A Century of Challenge

12 02 2012

We had the great privilege the other night of seeing Nicole Foss from Canada present her Century of Challenge lecture….  and what a polished performance!  Over 1 1/2 hours of stumble free oration, without a single second of emotional  drama, all factual, all presented in a way anyone could understand.  Even for someone as knowledgeable as I am, there wasn’t one second of boredom!  At the end, she got a deserving standing ovation….

Nicole Foss at the Big Pineapple, Nambour

My heartfelt thanks to the Transition Nambour folks who organised this, great job guys…. and the attendance was amazing, I estimate at least 300 people turned up, her biggest audience ever according to Nicole…!

The future belongs to the adaptable

To say we are in deep shit is an understatement.  I cannot understand how the morons in charge of running the world cannot at this late stage come out and say it; it is really beyond me… as Nicole said, they can kick the can down the road some more but they are running out of road.  Greece will default, no ifs no buts, it’s only a matter of time, it could easily happen this week.  It is mathematically impossible for Greece (or any other European country to repay its debts – it’s as clear as 1 + 1 = 2..)  Portugal will be next, and Ireland, Spain and Italy will follow suit.  The Euro, and the Eurozone, are finished.  And as the dominoes fall over one by one, the greatest depression will begin.  And make no mistake, Australia is not immune, globalisation has made sure of that.

Are you ready?  The future will have two kinds of people in it: the adaptable, and the rest.  Those who watch Days of our Lives, and those who listen to the likes of Nicole (and Chris Martenson, and James Howard Kunstler, and and and many other prophets all over the internet).

If you are in debt, it’s time to get out.  Nicole predicts that property values could easily fall to what they were in the 1970’s, that is to just 10% of their current bubble value.

Architecture of a housing bubble

Canada and Australia have much in common….  largely untouched by the GFC, with an economy that relies on abundant resources the rest of the world wants.  As long as they have money to pay for it.  China’s housing bubble is even worse than ours.  They have entire cities, all brand new, that are uninhabited…..  poor Chinese have no hope of ever buying apartments there, China’s capitalists are way past the stage they can recover their investments, or repay their debts.  When this bubble bursts, just watch the demand for our resources fall off a cliff.  But they keep saying “this time it’s different”.  It’s different alright… this time the depression will be global.

Here, our banks are raising their interest rates, even though the Federal Reserve is lowering the cash rate.  This is a very bad sign in my opinion.  Australian banks have to raise an important proportion of their funding from overseas and the deep crisis in Europe means that the cost of borrowing money in those international markets has risen to levels not seen since the GFC. The RBA cannot influence the price of money internationally.

Just think about what this means… anyone worried about not being able to meet their commitments may decide to sell.  As  more and more houses hit the market, there are fewer and fewer buyers, worried that if they borrow, their interest rates may rise and sink them too.  So prices fall.  As prices fall, more people stake out sale signs on the footpath, worried that their investment is going pear shaped.  So prices fall some more…

Eventually, many people end up owing more than their properties are worth, called being “underwater” in the US.  It has happened before, in the 1930’s great depression.  My mother in law’s parents lost everything like this at the time.  Don’t think it can’t happen again.

As Nicole pointed out, all this depressing stuff occurred at a time resources were plentiful, and cheap.  There were no excuses for growth to not occur, except that it is money that oils the cogs of the economy, and without money, everything grinds to a halt….

Now imagine what happens when, after much deleveraging, this idiotic system tries to put the pedal to the metal again only to discover the energy to do it with is no longer there.  As one last item to depress you, here is a little something I found on the internet the other day.  It is a spreadsheet from a government website http://www.ret.gov.au/resources/fuels/aps/Pages/default.aspx

See those red numbers at the bottom…..  that’s our depletion rate.  TWENTY SIX POINT SIX PERCENT PER ANNUM!  Still don’t believe we’ll run out of oil before 2020…?

Table 1A. Petroleum Production, Australia



Crude Oil Condensate Total Crude Oil and Condensate
megalitres megalitres 000 bbls / day
2008-09 20,106 7,680 27,785 479
2009-10 17,497 8,896 26,393 455
2010-11 13,231 8,426 21,657 373

November 2010 1,196 704 1,900 398
December 2010 1,101 725 1,826 371
January 2011 851 721 1,572 319
February 2011 840 590 1,431 321
March 2011 1,027 640 1,667 338
April 2011 995 675 1,670 350
May 2011 1,036 661 1,696 344
June 2011 843 661 1,504 315
July 2011 793 661 1,454 295
August 2011 989 709 1,698 345
September 2011 1,071 581 1,652 346
October 2011 1,122 632 1,754 356
November 2011 1,127 668 1,795 376
December 2011 1,182 658 1,839 373
Percentage change on year-to-date



Fiscal -17.8 -12.7 -15.9
Calendar

-26.6

-10.2 -20.9
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Are we there yet? revisited

6 02 2012

In December 2011, I posted a Post Carbon Institute video entitled “Are we there yet”.  A visitor called Ed posted a very long winded reply, which whilst it totally disagrees with everything I believe in, I allowed in the interest of free speech and all that…. you can read it under the video here.  Because it is so long, and because it raises lots of interesting points, I decided to address it here as a new post rather than another long winded reply to a comment.

Ed, if I may say so, slots into my Conspiracy Theory Believer type. But here goes….

Yes Ed, life expectancy is much higher now than say 100 years ago, and it’s all down to Fossil Fuels.  When everyone has 200 slaves working for them, it allows them to specialise considerably, so we have specialists who turn oil into drugs, into MRI machines, into food, into air conditioners, ambulances, fire fighting helicopters, the list is very very long…  That’s why everything will change a lot post Peak Everything.  Having said that, I believe this will not last as a whole generation of young people will die even before their parents from malnutrition.  When I see what people put in their shopping trolleys believing it to be food, I just shudder…..

Ed says “there is more oil on the market now than ever before”.  Well…. yes and no.  There is less “conventional oil” than ever before plus a rising amount (for the time being) of “unconventional oil”.  Big difference.  The net energy of “conventional oil” is currently about five times bigger than that of “unconventional oil”.  I cannot stress how important this is.  Yes we can make oil (and gas) out of coal, waste plastic, horse shit, almost anything that contains Carbon and Hydrogen atoms…. but unlike oil that comes out of the ground for FREE (well, almost for free), all those alternatives have to be manufactured.

Check this out….. :

See that blue stuff…?  It’s SURPLUS ENERGY.  It’s the energy we currently run the world with.  Now when the surplus is even as low as 80%, there’s loads more blue stuff than red stuff (which is the energy input for making the blue stuff).  Think of it as a tax; you take home the blue money, and government taxes you the red money.

NOW…  and this is the crucial bit, as we roll over the energy cliff, some of those things you talk about with glee, desalination, methanol, alcohol, hydrogen, all have very low net energy, maybe under 50%.  That’s like your income being taxed 50%!  Now you don’t have to be Einstein to realise that if you go home with only half your pay, you won’t be able to do anywhere near as much with your money as you did before.  And so it is with energy…. it’s not how much is left that matters, it’s how much energy “tax” (NOT like a Carbon tax I hasten to say) Geology and Physics will take away from you…

Even Deep Sea Drilling is becoming unviable now.  The Deepwater Horizon failure is a classic case in hand.  For what was basically just one and a half days’ worth of global oil production, BP cut corners to drill a mile below the sea, and another mile below the bottom.  They cut corners because they could not sell this oil for $200 a barrel (just picking numbers out of the air I know), and at “just” $100/barrel, there was insufficient profit in it for them to spend the extra billions to ensure the safety of the operation.  I predict many more such disasters in the future…

Ed further states “We are forced to wired (sic) into the electric company, we are forced to buy fuel from the makers of the fuel.”

This isn’t true.  Nobody forces you to do anything.  My old boss Ernest has a house in suburbia that is not wired to the grid, and runs a stand alone solar power system.  We are wired to the grid to actually make money!  We profit from “the Matrix”!  And nobody makes you own a car or buy fuel for it.  I didn’t own a car for six years and survived… and BTW, we do not have a generator to keep the lights on when the grid fails, we have backup solar power.  Have you bothered to read the wealth of information I have freely distributed on this blog Ed?

Regarding desalination, I am totally opposed to the idea.  I must admit, I had never thought of where ships get their fresh water from, but a ship is a totally different proposition to a town or city.  It’s an ideal place to desalinate when surrounded by salt water with a huge source of waste heat in the engine room called a diesel engine (or two or three or four!)  Desal requires huge amounts of energy, and that we are now attempting to keep growth going by using such idiotic technology is a symptom of humanity having hit limits to growth…..  We are so clever….

“Peak oil only exist because Governments regulate it” continues Ed….  Really Ed… the government wants to crash the economy by restricting oil supply through regulation?  I know they’re all morons, but this bad?  If this were true, why are governments everywhere pushing all this mad fracking business to get oil and gas trapped in rocks thousands of feet below the ground, poisoning the water so we can use the fracked gas to power desalination plants?  Fun?  I call it clutching at straws.

The problems with cars is not that they are not diesel electric (Chevy’s Volt is a petrol electric BTW…) but that they are too big, and designed to go way too fast…  And while I hear you re diesel vehicles, you may be surprised to learn that it’s an American problem; in Europe they already build small diesel cars that easily do 75 MPG.

Now to the reason your road and pipeline infrastructure is crumbling…  This is a typical symptom of Limits to Growth.  I know you’ll believe this is more propaganda Ed, but you see, we have reached the stage where old infrastructure has to be replaced at the same time as new stuff has to also be built to keep up with “growth”  Worse, as we run out of “conventional oil”, new infrastructure to replace it has to also be built.  You know, like those pesky wind farms and solar power stations…  And all this development is generated with debt, just as we fast approach Peak Debt.

I don’t need the government to tell me everything’s falling apart…. it all makes perfect sense, it was in fact predicted by the Club of Rome way back in 1972.  Am I the only person capable of critical thinking?  Ooops…  sorry, didn’t mean to insult my readership!

Fact is the morons in charge cannot do a thing about it, it’s all too late, the Exponential Function has us by the balls…  like the exponential event in a nuclear explosion, the Matrix is right on course to blow up in our collective faces.  Hang onto your hat Ed, you’re in for the ride of your life!