. So you can assume very high gasoline prices 10+ and historically reasonable home prices from the Great Depression and Americans can still manage to purchase gasoline at prices we would consider devastating. Well my example is a devastated economy at the depths of a depression and it continues to function even with very high oil prices.
We are not even really considering serious attempts to mitigate gasoline costs that are simple such as car pooling.

The only assumption that needs to be made is that housing simply falls in price to match the Great Depression in a oil induced depression. At no point even at the bottom where alternative fuels are viable do you really need to assume that gasoline has become unaffordable and this is to 10 dollars a gallon and a 50% drop in wages. You can still purchase a significant quantity. Conservation can easily improve your lifestyle by a good bit but its not required.

All of America is like Detroit today and certainly social issues will override this simple calculation but you don't need to invoke the argument that gasoline is unaffordable at very high prices even at a reasonable guess at a bottom. Everyone above this level will do better of course.

Obviously what you do have to do is assume that housing prices will crash. What this suggests is that arguments against high gasoline prices are assuming that its impossible for housing prices and rents to tank to depression levels thus we can't afford expensive gasoline.

I'm more than willing to take someone up on that bet and history suggests I'll win. As far as people defaulting and going into foreclosure well at some point once housing prices fall far enough if banks are unwilling to make loans I'm pretty sure hard money lenders will be more than willing to underwrite loans on 5k-10k homes with 50% down. The median house price is not a good indicator as reasonable homes would be available for much less. You don't need credit with a bank to buy a home simply a job. In any case in the model gasoline never becomes unaffordable it just get to the point that you can choose a much higher standard of living by choosing not to use gasoline vs paying for it. People that eliminate most or all of their gasoline usage can at some point live significantly better than those that continue to use significant quantities.

This means of course that the society would be increasingly changing towards one that catered to people who did not drive as it does it makes it even easier to live gasoline free or low gasoline budgets.

Construction of new denser housing becomes viable as the difference between higher housing costs vs living without gasoline starts to work. This will probably send any housing stock not amendable to such a transition to and effectively zero value thus slowing the transition but making it permanent as the housing stock degrades.

Now of course the rest of the world probably won't far as well but the US can in a sense pull a China and become very competitive on world scale wages even with high oil prices it just will as I've outlined be forces to fully devalue its housing stock. In general most of the population is reasonably educated and if forced willing to work and of course localization will boost employment as imports outside of oil become unaffordable.

And of course more important this is ignoring social issues during this high stress period obviously on that front its very rosy.

Can the price of oil go up and down sure can the society succesfully transition off of oil in the face of ever rising prices sure it can but only if it devalues its housing stock. I'd argue we are doing or damnedest to prevent the obvious at the moment and not only will it fail to work but it will seriously cripple our ability to execute a natural transition off of oil. It won't prevent it just its not helping in the least indeed its probably hastening the process by forcing us into a financial corner that will make the eventual collapse in housing even faster than it would naturally occur and spike oil prices in dollar terms.

If you look back if we had not blown the housing bubble then it would already have been deflating from a lot lower level for several years and probably we would have been paying less for oil in dollar terms as the currency would have remanded strong and bubble demand would not have caused as much to be burned. It would have been a lot longer more sedate twilight period with transition. In fact substitutes like EV's coupled with expansion of rail could have probably put a much higher floor under housing prices leading to a decades long drift downwards easily managed by treating housing as a depreciating asset and steadily increasing down payment requirements as prices fell.

Here in central Arkansas some places rent for as low as $350 a month for a house trailer.

I pay the rent on the trailer my last ex-wife is living in, otherwise she'd be homeless. She is unable to work because of herat problems, mini strokes, failing eyesight and a host of other problems. Sooner or later she'll end up in a nursing home because she won't be able to take care of herself, but till then she lives at the fringes.

You'll find that a lot of what you have been saying is closer to happening than you might, yourself, think, at least in some places of the US.


Is it possible peak oil will never be recognised in the mainstream even when combined field depletion rates are at their maximum because neoliberal economists will just keep saying 'The cause is a lack of investment'?

I see no reason for it ever to be recognized mainstream.

My paper was rejected so I'm working on a blog but as far as I can tell we are well past peak oil and things have generally been falling apart with the top coming out even better each round of the game.

They have beaten peak oil if you will why do they care ?

Peak oil would only be important if the goal was to create a society similar to ours but using a lot less oil. If thats what our leaders had decided to do then Peak Oil would be mainstream now and not a ridiculed subject. However realistically a poorer conservative middle class that would exist in such a balanced world is not a big money maker.

Sure with effort we probably could create a fairly high standard of living for the average person with aggressive use of alternatives but there simply is not a lot of profit to be made off such a society so its basically useless for providing concentration of wealth at the top. Our leaders profit margins would be razor thin.

Its far better to go back to older methods effectively feudalism where most of the populace is dirt poor but a few are insanely rich and powerful. Richer and more powerful in real terms then they are with a large middle class. As long as expansion was happening the top rose higher so why rock the boat but once that fails then the experiment in a large middle class can be discarded.

Our leaders have pretty much told us point blank consume or die and they mean it.

I hope you can see that for them Peak Oil is literally a non-problem as all it does is help along the destruction of the middle class. Certainly they need a certain amount of oil to power their military and keep the technology going and they have every intention of keeping high tech so they need a technocracy but it need not be any larger than what the Soviet Union maintained. And they probably need at least some renewable energy sources to supplant nuclear and coals. They are by no means against it just they don't need massive amounts enough to support their supporting technology pyramid and military.

Once the plug is pulled on the middle class the remaining oil supplies are more than ample for this much smaller group of elite and support staff.

If this scenario is correct then peak oil is not a problem nor is global warming as mass manufacture dwindles as the middle class collapses the resources are more than ample to support a top ruling class of a few million or less plus whatever they need for support.

Obviously they probably have a bit of and excess population problem but thats something that will solve itself perhaps with a bit of help.

This last housing bubble pretty much set the stage for the final collapse of the middle class in the US what really really interesting is it seems China has also decided to play exactly the same game. We can assume that when its time to collapse the short lived middle class in China it won't be done gently. Assuming I'm right they seem to be setting up to play almost exactly the same game the US has played.

We are actually already deep in the final bubble which is the Sovereign debt bubble. Thats the checkmate move since it collapses the existing governments allowing them to be replaced.

So we are now at the top of the ninth if you will. Overall with this scenario resources simply are not a real issue recycling of the wasteland that was suburbia will provide resources for decades to the elite if not centuries. I'm not sure whats going to happen to all the former middle class most will fall in abject poverty many will scratch a living as subsistence farmers using organic methods as they have no choice but living in hovels. Many will probably die.
Some of course will sail through the eye of the needle and be support staff for the rich and live quite well. Few will have moral qualms about the situation as the masses of poor tend to do a very good job of putting blinders on morality.

Peak Oil is not even remotely close to being a real problem except of course to the middle class and all the poor below them.

Eventually of course one has to imagine that disease and war will take its toll on this society and population levels will fall and one day those masses of poor won't be so massive and servants and slaves will become increasingly expensive the value of a human being will rise slowly as numbers drop. Perhaps technical advances esp in renewable will filter out into the general populace but this time they will choose to limit their numbers of their own free world recognizing that as each generation is smaller and smaller that their leaders lose their grip on power. Eventually one hope that the cruelty subsides and the wealthy slowly develop a bit of a conscience and their support staff no longer fear being thrown out for speaking their mind as things really are not all that bad "outside" any more. Recycling of the excess of the 20th century along with energy constrains creates a frugal society that slowly gains in wealth.

Certainly you don't need this powerful cruel leadership but even if its not overt at our population levels no way can a technical society embrace the masses of poor even if you wanted to help we did not when we had plenty and we simply can't when we have little.
Once the emergency is over in Haiti I think its a safe bet that all the nations will pack up and leave and pretty much leave the Haitians to fend for themselves for example. Even today we can no longer afford to rebuild Haiti and fight our wars and keep our bankers happy. I could well be wrong but I suspect I'm right. With Haiti it might not be done in and obvious manner but its a safe bet that the rebuilding will be slow and many Haitians will try and flee and be turned back.

We are entering a period of cruelty thats not been seen in a long time and its practically impossible to prevent it from happening.

Perhaps this attempt and returning to the time of Kings and Queens will fail we do have a lot of knowledge and given the problems our technology can readily be adapted in novel ways. Just perhaps once the poor many former middle class realize that the burden of the middle class is no more they will wake up and focus on improving their own lives. First of course feeding themselves but then to bettering their lively hoods on their own stabilizing their societies and humanely reducing their populations and working with the resources they have forgetting about they old schemes completely.

In the end thats what has to happen and the poor can easily throw off the old yokes and start anew even as they are discarded. Being thrown out could become a blessing not a curse and perhaps the people of the world will reject the old ways and forge a new path right from the start. The new elites will see the technical support staff sneak away in the night to help build these new villages and eventually they will be left sitting alone in their castles with no one to rule.

Thus even then the problem is still not Peak Oil its us we can at any moment choose to simply change the way we treat or fellow human beings. We may very well not have all the baubles we have now but any time we wish we can choose a new path we are the only ones stopping ourselves in the end. So perhaps just perhaps this attempt to throw so many out in the cold and deep poverty will backfire as knowledge cannot be so easily thrown away.

The term "denier" is thrown around often here, pretty much a term of derision toward anyone who seriously differs with what the person throwing the word around says...so why not use it once more...

There is another class of denier.
What people in the oil industry can never accept is this: Peak oil is part of an ongoing transition. That is what it means to me, and frankly we could have gotten on with the modern world decades ago if the reactionaries had not been so convinced that not only does oil provide energy, those in the industry convinced themselves that oil IS energy, and that there can be no other form of energy, not now, not ever.

Well, get over it. The earth swims in a sea of energy. There is so much biological energy, chemical energy, heat energy, nuclear energy occuring every single second of the day and night on earth it is essentially uncountable, and of course of it comes from the movement of nature herself...atoms moving about, photons moving about, planets hurling about...an incredible sea of energy that humans have not even began to grasp the full quantity of, the real meaning of, the impact it will have on human destiny. If this generation refuses to learn about it, to put it to human use, the next generation will.

Compared to the variety and wealth of energy hurling about daily on this planet and being hurled at this planet, oil will be seen in the future as a human fascination with a few greasy, sloppy filthy pits.

And "peak oil" will be seen as the greatest gift to the human race since the opposable thumb.


I agree its going to force humans to finally deal with our population problem one way are another. Oil is one of many resources reaching depletion right along with it or even ahead is water collapse of the ocean fisheries is looming.

Once the oil is gone we will literally be forced to grow up and give up on this game of using expansion to hide from our real issues.

No matter how the future unfolds eventually we simply have no choice but to accept that we have to live within the limits of the planets capacity. I have to think once we make that choice we will go further and leave and ever lighter footstep as once you limit yourself why try to maximize within your limits ?

In the very long run this 5,000 years of time where we expanded and destroyed will fade and become and ever smaller part of human history in time becoming a very brief sort of horrible childhood between the long years of hunter gathering and whatever lies ahead.

I have to think that the future generations will increasingly have more in common with the tribes that lived for 100 of thousands of years pretty much in harmony with nature despite their ignorance.

Perhaps our concept of the Noble Savage for real or something along those lines. Assuming we keep technology its easy enough to see that eventually it will become discrete if we wish it to be. If one reads about nano-technology once can easily imagine a world where we would literally carry our factories inside us as nanobots and technology has shrunk to the point its rarely obvious.
There if you need it but for the most part latent.
What we could do in biology with 100,000 more years of study and understanding is impossible to really know. I think the stars will always beckon and when we are ready we will explore but it will be a not as humans today but I have to think some far more mature and learned species with our own adolescent period as a reminder its far better to watch and listen then to alter and intervene.

Whats really interesting is if this is true one has to think that other species went through a similar painful period before maturing if so it makes sense that they won't help us as we need to help ourselves just as if humans do finally grow up before moving on into the stars I suspect we too will choose to allow a species to either make it through this trial period or die trying you simply cannot help or they will never grow up.

Makes one wonder what happens if a immature species actually managed to jump to the stars while still in its ravenous phase. I have to suspect that they would be treated as a locust swarm or infestation that needed to be dealt with. We may well have been lucky that we never managed to progress in our great space race and that it was aborted if we had managed to stay on the trajectory we where on in the 1960's we might have become a pest species :)

True or not who knows but looking around today it makes a lot of sense that until we accept this gift of peak oil we cannot really grow and go on to the next step in evolution.

Compared to the variety and wealth of energy hurling about daily on this planet and being hurled at this planet, oil will be seen in the future as a human fascination with a few greasy, sloppy filthy pits.

And "peak oil" will be seen as the greatest gift to the human race since the opposable thumb.

In all my time on TOD I have never read a more delusional post. True there are all kinds of energy on this planet but all forms of energy are not created equal. Energy is categorized by its cost, availability and ease of use. Liquid petroleum has been by far the most versatile form of energy. It has historically been very cheap and easy to acquire. Liquid petroleum is the primary form of energy used in the development of all other forms of energy. Peak oil means peak everything else.

Fossil fuel, in the form of coal, enabled the industrial revelation. It gave us power to run textile mills, steel foundries, railway trains and other goodies. It also turned major cities into soot pots. Liquid petroleum however helped clean the cities but it also put the industrial revolution into overdrive. Liquid petroleum and natural gas turned into liquid fertilizer enabled the green revolution. This enabled our population to explode.

All this cheap and readily available energy feeds agriculture, industrial growth and people. The fate of all three hinges upon the continued availability of cheap and readily available energy. When energy gets much more expensive and less available all three will begin to shrink. Food production will decrease, industry will cease to grow and the population will begin to decline, perhaps dramatically.

We are witnessing today the beginning of this process. It is currently known as The Great Recession. It will soon be known as the Greatest of Depressions. And following that will be the collapse of the world economy. That will turn life on earth into a literal hell on earth.

That will not be such a gift to the human race.

Ron Patterson

Energy and Human Evolution

After a few generations, they might come to believe that the rubble amid which they live is the remains of cities built by gods.

I am inclined to agree. Based on a great fondness for the natural world I welcome the idea that there is an end in sight to industrial expansion and all that it brings with it.

Compared to the variety and wealth of energy hurling about daily on this planet and being hurled at this planet...

I grew up reading about the wealth of energy in the universe that mankind was destined to harness. That view is best encapsulated in the quest for a practical nuclear fusion reactor, which is a catalog of ever more expensive failure and disgrace rather than triumph.

A second objective reinforcement of the lesser character of alternatives is simply that nothing has succeeded on its own merits. When tax credits and subsidies go away, so does windpower, biodiesel, ethanol, solar, etc, except in unique situations where the grid or infrastructure doesn't serve.

Not to dis alternatives, but there is every sign that the world to come will be a smaller and less convenient one, and getting there from here is not going to be much fun.

In fictional works fusion is the great power getting us up into space and out of our home solar system.

If the wind farm can not produce a wind farm, then it's not sustainable.

If the solar cells can't produce solar cells, then they are not sustainable.

Though Oil could produce more oil production, in the end it is not sustainable.

We will piggy back one on the other and might get to the point that we can sustain for a while, but we will in the end be going down hill at least population wise. This might happen for decades or longer in a rosy future way, until we hit a balance point.

Knowing where that will be is not something we can really know, we can run the numbers and think the thoughts, but we won't know till we have been there for a while.

If you could start at say 0:00:00 Greenwich and move globally second by second over the earth converting everything you meet to a sustainable farm house and crop land, or moving those people from that area to the next section. Like a movie showing the globe lit by the sun as it turns. Slicing out sections one second wide. One second of Longitude is about 94 feet at the equator. So it will take some time to do the sweep, but it's just a mind puzzle, stay with me.

Sweeping over the globe, when you got back to Greenwich you'd have all the people that the world can't support caught up in the drag net. It would be interesting to get the ole maps out and do a global study on all 57,000,000 square miles of land surface and see how many people could make it in a low FF sustainable living kind of lifestyle.

Aw well, it'll happen one way or another, and even in my thought puzzle above, what would we do with all the people caught up in the drag net of unsustainablity? Wars, Famines, pestilence, old age take their tolls.


Ron -- reading all the various views has inspired some deeper thinking. We chat about PO, global declines, ELM, etc. And of course the huge impact of the geopolitics. Thinking as just a citizen of the US it seems the issue boils down to PI: Peak Import. And, even more important, the differential between PI and consumption demand. Not that I expect to see "PO" disappear from our chats but that is really the issue for us. However much oil the world produces in 2015 is unimportant per se. It's a question of how much oil our economy requires vs. how much we can import. This takes into account a number of variables we have difficult projecting with great confidence: what will export capacity be, how much will China be able to keep off the market, how well can the US economy compete for purchases with the likes of Chindia, ELM, etc. It also puts into play the nasty little possibility of the forceful control of foreign oil production by the US or others.

When we chat about PO we always have to qualify the conversation with all the "what ifs" I mentioned above. But in the end the questions boils down to whether we can afford and have access to the energy we need to sustain our economy. I still foresee a world in which the US and China will take from the rest of the world what we require. Either through financial strength or military adventure. The date of PI will vary from one country to the next. I suppose one could classify the "winner" as that country which can delay PI by the longest. Either thru alt development, conservation or control of the exports. And any combination thereof.

Your thoughts of PI?

Rockman, I have the greatest respect for your opinions, especially where it concerns oil production and the geology of the oil business. But here you are talking about politics, primarily the politics of peak oil. And here... you are way off base. But that is okay Rock; politics is just not your forte. ;-)

The US and China will NOT take by force the oil they need while the rest of the world takes the hindmost. Japan, just to take one example, has virtually no fossil fuel resources, not even coal. Ditto for Taiwan, South Korea, Singapore and a few dozen other countries. They would sink into utter desperation if we took, by force, what they need to survive. I don't know what they, as a group might do but for sure they would not stand idly by while we took food from their mouths and shelter from over their heads.

Others like Germany, France, Italy and dozens of other European, Asian and South American countries have some small amount of fossil fuels but only a fraction of what they need. They would be almost as bad off as Japan, South Korea and the others. And no doubt they would join them in the effort to keep their fair share of the earth dwindling booty of fossil fuels.

I agree with you on peak imports, and in fact I think we are well past the peak of imported oil... worldwide. Which is just another way of saying we are past peak exports for exporting nations. This Great Recession is one of the results of peak imports, and it is about to get a lot worse within the next five years.

The result will be increasing isolationism, not world domination via military and/or financial strength. We will have little of either after the collapse. We will be in terrible shape but a lot better shape than Japan or South Korea. Every nation will have its own hell to live and some will have a higher percentage of survivors. Here in the US we may have a 10 to 20 percent survival rate. That will be a lot higher than in most of the world.

Who will have the highest survival rate of all? Why Russia of course.

Ron P.

I respect you to Ron but you are full of crap. Not really...just wanted your undivided attention. And true...politics doesn't interest me that much. But human nature is always at the forefront of my thoughts. The US has already utilized military force to stabilize global oil production (though one might question its success). But you might believe we invaded Iraq just to bring those folks democracy. Wouldn't argue that point with you if you do...to each his own opinion. But other than a little gun boat diplomacy I don't anticipate any long term shoot outs over oil directly.

I don't see so much a direct military intervention as a "bullying" effort for lack of a better term. I count economic and political bullying as part of the weapons. You say we won't take oil by force but now you have to define "force". Having the ability to outbid another country for oil is a force...an economic one. We've utilized that "weapon' to our great benefit for decades. Using our ability to offer the House of Saud protection should they every need it (in return for preferential oil purchase rights) is also a "forceful" position. And I agree with you about isolation. To a degree. It might end up with the US and China collectively isolating themselves from the rest of the oil importers.

Relative stability was my point which you did to seem to pick up on. Most of the world might be suffering greatly from PO (PI really) while the US and China might not be (not at PI yet). But I agree...that's a questionable "might not be"". But I go back to my basic view of human nature. If it came down to the choice for Americans to suffer severe deprivation vs. taking what they can from an already suffering world I would vote we would turn in to the biggest bastards in the universe. But that's just my harsh view of our society.

Rock, it doesn't matter what we invaded Iraq for, we are getting no greater percentage of oil than before and oil is not any cheaper, in fact it is a lot higher.

Of course we could try to outbid other countries. In fact a bidding war is what is keeping oil as high as it is today. But our ability to out bid depends on the price our citizens can afford to pay for oil. As the oil supply declines all nations must bit for that dwindling supply. If we are in the midst of a great depression our ability to out bid someone else will be severely limited. Remember Rock, it is not the government doing the bidding; it is the consumers of the oil who must bid for it, you and I.

No, we will not bully our way to cheaper oil. If we try to force Saudi to give us oil, cheaper than they could get if they sold it to Japan, we will have little success. Saudi could just as well decide that they can accept protection from someone else.

Also our military strength is limited. It is already stretched to the very limit. Terrorism and gorilla war is where the action is right now and if we tried to bully the entire world, as you suggest, then we would find ourselves victims of terrorist, not just from Islamic nations, but from every nation in the world.

No Rock, it is just not going to happen. We will not take by force the remains of the earth's dwindling resources. It is not that our human nature would cause or prevent us from bullying the rest of the world; it is that they have the same human nature as we do. What they lack in military power they make up for in sheer numbers and dedication to do the greatest damage with the least resources. Surely we learned that lesson one September day in 2001. The surest way to insure our own destruction would be to turn the entire world against us.

Peak Imports and Peak Exports are, of course, just another facet of Peak Oil. If oil production were still rising then imports and exports would still be rising. The reason we notice them first is because they are leveraged. A percentage drop in production exporting countries means a greater percentage drop in exports.

Ron P.

China and the U.S. may outbid others for the oil, or they may secure it with military action (or the threat of). Getting said oil home is another question. So the import(ance) of imports will be very much a big question. It doesn't take much to close a Strait, blow a pipeline or sink a tanker. About the only viable option would be a system of rationing. Can you say "a snowball's chance in hell"?.

I hope you're right Ron. What I describe is not a country I would truly be pleased to be a part of. But I also have a much greater faith in our ability to "out savage" the other guy. Seen it first hand. As they say: not a pretty picture. But I will glady take back all my harsh expectations of our society...just as soon as they show me a reason.

I'd like to add one thought here.

People talk about Peak Oil and Chinese and US demand but as the system becomes strained its not Chinese and US its subpopulations in both countries competing for oil. What your missing is how high energy costs can fragment a nation on financial bounds.

The guy making minimum wage sees fairly small increases in gasoline prices as a huge issue while your average middle class family sees budget strains depending on their debt load the effect can be all over the map.

Regardless many people have deep pockets and can afford the oil at the moment as the baby boomers approach retirement on average the US is as wealthy as it will ever be as it has the greatest number of people at the peak of their wealth. ( Sad given where we are but still its peak wealth )

Similar holds for China thus as peak oil strains our countries its not US vs China vs the World is US citizen competing with another US citizen who might make less money. There is no We in Peak Oil :)

Its primary effect is to cause social fragmentation as it forces a larger and larger percentage of people under water.

Globally its the same in general its haves vs have nots the wealthier classes can afford oil at prices well past when the society crumbles and some price points move large segments of a given society into a deep poverty downward spiral as the loose what little they have.

I think people miss this point and I think its very important as our societies are divided by peak oil and thats the real problem.

Good point memmel, yet I don't see the two senarios being mutally exclusive. As for class warfare over oil, I don't see the have-nots just standing by the side of the road as the mobile wealthy ride on by. Can you say "quick, give me another rock!" Most of the "haves" probably wouldn't last long. Maybe in the KSA. Not in the USA.

I think this fact is starting to dawn on them :)

Just because they set things up so they could take all our money does not mean its a good idea. We have reached the point in time where they top of society has finally reached their goal of full control and ability to crush the masses.

Now I think they are realizing what kings of old knew all too well just because your technically able to crush all your citizens does not mean your able to do it with impunity. By becoming kings they have put their own lives at stake. People are starting to learn the names and faces of their masters and more importantly where they live and work.

Sure there is probably another layer back behind the CEO's of banks thats the real power the top does not actually work but their henchmen or right hand men are increasingly in danger as they do their masters bidding. You don't have to actually hit the squids body cutting off its tentacles is enough.

The problem with absolute power is of course when wielded the people your fighting have nothing to lose. In fact this is the underlying problem behind the terrorist organizations that seem common these days. Their recruits come from a population that has been crushed.

Every single country that reaches this level of absolute authority has to deal with the fact its create a huge population of people that really don't have anything left to lose.

It may take centuries for such rule to be overthrown but in the long run this is why despots don't last. They never have and never will.

Surprisingly this is why I'm actually not a doomer over the long term which could be centuries because in the end despotic regimes fail and no matter what we do or how horrible things get eventually they settle out and you have to solve your real problems you cannot beat people who have nothing left to lose its impossible.

For us its deciding how X number of people can live in equality. The value of X and what equality means is open for debate of course but no matter what we do we have passed the point where endless growth will work and we will be forced to eventually develop a sustainable equilibrium. And underlying this you have to solve the problem of concentration of wealth once and for all as its the root of the problem. Its what allows people to eventually concentrate wealth and power to the point that they have absolute control and their population has nothing left to loose. To break this cycle you have to solve the problem of people getting rich.

Whats really interesting is the problem of wealth starts with people working hard and improving their lot with their own labor. They correctly believe they deserve their wealth. However often not a generation later this hard won wealth is bequeathed on people who did not earn it. If they are smart and hard workers then they will use their money to make more money and correctly claim they deserve it. Eventually of course one of these smart wealthy people will realize they don't have to work hard but can leverage their current position to tilt the playing field into their favor however slightly.

Now the same route they used to become rich is closed to other budding entrepreneurs. A very simple example is MS and Google. Both have by their success also defended their turf.

You don't see Google out investing in other search engine companies and MS investing heavily in operating system companies.

The chain restaurants are another example. Success tends to sterilize and block the routes to success in the same area.

Biodiversity if you will is lessoned and those on the top increasingly use there position to rise higher.

What we can't seem to do is to create a happy middle ground where companies and people form a large enough group to perform a specific task but not large enough such that it prevents others from forming their own groups.

Even in open source we see the success of Linux has itself dramatically decreased the diversity of open source OS's in widespread use. We don't have a large number of competing kernels using the same user land. People don't have a pick of kernels to use with Open Source software. Diversity did not happen. Its not just mean people and companies that suffer this even when the door is arguably left open its really shut.

Thus elimination of this concentration effect cannot be solved by even passively allowing competition it needs aggressive support and nurture. Its a problem that won't solve itself even a open environment is not good enough. The people who succeed have to literally help their competitors succeed. As you climb the mountain to the top you pause and give a helping hand to those who follow.

For the rich I'd guess this means if they make a million dollars they pause in their pursuit of wealth and help another person make a million this person helps another and so on. Thus before you move higher you pass on your success if you will to someone else.

I think something like that is the answer periodically you simply don't go forward until you have ensured that someone else also makes it to your own level.

Using my linux example the linux developers would be tasked with helping create another alternative kernel and bringing it up to be equal with linux. Of course overtime its a whole new team pushing forward but you get the picture.

Or we always end with two extremes those with everything and those with nothing.

The Corporate PTB drove the nail home today.

January 21,2010: The day the dream that was America finaly died.

Check out Olbermann tonight. Nailed it pretty good.


Hey Mel, looking forward to your blog......dare I say: it's about time ;-)
My guess, plenty of people will follow and comment !
So, good luck, count me in !

How would the U.S. lose 80-90% of it's population? We could easily have some sort of back to the land movement if it really is TEOTWAWKI. We still have some oil, we still have coal. We can live with much less wealth. Heck, we could even force Canada to export any excess oil to the U.S. Look at how people live in rural India today, even if some were forced to live like that we would not have those death rates. I simply cannot fathom deaths that high from anything short of a nuclear exchange.

Floridian, India will not be exempt from the great die-off when the world economy collapses. What will happen is the world infrastructure will collapses?

Today's excess population exist because of the infrastructure to employ them and to feed them. When that disappears they can be no back to the land movement. Half would either die of starvation of freeze to death their first winter trying to survive by grubbing from the land, especially those in the northern latitudes. And remember they would be on someone else’s land and they would not be welcome. They might even be shot.

I fully realize that you cannot fathom such a catastrophe. Few people can. Read this and become a little wiser.

Energy and Human Evolution by David Price

Starvation will be a direct outcome of the depletion of energy resources. Today's dense population is dependent for its food supply on mechanized agriculture and efficient transportation. Energy is used to manufacture and operate farm equipment, and energy is used to take food to market. As less efficient energy resources come to be used, food will grow more expensive and the circle of privileged consumers to whom an adequate supply is available will continue to shrink.

Ron P.

food will grow more expensive and the circle of privileged consumers to whom an adequate supply is available will continue to shrink.

...and the starving and desperate will follow the food, and take it....

People have been saying the apocalypse was just around the corner for as long as written history has recorded. If Push comes to shove, 100% of fossil fuels could go to food production and absolutely no consumer goods in developed countries. I'd worry about localized die-offs, not a global die-off. If Pakistan and India are vying for food and glacial water, they are both nuclear armed nations and a few billion people could turn to dust in an instant.

Food production by whom? For whom? Enforced by whom? Distributed by.....

Anything from the federal government to large militias/quasi governments. The oil exports will not just stop one day. If actual starvation is a threat, the the U.S. population would most likely decrease ahead of any serious problems. I can imagine any and all non-citizens being removed from the country.

I can imagine any and all non-citizens being removed from the country.

Put them all on cattle cars and push 'em across the border, all 15+ million of 'em. Or maybe they'll just volunteer because things are so bad here.

Think systems, Flori. Think big picture. I agree that populations likely wouldn't drop that far, that fast. More of a slow decimation. Of course, with the Rapture and all of that, there may be plenty for all of us "Godless remnants of humanity".

Who knows, it wasn't that long ago people were goose stepping across Europe. I think it'd be far greater than 15 million though if it came to that, that should get us closer to manageable numbers. I think the problems related to peak oil will start in the poorer countries and creep their way up. The brunt of the burden will fall on the third world. You may joke about Rapture, but some people have almost a religious belief in a die-off.

You may joke about Rapture, but some people have almost a religious belief in a die-off.

Around here, many are counting on it.

A total, imminent collapse is possible if you discount thorium and ultimately fast breeder reactors. We are not moose with a single energy source, the entire world is not going to collapse. Research was slowed in fast breeders to prevent nuclear proliferation, but I imagine research will accelerate in the relatively near future. In the end you could be right, or 30 years from now we may be able to look back at your posts on here using a caching service and laugh like many do at the population hysteria of the 70s. I am not denying infinite growth on a finite planet is impossible, I simply believe that in the end I will not bear the brunt of it as we could easily stabilize or reduce the population of the U.S. Nuclear reprocessing will be carried out due to necessity.

I can imagine any and all non-citizens being removed from the country.

Maybe it's time to become a citizen of the world?



N55 has initiated a new campaign called NO BORDERS CAMPAIGN. NO BORDERS CAMPAIGN aims to abolish all borders in the world.
As a part of NO BORDERS CAMPAIGN, N55 offers the service to redesign national symbols such as flags, national anthems, buildings etc. By redesigning the symbols N55 hopes to provide new symbols that all persons could be really proud of.


Borders between nations, and nations as such, are ideological constructions that exclude other persons socially and prevent them from sharing land, water, food and other resources. To exclude other persons in this way is not in compliance with the fact that persons should be treated as persons and therefore as having rights. It makes no sense to talk about persons and persons' rights if persons are not allowed to participate in society, stay on the surface of the earth, drink the water etc. If we want to respect persons and persons rights' we must try to share the land and resources of the world.
It is not possible to accept borders between nations or nations themselves and at the same time respect persons and persons' rights.

The US supreme court's recent decision is proof that TPTB are not going to let something like this happen. As long as we allow corporations all the power of world citizenship, we as a people may as well throw in the towel now! We need somehow to wrest this power away from them.

National borders are not going to stop global problems from crossing over, if anything they will exacerbate them.

This by the way is a direct consequence of global population overshoot. Take a long hard look at what is happening in Haiti...

The recent U.S. Supreme Court decision is accurate. Donating is a form of lobbying, lobbying is protected under the 1st amendment. Prior to this ruling labor unions benefited disproportionately. It is only fair to corporations to have their influence as well since labor unions were able to take advantage of the fact the corporations could not donate money.

Which labor unions you talking about floridian? Are you suggesting labor unions have equal the power of corporations? this decision just ratified the situation we already have. Please pay attention.

Prior to this ruling, labor unions would have more power to lobby through their members.

People have been saying the apocalypse was just around the corner for as long as written history has recorded.

Yeah the Mayans probably said the same thing, and the Easter Islanders and all the other dozens of civilizations that have disappeared. Anyway that is not an argument Floridian. It contains not one iota of logic.

If Push comes to shove, 100% of fossil fuels could go to food production and absolutely no consumer goods in developed countries.

And everyone employed in the consumer goods industry, either manufacturing, delivering or selling would be unemployed. At least 60% would be unemployed. No tax base so the federal, state and local governments would have to lay off most everyone, stop social security, no police or fire.... hell, what's the use. God do you think about what you say before you write it down?

I am disappointed that you could not make a better argument. Oh well, it's the internet, what the hell should I expect.

Ron P.

Indeed Ron, but I'm simply trying to say that people have been saying the end was near forever. There were many people back in the 70s who were just as fervent believers as you that a population crash was just around the corner. Didn't Ehlrich say that by the year 2000 the U.S. would only have 30 million people? I believe world population will stop growing and shrink, I do not believe it will crash that far. Some countries will fair better than others.

Didn't Ehlrich say that by the year 2000 the U.S. would only have 30 million people?

No, he didn't say anything of the sort that I know of. He did predict the collapse, and he will be proven correct. He was just too early in his predictions. He underestimated the food that would be produced by the green revolution. Read "Overshoot" by William Catton, written in 1980. He was 100 percent correct in everything he wrote.

The green revolution has reached its limits. Per capita food production has peaked is dropping. Per capita energy production has peaked and is dropping.

Did you read the David Price link that I posted above? Everything he wrote is based on facts and logic, hard sound facts and logic not some prediction that someone made that did not pan out.

Ron P.

Yes, I did read the Price link. The concepts he presented I am familiar with. His concepts are entirely correct, I just do not think the population will crash to 20% in places like the U.S. I believe we may see starving Ethiopians on T.V. again, but this time we will be powerless to help. If world population decreases by a significant amount, the reserves for things such as Uranium and Phosphorus, allowing greater time to adapt.

So you think it is going to happen to everyone except us. We will be watching TV while the rest of the world is in chaos. We are exempt.

Oh well, how can I argue with logic like that?

Ron P.

Or it may prove impossible for even a few survivors to subsist on the meager resources left in civilization's wake. The children of the highly technological society into which more and more of the world's peoples are being drawn will not know how to support themselves by hunting and gathering or by simple agriculture. In addition, the wealth of wild animals that once sustained hunting societies will be gone, and topsoil that has been spoiled by tractors will yield poorly to the hoe. A species that has come to depend on complex technologies to mediate its relationship with the environment may not long survive their loss.

Net food importers will obviously be affected long before I feel the effects. In 1906, the US population was 85,450,000, that was long before the green revolution. With the better understanding of agriculture the U.S. could support numbers closer to those of today sans huge fossil fuel inputs. With the help of Canada and their tar sands we should not bear the brunt of it.

Ron, sorry I didn't bowl you over with my big picture view and wall shaking rhetorical argument...:-), we may just have to agree to disagree for now...perhaps you will win my over to the dark side, only time will tell...

But in all seriousness, I would like to again ask a question I have asked in various forms here before...when the oil age began, and industrialism began, did anyone really believe that was the final stage in human development, that this would be as far as energy production, distribution and use could develop? That just seems so odd to me...that we find what from the start was a pretty filthy raw material that had to processed, refined and carried about (heavy stuff to carry by the way, using a good percent of the raw material just to find it, drill it and move it), that this was as good as the human race would ever do? People say "it's easy to get...", well it may have been once, but drilling for oil now, offshore, and pushing it out with some of the most massive water moving and injection projects in hydraulic history...can we still say it's easy to get? Power density yes, that's a strong suit, IF you are willing to spit two thirds of the power up the smokestack or out the tailpipe, are we saying that's as good as we can do? Astounding.

You say " When energy gets much more expensive and less available all three will begin to shrink", and of course that was one of issues, the use of the word "energy" to replace "oil" or "petroleum". Energy is NOT oil, it is much, much more than just oil.

Of course there is a human pride element here, I admit: Given the volume and variety of energy on earth and striking earth other than petroleum, we are not saying the amount of energy will decline, what we are essentially saying is "the amount of petroleum will decline (undeniable, didn't we always know this?), and we are simply not smart enough to use any of the other of the vast sea of energy on earth and striking the earth...we simply can't do it." I have always felt that the resistance to peak oil by many thinking people is that it is essentially a slap in the face to thinking humans, it is calling us stupid right to our face.

Now we may well be stupid, I won't argue that at this time, but that still does not make us enjoy being called stupid. In that respect, your word "delusion" may be somewhat accurate...I live with the delusion that at the end of the day humans in total are not stupid. I will simply have to stay with that one, and what the hell, there are worse delusions to have to spend life with.


I would like to again ask a question I have asked in various forms here before...when the oil age began, and industrialism began, did anyone really believe that was the final stage in human development, that this would be as far as energy production, distribution and use could develop?

Roger, you are going down the wrong road; you are asking the wrong question. Of course we can develop more and better technology. Of course we can develop different ways to harvest energy from the sun, wind and sea. It is just that these things will not solve the problem and will, in some sense, make them worse.

It would take many years to convert our transportation fleet to electricity and would be extremely expensive. It would take thousands of square miles of solar panels, millions of wind generators and there would still be serious problems. Massive battery banks would be required to hold electricity at night when the sun did not shine or when the wind did not blow.

Of course we still have coal, dirty coal. But China is running short of coal right now and many countries, like Japan and South Korea have no coal at all. After the decline in the oil supply hits hard, just a few years from now most countries with coal would have learned their lesson. Coal will become much dearer and coal producing countries will not even export any at all.

The world economy Roger, is not just based on energy, it is based on cheap energy. The economy must either grow or collapse and without an ever increasing supply of cheap energy it will collapse. In a collapsing economy few people will be able to afford higher transportation cost, higher food cost and higher cost of all goods and services.

But let me explain why the economy must grow or collapse. We have a debt based economy. In a static economy borrowed money does not create a profit. A business built on borrowed money must grow in order to pay the interest on the debt. In a shrinking economy the money supply dries up, as is happening right now, and no money is available to grow the economy.

The second reason that we must have growth is because the population is growing. World population is growing at 1.2 percent right now and the economy must grow by that much just to give jobs to new people coming into the work force each year.

And the third reason may shock you. The third reason is technology. Technology creates ways to make things cheaper, quicker and easier. The Luddites knew that the new technology of the flying shuttle would put a lot of weavers out of work. This was true but in those days, at the beginning of the industrial revolution, all economies were growing so there were plenty of places the Luddites could find work. In a shrinking economy technology will put people out of work and they will be no where they can find further employment.

And this brings us to the real problem... Overshoot! We are deep, deep into overshoot. We are way past the long term carrying capacity of the earth even if we never ran out of fossil fuel. Every day we are further raping the earth, decreasing its carrying capacity. Only by applying massive amounts of fossil fuel supplied fertilizer and pesticides can we keep up with the ever increasing demand upon the earth for food. Massive mechanized diesel powered farm equipment is required to keep this food supply flowing.

But that flow of food is being attacked from several sides. Water tables are dropping, rivers are drying up and the land is being depleted of precious minerals. The land is being blown and washed away. And because of all this the demand on fossil fuels is increasing each year. When fossil fuels, especially liquid oil, are getting more expensive each year.

And soon it will all collapse... like a house of cards.

Ron Patterson

Ron, I have been coming here for almost 4 years, and before that was well fimiliar with the whole "Limits To Growth" argument. I am not faulting it, again, one has to assume there is an outer limit to everything...I just don't think that petroleum is the limiting factor. I think it is a serious, very serious issue, but not the outer limit (some who make the argument that water may well be the growth "speed limit" even have a strong argument to me). My whole point is agan one that I have made before on TOD:

Doomerism I will discuss, neo-primitivism I can even understand as an aesthetic idea, but defeatism leaves me nothing to even discuss, much less do...if the argument is set at the beginning as: "we have a crisis...we must do something...what should we do...it doesn't matter because everything we propose as a solution is worse than the problem, there is no solution..." Then the whole discussion quickly locks up...it essentially becomes a polemic and not a discussion at all. If I accept the heart of what the defeatist position says, I can end the whole discussion in two words: IT'S OVER.

So go out and party...:-) (of course if your trying to encourage change on the part of the populations of the world, I am not sure that line of argument is going to achieve the change you may hope for...


With storm winds raging away here in Northern California, the electricity went out the other day in my neighborhood.

First thing I did was look for that emergency hand crank radio I had bought a few months ago. Couldn't remember where I put it. It was dark and cold and I decided the best course of action in this slow emergency was to duck under the blankets and sleep some more. (Hey, not my fault, the dopamine made me do it.)

Later, I started pacing and looking out my window for those darn PG&E trucks. Where were those guys?

Yup. There they were. Parked by the circuit breaker not far from my house. (It always blows when a tree falls over and knocks out a wire somewhere up hill.) Their engines were running and lights flashing to ward off the cold sheets of pouring rain.

Probably the crew members were drinking some hot coffee, eating donuts and waiting in their cabs for the storm to subside. No way were they going to go up among the trees and brush while the winds and rains blew like that at hurricane-scale speeds.

Eventually the worst of the storm passed. A few hours later, miraculously, the electricity blinked back on. Saved.

But then it gets you thinking about what would have happened if the PG&E crews were low on gas ... and low on donuts and short of hot coffee? Scary. I'm not at all prepared. Still looking for that hand-cranked radio. Where did I put that darned thing?

step back,

Your so right, an emergency like that is educational. I went through the worst weather emergency in my life last Feb. (2009) when Kentucky had the worst ice storm in our recorded history. It was a fascinating experience.

The ice began to fall...then a sound like gunshots, now and then at first and then picking up speed, until they were firing at the same time like artillery, and the constant sound of huge trees and limbs crashing, on and on through the night, hour after hour, through the night and into the daylight.

At dawn the power failed. They will get it back on soon enough I thought...but it stayed off, hour after hour. The outdoor tempeture was 17 degrees, and sunlight was ending. I had some sandwich meat and bread, and boiled tea with a candle under a saucepan...the house got colder and colder and then started getting dark. I had two kerosene lamps. I was charging my I-phone on my car for news and phone contact, and warming up by starting the car and running it for a half hour at a time, still the ice was falling, I had to dig the exhaust pipe of the car out of the ice layering on the ground behind it. Then darkness. The whole town was dark. The whole county was dark. I didn't know it at the time, but the whole central part of the state was blacked out.

I warmed up and charged up and piled into bed in a cold house, the indoor thermometer said 25 degrees. I bundled under mountains of blankets but still couldn't stay warm, I could see my breath in the light of the kerosene lamp.

At 2AM I was shaking, the house seemed to be getting colder. I went into the kitchen, where I had the water faucet dripping in the hope of keeping it from freezing. water was frozen on the faucent and in a a layer in the sink. I checked the indoor thermometer, 17 degrees indoors. I had to bail.

I went out and trudged through the layered ice to the side of the house. The ice had weighed down the conduit carrying the electric input to the house, and broken it out of the top of the electric meter, and then pulled the meter from the wall.

I went into the house with a flashlight, used a garbage bag to throw some clothes, emergency dishes, paper towels, spare shoes, etc, into a garbage bag in the dark. I loaded into the car. A tree limb had fallen acroos the windshield and cracked it and tore off the passenger side mirror, scuffing up the hood. I dragged it off the car and shoveled ice off the car and away from the front of it while it warmed up, got back in and started driving ever so slowly in the ice. I left the house behind just after 2:00AM with all the rain gutters torn off, the water frozen and bursted and the electric power line to the house torn away from the wall and lying across the yard.

It would be the last night I ever lived in my home of 32 years.



And the important parts of your story are that you had cheap abundant gasoline in the tank of your car which enabled you to bale out from that situation that night.

Otherwise you would have had to use one of the many ample other sources of energy that Mother Nature surrounds us with on such a a nice warm and toasty 17 degree (Fahrenheit we of course presume --because Kelvin at that number is a bitch) evening.

On the fuel in the tank, how true. On the Kelvin, no, it was Fahrenheit, the only Kelvin we know in Kentucky would be Coolidge or Kelvin and Hobbs...(okay, it's an inside the U.S. joke...:-)


Who could disagree with your useful article.

Interesting to align the dates on your Figure 2 with my chart plotting an index of oil price volatility that was first published June 2009 (and reproduced on the TOD last December).

Geopolitical and Economic History of Oil Price Volatility

You focus on recessions, but think stock market crashes also worthy of attention . For example, note that your Figure 2 also picks up a peak in real oil price change in 1986 coinciding with the temporary collapse of the OPEC cartel that year.

Causation hard to prove, but it is highly auspicious that this price spike presages the mysterious 1987 Black Monday stock market crash. And this occurring at a time, as indicated by your chart, when YoY GDP is relatively steady in positive territory.

M. King Hubbert explained all this decades ago... and the consequences also http://www.youtube.com/watch?v=ImV1voi41YY&feature=channel_page
Hubbert along with Howard Scott and others offered up plans to convert to an energy accounting system http://www.scribd.com/doc/22289589/Man-Hours-and-Distribution-M-King-Hub...
Hubbert was the main writer of the Technocracy Study Course.. the last two chapters offer an alternative system based on science.
Another very good writer explained some of the basics of the ideas of a science based social design http://www.technocracy.org/component/content/article/71-archives/285-ivie .. Wilton Ivie a biologist connected with TechInc - Wilton Ivie B.S., M.S. in biology from University of Utah.
Member of Technocracy since 1937. Served on the staff at CHQ. He was the author of Comments on the News which appeared monthly in Technocratic Trendevents, and wrote numerous articles some under the pseudonym ``Techno Critic'', in addition to the numerous articles under his own name. For the last 9 years of his life he worked at the American Museum of Natural History.

As long as we use the current contract society based on money it looks pretty hopeless and the carbon burning will continue and that is bad news http://www.esrl.noaa.gov/research/themes/carbon/ as science has demonstrated to us.

People have been trying to reform the Price System since around the time of its conception... http://history-world.org/reforms_of_urukagina.htm ..., and so far that is not working out so well. With modern energy conversion and robotics/engineering, there is no need for Adam Smith economics which repress creative endeavor... to say the least. Investigate alternative ideas that are secular and humanitarian and science based, is my reaction http://www.technocracytechnate.org/ because the countdown to chaos has started in our Price System model of doing 'business' http://www.youtube.com/watch?v=4i-GfgNTteE&feature=channel_page