German Military Study Warns of Potential Energy Crisis

This week a study on peak oil by a German military think tank was leaked on the Internet. The document shows that the German government is closely studying the issue of peak oil, and is aware of the potential for serious consequences as oil production declines. The study is reminiscent of the Hirsch Report, commissioned by the U.S. Department of Energy, that warned of the risks posed by peak oil.

The document warns of the potential for regional shortages, market failures, and a shift in political power toward those capable of exporting oil. This report describes potential outcomes that require planning and preparation. The scenarios outlined in the paper are exactly the kinds of drivers that lead me to advocate for greater regional energy self-sufficiency. The report clearly lays out just how vulnerable Europe will be because of its continuing dependence upon Russia for both oil and gas, and notes that Russia will be in a very strong political bargaining position as a result.

The report can be accessed from the popular German paper Der Spiegel in this story: Bundeswehr-Studie warnt vor dramatischer Ölkrise. The report is so far only available in German, and while Ich spreche ein wenig Deutsch (I speak a little German), I am not fluent enough to capture the essence of the report. (Der Spiegel has summarized the report in English now: Military Study Warns of a Potentially Drastic Oil Crisis).

However, I have a friend who is both fluent in German (his native tongue) and passionate about peak oil outreach. Given a week, I could probably translate the report. My friend (who didn't want to be identified) did it overnight. Below is his translation of the major points in the report.

Peak Oil

Implications Of Resource Scarcity On (National) Security

Center for German Army Transformation, Group for “Future Studies”

July 2010

1. Introduction

The focus of the document is on the topic of finite resources, using Peak Oil as an example. The report is part of a series of publications focused on the long term (30 years) with the intent to enable the Ministry of Defense to take action early.

In the past, resources have always triggered conflicts, mostly of regional nature. For the future, the authors expect this to become a global problem, as scarcity (mainly of crude oil) will affect everybody.

The authors confirm multiple views on Peak Oil timing and concede that there will be Peak Oil eventually. The study isn’t about positioning the problem on a timeline, but instead about the consequences of a peak. They expect major consequences with a delay of 15-30 years after the peak has hit.

The report refers to the uncertainty of reserve statements mainly in OPEC countries based on the quota allocation method within OPEC but also refers to the possibility of better extraction technologies.

They suggest that it has become urgent to understand those consequences of an eventual peak now in order to have enough time to adapt.

2. The Importance of Oil

2.1 Oil as a driver of globalization

95% of all industrial outputs is dependent on oil as a fuel and/or as a chemical base for polymer production etc. Oil has become a key driver of modern lifestyle and globalization.

Substantial oil price increases poses a systemic risk, not just for obvious things like transportation, but equally for other subsystems.

Thus, internationally, but equally nationally, there is a vital interest in securing access to oil, which is currently possible on world spot markets, with OPEC being cooperative due to a mutual dependency between key actors (and a massive presence of the U.S military in the Gulf region).

Yet, on the other hand, regional conflicts can always at least partially be attributed to resources, such as in the Caucasus region, the Middle East or in Nigeria. They may also fuel conflicts due to the wealth they create (such as in Africa).

The report sees – within a timeframe until the year 2040 – a changed international security layout based on new risks (including transport risks for fuels) and new roles of actors in a possible conflict around the distribution of increasingly scarce resources.

2.2 German energy security.

The term is defined narrowly as “reliable energy supply”, and then extended to include environmental objectives, technology transformation of societies, planning for energy demand and the long-term planning of a national strategy, tied in with international organizations.

This expansion of the view is seen as required based on the globalization of energy markets. However, the report then narrows in scope again to the possible risk from a supply shock, focusing on the key suppliers of oil: Russia, Norway and the U.K. It is noted that both European partners are already past their peak and that Germany is increasingly dependent on Russia, which currently is reliable but not necessarily so in the long term. Given the expected decline in German energy consumption, the Russian share will likely be 40% by 2025, with the Middle East, Africa and sources around the Caspian Sea making up for the increasing gap from declining European production.

3. Possible Scenarios After Global Peak Oil

This chapter looks at gradual changes (3.1.) and the risk of disruptive changes (3.2) past a certain tipping point.

3.1 General interdependencies driven by Peak Oil

3.1.1 Oil as a deciding factor in international relationships

With increasing scarcity, producers are increasingly in an advantageous position, both from high revenues and access to cheaper oil when compared to spot market prices. This partly reverses the trend to free oil markets which took place after the '70s shocks, and gives those countries more control over the supply chain, with a risk of monopolies and nationalizations, and of “political pricing.”

Further, oil producers use increasing amounts of their production internally at lower prices, which increases domestic consumption and inefficiencies, accelerating the problem. [The authors miss out on the fact that high oil prices also bring more wealth to the country which AGAIN increases resource consumption].

The report then looks at increasing “strategic” moves by key actors including the Chinese CNPC (China National Petroleum Corporation), which tries to grab the sources that are still available (particularly in Asia and Africa), but often at relatively unattractive conditions.

Overall, the authors expect a reduction of “free market” mechanisms in oil trade, and a rise in more protectionism, exchange deals, and political alliances between suppliers and customers, which could lead to significant geopolitical shifts. Equally, the authors expect this interdependency to shape foreign affairs of oil importers, making them more tolerant towards rogue behavior of suppliers out of sheer need.

Overall, higher volatility and loss of trust are seen as possible outcomes in a world where oil supplies are limited, increasing the need for “oil related diplomacy” and thus increasing the risk of moral hazard among all actors, which in turn decreases overall global supply security.

The report then refers to already existing actions of the German government to tie close economic relationships with energy suppliers, and to the tendency of consuming countries to reduce oil dependency, trying to steer clear of risks of future supply shocks.

The Middle East is identified as a very dangerous region with high external involvement from many players and thus a very unstable overall situation.

Overall, the report expects a reduction of the importance of “Western values” related to democracy, and human rights in the context of politically motivated alliances, which increasingly are driven by emerging economies such as China – likely leading to double standards. Emerging economies are equally expected to receive higher recognition in international organizations, particularly those with strength in resources (such as Russia).

3.1.2 New security risks based on additional/alternative energy resources

New conflicts are potentially arising from oil exploration in international or disputed ocean waters, where multiple issues arise, particularly around the Arctic Circle, with further geopolitical risks for conflict.

Also, the shift to natural gas is reviewed as an extension of the “oil age”, because it might be able to replace crude oil as a bridging source until new solutions are found. The risks for problems from transporting gas (pipelines) and the related issues (as seen between Russia and its neighbors during the past years) are highlighted.

Equally, nuclear power as a potential source is highlighted – emphasizing the risk for safety and the proliferation of nuclear technology. This would also require an increasing shift towards electricity.

Equally, the competition between biofuel and food production is highlighted, showing the limits of biofuel outputs to compensate for reductions in oil availability, and also showing risks for water supply and soil degradation from excessive use.

Overall, the authors see a trend to increase the energy autonomy of entire regions from external supplies, both in the ability to generate alternative fuels (from biofuels and coal), but particularly in electricity generation.

3.1.3 A shift in roles between private and public actors

Based on the increasing importance of oil, governments are becoming more relevant in securing the benefits of oil, both on the supply and on the demand side. This puts a higher emphasis on political negotiations and deals, and increases the risks for nationalizations of resources and key exploration activities.

Exploration licenses are seen as a key area where bidding wars (including non-financial commitments) might emerge. Equally, increasing pressure to renegotiate or revoke already existing licenses might emerge. Ultimately, each country will try to secure sufficient oil to maintain its standard of living.

On the other hand, private enterprises are seen on the rise in protecting infrastructure and ensuring production and transportation security in less developed regions, particularly if weaker countries become unable to keep their own services up.

The dependency on oil-related infrastructure (pipelines, refineries, harbors, key pathways on oceans) will increase, and thus the risk. Damaging infrastructure through hostile acts (sabotage, war) might become an attractive target for groups or countries with a tendency to use violence. The same is expected for electricity and natural gas-related infrastructure – they all might require higher protection.

Generally, the focus of risks is expected in the region which the authors consider the “strategic ellipse” (a term used for the region East of Europe reaching from Saudi Arabia in the South to Russia and former Soviet Union countries in the North), because a majority of oil reserves are located in this area.

3.1.4 Economic and political crises as a consequence of the transition to “post-fossil” societies

A number of risks of higher oil prices are seen for modern economies, particularly in transportation. Security risks are seen in resulting systemic crises.

A first direct consequence of higher oil prices and lower availability of fossil fuels is a possible reduction in transportation capacity, equally in individual transportation and in freight forwarding. This might lead to another “mobility crisis” for societies that heavily depend on cars and trucks.

Higher cost in commercial transportation markets might severely affect current supply chains, and no alternatives are in sight (electric trucks don’t exist yet). Food particularly might become a critical issue for countries that are a) highly dependent on imports and b) are susceptible to price-increases of food products, particularly affecting Africa, parts of Asia and Latin America, and the Middle East.

High oil prices would further affect almost all aspects of society, as it will also influence the cost of chemicals and all products derived from them, which might substantially alter the nature of value chains and make certain things uneconomical – ultimately leading to higher unemployment during a transformational phase away from an oil based economy. This might particularly affect the German car industry.

Limits in availability might also strengthen regulatory efforts, encourage the allocation of energy (oil) by rationing schemes and possible other actions limiting free markets.

Additionally, the changes and likely reduction in standard of living might render societies less stable and make them more attracted to extremist political positions and even trigger changes in government systems, as trust into key actors in politics will diminish. This might be a particular risk for the relatively young democratic countries in Eastern Europe.

3.1.5 More selective intervention – key actors overwhelmed

Overall, more expensive transportation and increasing problems “at home” might reduce the ability of larger countries to intervene internationally (politically and/or with military action), and also lower the readiness to provide help to poorer countries. The focus will be more on a country's (energy) interest for itself and not so much on an ideal of transferring Western values. The gap will likely not be filled by NGOs, as they will be affected by similar limits.

Overall, international institutions will be weakened, as they will have less resources to provide help and support, and it becomes equally possible that help will be attached to direct (energy) needs of the donors.

3.2 Systemic risks after reaching a “tipping point”

In addition to the gradual risks, there might be risks of non-linear events, where a reduction of economic output based on Peak Oil might affect market-driven economies in a way that they stop functioning altogether, leaving the possibility of a relatively steady downward trajectory.

Such a scenario could develop through an initially slow decline of trade and economic activity, combined with higher stress on government budgets from lower tax income, higher social cost and growing investment into alternative technologies.

Investment will decline and debt service will be challenged, leading to a crash in financial markets, accompanied by a loss of trust in currencies and a break-up of value and supply chains – because trade is no longer possible. This would in turn lead to the collapse of economies, mass unemployment, government defaults and infrastructure breakdowns, ultimately followed by famines and total system collapse.

4. Challenges for Germany

4.1 Risk of new dependencies for Germany

Oil as a new factor of global power would create significant dependencies for Germany, and in order to avoid supply issues, strong ties with suppliers are a must, but equally a diversification of supply relationships, taking into account that a supplier might intentionally reduce capacity to accomplish political objectives.

Among the key supplier countries is Russia (supplying 35% of German oil imports), where reliability risks are prevalent, given past experience. Natural gas, as a possible temporary substitute, bears the same risk (37% comes from Russia). Thus, a diversification becomes essential.

4.2 Focus of politics on supply relationships

Germany needs strong and reliable ties to Russia and other Caspian Sea countries. This might create some challenges in international relations, particularly with smaller Eastern European countries [like Poland]. Thus, intensifying relationships to the Middle East might be equally relevant. However, all those relationships have an inherent risk of being instruments in conflicts, which puts a certain limit on treating all foreign partners the same.

4.3 More pragmatic foreign policy

The need to mitigate supply risks might require some compromises on foreign affairs topics (such as human rights). Equally, more active diplomatic efforts will be required with a focus of energy security in mind. This is more difficult given Germany’s reluctance to engage in political power play due to its history, but needs to be tackled in order to deal with the challenges ahead. The authors don’t want to encourage military solutions, but suggest a strong preventive development of political and diplomatic initiatives to tackle the problem.

4.4 Importance and freedom of industrial nations reduced

All industrial nations that depend on energy imports will become more dependent on new partners, both in emerging economies and supplier countries. This requires a new focus in foreign affairs, sometimes giving up standards in negotiations with countries that have different cultures and political systems.

4.5 Help in stabilizing supplier countries at risk

Some supplier countries (and surrounding regions) might be destabilized by the force of higher resource prices. This is an area where Germany needs to help by providing support for nation building and conflict resolution on the national and international level. This is in conflict with the lower economic power likely to result from Peak Oil, which might make interventions less likely and requires new approaches of “stabilization with lower effort.”

4.6 Growing conflict potential concerning the Arctic Circle

Germany might have to take positions in case of an upcoming conflict regarding resources in the Arctic Circle, where multiple countries (including Russia) have open claims for accessing oil and gas fields. This requires further research.

4.7 Nuclear technology proliferation

The risk for nuclear technology proliferation and thus more countries with the potential for nuclear weapons (and the risk for terrorists having access to nuclear material) is growing due to the proliferation of nuclear technology for energy generation. Equally, risks for terrorist attacks and accidents on German soil are rising. Both scenarios require more surveillance, intelligence and preventive action.

4.8 Higher conflict potential regarding critical infrastructure

Energy delivery infrastructure for all sources including electricity will have a higher importance in an oil constrained world, thus, securing its reliability, security and availability becomes mission-critical. International cooperation is needed to secure large international supply paths (pipelines, sea routes).

4.9 Larger “energy regions” change international alliances

The expectation of stronger connections between suppliers and consumers across continents creates different settings for current international alliances and security risks. DESERTEC (a large power production system in Northern Africa based on CSP) would require different settings even for military strategies.

4.10 Peak Oil for armed forces

Armed forces would also be significantly affected by fossil fuel limits, as they are very dependent on oil products. Significant investments in alternative energy procurement technologies (biofuels, coal-to-liquids - Fischer-Tropsch) and applications (electric and hybrid vehicles) would be required, with long transition times. Further, local energy-independence of stationary troop infrastructure (like military bases) using more renewable sources would be beneficial. The long term objective would be to fully convert Germany’s armed forces to only use renewable energy sources by 2100.

4.11 Crude Oil as a systemic risk

For scenarios which end with a complete destabilization of societies, Germany is at a significant risk given its strong participation in a globalized economy. Being still able to act requires a number of basic infrastructures to keep functioning, both for the country and its armed forces. Work is required to look into redundancy, high-resilience of infrastructure and local self-organization approaches.

5. Summary

The report sees significant risks arising from an unavoidable peak in oil production, which go beyond gradual shifts in energy systems and economies. This will likely lead to economic change and new geopolitical risks that affect much more than just what we can anticipate. The overall ability to describe exact outcomes is very limited, as many scenarios are possible, and further research is required.

Overall, more emphasis needs to be put on understanding and shaping international relationships with respect to energy security, anticipating and integrating the ongoing shift to different players in a resource-constrained world.

In any case, Germany has to identify and implement alternatives to the current transportation technologies that require oil, and put a similar emphasis on avoiding other dependencies, for example concerning rare earths.

For armed forces, Peak Oil creates significant risks, both from a mobility standpoint as well as from dependencies on other societal services. Understanding those risks requires further analysis and likely a very different approach in the future.

In general, more preparation is required for society and the army to make sure that problems are recognized and solutions are actively implemented.

Dear All,

Thanks for posting and translating.

Don't quite agree with “They expect major consequences with a delay of 15-30 years after the peak has hit” !

But I would be interested in seeing the whole report (translated) if possible.


I agree. Some of what they say is very optimistic.

This for instance:

"Auf Grund der engen wirtschaftlichen und politischen Verbundenheit mit Norwegen und Großbritannien sind diese als besonders zuverlässige Lieferanten zu betrachten. Beide Staaten haben ihre nationalen Peaks bereits überschritten, könnten aber nach Schätzun-gen des BGR noch mehr als 25 Jahre lang die gleichen jährlichen Mengen an Erdöl för-dern wie 2008."

"Because of the close economic and political ties with Norway and the UK these are regarded as particularly reliable supplier. Both countries have already exceeded their national peak, but could, based on the BGR estimates, supply the same annual amounts of oil as 2008 for another 25 years."

I like Khebab's graph on page 82. It looks like TheOilDrum is taken seriously by governments.

But then again...

"Investment will decline and debt service will be challenged, leading to a crash in financial markets, accompanied by a loss of trust in currencies and a break-up of value and supply chains – because trade is no longer possible. This would in turn lead to the collapse of economies, mass unemployment, government defaults and infrastructure breakdowns, ultimately followed by famines and total system collapse"

Is probably the most concise explanation of the possible risk I've seen for a long time

Yes, "ultimately followed by famines and total system collapse" pretty much says it all.

This is the risk (albeit of unknown probability) the Gail will not let us brush under the rug (nor would any other highly competent actuarial).

Gail deserves a great deal more respect than she gets from some of the people who post comments.

I don't necessarily agree with every single thing she says, but I take every word seriously to the extent of thinking "she has devoted a lot of time, energy, and expertise to these words, and she may be right-meaning I'm wrong."

Our failures in reasoning are much more like to trip us up than our successes.

I don't believe it is possible to disprove her general arguments;and as I see it, the only real hope we have of her being wrong in terms of the grand scheme of futiure things is that we get VERY LUCKY INDEED in several respects-a slower than expected decline in ff production, faster then expected progress on the renewables front, pilotical success on a grand scale in implementing conservation and efficiency measures, avoiding any major wars.....

I do believe it is possible to avoid a devestating collapse, but I seriously doubt if we will get our act together and actually take the necessary preventive proactive steps.

OFM: As a history buff you couldn't have possibly missed the significance of

4.6 Growing conflict potential concerning the Arctic Circle
Germany might have to take positions in case of an upcoming conflict regarding resources in the Arctic Circle, where multiple countries (including Russia) have open claims for accessing oil and gas fields. This requires further research.

of course a little earlier this line

Germany needs strong and reliable ties to Russia and other Caspian Sea countries. This might create some challenges in international relations, particularly with smaller Eastern European countries [like Poland].

is one the translator certainly wanted to catch our eyes--I believe all bracketed material is original text inserted by the translator.

Well as an imperialist Yankee I've thought strong U.S. ties with Poland, Slovakia, Hungary and Slovenia--something like a US European free trade zone commonwealth--could serve a similar function to the handful of U.S troops in the Korean DMZ. Of course it might be understandable if some wondered about the prudence of using another hair-trigger as a stabilizing mechanism. But if big dogs started barking nearby those countries might make overtures from Uncle Sam themselves.

It is a summary, not a translation. The actual text is much longer.

The only reference to "Polens" is in a footnote on page 70.

Wie ansatzweise schon das Beispiel der Diskussionen und Konflikte um die Ostseepipeline zwischen Russland und Deutschland unter Umgehung Polens gezeigt hat.

As to some extent already the example of the debates and conflicts around the Baltic Sea pipeline between Russia, Greece and Germany has shown, bypassing Poland.

Interesting possible scenario.

Could be, some day.

As Yogi sez, predictin is hard, specially the future.

When I comment on international affairs, I try to do it from the pov of an impartial and disinterested observer and point out what I think is relevant, rather than pushing the agenda of some particular faction ..

But if and when times get rough, personally I'm with you- my own survival and the survival of my kin group is more important to me than the survival of a hundred times as many people from China or Africa-or from France or Germany or even California for that matter.

If Uncle Sam gets in a scrap of any sort, I want him to win.

But it sure would be nice if he would act a little less like a CRAZY uncle and avoid more scraps!

Thinking of 1939, I was going to quote Yogi myself OFM,
like deja vu all over again
so thanks for giving me the lead in.

on a lighter oil (or rather oil free) note here was our local paper's front page picture the last day of August

a thirty second or so youtube clip of this pastime is here of course oil use is more in evidence in the video. Lots of it, both flowing past and getting burned, powers our little subarctic town.

and thanks for the clarification Merrill,I thought my wording might bag one. Yesterday I managed a false step that netted me a concussion so I find myself fighting for words more than normal today--'summary' just never floated to the top.

Gail is good at pointing out the risks, but her conclusion seems to be that we should keep on trying to get what fossil fuels we can by whatever means necessary. That includes such things as her support of fracking.
This of course ignores two things:
One that climate change is likely to be an even greater disaster for humans now and in the future than the collapse of economies from peak fuel. Even if we were able to prop economies up until some possible green alternative kicks in, we may well push the climate into positive feed back in the mean time leaving us NO out from an even worse collapse than economic/fuel collapse
Two that the longer we put off collapse Gail has maintained we put off the early deaths of many humans. I pointed out to her (which she did not respond to) that every year we add 70 million humans to planet earth. An early collapse means less total untimely deaths than a collapse somewhere down the line. If we put off collapse for just 15 years we could if present population trends continue have another billion more humans who will be faced with untimely death.

Regardless of how awful economic collapse caused by peak fuel may be the effects of putting it off by more deepwater drilling, mountain top removal, nuclear power plants, and fracking will make an eventual collapse much worse.

Of course, the UK is already a net oil importer, and Sam's forecast is that Norway will approach zero net oil exports in about 16 years, which is actually about the same time frame that he shows Russia approaching zero net oil exports.

Russia, because of the frontier basins (which aren't really very well reflected in the net export projections), is a somewhat of a wild card, but IMO Russia's frontier basins are to Russia as Alaska is to the US, i.e., helpful, but not a game changer.

Here are the actual net export numbers for Norway & Russia (black dots, through 2006), along with Sam's projections (circa 2007), showing low case, middle case, best case (note the different vertical scales). The projected 2005 to 2015 net export decline rates are shown for both countries. Note that the 2007-2009 data points for both countries fell between Sam's middle case and best case.


Norwegian Net Export data for 2007-2009:

2007: 2.3 mbpd
2008: 2.2
2009: 2.1


Russian Net Export data for 2007-2009:

2007: 7.0 mbpd
2008: 6.9
2009: 7.1

Paper that I delivered on our net export work on the 2005 top five net oil exporters (principally Sam Foucher's excellent mathematical modeling) at the 2007 ASPO conference:

I think price will be very important in Russia's decision to develop natural gas fields.

If very high prices can be obtained (say 3 times current levels), Russia will be more than happy to continue to drill for gas, in even the most adverse environments. But if high natural gas prices cause economies to shift back into recession (or if importers are already badly into recession, because of oil and credit problems) then high natural gas prices will remain too low, and Russia will stop drilling in the very high priced locations.

This will really reflect a problem of inadequate EROEI / high price to extract. Importers will need to be able to pay these high prices, or the operation won't make economic sense.

It may be that China will be able to pay higher natural gas prices than Europe, because it uses less gas per person, and makes better use of what it does imports--the same situation we see with high oil prices hitting the "West" harder than China and India.

To clarify slightly, the above charts for Norway & Russia are for oil.

Regarding Norwegian gas, I think that Rune believes that Norway may be at, or quite close, to a gas production peak.

Regarding Russian gas, the real problem is that their consumption, as a percentage of production, is quite high (72% in 2008, EIA), so any decline in production and/or an increase in consumption will have a significant impact on net NG exports. For example, assuming no change in consumption, a 5% decline in Russian NG production would result in an 18% decline in net NG exports.

As I have previously noted, I think that both the US and Europe are facing Proximal Producer Problems, with key geographically close sources of net oil exports, Mexico & Venezuela for the US and Norway & Russia for Europe, showing generally flat (Russia) to declining (Norway, Mexico, Venezuela) net oil exports. And of course, then we have "Chindia" out there bidding for net oil exports, wherever they can get them.

Even if we include Canadian net oil exports, the combined net oil exports from Canada, Mexico & Venezuela (three of the top four sources of US oil imports) fell from 5.0 mbpd in 2004 to 3.8 mbpd in 2009 (EIA).

Re: Norwegian gas

Norway may be at, or quite close, to a gas production peak.

An article out today titled Gas problem for Norway and Russia addresses the issue of gas prices and their effect on production from Norway and Russia and has the following:

Lower prices on natural gas mean lower budget revenues for both Norway and Russia. It could also cast shadows over planned new field projects, including in the Barents Sea.


According to NRK, budget cuts are underway already in 2011.

At the same time, Norway is in danger of running out of available hydrocarbon resources. The country’s oil production has dropped 40 percent since the peak in 2001 and also the finding of gas reserves have stagnated.

Another Norwegian article concerning the fall in revenues due to low gas prices came out yesterday:

Norway's oil and gas wealth disappears

The low gas revenues could force severe cuts in welfare, and give the government far less room to maneuver.

My understanding is that Norway is on track to produce at its current level for perhaps a decade before decline sets in. If prices are low during that time, reducing funds for exploration, the descent from peak production rates could be steep.

Here's the chart for Norway from the Gas Trends databrowser:


(Note: the Gas Trends databrowser is a new, in-development databrowser that focuses only on natural gas. Both BP and EIA data are available as well improved graphics for blog posts.)


Just to follow up on Jeffrey’s comment.

The diagram above shows developments in actual Norwegian natural gas production (sales) between 1996 and 2009. Further it shows my forecast of Norwegian natural gas production/sales towards 2020. My forecast is developed by using data for individual sanctioned fields as reported by NPD for estimated original recoverable reserves (NPD data as of end 2009, remaining recoverable reserves (NPD data as of end 2009) and R/P ratio (Reserves over Production).

NOTE! The black (High case) and red (low case) lines in the diagram shows MOE (Ministry of Oil and Energy) and NPD (Norwegian Petroleum Directorate) forecast as published in MOE’s Factsheets for 2009.
There are revisions to MOE’s forecast in their Factsheets for 2010 which now shows a high of around 130 GSm3/a and low of around 100 GSm3 on Norwegian sales gas volumes by 2020. In other words MOE has revised down its forecast towards 2020.

As of end 2009 NPD’s estimated remaining recoverable natural gas reserves for NCS stood around 2 040 GSm3 of which 70 % were in Ormen Lange, Snøhvit and Troll. Presently these 3 fields are facilities restricted.

Volume of commercially undeveloped natural gas on NCS is presently low and is as of now expected to have a small impact on my forecast. Volumes of some of these discoveries range from 30 GSm3 to 50 GSm3.

High hopes had been pinned to the recent drilling in the Gro prospect, which turned out as a disappointment and made NPD revise down their estimate of recoverable reserves.

The above diagram shows development in Norway’s natural gas production by some individual fields and group of fields as reported by NPD (Norwegian Petroleum Directorate) for the period January 2001 and as of June 2010.
The diagram shows a small growth in Norwegian gas sales as of June 2010. This is less than what I have in my present forecast.

Recently the seasonal off take of Norwegian natural gas shows less variation. Growth in sales has recently come from Troll and Ormen Lange and the diagram shows that new developments (included in the yellow columns) on NCS are not able to fully offset declines from Gullfaks South and the Sleipner area.

I plan for (and works with) to have future post(s) on TOD on historical and forecast developments for Norwegian crude oil and natural sales gas production.

The following article covers the ban on Russian wheat exports, but the "FELM" (Food Export Land Model) premise is the same as the ELM, i.e., domestic demand is generally satisfied before a product is exported--and therefore any production declines result in steep, and generally accelerating, decline rates in net exports.
Fears grow over global food supply

Russia announced a 12-month extension of its grain export ban on Thursday, raising fears about a return to the food shortages and riots of 2007-08 which spread through developing countries dependent on imports.

The announcement by Vladimir Putin came as the UN’s Food and Agriculture Organisation called an emergency meeting to discuss the wheat shortage, and riots in Mozambique left seven dead. . .

“This is quite serious,” said Abdolreza Abbassian, of the FAO in Rome. “Two years in a row without Russian exports creates quite a disturbance.” Dan Manternach, chief wheat economist at Doane Agricultural Services in St Louis, added: “This is a wake-up call for importing nations about the reliability of Russia.”

With increasing scarcity, producers are increasingly in an advantageous position, both from high revenues and access to cheaper oil when compared to spot market prices. This partly reverses the trend to free oil markets which took place after the '70s shocks, and gives those countries more control over the supply chain, with a risk of monopolies and nationalizations, and of “political pricing.”

All of the above is an assumption, that physical shortages will automatically result in one way price action with advantages to producers. The price of oil is restrained by the upper bound effect where costs/unit output beyond a certain level triggers business slowdown. This is an economic law of gravity that cannot be overturned either by manipulation, or autocracy.

The conceptual basis of Net Exports (outside of the EROEI differential) is that producers are industrialized as much as consumers. Producers are dependent upon the stream of goods and services emitting from oil consuming nations. When consuming nations fail due to oil shortages so will producing nations. When producing nations reach the same level of industrialization as current consuming nations they will either be net energy importers or indistinguishable in their level of demand from their energy customers.

'Free markets" is not an issue: there have never been free markets in crude, anywhere since the end of WWII when authority was given to the Texas Railroad Commission to fix prices.

Producing nations may indeed have oil but lacking final customers may as well not have any at all. Like other participants in the USA- style consumption paradigm, producers confront the fate identical to that faced by USA real estate lenders/speculators, USA jobless and USA small businesses since 2004. When there are no customers with money all businesses are eventually ... out of business.

Oil prices matter ONLY to waste- based consumer industrial economies with large fixed investments mortgaged to inexpensive inputs. The shift to conservation economies will be just as destructive to oil producers as it will be to their customers. Reference various remarks by Saudi oil ministers on this subject. Producing countries have corrupt and ineffective governments and few functioning social institutions. Loss of incume will lead to revolutions rather than toward economic superpower status. What is happening in Mexico currently is a good example of what is to come to other producers as they either lose production ability or customers.

Mexican economy is damaged both by the loss of oil income, a large shrinkage of drug income due to the recession in the US as well as the shrinkage of remittances from Mexican workers in this country.

Producer countries are run by autocrats (Russia, Venezuela) or mafias (Mexico, Iraq, Angola, Yemen, Mexico, Nigeria) or militants/radicals (KSA, UAE, Iran). They are all dependent upon the flow of western 'growth' in the form of funds/credit along with Western luxury/consumer goods (and food) to keep order. 'Destroying the West' makes sense to US business executives (which have done just that) but the status quo is very important to both (oil) users and pushers.

What is happening in Mexico currently is a good example of what is to come to other producers as they either lose production ability or customers.

Relative to their 2004 production peak, here are the five year rate of change numbers for Mexican total liquids production, consumption and net oil exports:

Production: -5.0%/year
Consumption: +0.8%/year*
Net Exports: -14.1%/year

*Mexico has shown some recent year over year declines in consumption, but in order for the net export decline rate to be at or above the production decline rate, consumption must fall at the same rate as, or at a faster rate than, the production decline rate (their 2009 consumption decline rate was only about half their 2009 production decline rate, relative to 2008). Here are the 2008 to 2009 rate of change numbers for Mexico (EIA):

Production: -6.1%/year
Consumption: -3.3%/year
Net Exports: -12.5/year

I'm afraid that "Net Export Math" is relentless.

In simple percentage terms, a 22% decline in production from 2004 to 2009 resulted in a 51% decline in net oil exports. Here is the EIA net exports chart for Mexico:

Incidentally, Mexico has basically started the transition to net importer status. As David Shields predicted, because Mexico no longer produces enough of the right type of crude oil for their domestic refineries, Pemex is looking at importing crude oil in the near future.

Incidentally, Mexico has basically started the transition to net importer status.

But the peak-"theorists" are nonetheless still Chicken Littles making silly noises about pieces of the sky coming down on our technologically always-advancing civilization. ;-0


Incidentally, reports are just incoming from Cornucopia Breaking News: Captain Nemo has just surfaced near Brazil shoreline and says he found 2 new Saudi Arabias a mere 20,000 leagues under. Once again, the good news just can't stop itself from gushing in. BP is capped. Nemo has been found. What more can one wish for?

I was editing some Wikipedia articles on oil production about the time that Mexican oil production peaked, and it was perfectly obvious from the publicly available information that their oil production was about to peak. I ran into a lot of interference in editing articles because Pemex, their state oil company, was in a total state of denial about what was going to happen to their production.

Most of their production came from the Cantarell field. A few years before they had started the biggest nitrogen injection program in the world to maintain production, and while production rates had increased, the water interface was approaching the gas interface as the oil layer became thinner and thinner. What happens when the water layer reaches the gas layer and the oil layer goes to zero? I'll give you three choices 1) production crashes, 2) production crashes, 3) production crashes.

Pemex was in a state of total denial about this, and refused to admit it. They also pointed to their other big oil fields as having the potential to replace it. Pemex is a huge bureaucracy, but they have neither the capital nor the technical expertise to develop those fields. Mexico could bring in American oil companies (which have both the capital and the technology), but then the Mexican oil industry would begin to resemble a gazelle carcase being torn apart by a pack of hyenas, and the Mexicans would never allow that given their history with US oil companies. So their other oil fields are just going to sit there as their production continues to decline.

The thing is that Pemex has a monopoly on Mexican oil production, and has all the geological data, production data, capital planning data, and marketing data to predict what is going to happen to their oil production with considerable accuracy. However, they lack the internal honesty to admit the truth to themselves, so their crash in production came as a complete surprise to them.

So, that's it for Mexican oil exports. My bigger concern is that Saudi Arabia's Ghawar field is starting to look like Mexico's Cantarell field (world's biggest water injection project, frantic drilling of horizontal wells), and Saudi Aramco is starting to behave like Pemex. If that's the case, Aramco would be the last organization to give you realistic projections of future production. If Ghawar was about to crash, Aramco would be the last organization to admit it. At least with Pemex the company had to publish their basic data. In Saudi Arabia all the data is a state secret.

As I said in prior years. . .

(1) IMO, the decline of the two largest producing fields in the world--North Ghawar & Cantarell--represented two warning beacons heralding the onset of Peak Oil;

(2) The key difference between Saudi Aramco and Pemex is that the latter company has admitted to the decline in production from their largest oil field.

Hi All,

Russia will want to sell it's gas, and its most direct strategic interest is not to see western Europe go to the wall. However, it may have no choice.

With credit/ monetary problems/ lost discretionary income/ general infrastructure risks, and general 'systemic uncertainty I don't imagine Russia will be doing much investing.

But current in-production gas is interesting.

A severe systemic shock would force a major drop in electricity and heating demand in Europe. Even assuming that monetary stability could be maintained, the revenues due to Russia from Europe would drop very significantly. But the fixed operating infrastructure, from Russian production to European distribution pipelines to national electricity generation to grids were developed in the expectation of high(current) demand and real revenues. If the (real) revenus drop enough, they may fall below the current production and fixed operating costs. The whole system may lose its economies of scale and effectively become unviable.

Also, as this infrastructure represents some of the most specialised and complex supply-chain dependencies on the planet. Therefore they are at most risk from failures in the supply-chains that re-supply the infrastructure.

Losing monetary stability just adds insult to injury!

The report has various voices running in different directions. Some of the strategic conclusions, and risks outlined in the report seem to be in direct contradiction. Still, good to see it even (maybe especially) in its unedited state.

On exports/imports:

Australian crude oil imports could decline by 5% in next years

Just a simple trend analysis.

Australian crude oil imports could decline by 5% in next years

Interesting link.

I can agree with this

Rail development and conversion of our truck fleet to CNG/LNG have become ever more urgent.

but this claim, left me scratching my head..
A 5% decline in crude oil imports would endanger the medium term viability of one of Australia’s oil refineries. Such a decline rate would also be too high to be offset by fuel efficiency improvements or electric car transition programs as assumed by the RTA in their final report on the M2 widening.

Refining capacity is surely very elastic : After all, they refined MUCH less than what is used now, in the past.

Perhaps they meant viability in the narrow, reduced profit sense ?

Matt. I live in Australia and read your reports.

You do a fantastic job. Thank you.

Once again in the recent Australian elections the political parties and the MSM never once acknowledged the issue. And Abbot as you pointed out is completely ignorant. (and IMO not just on PO either).

Keep up the good work. some of us are listening - and making plans for an oil deprived future.


I posted a comment about this possible flaw yesterday.

In fact this contradicts BP data (see data browser), according to which UK is a net importer since 2006.

Maybe here also the original source from German geological service BGR is wrong, which says:

"The most important supplier of crude oil in 2007 was the CIS with 42%, with the lion's share of 32% from Russia. Behind this the North Sea states of Norway and United Kingdom follow with a share of 29%."

But I think that apart from this detail the Bundeswehr study is excellent!

I think the imports from the UK are due to the pipeline system. A lot of Norwegian oil seems to go to the UK first and then to Germany.
Looks like the UK is taking a firmer grip on that oil. Seems like that this year the UK changed their transit status and buy the norwegian oil and sell it than to germany.

Here are the statistics from "Deutsche Mineralölverband" for the first six month of 2010.

UK 6.555.358 tons + 29.3%
Norway 4.373.451 tons - 42.7%

the full report ( exel ) imports are on page 2.

Apparently the definition of peak oil is in an Appendix. Do they define the ONSET of peak oil. Some argue that we will have a rise in production (which we have seen for the past few decades more or less) and then a plateau and finally a drop. Well, if the plateau is more or less the top level of production, even if it lasts a few years before production drops, then the ONSET of peak oil might be construed as the time when the plateau was initially reached.

This would allow for an alternate interpretation of the "15-30 years after the peak has hit"; i.e. we are already several years into this time period.


Actually, what you have translated is Der Speigel's article, not the full report. The english version of the Der Speigel article is now available, as updated at the top of this TOD article. Your helpfullness ia appreciated, though :-)

I have Google-translated portions of section 3.2, and it pulls no punches;

3.2 Systemic risk in excess of the "Tipping Point"

The Peak Oil may have dramatic consequences for the global economy. The extent of these consequences will be - not only, but can also - by a decline in growth measured in the global economy. The following discussion will show that there exists on the scale of potential, peak-induced growth costs a tipping point at which decides whether the impact of the peak remain analyzable ex ante or not.

The phenomenon of tipping points in complex systems is known from mathematics has long been under the term "bifurcation". In recent times, particularly in the area of climate research pointed to possible "tipping". Tipping Points are characterized by the fact that when they reached the system stops responding proportionately to changes, but chaotic. Have such a small change in temperature to such a point a dramatic effect on an ecosystem. The Gulf Stream would not proportional to global warming more slowly, but stops suddenly. Similarly, the monsoon sets in at some point and is not just weaker.

Intuitively, it may be rather obvious that a phase of slowly declining oil production also leads to a slowly declining economic output. The Peak Oil would simply turn back the level of prosperity for a while, during which then technological solutions could be found. This intuition is deceptive: economies move within a narrow band of relative stability. Within this volume turschwankungen-conjunctivitis and other shocks are possible, but the operating principles remain the same and provide a new equilibrium within the system. Outside of this volume, however, this system reacts chaotic.

In contrast to climate research can be in economics, at least one boundary of this volume identify clear: An economic tipping point is where is shrinking - for example, in consequence of the peak - the world economy on indefinite time. In this case, a chain reaction would be the result, destabilizing the economic-based and broader security policy so that all derivatives beyond the analytical frame-work.

The combined capacity of conventional and non-conventional oil drops.

- 1 The Peak Oil occurs and the decline of conventional oil flow can be at least in the foreseeable future not fully captured by non-conventional oil. The term "foreseeable" is of particular significance here. It leads ultimately to a loss of confidence in markets.

In the short term the world economy reacts proportionally to the decrease of the oil-supply.86

- 1 Rising oil prices reduce consumer spending and output. There will be emphasis on youth-ones.

- 2 The rising share of transportation more expensive all traded. The trading volumes are falling. For some of them just break off one-revenue sources, others can no longer afford essential foodstuffs.

- 3 Budgets come under extreme pressure. The expenses of Sicherstel-ment of the food supply (increasing cost of food imports) or social (rising unemployment) compete with the required skills necessary investments in Erdölsubstitute and Green Tech. The revenues are reduced by the recession and the necessary tax relief drastically.

In the medium breaks down the global economic system and any market-based economy organized.

- 1 The economic agents realize the permanent need of a sustained contraction and shrinking world economy ausgehen.88

- 2 Tipping Point: In a shrinking economy, either for an indefinite time savings not invested because companies make no profits for an indefinite period not longer able to pay cost of debt to equity shareholders or profits auszuschüt States. The banking, stock exchanges and financial markets overall break together.

- 3 The financial markets are the backbone of the global economy and an integral component of modern societies. All other subsystems have co-developed with the evolutionary economic system. A disintegration can not therefore be analyzed under the current system. It would set an entirely new system state.

To illustrate yet to be theoretically plausible outlines some consequences:

Banks lose their business base. You can pay interest on deposits, because they can not find creditworthy companies.

loss of confidence in currencies. The belief in the value-preserving function of money is lost. It only comes to hyper inflation and black markets, then to a tauschwirtschaftlichen organization at the local level.

collapse of value chains. Labor processes are based on the possibility of trade in precursors. The processing of the necessary transactions without money is extremely difficult.

Unbound monetary collapse. If currencies lose their value in their country of origin, they are no longer exchangeable for foreign currency. International value chains collapse as well.

Mass unemployment. Modern societies are organized labor and have throughout their history ever differentiated (specialized). Many professions have to deal only with the management of this high degree of complexity and nothing more with the direct production of consumer goods. The suggested here to reduce complexity of economies would in all modern societies, a dramatic increase in unemployment.

State bankruptcies. In the situation described State Revenue break away. The possibilities of the debt are limited.

collapse of critical infrastructure. Neither the physical nor the financial resources for the maintenance of adequate infrastructures. The problem is compounded by the interdependence between infrastructure and with different subsystems.

famines. Ultimately, it will provide a challenge-to produce food in sufficient quantity and distributed.

The illustrated sequences show that the energy supply of the economic cycle must be secured. The power supply must be sufficient to enable a positive economic growth. A shrinking indefinitely economic performance represents a highly unstable state, the inevitable end to a system collapse. The security risks of such a development can not be assessed.

A conversion of oil supply is up to the entrance of the Peak Oil is not in all world regions equally be possible. It is likely that a large number of states not in a position to make the necessary investments in time and in sufficient amount. A high level of systemic risk in view of the degree of globalization in Germany so in any given case, and regardless of one's own energy policy.

The report mentions that continent based electrification (e.g. DESERTEC) will become important and that current alliances may have to change due to the geographic location of renewable energy sources and the routing of transmission lines. Protection of electric grids will become a new task.

The main challenge for armed forces will be that global conflicts arising from declining oil production will require a continuation of higly mobile air-borne intervention but that this may actually no longer be viable.

The report has to be seen in the context of the current debate on the size of the German Army, the draft system and also in relation to Afghanistan. President Koehler resigned over some remarks he did when visiting German soldiers there.

German President Koehler resigns over Afghanistan comments,,5634608,00.html

'I No Longer See Any Military Point' in Conscription,1518,713548,00.html

The main challenge for armed forces will be that global conflicts arising from declining oil production will require a continuation of higly mobile air-borne intervention but that this may actually no longer be viable.

Consider Afghanistan. It is only practical to put a small number of troops in that country since it is several hundred miles of bad road from the coast. US power is realistically limited to areas that are readily accessible by sea-borne logistics. If the Afghanis were being supplied with modern anti-air and anti-armor missiles (as we did when they were fighting the Soviets), the enterprise would collapse in weeks.

On the other hand, there may be less reason to do all these highly mobile air-borne interventions. If the logic is that we reduce danger to the homeland by "fighting them over there, so we don't have to fight them here", then a world in which international air transport and movement of people is sharply curtailed due to lack of jet fuel is likely to be much less dangerous.

In the powered down future, only a small number of people who have legitimate reasons for travel and have been fully vetted by both governments will be arriving at Ports of Entry.

Armies will once again take up their traditional roles which are to maintain internal order and to prevent the peasants and soldiers of the neighboring countries from crossing the border.

People in Northern Africa will have more and more need for electricity themselves. How willing will they be to continue to export large amounts through DESERTEC?

People in Northern Africa will have more and more need for electricity themselves. How willing will they be to continue to export large amounts through

Simple: The exported numbers will swamp local demand - certainly in the short term.

Of course, as local wealth builds from the Energy Revenue, there will be an upward local move in consumption, at least amongst the elite few on the inside.
Even then, that is still not likely to be a significant percentage of the exports.

So far missing from this debate, is the nature of the tail, and how that can flip current political will.

If the decline threatens to be drastic, then Coal will be back on the table very quickly, as most of the Gas flows in the EU, are being used to displace Coal.

Political will shifts very quickly, when pushed.

Smart countries will be careful how they 'retire' their coal capacity.

What carefull retiring?

There is a large surplus in generating capacity (the 2nd graph shows generating capacity vs. annual peak demand, green vs blue). Germany has almost double it's annual peak demand in generating capacity and is expected to grow that number to about 2,5x over the next 6 years. Other countries also have sufficient capacity to meet peak demand and have plans to greatly expand as well.

So especially Germany has a great freedom to choose it's energy source for generating electricity. Moreover it has a large share of renewable sources which require no fuell and it operates a lot of Lignite plants that source their fuell locally.

What carefull retiring?

I did use quote marks :)
Your graphs are interesting (need to be opened in separate window, to see captions)
and coupled with an earlier link

These Show Coal usage has declined to a plateau, mostly met from local production.
- but your data shows plans for quite a bit more coal.
Perhaps that is because the increase in Natural Gas is largely imported, and the supply risks are considerable ?

The peak capacity graphs seems a strange data focus, as they do not break out the renewable portions of that - so of course, the Peak ratios will accelerate.

More useful would be to know the area under the curves, and how much renewable displacement is occurring.

The EIA data shows Coal flat, and NG in decline since 2003, with Electricity steadily upward, so it would seem the NG decline is renewable displacement ?

If we take your German Oil value of -16.6%/11yrs, that's a half life indicator of ~4 decades. It's likely to be slower than that, due to the first reductions being easiest from the Elasticity Effect, but it gives an indication of a tolerable tail rate.

This is off course capacity and it's not said that these are running all the time. Actually I expect quit a large share to be running very little, because these are old uneconomic plants.

Renewable electricity is now at about 18,6% of non privelidged electricity. < very good source on the German renewables market!

As explained in this report by the Fraunhofer Institut, a increasing share of renewables in the electricity mix will call for a larger share of middle and peak load: (German)

As can be seen here, only nuclear and lignite plants are run as baseload, while coal, NG and others provide the middle and peak load:

The same website also shows actual wind and solar power generation:
(Both are 2h delayed.) That website is very good resource. It also shows predicted wind and solar generation and lists of generating unit >100MW, generating units <100MW and unavailability.

As for renewable capacity:
There was about 26,387MW of wind capacity at the end of the second half of 2010:
There was about 13,183MW of solar capacity at the end of june 2010:

There's one more factor involved in Germany's electricity supply robustness: It's very strongly interconnected. At the end of 2004 (it has been expanded since then) it had 18GW of export and 16GW of import capacity with 8 of it's 10 neighbouring countries. (See page 18 of the Fraunhofer report.) Germany has a baseload of about 40GW. This means it can also import electricity directly from other countries where it's available, next to the ability to choose from a wide variety of fuels for it's powerplants.

Norway for example doesn't only have a lot of oil, but it also has a lot of hydro power. Poland has coal. The Alps have hydro. The Netherlands still has roughly 1,200 Gm³ of NG in the Slochteren field. France has surplus nuclear during the night. These resources are now largely allocated, but I can imagine a scenario where Germany can trade the output of it's (renewables-)industry for power.

All this, the fact that germany has 17GW of baseload nuclear and 14GW of locally sourced Lignite baseload, make me believe that the German grid won't be hard hit by a peak-oil scenario. (That's relative to other impacts such a scenario has.)

Thanks for the great links!

This is off course capacity and it's not said that these are running all the time. Actually I expect quit a large share to be running very little, because these are old uneconomic plants.

- and cyclic energy has a high peak:average ratio, which is why I was expecting the peak data to include that somehow.

What is privileged & non-privileged electricity ?

Also Switzerland has/will have 12 GW of pumped storage, Austria could build much more pumped storage (as could Norway and Germany itself).

I could foresee two cycles/day for pumped storage. Up with Nuke (mainly French today) Midnight till 5:30 AM, down for morning demand, up with excess solar PV 10 AM till 3 PM (depending on time of year), down for evening peak.

Extra wind in the winter to help offset reduced solar.

Best Hopes for using Pumped Storage to balance supply with demand,


There's some roughly 500 major electricity consumers in Germany that are exempt from paying the full feed-in "umlage". Instead they pay a fixed rate of 0,05ct. (Every non-privileged consumer pays an "umlage" of about 2ct per kWh on top the normal price to finance the feed-in tarifs. And if I'm not mistaken the privilidged consumers have to meet certain renewable energy targets by them selves (largely by importing cheap hydro).)

TIWAG (Tiroler Wasserkraft AG) is currently expanding the Silz generating group and has plans for more expansion at two other sites, but Austria is fairly dense with hydro power and the strong environmental laws also make it difficult to expand much. Currently Austria is a net importer of electricity. It finances this by selling it's abundant peak-capacity and buying back cheap baseload from Germany.

Norway on the other hand has much more potential to expand it's hydro capacity. It currently meets >99% of its electricity demand with hydro. Moreover it has huge wind potential that could be very well combined with the available hydro capacity.

The EU is stimulating market integration of the electricity markets. That's why a 1GW connection between NL an UK is currently being build (almost finished), why a second connection between NL and NO is planned, a connection between NL and DK is planned, a supergrid on the North Sea is planned, why new cross border connections and expansions are planned.

The market coupling of entire west Europe is scheduled for this autumn. After that the intra-day and day-ahead markets of Germany, Denmark, Sweden, Norway, Netherlands, Uk, Belgium, Luxembourg, France, Switzerland and Austria will be coupled. This means that the cheapest producer will determine the price in all these countries as long transport capacity is available. If transport is full for a certain period, then the prices for the two regions will be determined separately.

A couple of weeks ago there was an article on TOD explaining why plain wind without pumped storage can be used as baseload. I don't think there's much need for more pumped storage at this point. Certainly not as markets are integrated more.

Instead they pay a fixed rate of 0,05ct. (Every non-privileged consumer pays an "umlage" of about 2ct per kWh on top the normal price to finance the feed-in tarifs.

Interesting numbers; I also see 2.7ct penciled in for 2011 - on a 5ct budget, that's trending to be quite an increase.

How much 'push-back' aka squealing, is coming from those users ?

If it ever gets built ,I am cynical enough to expect all but the portion of the juice needed to support the local elite( the ones with bugout houses in in London and Paris and New York) to get exported;the commoners will be left in essentially the same situation as they are today .

One interesting detail in the original report is hidden in the table of contents: They go from the introduction right into the discussion of the effects of peak oil - no detailed explanation of what this is. Peak Oil is explained in an appedix - does this mean they see Peak Oil as a given, as generally known and accepted, and the appendix is for those few latecomers who have not been convinced yet?

Maybe it is too easy to get bogged down in the details, and to start picking arguments--maybe efficiency will save us, maybe new technology. They may want people to actually get as far as what they consider important.

Maybe it is too easy to get bogged down in the details, and to start picking arguments--maybe efficiency will save us, maybe new technology. They may want people to actually get as far as what they consider important.

It all depends on the shape of the tail of finite oil.

Efficiency will certainly help, but there is also what I'd call elasticity, which is discretionary energy use. That is significant.

Elasticity has the fastest response time, then Efficiency needs a finite time, to replace current fleet, with new fleet, or shift usage.

The numbers here are the half-life of the fleet-miles, and the change made in the new purchase. The USA has the most 'fat' in their change potential, as they are coming from the least efficient position.

New technology always helps, but unless something truly disruptive gallops over the horizon, new technology will deliver incremental gains.

It can certainly change the shape of the tail :
Better oil extraction is being worked on all the time.
Gas is getting far more mobile.
Wind turbine tech is always improving,
Solar PV tech is moving all the time. We now have many GW scale solar factories being built.

The infrastructure to move personal transport to more electric, is also ramping, but that is not something that can accelerate a lot more.
Double ? - perhaps. Factor of 10 ? - Unlikely.

It's the old adage, that with nine women pregnant, you don't get a baby a month.

Of course, Coal reserves are very large, and desperation may yet drive a jump in coal focus.


in europe PO is much more known about, & accepted. i forget which country a friend was visiting, but there was a exhibit in a museum he visited...he was shocked to see such.

The U.S. Army released a report a few months ago that said essentially that somewhere between 2012 and 2015 there would be no surplus oil production globally which means no excess capacity and no "buffer" to absorb sudden demand increases. Looks like the riders on this "roller coaster" will at last be aware that the plateau of the last hill reveals a long way down with no remaining track...

It was in the 2010 JOE report from the US Joint Forces Command (US military warns oil output may dip causing massive shortages by 2015)

Interestingly, the USJFCOM relied on a study made by Glen Sweetnam, then Director of the International, Economic and Greenhouse Gas Division at the Energy Information Administration:

Meeting the World’s Demand for Liquid Fuels

And around May, Glen Sweetnam became Senior Director for Energy and Climate Change at the National Security Council (White House).

Does anyone have Glen's current e-mail address (spam protected)? Or e-mail me with it.

From the 2010 JOE:

The central problem for the coming decade will not be a lack of petroleum reserves, but rather a shortage of drilling platforms, engineers and refining capacity. Even were a concerted effort begun today to repair that shortage, it would be ten years before production could catch up with expected demand. The key determinant here would be the degree of commitment the United States and others display in addressing the dangerous vulnerabilities the growing energy crisis presents.

A severe energy crunch is inevitable without a massive expansion of production and refining capacity.
While it is difficult to predict precisely what economic, political, and strategic effects such a shortfall might produce, it surely would reduce the prospects for growth in both the developing and developed worlds. Such an economic slowdown would exacerbate other unresolved tensions, push fragile and failing states further down the path toward collapse, and perhaps have serious economic impact on both China and India. At best, it would lead to periods of harsh economic adjustment. To what extent conservation measures, investments in alternative energy production, and efforts to expand petroleum production from tar sands and shale would mitigate such a period of adjustment is difficult to predict.

One should not forget that the Great Depression spawned a number of totalitarian regimes that sought
economic prosperity for their nations by ruthless conquest.

And note that the above is the best case scenario. They don't talk about the others...

Thanks, Nessus, lb262 , Gail (does this mean you’ll ask Glen Sweetman to do a guest post?) – And Will for bringing up this report.

Re: “At best, it would lead to periods of harsh economic adjustment. To what extent conservation measures, investments in alternative energy production, and efforts to expand petroleum production from tar sands and shale would mitigate such a period of adjustment is difficult to predict.”

Re: To focus a bit, here is one critical topic:
“To what extent…investments in alternative energy production…would mitigate…is difficult to predict.”

It’s especially “difficult to predict,” if one does not try to predict it.

As far as I understand it, (and I’d be happy for references to the contrary), no one/group/study/government, etc., *anywhere* has done the kind of “top-level” analysis required to assess the feasibility of the following:

1) transferring most functions of industrial economies and global industrial civilization from an LTF base to an electrical base;

2) Using “alternative energy production” to supply that electrical basis; and, then,

3) taking up the limits of growth in general, and the limitations of the interdependence of LTF functions and electrical functions (eg., diesel for heavy equipment to maintain roads, roads required for maintenance of the electrical grid, etc. ), and how this impacts the prospect of such a change-over.

No. I wouldn't ask Glen to do a guest post. I met him at an EIA conference a few years ago and have corresponded with him when he was at the EIA.

Just to keep things in perspective-I just burned maybe a pint and a half of diesel ripping up about a thousand square feet of grass sod running to a brushy, shrubby briar patch-a place that we haven't gardened for five or six years.If the tractor and implement had been parked closer, it would have taken no more than a pint, but it took a third as long to drive there and back as it did to do the actual work.

The heavy spring tooth cultivator-essentially a small six foot chisel plow-ripped out the roots and briars and brush and carried everything to the end of the patch beautifully, where it will rot and eventually be reincorporated into the soil.

Resting this spot for five years means that most of any pesky insect eggs, nematodes, fungus, blights, weed seed, or whatever formerly present will have diaappeared.

Working this ground up for a garden by hand would have been at least a week's backbreaking work for a young tough man.

Just to keep things in perspective.

Being one of the few regulars here who take right wing principles and politics seriously, I have always made a practice of following the news as it relates to national security and military affairs-in short, to history.

(This does not necessarily mean that I agree with any current right wing policy and/or position-but rather that that I take the principles involved seriously-just as i take ecological principles seriously.)

I have yet to see anything written by any military think tank that does not evaluate the the overall oil and energy situation as evolving into a grave crisis within the near to middle term.

Some argue that declining demand in a crashing economy will mean that oil will get ever cheaper.

Maybe so.

But the less oil available, the higher the utility of the last marginal gallon of supply.

The utility of that pint of diesel to me in terms of personal labor and the opportunity costs or value of my time could easily be as much as two hundred fifty to five hundred dollars, considering that the tractor and implement are sunk costs, and what I would have had to pay a laborer to do the job.

I expect the last few dregs of oil that reaches consumers to fetch ungodly prices, limited only by the costs of whatever biofuels are available, or the cost of running electrically powered machinery.

Daddy says that if we still had a mule and the right implements, he could have done the job in less than a day when he was young.


This is off-topic, but I'd like to ask the question to an experienced farmer:

I planted my first garden last year (used a tiller and did lots of hand digging, so I understand your comment about the worth of petroleum).

I don't have very much land and I can't afford to leave any of it idle as many gardening books suggest. Do you have any suggestions on how to control or prevent the pests that build in a post petroleum world?

The best I've come up with is collaborating with neighbors and rotating the 'rest time' for the land around the neighborhood.


Folks who have only limited space do have some good options and strategies available to them to help with pest and disease control.

Probably the best single one, taken all the way around, it to avoid inadvertently introducing any pest or disease to your plot-meaning to be very careful about where you obtain your seed, transplants, mulch, and so forth, and being careful if you loan or borrow your tools to make sure they leave clean and return clean-hose them off well and leave them out in the sun for several days if there is any doubt.

If your nieghborhood is not too heavily urbanized to support a good population distribution of birds, you can encourage species that are helpful, such as purple martins.

Modern gardening gurus often have very little good to say about plowing, especially deep plowing, but if your land is reasonably level, autumn plowing is a very good way to both bury undesirable insect eggs and seeds deep enough they will rot and die, or bring them to the surface where the birds and winter frost can get at them;and it should not be forgotten that plowing offers a great opportunity to rapidly incorporate any avialable organic materials such as grass clippings and fallen leaves into your soil.It is better that such materials are composted first, but so long as you don't apply too much in any given year, plowing them in is fine and probably the single fastest way to build up depleted soil.

Any any land you have under your control that cannot be cultivated can be useful if maintained in a near natural state, as it will help provide a habitat for a useful local mix of predatory insrects and pollinators.

You can control some pests rather well by growing certain crops only early or late in the season, as the pests that are the worst ones are less troublesome at those times.

Old true breeding varieties of common crops have a lot going for them , but the truth is that you can often do a lot better with hybrids that are quite resistant to many diseases-at the cost of purchasing your seed of course.

In the end, you may simply have to give up on some crops if you do bnot wissh to use chemical controls-or even if you do.

But you can probably manage pretty well just by doing as much rotation as you can within the limits of your space, local climate, and preferences.

If you live within the US, your state govt almost certainly has many many useful publications available at nominal cost for hard copies or free on the net that outline your most likely available local options on a regional basis, crop by crop.

These publications still tend to be oriented towards bau agriculture , but in recent years there are more specifically written for the needs of the smal and/or organic grower every year.

Thanks to OFM and RG. Very good suggestions. I have looked at university extension office publications in years past (I live in Oregon) and have found a surprising amount of bau type information. I'll have to look again.

I hope this is an indication that I'm doing something right - I have TONS of bees, birds and squirrels visiting my yard now (although the darn squirrels eat many of my vegetables before I do), where before it was pretty barren.

If things get bad enough after the oil/financial crash, I figure those pesky squirrels might be tasty squirrels.

I know a number of extension agents in several counties in CA. They are all glad to talk to home the off season. The people I know all specialize in some particular aspect of AG so they guy who is into wine grape research might not actually know much about home gardening.

I'd suggest checking out if your area has a Master Gardeners program. I took it in DE years and years ago. Besides learning a lot you will also get to know extension personnel on a personal basis and this never hurts.


For a smaller garden - hand removal of pests will help a lot. Insecticidal soaps & oils are very useful too & can be made at home. Hot pepper & garlic is useful as a repellent (though I have no direct exp. w. hot pepper & garlic solutions)
I personally stock Neem oil concentrate (Japanese beetles,fungal diseases, etc)(pretty much unlimited shelf life IMO) and BT (cabbage looper, hornworms, etc)(unsure of shelf life, a few years anyway).
For what it's worth, I think that a good pesticide (the above are approved for organic gardens, and are all I use, except for potatoes which need Spinosad due to multiple pesticide resistant Colorado Potato Beetle)), used only when necessary, could prevent starvation in a pinch. With a little luck, you can go without. Sometimes though an entire crop can be wiped out in 2-3 days.
PS I know I'm not OFM - but maybe this is of use to you.

Thanks Seagatherer,

Stocking up on some essential organic pesticides is a good, prudent idea. I have a small stock of organic fertilizer (Steve Solomon's 'complete organic fertilizer' ingredients) but I hadn't tumbled onto the idea (duh!) that I could do that same with some organic pesticides.

I read many of the pests only become problematic after a number of years of accumulation and growth - I wonder if the judicious use of pesticides for one season 'resets the clock' on pest accumulation?

There are a couple of things that will help you. Part you can read about the oher through direct observation.
Disease and insect control basics follow a triangle. Taking disease for example - you need 1) disease, 2) susceptible host plant 3) correct environment conditions. Most chemical applications try to remove/reduce disease. Hybridization tries to reduce susceptibility. Knowing the parameters( temperature, moisture and humidity, time of year) when disease gains traction will help with control efforts. Realizing that diseases are likely always present gives you the right frame of mind. Disease requires all 3 of the triangle to become a problem.

Insects have a triangle as well. 1) Insect, 2) Host 3) environment. I assume insects are always there - you need to decide what level "threshold" population is tollerable. Most insects have a preferred "food". I have given up on cherry trees because of borers. Prunes, apples, pears, are all fine. Temperature plays a big role in life cycles of quick to reproduce insects like aphids. Insects eat other insects. Many people point to ladybugs, I'm more skeptical about them. 1) Ladybugs fly and 2) They may prefer the taste of some bug you don't have and leave.
On the other hand using a broad spectrum miticide can kill your predatory mite population and make matters worse than you can ever imagine ;-(
You can try to control insect populations or plant something they really love somewhere close by, wait until its infested and pull it out and burn it. I often joke if you don't like deer in your yard plant strawberries along a busy road nearby, same kind of idea.

2 brick method of bug control - 100% effective, never allows resistance to build. Take a brick, place a bug on top of it and hit it with the other brick. Kinda slow.....

Seagatherer, your suggestions are good ones, especially for those of us who have more time than money and can therefore effectively pursue labor intensive techniques such as removing pests by hand.

I haven't thought about it for some time, but my deceased mother had a couple of very pet turkeys which she let into her family's gardens when she was a kid;the turkeys caught and ate a considerable number of bugs and catepillars, but they required close monitoring as after a few hours they were apt to start pecking ripening tomatos and such.

I can't vouch personally for just how much it will help with pest control, but running a few chickens on a garden plot in the off season definitely seems to help with weeds the following year and obviously helps with soil fertility.

Whenever I happen to see a blacksnake I can catch easily, I transport it to a place on the farm or near the house where it will be helpful in keeping down rats and mice.

Another technique that can be very heplful in controlling various sorts of rots and fungus is to grow things on trellises, where they will dry faster after a rain and the air circulates better in hot humid weather; you can support a large squash or even a pumpkin off the ground in a mesh bag of the sort that is used to ship onions and cabbages, or on a couple of small pieces of scrap lumber.This can save a good portion of pumpkins from rotting in excessively wet weather.

Pruning fruit trees so that air and light penetrate well into the interior of the tree is a practice I reccomend highly.Ditto thinning fruit to the point that limbs do not press tightly one down on another cutting off the sunlight and free flow of air.

What I have found is that virtually all the techniques I have run across will work, depending on energy of the gardener and local conditions, with the exception of a few that are diametrically opposed to the basic principles of plant ecology.

You can't for instance grow sun loving crops in a seriously shaded spot such as between close spaced fruit trees or in a partially wooded area and get a worthwhile yield-not by my standards of a worthwhile yield at least.

But you can often grow early or late season crops in such a place during the summer-for instance kale doesn't like the summer heat here , but it does really well early and late;and it does grow fairly well during high summer in a spot that gets only a few hours of full sun in the late afternoon or early morning and diffuse sun the rest of the day.

The heavy spring tooth cultivator-essentially a small six foot chisel plow-ripped out the roots and briars and brush and carried everything to the end of the patch beautifully, where it will rot and eventually be reincorporated into the soil.

An excellent device for clearing that kind of brush. Any need for a subsoiler at this time?

Working this ground up for a garden by hand would have been at least a week's backbreaking work for a young tough man.

Hence the PO adage about having 12 'oil slaves' at our disposal currently.

Daddy says that if we still had a mule and the right implements, he could have done the job in less than a day when he was young.

:-) No doubt!

If I recall correctly, it has foot pedals that allow you to shift the tines right and left in order to keep the row centered if the team doesn't straddle the row exactly.

You have to feed the mule all year. One must keep that mule working all year or it is a serious loss.

A thousand square feet is 1/42 of an acre. OTOH the mule provides some manure to fertilize the garden next year.

Beware of thinking animal driven farming is good for much of anything other than feeding about a third of the population we presently have.

You have to feed the mule all year. One must keep that mule working all year or it is a serious loss.

Feed is indeed an important consideration. Grass here grows about 7 months out of the year, though, with hay for the remaining months. Grain supplement is preferred during the more strenuous working times, though light work (light cultivation, a lot of wagon work, riding, etc) does not require such supplementation.

Beware of thinking animal driven farming is good for much of anything other than feeding about a third of the population we presently have.

I'm also wary of thinking that the population will continue to grow or even remain at the current level.

We do have a subsioler and I use it at long intervals in the orchard where it is nescessary to run a lot of trips down the rows with the truck to haul the fruit out and the tractor to mow and spray.

The orchard is in a grass sod, and it appears to grow about as well in any one spot as another, except directly where the wheels run;and it grows pretty good there too.So that's where I use it-directly in the spots the wheels usually run.

I don't make many trips at all over garden ground with the tractor, and since it has flotation tires with a huge footprint, especially in the rear, it doesn't compact the soil much, considering that the organic content is high and the soil is springy and resilient.

In my view, this German study is one of the more concise, straightforward, and common-sense appraisals of the overall oil situation that I've seen in a long time.

To amplify upon some comments I made yesterday, I think one of the more certain of the predicted outcomes of an ever-tightening oil supply situation is that free and open oil international markets will be largely replaced by bilateral energy/security arrangements: i.e., you ensure us a reliable supply of oil at a reasonable price, and we in turn will provide military protection and will help keep your regime in power. Of course, money will still change hands and it will not be an all-or-nothing sort of thing, but there will be an implicit understanding that oil will always flow in the right direction and that the 'customer' will in turn make sure that no one messes with the 'supplier'.

These alignments are already forming (e.g., US and Saudi Arabia + UAE, versus China + Iran + Venezuela + Africa?). This will further push the world into opposing power blocks, but this time based on energy supplies rather than politics and ideology. Of course, these relationships will be inherently unstable and subject to all sorts of stresses, both internal and external. A recipe for perpetual low-level armed conflict. I'm afraid that Iraqs and Afghanistans are going to become a way of life.

On another note: I do however take issue with the notion that economic hardship and more expensive energy supplies will reduce a major power's ability to intervene in other country's affairs. In any country the military will get first crack at the available oil, right down to the very last drop. Also, I envision the following chain of causation: economic hardship => domestic political instability => desperate rulers => foreign military adventures as form of distraction and means of retaining power. History is replete with examples the mindset: when all else fails, start a war. How often has lack of money ever prevented a war?

Finally, at the risk of nit-picking, I also question the statement in Item 2.1 that 95% of all industrial output is dependent upon oil. This would only be true if 'dependent' really means partially dependent and that the transport of industrial raw material and product is considered part of 'industrial output' rather than transportation.

With the obvious exceptions of the petrochemicals, plastics, and rubber industrial sectors, most heavy industry is not terribly oil-intensive. Just examine the energy consumption in such major industrial sectors such as iron & steel, cement, textiles, glass & ceramics, pulp & paper, and almost all heavy manufacturing. These industries mainly rely on coal and natural gas, either as used directly as a fuel or as used indirectly in the form of electricity.

Anyway, this German study should be an eye-opener for many mainstream people who have been disdainful of all the doomerish pronouncements put out by those fringe peak oilers. When a group as conservative as the German military comes to more or less the same conclusions, it certain adds much credibility.

I think that there is a very major chance that the powers that be will find themselves out of power. In some cases, this may mean a very major disruption--new constitution, new national boundaries, military may be entirely different. I am not sure the report wanted to even mention this issue.

And they didn't mention the most drastic tool for a strategic "demand destruction":
Nuclear War

I think the West will quickly be out of spare parts if they annoy Asia

The US might have outsourced a lot of its manufacturing but the production of military hardware was not one of them. This then gives them even more reason to start a war if the economy is in decline.

Electronic parts could dry up quickly during a war

A key question is whether the great powers can keep the Middle East divided and alligned individually with different great powers, or whether a new alignment forms in the area between Pakistan, Turkey, and Sudan.

I don't envision a bipolar US - China world. Instead it is more likely to evolve towards a multipolar world with US, EU, China, and a new Middle East alignment as the great powers, with Japan, India, Malaysia/Indonesia, Brazil, and Russia as a second tier. Japan may align with China, Russia may align with the EU, and the UK may align with the US instead of the EU.

Merrill -

I don't think it will be a bipolar US-versus-China world either .... I just gave that as an example. I do think, though, that multiple blocks will form, but the exact make-up of those blocks is open to speculation. I also think it will be a somewhat fluid situation, with countries joining and quitting the various blocks for various reasons.

However, any way you slice it, it does not bode well for a peaceful, stable world. This is old-fashion zero-sum competition, which leave little room for mutually beneficial cooperation. It does not make one feel very hopeful.

We have the dissolution of the Soviet Union and the reorganization of Russia, the reforming of the Chinese government and economy, and the creation of the EU and euro. This parallels the global political power shifts that occured around 1870 including the opening of Japan, the Franco-Prussian War and the emergence of the unified German Empire, and the unification of Italy.

The end of the dotcom bubble, caused by overinvestment in technology venture and preparations for Y2K, parallels the Panic of 1873, caused by overinvestment in speculative railroad ventures.

We are now in a period analogous to the 1880s decade. The French invade Tunisia because of attacks on them in Algeria. The British take over Egypt because of attacks on foreigners. The British send Lord Gordon to Khartoum with bad results. The Triple Alliance is created between Germany, Austia-Hungary, and Italy. A bomb kills one policeman and injures many more at Haymarket Square. George Eastman, the Steve Jobs of his day, patents the hand held camera.

By 2040, when the oil truly runs out, we will hear the Guns of August again.

Thanks for the historical comparisons!

"History may not repeat itself, but it rhymes a lot." -- Mark Twain

I agree with you joule. I've rattled on before about a MADOR strategy (Mutually Assured Distribution of Resources) developing between the US and China. Not so much a formal treaty but more along the lines of a symbiotic relationship. Just seem to make sense for the largest consumer country to at least cooperate passively with the largest producing country. Add the monetary link between the two countries it seems an absolute necessity for each to see the other maintain stability if not prosper. China needs to US to buy its exports. The US needs to borrow the money back from China so it can continue to "spend its way to prosperity". At least that's what "they" say.

Of course, if such stability does develop between the US and China it will only last as long as there's enough of the pie to split between the two of us.

You are right that the US is the first market for China's export, but it is only 17.7% of the total !

pav -- Thanks. I knew the EU has a good bit of China import but didn't have any numbers. I made the point before that I thought Walmart could have a greater enfluence on China's human rights issues than any govt: if WalMart threatened to cut Chinese purchases 50% I suspect their govt would go into an real panic.

Here are three related items:

Most interesting perhaps is the report of the UK Industry Taskforce on Peak Oil and Energy Security, advising how the United Kingdom should prepare for an "oil crunch":

Glen Sweetnam's declining liquid-fuels scenario was not widely reported in the US but was covered in a long article in Le Monde. The "energy gap" graphic is useful:

In 2005 energy-policy think-tanks in the US staged an "oil shockwave" wargaming scenario. The wikipedia article includes a link to the original report:

It's good that the German report portrays Peak Oil as a military threat rather than merely economic which is how Peak Oil is generally considered on TOD.

It is interesting, arranging the geopolitical dominoes.

It is important to remember that the US entry into WW2 was triggered by the July 1941 US oil embargo of Japan(in part retaliation for the occupation of French Indochina in 1940, which was to cut off military supplies from getting to China, which Japan had been continuously fighting from 1937).

It is imperative that the West addresses Peak Oil seriously, not thru 'markets'. Reducing demand and substitutions will only go so far. You need to add to supply with unconventional oil(bitumen, heavy oil and oil shale). Deep offshore oil(est. 60 Gb) is too environmentally dangerous to expand.

73% of the world oil shale(409 Gboe) is in the USA.
66% of the world bitumen(550 Gboe) is in Canada
95% of the world extra heavy(297 Gboe) is in Venezuela.

Grabbing OPEC oil will probably lead to Iraq type quagmires(reduced rather than increased production).

The EU-27 imports 93% of its oil and it is basically impossible to alter that relationship.
The entire OECD imports 78% of its oil per IEA 2007.
The US imports 70% of its oil.
China imports 48% of its oil.

The best way for Europe to secure access and to moderate prices is by developing unconventional oil where it actually exists.

However, this seems to be a minority view at TOD(just me).

Or you could start getting serious about getting off goddamned fossil hydrocarbons altogether, starting with serious efficiencies and economies of use. Massive savings there, as soon as we want to do it properly.

It would also help if a lot more of us took on board the realism-inducing spell which John Michael Greer offered to his Green Wizardry students just recently: 'There is NO brighter future ahead.'

Once we stop pussy-footing around that steadily-dawning understanding, and embrace it, and thus start doing what's necessary to prepare for a future that can't and won't resemble the present and the recent past more than slightly, then we might start to get somewhere.

Looking for delusional ways to shore up current hydrocarbon use-rates is a mug's game. They're going down, whatever we do. So too are per-capita energy use rates from any conceivable replacement sources. Even governments and militaries are beginning to accept and think about that reality now. The important idea is to get used to it, and to spread the word, whatever initial outraged-denialist responses it kicks up for the time being. Evolving realities now on the very near-term horizon will soon cure those delusions.

Meanwhile, the people who are already in the realist camp can join up with the ever-growing grass-roots, sleeves-rolled-up throng who are doing the sort of thing which the Green Wizards (as one example) are striving to do: Archive, preserve, and learn to use and to transmit to the future, all the appropriate technologies, skill-sets and practical knowledge bases which are currently rather eclipsed from public notice, but which are sure as hell going to be coming back into widespread use again in the near future, as the Age of Gross Over-Abundance (for the Pampered Twenty Percent) dwindles in history's rear-view mirror.

It's good that the German report portrays Peak Oil as a military threat rather than merely economic which is how Peak Oil is generally considered on TOD.

I have portrayed it as military threat for as long as I can remember. I gave a presentation in Italy over the summer, and my comments about what happens when militaries are deprived of oil got a lot of people's attention. One guy afterward said "Are you telling that you think the U.S. military would just go in and take someone's oil?" He paused for just a moment, and then said "Wait, what am I saying?"

One of the things in the report that should alarm Eastern European countries is Germany's realization that they may have to toss them under the bus to curry favor with Russia. Poland may be more aligned with Germany than Russia, but guess which side Germany will take if it's a matter of getting their oil cut off? The report spells that out pretty clearly.


...guess which side Germany will take if it's a matter of getting their oil cut off?

And natural gas...

The NordStream gas pipeline does not bypass Poland by accident.

In response, no doubt, to Anglo-American attempts to keep Russia and Germany separated by a Poland and Ukraine who are more or less at odds with Germany and Russia and under the sway of NATO as much as the EU (the pipelines from Ukraine pass by L'viv and into Hungary and Sovakia, thence up the Danube Valley).

I have portrayed it as military threat for as long as I can remember.

The US military and government have been acutely aware of this since WWII. Roosevelt struck the mutual-aid agreement with Saudi Arabia right after WWII; Truman (IIRC) called Israel an unsinkable aircraft carrier; Eisenhower assisted in the overthrow of democracy in Iran in 1954 both to reverse BP nationalization and repel Soviet influence; Carter proclaimed the Carter Doctrine to repel Soviet; Reagan assisted Iraq in it's war against Iran; and Bush I & II invaded Kuwait & Iraq.

The US military and government have been acutely aware of this since WWII

Actually been going on since World War 1.

Germany aligned with the Ottomans to gain access to the Palestinian oil fields then under British control

The "winners" of the war, namely Britain, divided up the collapsed Ottoman empire in the Middle East into the strategic mess we are still paying for today.

See "Blood and Oil: The Middle East in World War 1"

The take home message from all this is that if you want to keep using someone else's oil then be prepared to fight and die for it.

The take home message from all this is that if you want to keep using someone else's oil then be prepared to fight and die for it.

Substitute the word 'water' for 'oil' and multiply that by 100 or 1000 fold at least. No shortage of hotspots in the evolving situation.

I have portrayed it as military threat for as long as I can remember. -R^2

Then why do you continuously bash the idea of energy independence?
Even some independence from imports is better than none.

Or are you a neo-Con i.e. that the US should 'regime-change'
oil-rich countries to maximize world oil production?

Our Iraq experience, Chavez, Bin Ladin, and Iranian politics shows that we would increase the price and decrease the flow of oil that way.

Iraq has taught us the limitations of military power to produce oil.
If you want to keep military power you need to produce your own oil.

Then why do you continuously bash the idea of energy independence?

What planet do you live on? How do you get so mixed up? When have I ever bashed the idea of energy independence? I have bashed delusional thinking on energy independence, but I am all for as much energy self-sufficiency as we can possibly muster.

Go look at my book review for Gusher of Lies. Even then I said that I thought Bryce was wrong for saying we don't need energy independence.

It's possible that report was leaked to serve notice to the Obama administration that they have to come up with something or risk losing the empire.

Heading off that possibility was one of the main reasons for the invasion of Iraq. Cheney et al. believed not only that America's oil addiction must be fed but also that the ability to control the oil market is central to bolstering US status with allies. Obama may be backing away from that role vis a via Iraq withdrawal & Iran and the Germans are saying that if you do that, you lose our support for Israel and eastern Europe over Russian... you lose the empire.

Obama's turn.

In fact this report's leak may have been timed to light a fire under Bibi's ass. (Shook his hand once in the late 80s).

The Cheney/Neocon doctrine didn't take into account that the passive-agressive defense beats the hyperkinetic offense. The US military is superb at blowing things up and killing people, but it does so at very great expense. The expense cannot be decreased without taking higher casualties. The American public has no stomach for taking higher casualties. Therefore, the US military cannot wage and win an economically profitable war.

Therefore, the sole superpower strategy based on control of oil markets by the Anglo American champion companies backed by technologically superior military and clandestine services is a failing strategy.

The US would have been far better off, in the long run, if it had trusted in democracy in Iran, instead of squashing it for short term gain.

I'd say that's Obama's strategy in Iraq.

Speaking strictly as an armchair student of history,and military history in particular, I would argue that if it weren't for two facts, we would have had no trouble whatsover subdueing Iraq.

The first one is that while we are no doubt the big bully nieghborhood cop of the world for the time being, we are actually pretty nice guys as such cop bullies go, and we have based our strategy on not killing off more than a tiny percentage of the local population, for us wiping the country as empty as the Empty Quarter of the Sahara technically would be as easy as taking candy from a baby.

The other primary fact is television and resultant secondary fact following that the American public won't stand for us commiting a massacre so long as the pictures come into our living rooms..

The third factor is the reaction of other governments and their publics. A more ruthless domination of Iraq and Afghanistan would make other governments even less cooperative than they are, and the US would become a pariah state in the eyes of the world.

Even with current levels of force, we have to emphasize various noble goals and objectives to make our position more palatable to the world.

oldfarmermac -

I would agree that it would be have been no trouble 'subduing' Iraq by essentially destroying it. But that was not the original purpose. Rather, the goal was to install a US-friendly puppet government that would be willing to 'cooperate' with the US in terms of both favorable terms for US-based companies to access its oil reserves and the use of Iraq as a base of operations for increased dominance of the Middle East.

Looks like it hasn't worked out too well on either count.

As for TV, the Pentagon realizes all too well the importance of controlling the media, a lesson they learned the hard way with Vietnam. This is why reporters are now 'embedded' into military units so that the Pentagon can control what is reported and what images get seen on network TV. As a result, the only place an American is likely to see images of civilians being massacred is by viewing Al Jazerra or Wikileaks. It make take a while, but eventually the truth usually gets out.

hi Joule. You and Merrill have made excellent follow up points.

I agree with Merrill totally and with you to a very large extent;but there are always going to be some reporters around from someplace to get some of the truth out, and it tends to find its way here to the states ;the military can't control what we learn to the extent a lot of people think it can.

I made my comment simply because I don't like to see erroneous arguments go unanswered;such arguments can cause folks to come to unwarranted and dangerous conclusions.

At some point we or some other country may well be willing to simply wipe out the citizens of any country in possession of resources we see as critical to our own survival-or maybe just to our prosperity.

I hope this never comes to pass of course, but the fact that it COULD can't rationally be dismissed.

oldfarmermac -

I have no doubt that there are certain people who would have few qualms about wiping out vast swaths of Africa and Latin America to provide resources and 'lebensraum' for presumably superior white Christians. I'm sure such people can easily find ways to rationalize this stance, no doubt including selective interpretations of the Bible. And I don't think I am exaggerating when I say this. Just look at how the genocidal slaughter of over a half million people in Rawanda hardly made a blip on the radar screen of the mainstream media. It's only those lesser people over there and not us better people over here. Studied indifference.

If I recall correctly, even that great humanitarian, Henry Kissenger, once said something to the effect that it should be the policy of the Western world to reduce the population of the Third World. However, he did not elaborate as to how this might be accomplished.

Genocide is hardly a Twentieth-Century innovation, as it has been practiced (albeit on a much smaller scale) since we came down from the trees. Since then, tribes have been routinely slaughtering rival tribes, a practice that has steadily escalated, with the Holocaust being the pinnacle (so far). While perhaps the stuff of conspiracy theories, there are claims that certain countries have performed research into race-specific germ warfare. Whether such would be effective is an entirely different question (just be sure you really know who your ancestors are before you unleash race-specific pathogens), but the attempt, if true, is rather chilling.

We are a down right disguisting sort of ape when you get right down to it, aren't we? :(

Personally I don't put any stock in the rumored creation of diseases specfic to racial groups but of course I can't say such rumors are unfounded.

It seems much likelier that someone working on germ warfare systems would simply try to have a supply of antibody on hand to vaccinate the local friendly population just before or shortly after turning loose thier dog.This would greatly simplify the job of the technicians running the program;and the fact that such dieseases haven't yet been set loose among us is eloquent testimony to the difficulty of creating one.....

But of course the next breakthrough in nanotech or microbiology or genetics could make it easy....

Thank you for this comment J. Mine was too strident and I am glad I read on to find this. When I see CNN and when I sheepishly recall watching the imbedded journalists during Shock and Awe fame, I am reminded of Stepford Wives. I am also ashamed to have believed what they said.

"You can't handle the truth", .....what a line from Jack N. A Few Good Men. Nobel prize for Daniel Ellsberg.


Not a bad idea...

Some of the "provinces" of the New Roman Empire may indeed be starting to panic... in particular when they take a look at what is happening in the "New Rome".

The Occidental World (led by the US) is currently relying on a highly mechanized army (and on private and public mercenaries: not paid the same salaries) for its defense and for securing all the critical strategic resources, in particular oil, that it needs to maintain its standard of living.

In that regard, it is important to note that the operation of such a highly mechanized army is highly dependent on the availability of oil...

The day that massive quantities of oil are no longer available to power this highly mechanized army is the day when all those who are currently pressing at the gates will simply flood in and take over.


This appears to be a very early draft. For instance, the coverage of transportation needs to be greatly expanded - the idea that electric transportation doesn't exist is remarkably unrealistic - there are both electric trucks and rail (rail is obviously better for long distances), and water shipping can and will move away from oil.

They need to light a fire under the move to standardize and expand rail in Europe, which is moving very slowly at the moment. Right now trucks carry the majority of European freight, unlike the US.

It's time for Europe to kick it's oil addiction, as it is for the US.

I believe that the instantaneous direct connections of the Internet change everything, not least in terms of market architecture.

I wrote my conclusions about the shape of a networked Market 3.0 around ten years ago, and everything I have seen since then reinforces my optimistic view of the transformational role of the emerging Knowledge Economy.

I have made a couple of presentations re global energy markets and strategy to defence/intelligence oriented Think Tanks, as well as giving evidence post-'Spike' to the UK parliament's Treasury Select Committee.

This recent presentation was to a seminar at the UK's principal defence think tank on the subject of the potential effects of renewable energy on global energy security generally, and the Middle East and Iran in particular.

I see the potential for technology transfer in exchange for carbon fuels, essentially at nil cost to producers, the technology being paid for with the energy value of the carbon it saves.

In my view the first requirement to implement such a market model is the 'unitisation' or 'monetisation' of energy. So we will see (transitional) carbon currencies based on the intrinsic energy value of carbon rather than intrinsically worthless carbon in C02, and a gradual move to other energy currencies and to energy accounting using an energy benchmark or unit of measure.

Secondly, the requirement is for networked dis-intermediated markets within a global collaborative framework agreement. There is no reason whatever why energy producer nations and consumer nations such as China and India could not impose such 'peer to peer' markets on the 'Anglo' nations whose financial intermediaries collectively have been directly responsible both for the shit we are in and for our ludicrously dysfunctional energy markets.

Existing intermediaries such as IOCs will become service providers or go out of business. In fact we have been seeing a transition of IOCs towards a service provider model for many years now. The advantage for IOCs - and credit intermediaries aka banks for that matter - of a P2P model is that capital requirements for service provision are minimal compared to those for intermediaries.

The way I see it NOCs will be able to raise the necessary capital simply by 'unitising'/ 'monetising' future production and selling it to energy investors and/or exchanging it directly for technology. This monetisation of oil has been pretty much exactly what has been going on in the oil market overtly (Shell/ETF Securities) since 2005, and probably opaquely before that (BP/Goldman); and currently in all probability right now by Saudi Arabia.

I believe that the instantaneous direct connections of the Internet change everything, not least in terms of market architecture.

Yes, I can agree the Internet is going to be important.

I wrote my conclusions about the shape of a networked Market 3.0 around ten years ago, and everything I have seen since then reinforces my optimistic view of the transformational role of the emerging Knowledge Economy.

Err, you seem to have missed the collapse, that resulted from the virtualization of trading, and the illusions that can thus be too easily created ?!.

Given the fundamentals of human greed, and the complete trust in the intangible, you thus create something that is unconditionally unstable.

If you decouple from reality, and have no designed-in stability, there can only be one outcome.

CrisCook -

I'm afraid I don't quite understand some of the jargon you've used in this comment.

First, I'm not quite sure what you mean by 'peer to peer markets'. Or is this just another name for some sort of bilateral arrangements rather than outright sales?

Second, what exactly takes place when one is 'unitising/monitising' future energy production? Is this just a form or selling energy futures, or something more elaborate?

Nor do I quite get this notion of exchanging technology for energy. Given the instantaneous direct connections of the internet and the sea of information the world is now swimming in, it is very difficult these days to maintain a proprietary technological edge for very long. Technology has become sort of a commodity that one easily buys by the pound. This is why countries that were not so long ago considered Third World have been doing things like putting satellites into orbit.

As a general comment, as far as markets go I would have to say that an argument could easily be made that instantaneous communications has made things worse rather than better and has been responsible for some of the recent financial crises. It has made large-scale speculation and manipulation much easier, and has injected a level of unreality into the markets, such as in the form of high-speed algorithmic trading, credit default swaps, and all sorts of other financial games that have little bearing on actual physical goods changing hands. If everybody had to do these things in longhand using a quill pen, a lot of this gaming the system would not have been possible, or at least not as easy.

What is it that I'm not seeing here?

Given the expected decline in German energy consumption

Germany average YOY shifts in petroleum consumption, 2000-2008:

Total -29.86
Gasoline -25.04
Jet Fuel 5.03
Kerosene -0.04
Distillate -7.49
Resid 3.03
LPG 2.06
Other -6.97
ResidBunker 1.86
DistBunker -0.1
Dist-Bunker -7.39
Dist-Bunker-Gas -32.43

Data from EIA, who provide separate numbers for resid and distillate use as bunker fuel, hence the "Dist-Bunker-Gas," which shows that they are overall utilizing less transportation fuel over time. 2000 is an appropriate choice for a starting point as Germany has seen double digit declines in gasoline in this year and every year since, owing to the switchover to diesel powered vehicles and other forms of transport.

The gain in resid is unusual, as this has been first choice among many other industrialized nations for phasing out unneeded petroleum consumption. Germany's increase in its use would be indicative of its strong dependence on exports, I'd imagine. Over the full range of EIA data, 1984-2008, resid averaged -4.76 YOY.

Germany declined -132.29 in total consumption for 2009. Curiously enough 2007 showed an even sharper decline of -220.83, owing to a big loss in distillates - high fuel prices discouraging motorists?

According to the EIA , German oil consumption peaked in 1998. It has fallen from 2,923.0 Kbpd in 1998 to 2,437.0 kbpd in 2009, for a decline of -16.6%.

Meanwhile, German GDP has grown during the same period from €1965.38 bn to €2409.10 bn ( ) for total growth of 22.6%.

That tells us something about whether it's possible to grow economically while reducing oil consumption.

That tells us something about whether it's possible to grow economically while reducing oil consumption.

It does show nicely, that they are not tightly coupled.

Of course, the Oil reduction is in what I'd call the Elasticity Zone, the real test will be if they can continue on that trajectory.

Germany was the worlds largest exporter.

the real test will be if they can continue on that trajectory.

Yes, they'll have to start moving from diesel cars to EREVs, and they'll have to get serious about moving from trucks to rail for freight.

Germany declined -132.29 in total consumption for 2009. Curiously enough 2007 showed an even sharper decline of -220.83, owing to a big loss in distillates - high fuel prices discouraging motorists?

I remember reading something about bargain prices for heating oil at that time. People stocked up and didn't have to buy as much later on.

I've been weaning my family off of oil for several years and made some short videos showing people what they can do... I attached one here....


In accordance with the Senate of Berlin, the power company Vattenfall has announced plans to increase the production of biomass energy – by employing tropical wood as source material for new german power plants. One million tons of timber will be needed and Liberia's rubber plantations are supposed to fill in, without thinking about the impact on the environment, the encouragement of rubber cultivation, the prospect of an ever increasing market demand for tropical timber.

All the more reason to hope that LNER can offer us abundant energy.
1 cupfull of petrol (Gasoline) will raise 1 tonne through 1 km.

1 cupfull of deuterium will raise the same mass through 4 million kms if the effect due to the weak force.
If it is due to the strong force it will raise the mass through 8 million kms.

I cannot imagine that any of this comes as a startling revelation to the Bundeswehr.

My impression is that the aggression of both Germany and Japan in WW2 were to secure oil.
I also believe their failure to secure oil contributed significantly to their defeat.

So why the public fanfare?
Was this fruit "stolen" so it tastes sweeter?
For whom was it intended and for what reason?
Is it pap for the chattering class(us)?

I hope this is not a re-post, if it is pls delete the earlier post. It was here and then gone when I went back to proof-read it. Poof!

Let us not forget Iraq's WMD's. They did have them. They were not chemical or biological or nuclear, (at least none were found), but economic. Saddam wanted to start trading oil on the Euro instead of the Dollar. So the US took him out. Iran is now considering(or maybe already is, I'm not sure) doing the same thing. Will the US go to war again over the Petro Dollar? My guess is yes, though Iran is a much harder fight then Iraq and war there will put the US and Russia at odds once again. How would the US do in an even fight with technology comparable to it's own? The Russians will supply Iran with state of the art equipment (Stealth).
I'm glad I'm too old to be drafted.
They will no doubt call the war's cause the nuclear threat that Iran poses (to us in the US? nope, to Israel), but maybe that threat is only as real as Iraq's WMD's? Even if Iran get's the bomb, would they be stupid enough to use it? As they are religious zealots, some think they might, but a politician is a politician all around the world so putting your country and your power at risk with no gain is not usually done. Religion is a mask that politicians around the world use to gain support, but when the chips are down, they do what is best for their own gain, not their religions gain or the good of the people. Kinda off topic but... Economics makes our world the way it is as much as physical reality does. What is the real value of a perfect diamond? If I had 10 Hope diamonds think of how much research I could fund? Will it get me to work or feed me?
This is not the forum to talk about fears of the next big war, but a pre-emptive strike against Iran from Israel is almost a given in the next six months. Back on topic, what would such a war that could disrupt the entire middle east do to PO forecasts? Not a pretty picture.
Was the Iraq war over the petro dollar? Maybe not, but I think it was certainly a factor.

Edit: This is only my opinion, so I did not sight sources and back up my statements. What source can I sight for "Religion is a mask that politicians around the world use to gain support, but when the chips are down, they do what is best for their own gain" except my own personnel observations. What are your personnel observations on this subject? :-)

With Cheney out of the Oval Office, war footings have changed considerably. However, the nuclear capability of Iran is another aspect altogether...

I am enjoying how the posters on this thread are dancing around the reality of what basic instincts we would revert to with the loss of cheap energy. "Back to fighting like cats in a sack" as Monbiot says.
The worries of what the "world opinion" might be will disappear. Tribes decimated other tribes in the past to retain sufficient resources, whether they be monkey hunting grounds, corn cultivating areas, or whatever. We will do the same.
As someone who has smelled the odor of wartime reality, I am sure that we will use any and all at our disposal to retain our way of life. Our militaries will commandeer whatever they need.
As tribes we continue to retain the ability to separate ourselves from others in order to justify this necessary wartime activity. Today it is countries and races and religions. Or if those are not conveniently in play, we find other differences to exploit. Doubt me? How about how Canadians refer to the "Newfies" or those in Holland relegate the Frieslanders to positions of inferiority. The Belgians do the same to those in the north. It is hard wired in us, after thousands of years of fighting off those who would take our food or other important resources. It is why we stayed at less than 1 billion for thousands of years.
We don't need to do it now, we have cheap energy to allow us the largess we enjoy, but we still do it, and we will do it again as the largess shrinks. Don't kid yourself. We are nothing but intelligent coveting apes.

North American anthropology has shown waves of new people coming here and being wiped out or assimilated. Some things never change...As to the last part of your post... Intelligent? I see no evidence of that! :-)
Edit: I have "Thin-telligence" I look out for me and mine only and screw the rest of the planet. That seems to be the BAU train of thought.

treeman -- Interesting perspective. And let's not forget those pesky Texacans and their alledged right to withdraw from the union. The Texas Rail Road Commision still has OPEC like power to restrict oil production in the state. The "allowable' has been set monthly at 100% since the 1970's. But the TRRC meets every month and votes on the allowable. If they meet one month and decide for whatever reason they want production from all Texas oil wells to be cut 50% all they have to do is pass the vote. And then sit back and wait for the Mother of All Legal Battles with the feds. And lets not forget that Texas and La. have a huge percentage of the US refinery capacity. One day either state may decide the pipeline systems transporting products to the NE are unsafe and decide to impose a moratorium on shiments. Of course, it would take rather extreme circumstances to come to that point. But the worse case scenario of PO could be extreme. Not a pleasant thought picturing the US Army facing the Texas National Guard at the state border some day.


You know, I used to dismiss all of these people advocating state secession from the federal government as just a right-wing fringe element engaged in delusional wishful thinking. But it appears that the notion is beginning to get some traction, particularly since issues like immigration, drug legalization, and rejection of federal authority in certain state matters are getting increased attention. Increasingly tough economic times naturally increases resentment of the federal government. The result will be increasing doubts about the government's very legitimacy. That combined with a growing ugly mood out there, could serve as the catalyst for some sort of defining event involving a showdown between federal marshals and local law enforcement.

Maybe official outright secession won't take place, but rather an understanding the the feds will keep their noses out of things in places like Texas, California, or Arizona and will not challenge local laws.

There are of course some very thorny issues associated with a state actually seceding. Do the residents of such a state still receive Social Security and Medicare benefits? Will, the FBI no longer investigate racketeering in the state? What about homeland, security? However, I think a growing number of people will decide they'd be better off being cut loose from the federal government, whom they view as one big parasite.

All good points. One minor quibble I have (and it's not your fault);

I am sure that we will use any and all at our disposal to retain our way of life.

I would replace the last 3 words with one - 'lifestyle'

The American Way of Life centers around freedom of speech, democracy, family, community, volunteering to improve the quality of life for others, self-determination, and a host of other principles the Founders communicated in the Declaration of Independence and other writings.

Large houses, gas guzzling cars/SUVs, energy hog TVs, obesity, and other hedonistic practices are lifestyles. Let's help to keep the distinction aboveboard.

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.

Perhaps you underestimate the importance that Americans place on the pursuit of Happiness.

I don't, I merely made the point distinguishing lifestyle vs. 'way of life'.

Since the "pursuit of happiness" is in the Declaration of Independence, the hedonistic practices are clearly part of the American Way Of Life.

We'll agree to disagree about the semantics.

Yes "treeman" you are absolutely right. A deeper reading of past history and critical analysis of recent times show that we are just Overeating Apes :-)

meat eating apes with big brains that can make almost all portions of the planet their habitat--not many other ape species that far from the tropics these days. We will only learn so much about ourselves studying apes--the hominid diverged from the apes maybe seven million years ago, a very significant portion of the 35 million years or so apes have diverged from monkeys.

I mean we do have that reptilian brain core but how much about ourselves to we learn from studying lizards--well then again maybe we can learn a lot about ourselves from lizard

couldn't find a pic of stacey the lizard but what better way than to bow out
'Nice Dreams'

Some suggestions for German Public Policy

Look seriously at what needs to be done to move freight from truck to electrified rail. This is the MOST critical issue facing Germany !

Wind can be expanded somewhat (now 7%, perhaps 8% of generation), solar has more potential (now 2%, potential perhaps 25% of total generation, but at the wrong time !). Limited geothermal and bio-mass possible. Hydro is about 3% and lots of small & very small hydro might grow that to 4%.

Germany is a leader in conservation and efficiency, but more can be done. Certainly another -10% in demand for the same economic activity (some is already scheduled with existing programs, see outlawing incandescents, step by step and appliance standards).

Beyond that, build much more pumped storage to reduce the need for natural gas and start working on more nuclear. The quickest is to sign a long term agreement with EdF and have them start on, say, 3 to 5 EPRs not far from the Rhine. Luxembourg is another possibility. Perhaps a few more in Poland with joint Polish-German ownership (Germany owns half of four EPRs in Poland = 3.2 GW for Germany & 3.2 GW for Poland). And then look at more German reactors.

Significantly expand natural gas storage (keep at least 1 years worth of reduced demand on hand) and LNG import capacity. Make a deal with Dutch and/or Norwegians to buy gas in the ground and leave it there.

Look to Copenhagen and Amsterdam for models on how to increase bicycling. Promote eBikes and eTrikes.

Expand the already excellent tram system. Basically build on the edges, fill gaps, etc. as much as possible.

Steadily remove lanes from autobahns, highways and major streets. Get people and freight out of oil-burning vehicles.

Pressure VW, BMW, Daimler Benz, Opel, D-Ford to build electric cars and trucks (for local delivery).

Increase gas, diesel and aviation taxes significantly (perhaps phase in over next 6 or so years to allow people to adjust). Three euros/liter and then four, and five "later".

Sweden and Germany are the two world leaders in efficiency standards for new construction, and research leaders as well (PassivHaus). Still, very good can still be improved and retrofitting existing construction can become a priority.

Best Hopes for Germany,


All good points, though if I can offer a slightly different perspective on one aspect of one point;

Geothermal resources in Germany are actually quite good.

Most points are valid, but there are a couple of strange ones...

Steadily remove lanes from autobahns, highways and major streets.

Why ? That's a LOT of cost, not to mention the good-will train-wreck, of trips taking longer, and the removal of something already paid for...

Increase gas, diesel and aviation taxes significantly (perhaps phase in over next 6 or so years to allow people to adjust). Three euros/liter and then four, and five "later".

Be very careful giving this sort of advice :)
Politicians love any excuse to hike taxes, and flat taxes are very inefficient, and also waste good will.

Smarter is a differential system, that pushes consumers.

Example: A small impost is added to fuel, used to finance faster-migrations to the desired fleet. Be it Hybrid, or higher Electric, whatever, but it needs focus, and needs a tangible target.

Taxes just get passed on, and nothing changes.

Indeed, overtaxed buyers can afford to upgrade LESS often, so the Politicians can easily deliver a result worse than useless.

Steadily remove lanes from autobahns, highways and major streets.

Why ? That's a LOT of cost, not to mention the good-will train-wreck, of trips taking longer, and the removal of something already paid for...

He missed Part 2 of that solution: and replace them with electric rail

A well-designed 2-track light rail transit system has the capacity of about 16 lanes of freeway, so it can solve a lot of congestion problems. Take 2 lanes off a 6-lane freeway, drop rail tracks into them, add the other necessary infrastructure, and you have the equivalent of a 20-lane freeway. See the Transportation Research Board's Highway Capacity Manual and Transit Capacity Manual for the details.

And then there's the equally necessary Part 3: Introduce congestion pricing on the roads.

The problems with traffic jams and inadequate money to maintain roads are really just Tragedy of the Commons type of problems. The problem arises because freeways are free - people don't pay enough money to drive on them. Just put tolls on the roads, set a price high enough, and the problems will go away. If oil supply is a problem, just set the price even higher and use the money to replace road lanes with electric rail tracks. It's Economics 101.

It's really a no-brainer solution, but it appears to be politically infeasible in the US given the power of the automobile and petroleum lobbies. Americans think they have a constitutional right to free driving and free parking. However, it has been tried other places, and does work. So, Americans will have to continue driving on congested freeways burning gasoline they cannot afford, while people in other places will take the electric trains. I've been many of those other places, and they are quite pleasant places to travel - if you don't want to drive.

I've been many of those other places, and they are quite pleasant places to travel - if you don't want to drive

But were those places built out to a massive 'auto only' accessible sprawl first? Canada blew me away with packed bumper to bumper traffic exiting Winnipeg (the eastbound lane to Winnipeg was pretty much empty and our French speaking Gray Goose hockey playing driver finally just kept up in that one forcing his way in to the westbound as needed to make time) for scores of miles on Easter weekend back in the mid 1970s. Has Canada made a significant switch to light rail or is it still trying to follow our unenlightened lead. Well its an oil exporter so for the moment 'no worries' I guess but that can come back and bite you before you know it.

The closing lanes to put light rail on the freeway is one thing--but a truly user friendly public transport system to feed the big light rail lines is the real challenge. Nick would of course say 'Volt' to the rescue--I'm thinking that assumes the kind of economic growth we've been swaddled in, and that is hardly a given.

A country by country world graphic of road miles, or maybe road lane miles, per capita (broken to paved and unpaved would even be better) and rail (broken down to light and heavy) miles per capita side by side might be most instructive--Nick that's your cue hope you are still monitoring this thread ?- ) Alan are you still out there? Those seem like numbers you just might have handy.

The closing lanes to put light rail on the freeway is one thing--but a truly user friendly public transport system to feed the big light rail lines is the real challenge.

Yes. Buses require a lot of fuel. Trolleys are more efficient, but they require more infrastructure. And, both are very labor-intensive, especially as system density falls at the edges, as I discuss below.

Nick would of course say 'Volt' to the rescue--I'm thinking that assumes the kind of economic growth we've been swaddled in, and that is hardly a given.

Rail is a much nicer way to travel, but I see no indication that it's cheaper than personal vehicles: personal vehicles are self-service, so they're more work for the passenger (and less safe), but cheaper to operate. IOW, no bus or train drivers. System costs are heavily dependent of utilization, so empty return trips, low-utilization night and weekend routes raise costs dramatically. The need for high utilization makes expanding a system into low-density areas very expensive.

In turn, that means that dramatically raising the use of mass transit means moving people out of existing housing into new, expensive urban transit-oriented housing. That's very, very slow and expensive.

So, EVs are the most practical route for most travel.

no arguement that the EV is the best candidate for more or less a continuation of BAU but again:

I'm thinking that assumes the kind of economic growth we've been swaddled in, and that is hardly a given

We will see how it plays--9.6% officially unemployed last number I heard, and we're adding more fed debt by the second. The only project I've been on lately that wasn't being constructed with government dollars was a refinery turnaround. Don't know exactly what that means--pretty small sample size--but from my peep hole it does affect the view.

Well, things are painful right now, it's true. Getting back to strong growth in the US does look difficult at the moment.

My point was that rail is even more expensive than EVs, so it will be even more impacted by a bad economy.

I think you are right on there. Any idea where there might be a decent easy to read graphic comparing miles of road lanes per capita at least in the more developed world? Wikipedia has an okay chart (kilometers) but I'm thinking that if done by lanes rather than road length the US system would be significantly more than 5 times the size of Canada's.

hhhmmm, I'd just be googling.

The US DOT puts out annual books which are available online, which are mighty useful.

Here's one way to start:

EVs are considerably more expensive, and require more to operates, bot systemically and individually. 20% of our grid to run EVs, <3% to run Urban Rail.

EV's are a less bad solution, Urban Rail is a good solution.

Best Hopes for NOT emphasizing EV's.



That assumes that we move half the population into Transit Oriented Development: that's trillions of dollars, and very, very slow. Mass transit systems built around existing housing patterns aren't any more energy-efficient than EVs, and cost considerably more to operate due to the need for drivers.

Roughly 1/3rd of the population wants to move into TOD. Let's provide the "T" and let the market provide the "OD".

Even if 4,000 sq ft McMansions are going for, say, $50,000, who will want them ?

$35,000 in repairs (that will not be reflected in the future sales price), a fortune to heat & cool, sky high property taxes for a crime ridden environment with terrible schools. TOOO MUCH HOUSE for an only child family. Potholes in all the roads. Big lawn to take care of (can't grow a garden, all the top soil was scrapped off). Nothing nearby, you are kind of ashamed to say at work that you live in the 'burbs, drive everywhere. Resale trends say that your down payment will disappear if you resell in less than a decade. No equity build-up till year 15 of 30 year mortgage.

A nice TOD condo sounds SO MUCH BETTER !

There is no contradiction in building TOD housing while boarding up Suburban McMansions.


Roughly 1/3rd of the population wants to move into TOD.

IIRC, that was a survey that tells us only that people kind've like the idea. It doesn't tell us what premium they're willing to pay for it.

Let's provide the "T" and let the market provide the "OD".

I agree. Just don't expect the "T" to be fast, and the market response to be as big as we might want.


As for the rest: suburban living costs are much lower for the same type of living. If suburbanites want more compact housing for lower costs, the logical choice is townhouses and condos in the suburbs.

replied to wrong person

well if push comes to shove the owner (who or whatever entity that might be) could subdivide the houses and let rooms--assuming there is any work with easy transport range of the house. A little chicken or the egg thing going on there. I guess turning the McMansions into a bunch of work houses and extended care facilities might be less ugly than deploying Soylent Green scoops--though they could serve as the final fattening pens on an operation that really produced the 'green.' Enough sci-fi. Vegas is over outbuilt big time--might be one of they places to watch.

Not really looking for the Dr. Zhivago post-revolution scenario in the burbs though. If we can limp forward for the next fifteen/twenty years things may work themselves out well enough. The forward part may be the tricky part. Like you say, that requires some true forward thinking public policy--something our election cycle doesn't seem to favor.

We have *WAY* too many square feet of badly built housing (and shopping) for such high density uses as you suppose.

Replace two empty nesters in a 4,000 sq ft McMansion with MORE people ? Where are those extra people going to come from ?

Board up and later demolish is the only rational alternative.


you don't want to hear where the population density could come from--and I'm definitely not promoting the idea (though it is pretty much what Memmel suggested after his quick Icelandic eruption induced trip around the world). Cheap labor doesn't have to be overseas if first Davis/Bacon and then minimum wage disappear. Tear down the gates (yes there are still some marginally functional gates) and the third world will fill any room we have built and tack endless shanties onto those. Then watch those suburbs start to produce crops.

Sci-fi? The inconsistency of the right wing's position in these areas (they truly hate the concept minimum wage and and claim to hate illegal immigration) is the real fiction here. The money behind that faction loves cheap labor the immigration issue is just kept up front to get the votes of the not so well informed financially strapped working class. If they really wanted to stop illegal immigration huge fines and strict enforcement would be directed at the employers not the peasants-many of whom are truly indentured-working for pennies. Come to think of it I believe you made exactly the same point months back.

Yes :-!

Employer sanctions are the most effective means of controlling immigration, and thye are relatively easy to enforce.

We may not catch all the illegal Canadians & Mexicans that chose to retire here, living off of their savings and pensions, but they would stop the rest.


Rail is a much nicer way to travel, but I see no indication that it's cheaper than personal vehicles: personal vehicles are self-service, so they're more work for the passenger (and less safe), but cheaper to operate. IOW, no bus or train drivers. System costs are heavily dependent of utilization, so empty return trips, low-utilization night and weekend routes raise costs dramatically. The need for high utilization makes expanding a system into low-density areas very expensive.

Nick, we have been down this road before. Light rail systems are cheap to operate, it is the initial cost that holds them back. The Sky train in Vancouver is a driverless train - very cheap to operate, but expensive to buy.
Calgary's C-train has the highest ridership in N. America and a cost per trip of about 27c (Rocky Mtn Guy has posted this before)
The maintenance on trains is much less than on the vehicle fleet it replaces.
Agreed that low density is a challenge, but that's when you can use an electricbus, like this;

If ever there was an application for a Better Place style battery swap out, it would be city fleet of electric buses,
Also, an intermediate solution is the electric trolley bus, cheap to add the wires to main streets.

As for moving the people out of their houses, that is not the only way. Sometimes it is easier to move the jobs closer to them. It is not too hard to move some office jobs out of downtown, or the ubiquitous "office parks" to regional transit hubs.

Transit may be a better way than driving to get from Oakland to San Francisco, but better still to restructure things so the trip is not needed in the first place. You are correct that restructuring can be slow, but that doesn't mean it's not a good thing, or that we shouldn't start.


I like rail. I use rail. I think we should expand it.


1) rail currently serves only a very small % of vehicle miles traveled, perhaps 4% in N America, and 8% in Europe (that doesn't include bus pax-miles, which aren't fuel-efficient). Expanding that will be very slow, whether we build rail where people live, or build housing around existing rail.

2) mass transit is expensive, because of the need for drivers, as well as major infrastructure. Look at any of the mass transit systems: I think you'll find overall costs of roughly $1 per passenger-mile: that's substantially higher than personal transportation (keep in mind that most rail requires supporting feeder buses or trolleys, which are much more expensive to operate, due to a much lower ratio of passengers to drivers). Those costs would rise very quickly if we tried to expand rail to serve a lot more people, either because of the cost of serving low-density areas, or because of the cost of building Transit-Oriented Housing.

Rail, or mass transit in general, simply can't be considered a primary solution to our transportation fuel problems.

Streetcars make good feeders into "heavy rail"/Rapid Rail.

The bulk of Suburbia is a lost cause. Poorly built, over-sized, massive infrastructure required to support it. Part of the infrastructure is shopping. Shopping space per capita is x10 what it was in 1950, and most of that increase has been in Suburbia.

A SWAG is that urban shopping is x3 1950 levels and Suburban shopping is x15 1950 levels.

Lets just spend the next 20 years doing what we did from 1950 to 1970, but in reverse.

We did it once, we CAN do it again :-)


Streetcars make good feeders into "heavy rail"/Rapid Rail.

True, and they're reasonably fuel efficient, but they require expensive drivers, that have to be provided 2x7.

The bulk of Suburbia is a lost cause.

After WWII we had a housing shortage, and now we have a severe housing oversupply. It makes no sense to build a lot of housing now, and we're not going to.

Part 3: Introduce congestion pricing on the roads.

The problems with traffic jams and inadequate money to maintain roads are really just Tragedy of the Commons type of problems. The problem arises because freeways are free - people don't pay enough money to drive on them. Just put tolls on the roads, set a price high enough, and the problems will go away. If oil supply is a problem, just set the price even higher and use the money to replace road lanes with electric rail tracks. It's Economics 101.

Your part 2 has some merit,
but Part 3 suffers from the common flaw of reflex solutions:

It fails to think things through.

If you want to move away FROM oil, you have to ensure there IS something to move TO.
Not ALL users can move at the same time.

Whacking on taxes/prices, with no pathways, is worse than useless.
You have mow made those users poorer, and now less able to afford mitigation.

It's as dumb as trying to fix a brain tumor, by constricting the flow of blood to the whole brain. In the strictest sense it works, but the collateral damage will not get the intern that does it, a pass mark!

So Simplistic Economics 101 needs to go in the trash, and be replaced with Practical Policy 607.

If you want the fleet to move away from oil, increases prices a little, and recirculate that money to push new buyers onto the best-mitigation solution at the time.
That differential design is working quite well with many countries Grid systems.

The recent oil spike shows, that price is actually a poor/clumsy usage driver: You get a large wealth transfer, and a slight consumption change.

The other danger of Economics 101, is Politics 101 has an even lower entry requirement, and there, 'Excuses for new taxes' are seen as a gift from heaven, and never carefully analyzed. So you get the tax, and nothing else happens.

Why ?

Germany already has the the alternative for moving people, and most of the alternative for moving freight. There is something to shift to !

Squeeze supply of lane-miles as a way of shifting travel demand to oil-free modes or reducing travel demand (both good).

Converting lanes to bike lanes so they do not go to waste, and will have very little maintenance costs.

You seem to forget that Germany has NO domestic oil production and we are past Peak Oil Exports. German public policy is not as infantile as US public policy. They can, and do act in their long term national interest, sacrificing immediate approval for the greater long term good.

So, here and there, take away 2 of the 6 or 8 lanes of an autobahn, turn a 4 lane street into a 2 or 3 lane street (reversible center lane) plus bike lanes and slowly squeeze the road supply as gas & diesel prices climb towards 4 euros per liter.

Best Hopes for Disciplined German public policy,


PS: Germany also has some Suburban sprawl that needs to be trimmed, or turned into commuter rail suburbs.

You have to put yourselves a moment in the place of the institute that wrote this report. They go out and gather already existing data as well as already existing analysis. This is just all rehashed once again with a few specifics added related to its impact for Germany and its military. There isn't much in this study that is either original data or original analysis. We are analyzing to a certain degree a report that has taken data from reports we all previously reviewed. We are all chewing on regurgitated cud of recycled data that we have already previously discussed.

The real good news is only that it is published by the Spiegel and that we see the evidence that data is reaching and penetrating more into existing institutions around the world.

But as Nate and others have often commented on there is a grand canyon that lies between the endless analysis and the applied mitigation by institutions.

Maybe because I read german and know the culture quite well that reading this had no mystique for me.
It's just another report with the same old data.

yeah but it corralled comments from some TOD's most informed, informative and readable posters--for that reason alone it is a most worthwhile post. The gardening discussion was well worth the price of admission in and of itself ?- )

still couldn't agree more with your point

"But as Nate and others have often commented on there is a grand canyon that lies between the endless analysis and the applied mitigation by institutions"

Related to marktes, the study explains that in the medium term a tipping point can be reached, where the whole economic system collapse.

This tipping point is, where all market participants realise that the economy will shrink for long time. At that savings are not invested anymore, because companies wont make any profits. The companies are unable to repay their depts. The banking system and the stock market crash.

In einer auf unbestimmte Zeit schrumpfenden Volkswirtschaft werden Ersparnisse nicht investiert, weil Unternehmen keine Gewinne machen. Unternehmen sind auf unbestimmte Zeit nicht mehr in der Lage, Fremdkapitalkosten zu zahlen oder Gewinne an Eigenkapitalgeber auszuschütten. Das Bankensystem, die Börsen und die Finanzmärkte insgesamt brechen zusammen.

They also state that after hyperinflation, money might lose its function as basis for trading. And at payment in kind it is difficult to keep the komplexity of modern production chains.

That brings me to my questions:
- How do you think, a working financial system could look like at a continiously shrinking economy?
- Is a gold standard a sufficient prerequisite for trading at constant oil deplation?

Keep in mind: this is not an independent, authoritative study. It's a literature search of possible risks, some of which are pretty flaky.

There's really no reason to think that PO will cause long-term financial decline.