Chris Martenson on insanity

5 08 2017

Published on 4 Aug 2017

Read the latest articles at Peak Prosperity: https://www.peakprosperity.com/

Our Brave New ”’Markets”’
https://www.peakprosperity.com/blog/1…

The Inevitability Of DeGrowth
https://www.peakprosperity.com/blog/1…

Suicide By Pesticide
https://www.peakprosperity.com/inside…

View the “Accelerated” Crash Course Here: https://www.youtube.com/watch?v=pYyugz5wcrI





The Dynamics of Depletion

27 06 2017

Originally published on the Automatic Earth, this further article on ERoEI and resource depletion ties all the things you need to understand about Limits to Growth in one neat package. 

Over the years, I have written many articles on the topic of EROEI (Energy Return on Energy Invested); there’s a whole chapter on it in the Automatic Earth Primer Guide 2017 that Nicole Foss assembled recently, which contains 17 well worth reading articles.

Since EROEI is still the most important energy issue there is, and not the price of oil or some new gas find or a set of windmills or solar panels or thorium as the media will lead you to believe, it can’t hurt to repeat it once again. Brian Davey wrote this item on his site CredoEconomics, it is part of his book “Credo”.

The reason I believe it can’t hurt to repeat this is because not nearly enough people understand that in the end, everything, the survival of our world, our way of life, is all about the ‘quality’ of energy, and about what we get in return when we drill and pump and build infrastructure; what remains when we subtract all the energy used to ‘generate’ energy, from (or at) the bottom line is all that’s left…….

nicolefoss

Nicole Foss

Nicole Foss: Energy is the master resource – the capacity to do work. Our modern society is the result of the enormous energy subsidy we have enjoyed in the form of fossil fuels, specifically fossil fuels with a very high energy profit ratio (EROEI). Energy surplus drove expansion, intensification, and the development of socioeconomic complexity, but now we stand on the edge of the net energy cliff. The surplus energy, beyond that which has to be reinvested in future energy production, is rapidly diminishing.

We would have to greatly increase gross production to make up for reduced energy profit ratio, but production is flat to falling so this is no longer an option. As both gross production and the energy profit ratio fall, the net energy available for all society’s other purposes will fall even more quickly than gross production declines would suggest. Every society rests on a minimum energy profit ratio. The implication of falling below that minimum for industrial society, as we are now poised to do, is that society will be forced to simplify.

A plethora of energy fantasies is making the rounds at the moment. Whether based on unconventional oil and gas or renewables (that are not actually renewable), these are stories we tell ourselves in order to deny that we are facing any kind of future energy scarcity, or that supply could be in any way a concern. They are an attempt to maintain the fiction that our society can continue in its current form, or even increase in complexity. This is a vain attempt to deny the existence of non-negotiable limits to growth. The touted alternatives are not energy sources for our current society, because low EROEI energy sources cannot sustain a society complex enough to produce them.

 

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 

Using Energy to Extract Energy – The Dynamics of Depletion

 

brian-selfie

Brian Davey

Brian Davey: The “Limits to Growth Study” of 1972 was deeply controversial and criticised by many economists. Over 40 years later, it seems remarkably prophetic and on track in its predictions. The crucial concept of Energy Return on Energy Invested is explained and the flaws in neoclassical reasoning which EROI highlights.

The continued functioning of the energy system is a “hub interdependency” that has become essential to the management of the increasing complexity of our society. The energy input into the UK economy is about 50 to 70 times as great as what the labour force could generate if working full time only with the power of their muscles, fuelled up with food. It is fossil fuels, refined to be used in vehicles and motors or converted into electricity that have created power inputs that makes possible the multiple round- about arrangements in a high complex economy. The other “hub interdependency” is a money and transaction system for exchange which has to continue to function to make vast production and trade networks viable. Without payment systems nothing functions.

Yet, as I will show, both types of hub interdependencies could conceivably fail. The smooth running of the energy system is dependent on ample supplies of cheaply available fossil fuels. However, there has been a rising cost of extracting and refining oil, gas and coal. Quite soon there is likely to be an absolute decline in their availability. To this should be added the climatic consequences of burning more carbon based fuels. To make the situation even worse, if the economy gets into difficulty because of rising energy costs then so too will the financial system – which can then have a knock-on consequence for the money system. The two hub interdependencies could break down together.

“Solutions” put forward by the techno optimists almost always assume growing complexity and new uses for energy with an increased energy cost. But this begs the question- because the problem is the growing cost of energy and its polluting and climate changing consequences.

 

The “Limits to Growth” study of 1972 – and its 40 year after evaluation

It was a view similar to this that underpinned the methodology of a famous study from the early 1970s. A group called the Club of Rome decided to commission a group of system scientists at the Massachusetts Institute of Technology to explore how far economic growth would continue to be possible. Their research used a series of computer model runs based on various scenarios of the future. It was published in 1972 and produced an instant storm. Most economists were up in arms that their shibboleth, economic growth, had been challenged. (Meadows, Meadows, Randers, & BehrensIII, 1972)

This was because its message was that growth could continue for some time by running down “natural capital” (depletion) and degrading “ecological system services” (pollution) but that it could not go on forever. An analogy would be spending more than one earns. This is possible as long as one has savings to run down, or by running up debts payable in the future. However, a day of reckoning inevitably occurs. The MIT scientists ran a number of computer generated scenarios of the future including a “business as usual” projection, called the “standard run” which hit a global crisis in 2030.

It is now over 40 years since the original Limits to Growth study was published so it is legitimate to compare what was predicted in 1972 against what actually happened. This has now been done twice by Graham Turner who works at the Australian Commonwealth Scientific and Industrial Research Organisation (CSIRO). Turner did this with data for the rst 30 years and then for 40 years of data. His conclusion is as follows:

The Limits to Growth standard run scenario produced 40 years ago continues to align well with historical data that has been updated in this paper following a 30-year comparison by the author. The scenario results in collapse of the global economy and environment and subsequently, the population. Although the modelled fall in population occurs after about 2030 – with death rates reversing contemporary trends and rising from 2020 onward – the general onset of collapse first appears at about 2015 when per capita industrial output begins a sharp decline. (Turner, 2012)

So what brings about the collapse? In the Limits to Growth model there are essentially two kinds of limiting restraints. On the one hand, limitations on resource inputs (materials and energy). On the other hand, waste/pollution restraints which degrade the ecological system and human society (particularly climate change).

Turner finds that, so far it, is the former rather than the latter that is the more important. What happens is that, as resources like fossil fuels deplete, they become more expensive to extract. More industrial output has to be set aside for the extraction process and less industrial output is available for other purposes.

With signficant capital subsequently going into resource extraction, there is insufficient available to fully replace degrading capital within the industrial sector itself. Consequently, despite heightened industrial activity attempting to satisfy multiple demands from all sectors and the population, actual industrial output per capita begins to fall precipitously, from about 2015, while pollution from the industrial activity continues to grow. The reduction of inputs produced per capita. Similarly, services (e.g., health and education) are not maintained due to insufficient capital and inputs.

Diminishing per capita supply of services and food cause a rise in the death rate from about 2020 (and somewhat lower rise in the birth rate, due to reduced birth control options). The global population therefore falls, at about half a billion per decade, starting at about 2030. Following the collapse, the output of the World3 model for the standard run (figure 1 to figure 3) shows that average living standards for the aggregate population (material wealth, food and services per capita) resemble those of the early 20th century. (Turner, 2012, p. 121)

 

Energy Return on Energy Invested

A similar analysis has been made by Hall and Klitgaard. They argue that to run a modern society it is necessary that the energy return on energy invested must be at least 15 to 1. To understand why this should be so consider the following diagram from a lecture by Hall. (Hall, 2012)

eroei

The diagram illustrates the idea of the energy return on energy invested. For every 100 Mega Joules of energy tapped in an oil flow from a well, 10 MJ are needed to tap the well, leaving 90 MJ. A narrow measure of energy returned on energy invested at the wellhead in this example would therefore be 100 to 10 or 10 to 1.

However, to get a fuller picture we have to extend this kind of analysis. Of the net energy at the wellhead, 90 MJ, some energy has to be used to refine the oil and produce the by-products, leaving only 63 MJ.

Then, to transport the refined product to its point of use takes another 5 MJ leaving 58MJ. But of course, the infrastructure of roads and transport also requires energy for construction and maintenance before any of the refined oil can be used to power a vehicle to go from A to B. By this final stage there is only 20.5 MJ of the original 100MJ left.

We now have to take into account that depletion means that, at well heads around the world, the energy to produce energy is increasing. It takes energy to prospect for oil and gas and if the wells are smaller and more difficult to tap because, for example, they are out at sea under a huge amount of rock. Then it will take more energy to get the oil out in the first place.

So, instead of requiring 10MJ to produce the 100 MJ, let us imagine that it now takes 20 MJ. At the other end of the chain there would thus, only be 10.5MJ – a dramatic reduction in petroleum available to society.

The concept of Energy Return on Energy Invested is a ratio in physical quantities and it helps us to understand the flaw in neoclassical economic reasoning that draws on the idea of “the invisible hand” and the price mechanism. In simplistic economic thinking, markets should have no problems coping with depletion because a depleting resource will become more expensive. As its price rises, so the argument goes, the search for new sources of energy and substitutes will be incentivised while people and companies will adapt their purchases to rising prices. For example, if it is the price of energy that is rising then this will incentivise greater energy efficiency. Basta! Problem solved…

Except the problem is not solved… there are two flaws in the reasoning. Firstly, if the price of energy rises then so too does the cost of extracting energy – because energy is needed to extract energy. There will be gas and oil wells in favourable locations which are relatively cheap to tap, and the rising energy price will mean that the companies that own these wells will make a lot of money. This is what economists call “rent”. However, there will be some wells that are “marginal” because the underlying geology and location are not so favourable. If energy prices rise at these locations then rising energy prices will also put up the energy costs of production. Indeed, when the energy returned on energy invested falls as low as 1 to 1, the increase in the costs of energy inputs will cancel out any gains in revenues from higher priced energy outputs. As is clear when the EROI is less than one, energy extraction will not be profitable at any price.

Secondly, energy prices cannot in any case rise beyond a certain point without crashing the economy. The market for energy is not like the market for cans of baked beans. Energy is necessary for virtually every activity in the economy, for all production and all services. The price of energy is a big deal – energy prices going up and down have a similar significance to interest rates going up or down. There are “macro-economic” consequences for the level of activity in the economy. Thus, in the words of one analyst, Chris Skrebowski, there is a rise in the price of oil, gas and coal at which:

the cost of incremental supply exceeds the price economies can pay without destroying growth at a given point in time.(Skrebowski, 2011)

This kind of analysis has been further developed by Steven Kopits of the Douglas-Westwood consultancy. In a lecture to the Columbia University Center on Global Energy Policy in February of 2014, he explained how conventional “legacy” oil production peaked in 2005 and has not increased since. All the increase in oil production since that date has been from unconventional sources like the Alberta Tar sands, from shale oil or natural gas liquids that are a by-product of shale gas production. This is despite a massive increase in investment by the oil industry that has not yielded any increase in “conventional oil” production but has merely served to slow what would otherwise have been a faster decline.

More specifically, the total spend on upstream oil and gas exploration and production from 2005 to 2013 was $4 trillion. Of that amount, $3.5 trillion was spent on the “legacy” oil and gas system. This is a sum of money equal to the GDP of Germany. Despite all that investment in conventional oil production, it fell by 1 million barrels a day. By way of comparison, investment of $1.5 trillion between 1998 and 2005 yielded an increase in oil production of 8.6 million barrels a day.

Further to this, unfortunately for the oil industry, it has not been possible for oil prices to rise high enough to cover the increasing capital expenditure and operating costs. This is because high oil prices lead to recessionary conditions and slow or no growth in the economy. Because prices are not rising fast enough and costs are increasing, the costs of the independent oil majors are rising at 2 to 3% a year more than their revenues. Overall profitability is falling and some oil majors have had to borrow and sell assets to pay dividends. The next stage in this crisis has then been that investment projects are being cancelled – which suggests that oil production will soon begin to fall more rapidly.

The situation can be understood by reference to the nursery story of Goldilocks and the Three Bears. Goldilocks tries three kinds of porridge – some that is too hot, some that is too cold and some where the temperature is somewhere in the middle and therefore just right. The working assumption of mainstream economists is that there is an oil price that is not too high to undermine economic growth but also not too low so that the oil companies cannot cover their extraction costs – a price that is just right. The problem is that the Goldilocks situation no longer describes what is happening. Another story provides a better metaphor – that story is “Catch 22”. According to Kopits, the vast majority of the publically quoted oil majors require oil prices of over $100 a barrel to achieve positive cash flow and nearly a half need more than $120 a barrel.

But it is these oil prices that drag down the economies of the OECD economies. For several years, however, there have been some countries that have been able to afford the higher prices. The countries that have coped with the high energy prices best are the so called “emerging non OECD countries” and above all China. China has been bidding away an increasing part of the oil production and continuing to grow while higher energy prices have led to stagnation in the OECD economies. (Kopits, 2014)

Since the oil price is never “just right” it follows that it must oscillate between a price that is too high for macro-economic stability or too low to make it a paying proposition for high cost producers of oil (or gas) to invest in expanding production. In late 2014 we can see this drama at work. The faltering global economy has a lower demand for oil but OPEC, under the leadership of Saudi Arabia, have decided not to reduce oil production in order to keep oil prices from falling. On the contrary they want prices to fall. This is because they want to drive US shale oil and gas producers out of business.

The shale industry is described elsewhere in this book – suffice it here to refer to the claim of many commentators that the shale oil and gas boom in the United States is a bubble. A lot of money borrowed from Wall Street has been invested in the industry in anticipation of high profits but given the speed at which wells deplete it is doubtful whether many of the companies will be able to cover their debts. What has been possible so far has been largely because quantitative easing means capital for this industry has been made available with very low interest rates. There is a range of extraction production costs for different oil and gas wells and fields depending on the differing geology in different places. In some “sweet spots” the yield compared to cost is high but in a large number of cases the costs of production have been high and it is being said that it will be impossible to make money at the price to which oil has fallen ($65 in late 2014). This in turn could mean that companies funding their operations with junk bonds could find it difficult to service their debt. If interest rates rise the difficulty would become greater. Because the shale oil and gas sector has been so crucial to expansion in the USA then a large number of bankruptcies could have wider repercussions throughout the wider US and world economy.

 

Renewable Energy systems to the rescue?

Although it seems obvious that the depletion of fossil fuels can and should lead to the expansion of renewable energy systems like wind and solar power, we should beware of believing that renewable energy systems are a panacea that can rescue consumer society and its continued growth path. A very similar net energy analysis can, and ought to be done for the potential of renewable energy to match that already done for fossil fuels.

eroei-renewables

Before we get over-enthusiastic about the potential for renewable energy, we have to be aware of the need to subtract the energy costs particular to renewable energy systems from the gross energy that renewable energy systems generate. Not only must energy be used to manufacture and install the wind turbines, the solar panels and so on, but for a renewable based economy to be able to function, it must also devote energy to the creation of energy storage. This would allow for the fact that, when the wind and the sun are generating energy, is not necessarily the time when it is wanted.

Furthermore, the places where, for example, solar and wind potential are at this best – offshore for wind or in deserts without dust storms near the equator for solar – are usually a long distance from centres of use. Once again, a great deal of energy, materials and money must be spent getting the energy from where it is generated to where it will be used. For example, the “Energie Wende” (Energy Transformation) in Germany is involving huge effort, financial and energy costs, creating a transmission corridor to carry electricity from North Sea wind turbines down to Bavaria where the demand is greatest. Similarly, plans to develop concentrated solar power in North Africa for use in northern Europe which, if they ever come to anything, will require major investments in energy transmission. A further issue, connected to the requirement for energy storage, is the need for energy carriers which are not based on electricity. As before, conversions to put a current energy flux into a stored form, involve an energy cost.

Just as with fossil fuels, sources of renewable energy are of variable yield depending on local conditions: offshore wind is better than onshore for wind speed and wind reliability; there is more solar energy nearer the equator; some areas have less cloud cover; wave energy on the Atlantic coasts of the UK are much better than on other coastlines like those of the Irish Sea or North Sea. If we make a Ricardian assumption that best net yielding resources are developed first, then subsequent yields will be progressively inferior. In more conventional jargon – just as there are diminishing returns for fossil energy as fossil energy resources deplete, so there will eventually be diminishing returns for renewable energy systems. No doubt new technologies will partly buck this trend but the trend is there nonetheless. It is for reasons such as these that some energy experts are sceptical about the global potential of renewable energy to meet the energy demand of a growing economy. For example, two Australian academics at Monash University argue that world energy demand would grow to 1,000 EJ (EJ = 10 18 J) or more by 2050 if growth continued on the course of recent decades. Their analysis then looks at each renewable energy resource in turn, bearing in mind the energy costs of developing wind, solar, hydropower, biomass etc., taking into account diminishing returns, and bearing in mind too that climate change may limit the potential of renewable energy. (For example, river flow rates may change affecting hydropower). Their conclusion: “We nd that when the energy costs of energy are considered, it is unlikely that renewable energy can provide anywhere near a 1000 EJ by 2050.” (Moriarty & Honnery, 2012)

Now let’s put these insights back into a bigger picture of the future of the economy. In a presentation to the All Party Parliamentary Group on Peak Oil and Gas, Charles Hall showed a number of diagrams to express the consequences of depletion and rising energy costs of energy. I have taken just two of these diagrams here – comparing 1970 with what might be the case in 2030. (Hall C. , 2012) What they show is how the economy produces different sorts of stuff. Some of the production is consumer goods, either staples (essentials) or discretionary (luxury) goods. The rest of production is devoted to goods that are used in production i.e. investment goods in the form of machinery, equipment, buildings, roads, infrastracture and their maintenance. Some of these investment goods must take the form of energy acquisition equipment. As a society runs up against energy depletion and other problems, more and more production must go into energy acquisition, infrastructure and maintenance. Less and less is available for consumption, and particularly for discretionary consumption.

hall

Whether the economy would evolve in this way can be questioned. As we have seen, the increasing needs of the oil and gas sector implies a transfer of resources from elsewhere through rising prices. However, the rest of the economy cannot actually pay this extra without crashing. That is what the above diagrams show – a transfer of resources from discretionary consumption to investment in energy infrastructure. But such a transfer would be crushing for the other sectors and their decline would likely drag down the whole economy.

Over the last few years, central banks have had a policy of quantitative easing to try to keep interest rates low. The economy cannot pay high energy prices AND high interest rates so, in effect, the policy has been to try to bring down interest rates as low as possible to counter the stagnation. However, this has not really created production growth, it has instead created a succession of asset price bubbles. The underlying trend continues to be one of stagnation, decline and crisis and it will get a lot worse when oil production starts to fall more rapidly as a result of investment cut backs. The severity of the recessions may be variable in different countries because competitive strength in this model goes to those countries where energy is used most efficiently and which can afford to pay somewhat higher prices for energy. Such countries are likely to do better but will not escape the general decline if they stay wedded to the conventional growth model. Whatever the variability, this is still a dead end and, at some point, people will see that entirely different ways of thinking about economy and ecology are needed – unless they get drawn into conflicts and wars over energy by psychopathic policy idiots. There is no way out of the Catch 22 within the growth economy model. That’s why degrowth is needed.

Further ideas can be extrapolated from Hall’s way of presenting the end of the road for the growth economy. The only real option as a source for extra resources to be ploughed into changing the energy sector is from what Hall calls “discretionary consumption” aka luxury consumption. It would not be possible to take from “staples” without undermining the ability of ordinary people to survive day to day. Implicit here is a social justice agenda for the post growth – post carbon economy. Transferring resources out of the luxury consumption of the rich is a necessary part of the process of finding the wherewithal for energy conservation work and for developing renewable energy resources. These will be expensive and the resources cannot come from anywhere else than out of the consumption of the rich. It should be remembered too that the problems of depletion do not just apply to fossil energy extraction coal, oil and gas) but apply across all forms of mineral extraction. All minerals are depleted by use and that means the grade or ore declines over time. Projecting the consequences into the future ought to frighten the growth enthusiasts. To take in how industrial production can hit a brick wall of steeply rising costs, consider the following graph which shows the declining quality of ore grades mined in Australia.

mining-australia

As ores deplete there is a deterioration of ore grades. That means that more rock has to be shifted and processed to refine and extract the desired raw material, requiring more energy and leaving more wastes. This is occurring in parallel to the depletion in energy sources which means that more energy has to be used to extract a given quantity of energy and therefore, in turn, to extract from a given quantity of ore. Thus, the energy requirements to extract energy are rising at the very same time as the amount of energy required to extract given quantities of minerals are rising. More energy is needed just at the time that energy is itself becoming more expensive.

Now, on top of that, add to the picture the growing demand for minerals and materials if the economy is to grow.

At least there has been a recognition and acknowledgement in recent years that environmental problems exist. The problem is now somewhat different – the problem is the incredibly naive faith that markets and technology can solve all problems and keep on going. The main criticism of the limits to growth study was the claim that problems would be anticipated in forward markets and would then be made the subject of high tech innovation. In the next chapter, the destructive effects of these innovations are examined in more depth.





More Peak Oil bad news…..

15 06 2017

There have been no end of new articles on the demise of the oil industry lately. I’ve been so busy building that it’s only now I can catch up with some blogging, so here’s your lot for the time being.

From the srsroccoreport.com website comes this unbelievable analysis…:

While the Mainstream media continues to put out hype that technology will bring on abundant energy supplies for the foreseeable future, the global oil and gas industry is actually cannibalizing itself just to stay alive.   Increased finance costs, falling capital expenditures and the downgrade of oil reserves are the factors, like flesh-eating bacteria, that are decimating the once great oil and gas industry.

This is all due to the falling EROI – Energy Returned On Investment in oil and gas industry.  Unfortunately, most of the public and energy analysts still don’t understand how the Falling EROI is gutting the entire system.  They don’t see it because the world has become so complex, they are unable to connect-the-dots.  However, if we look past all the over-specialized data and analysis, we can see how bad things are getting in the global oil and gas industry.

Let me start by republishing this chart from my article, Future World Economic Growth In Big Trouble As Oil Discoveries Fall To Historic Lows:

The global oil industry only found 2.4 billion barrels of conventional oil in 2016, less than 10% of what it consumed (25.1 billion barrels).  Conventional oil is the highly profitable, high EROI oil that should not be confused with low quality “unconventional” oil sources such as OIL SANDS or SHALE OIL.  There is a good reason why we have just recently tapped in to oil sands and shale oil…. it wasn’t profitable for the past 100 years to extract it.  Basically, it’s all we have left…. the bottom of the barrel, so to speak.

Now, to put the above chart into perspective, here are the annual global conventional oil discoveries since 1947:

You will notice the amount of new oil discoveries (2.4 billion barrels) for 2016 is just a mere smudge when we compare it to the precious years.  Furthermore, the world has been consuming about an average of 70 million barrels per day of conventional oil production since 2000 (the total liquid production is higher, but includes oil sands, deep water, shale oil, natural gas liquids, biofuels and etc).  Conventional oil production has averaged about 25 billion barrels per year.

As we can see in the chart above… we haven’t been replacing what we have been consuming for quite a long time.  Except for the large orange bar in 2000 of approximately 35 billion barrels, all the years after were lower than 25 billion barrels.  Thus, the global oil industry has been surviving on its past discoveries.

That being said, if we include ALL liquid oil reserves, the situation is even more alarming.

Global Oil Liquid Reserves Fall In 2015 & 2016

According to the newest data put out by the U.S. EIA, Energy Information Agency, total global oil liquid reserves fell for the past two years.  The majority of negative oil reserve revisions came from the Canadian oil sands sector:

Of the 68 public traded energy companies used in this graph, total liquid oil reserves fell from 116 billion barrels in 2014 to 100 billion barrels in 2016.  That’s a 14% decline in liquid oil reserves in just two years.  So, not only are conventional oil discoveries falling the lowest since 1947, companies are now forced to downgrade their total liquid oil reserves due to lower oil prices.

This can be seen more clearly in the EIA chart below:

The “net proved reserves change” is shown as the black line in the chart.  It takes the difference between the additions-revisions, (BLUE) and the production (BROWN).  These 68 public companies have been producing between 8-9 billion barrels of oil per year.

Because of the downward revisions in 2015 and 2016, net oil reserves have fallen approximately 16 billion barrels, or nearly two years worth of these 68 companies total liquid oil production.  If these oil companies don’t suffer anymore reserve downgrades, they have approximately 12 years worth of oil reserves remaining.

But… what happens if the oil price continues to decline as the global economy starts to really contract from the massive amount of debt over-hanging the system?  Thus, the oil industry could likely cut more reserves, which means… the 12 years worth of reserves will fall below 10, or even lower.  My intuition tells me that global liquid oil reserves will fall even lower due to the next two charts in the following section.

The Coming Energy Debt Wall & Surging Finance Cost In The Energy Industry

Over the next several years, the amount of debt that comes due in the U.S. oil industry literally skyrockets higher.  In my article, THE GREAT U.S. ENERGY DEBT WALL: It’s Going To Get Very Ugly…., I posted the following chart:

The amount of debt (as outstanding bonds) that comes due in the U.S. energy industry jumps from $27 billion in 2016 to $110 billion in 2018.  Furthermore, this continues higher to $260 billion in 2022.  The reason the amount of debt has increased so much in the U.S. oil and gas industry is due to the HIGH COST of producing Shale oil and gas.  While many companies are bragging that they can produce oil in the new Permian Region for $30-$40 a barrel, they forget to include the massive amount of debt they now have on their balance sheets.

This is quite hilarious because a lot of this debt was added when the price of oil was over $100 from 2011 to mid 2014.  So, these companies actually believe they can be sustainable at $30 or $40 a barrel?  This is pure nonsense.  Again… most energy analysts are just looking at how a company could producing a barrel of oil that year, without regard of all other external costs and debts.

Moreover, to give the ILLUSION that shale oil and gas production is a commercially viable enterprise, these energy companies have to pay its bond (debt) holders dearly.  How much?  I will show you all that in a minute, however, this is called their DEBT FINANCING.  Some of us may be familiar with this concept when we have maxed out our credit cards and are paying a minimum interest payment just to keep the bankers happy.  And happy they are as they are making a monthly income on money that we created out of thin air… LOL.

According to the EIA, these 68 public energy companies are now spending 75% of their operating cash flow to service their debt compared to 25% just a few years ago:

We must remember, debt financing does not mean PAYING DOWN DEBT, it just means the companies are now spending 75% of their operating cash flow (as of Q3 2016) just to pay the interest on the debt.  I would imagine as the oil price increased in the fourth quarter of 2016 and first quarter of 2017, this 75% debt servicing ratio has declined a bit.  However, people who believe the Fed will raise interest rates, do not realize that this would totally destroy the economic and financial system that NEEDS SUPER-LOW INTEREST RATES just to service the massive amount of debt they have on the balance sheets.

As an example of rising debt service, here is a table showing Continental Resources Interest expense:

Continental Resources is one of the larger energy players in the Bakken oil shale field in North Dakota.  Before tapping into that supposed “high-quality” Bakken shale oil, Continental Resources was only paying $13 million a year to finance its debt, which was only $165 million.  However, we can plainly see that producing this shale oil came at a big cost.  As of December 2016, Continental Resources paid $321 million that year to finance its debt…. which ballooned to $6.5 billion.  In relative terms, that is one hell of a huge credit card interest payment.

The folks that are receiving a nice 4.8% interest payment (again… just a simple average) for providing Continental Resources with funds to produce this oil at a very small profit or loss… would like to receive their initial investment back at some point.  However….. THERE LIES THE RUB.

With that ENERGY DEBT WALL to reach $260 billion by 2022, I highly doubt many of these energy companies will be able to repay that majority of that debt.  Thus, interest rates CANNOT RISE, and will likely continue to fall or the entire financial system would collapse.

Lastly…. the global oil and gas industry is now cannibalizing itself just to stay alive.  It has added a massive amount of debt to produce very low-quality Shale Oil-Gas and Oil Sands just to keep the world economies from collapsing.  The falling oil price, due to a consumer unable to afford higher energy costs, is gutting the liquid oil reserves of many of the publicly trading energy companies.

At some point… the massive amount of debt will take down this system, and with it, the global oil industry.  This will have an extremely negative impact on the values of most STOCKS, BONDS & REAL ESTATE.  If you have well balanced portfolio in these three asset classes, then you are in serious financial trouble in the future.

Then…….  on ABC TV’s lateline (I’m rarely up late enough to watch it, so this was an omen…) this interview came up. I have to say, I found the whole Qatar thing rather bizarre, but this commentator thinks that Saudi Arabia is already in trouble

http://www.abc.net.au/lateline/content/2016/s4682983.htm

And now Zero Hedge has this to say as well….

Oil Prices Suffer First ‘Death Cross’ Since 2014 Collapse

For the first time since September 2014, after which oil prices collapsed almost 75%, Brent and WTI Crude futures both just flashed a ‘death cross’ signal as the 50-day moving-average crossed below the 200-day moving-average.

The crossover is typically seen a loss of short-term momentum and last occurred in the second half of 2014, when prices collapsed due to oversupply amid surging U.S. shale oil production.

 

As Bloomberg notes, OPEC and its partners will be hoping their efforts to curb output will be enough to support prices and counteract any fears of growing downside risk.

 

However, this morning’s news of “real” OPEC production may raise more doubts about the cartel’s commitment (and going forward, the Qatar debacle won’t help).





Book review of Failing states, collapsing systems biophysical triggers of political violence by Nafeez Ahmed

6 06 2017

I have written at length about the collapse of Egypt over the years, and Syria too. I’ve also discussed Nafeez Ahmed’s views on the unraveling now happening in the Middle East, and my most recent item here from the Doomstead Diner has attracted a lot of attention….. including from Alice Friedemann who pointed out to me that she has published an extensive review of Ahmed’s new book “Failing states, collapsing systems biophysical triggers of political violence”. It’s a long read (the references alone are almost as long as the article and would keep you busy for weeks!), but I was totally riveted by it and felt the compulsion to republish it here as it needs to be read as widely as possible. In fact, this review is so good, you may not need to buy the book……. as I’ve been saying for a very long time now, 2020 is when things start to get really ugly, all the way to 2030, by which time it’s likely the state of the world will be unrecognisable.

The overview of biophysical factors table below is alone really telling……

If after reading this latest piece you are not convinced collapse is indeed underway, then there’s no hope for you….!

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

alice_friedemann[ In this post I summarize the sections of Nafeez’s book about the biophysical factors that bring nations down (i.e. climate change drought & water scarcity, declining revenues after peak oil, etc.) The Media tend to focus exclusively on economic and political factors.

My book review is divided into 3 parts: 

  • Why states collapse for reasons other than economic and political
  • How BioPhysical factors contribute to systemic collapse in Syria, Yemen, Iraq, Saudi Arabia Egypt, Nigeria
  • Predictions of when collapse will begin in Middle East, India, China, Europe, Russia, North America

In my opinion, war is inevitable in the Middle East where over half of oil reserves exist.  Oil is life itself.  If war happens,  collapse of the Middle East, India, and China could happen well before 2030.  If nuclear weapons are used, most nations collapse from the nuclear winter and ozone depletion that would follow.   Indonesia blew up their oil refineries to keep Japan from getting oil in WWII. If Middle Eastern governments or terrorists do the same after they’re attacked, that brings on the energy crisis sooner.  Although this would leave some high EROI oil in the ground, the energy to rebuild refineries, pipelines, oil rigs, roads, and other infrastructure would lower the EROI considerably.

Alice Friedemann   www.energyskeptic.com  author of “When Trucks Stop Running: Energy and the Future of Transportation”, 2015, Springer and “Crunch! Whole Grain Artisan Chips and Crackers”. Podcasts: Practical Prepping, KunstlerCast 253, KunstlerCast278, Peak Prosperity , XX2 report ]

Ahmed, Nafeez. 2017. Failing States, Collapsing Systems BioPhysical Triggers of Political Violence. Springer.

1) Why states collapse for reasons other than economic and political

Since the 2008 financial crash, there’s been an unprecedented outbreak of social protest: Occupy in the US and Western Europe, the Arab Spring, and civil unrest from Greece to Ukraine, China to Thailand, Brazil to Turkey, and elsewhere. Sometimes civil unrest has resulted in government collapse or even wars, as in Iraq-Syria and Ukraine- Crimea. The media and experts blame it on poor government, usually ignoring the real reasons because all they know is politics and economics.

In the Middle East, experts should also talk about geology.  Oil-producing nations like Syria, Yemen, Egypt, Nigeria, and Iraq have all reached peak oil and declining government revenues after that force rulers to raise the prices of food and oil.  This region was already short on water, and now climate change (from fossil fuels) is making matters much worse with drought and heat waves causing even greater water scarcity, which in turn lowers agricultural production.  Many of these nations have some of the highest rates of population growth on earth at a time when resources essential to life itself are declining.

The few nations still producing much of the oil – Russia, Saudi Arabia, and the U.S. are about to join the club and stop exporting oil so they can provide for their domestic population.

Ahmed points out that “because these and other factors are so nested and interconnected, even small perturbations and random occurrences in one can amplify effects on other parts of the system, sometimes in a feedback process that continues.  If thresholds are reached, these tipping points can re-order the whole system”.  These ecological and geological factors result in social disorder, which makes it even harder for government to do anything, such as putting more money into water and food production infrastructure, which accelerates climate change and energy decline impacts, which leads to even more violence at an accelerating rate until state failure.

2) How BioPhysical factors contribute to systemic collapse in Syria, Yemen, Iraq, Saudi Arabia Egypt, Nigeria

 

Table 1. Overview of biophysical factors (water scarcity, peak oil, population) for nations Ahmed discusses in this book

The UN defines a region as not having water scarcity above 1700 cubic meters per capita (green).  Water stressed nations have 1000 to 1700 cubic meters per capita (yellow).  Water scarcity is 500-1000 per capita (orange) and absolute water scarcity 0-500 (red).  Countries already experiencing water stress or far worse include Egypt, Jordan, Turkey, Iraq, Israel, Syria, Yemen, India, China, and parts of the United States. Many, though not all, of these countries are experiencing protracted conflicts or civil unrest (Patrick 2015).

SYRIA

The media portray warfare in Syria as due to the extreme repression of President Bashar al-Assad and the support he receives from Russia.  Although there has been awareness that climate change drought played a role in causing conflict, there is no recognition that peak oil was one of the main factors.

Here’s a quick summary of how peak oil and consequent declining revenues from oil production, rising energy and food prices, drought, water scarcity, and population growth led to social unrest, violence, terrorism and war.

It shouldn’t be surprising that peak oil in 1996 triggered the tragic events we see today.  After all, the main source of Syrian revenue came from their production of 610,000 barrels per day (bpd).  By 2010 oil production had declined by half. Falling revenues caused Syria to seek help from the IMF by 2001, and the onerous market reform policies required resulted in higher unemployment and poverty, especially in rural Sunni regions, while at the same time enriching and corrupting ruling minority Alawite private and military elites.

In 2008 the government had to triple oil prices resulting in higher food prices. Food prices rose even more due to the global price of wheat doubling in 2010-2011. On top of that, the 2007-2010 drought was the worst on record, causing widespread crop failures. This forced mass migrations of farming families to cities (Agrimoney 2012; Kelley et al. 2015). The drought wouldn’t have been so bad if half the water hadn’t been wasted and overused previously from 2002 to 2008 (Worth 2010). All of these violence-creating events were worsened by one of the highest birth rates growth on earth, 2.4%.  Most of the additional 80,000 people added in 2011 were born in the hardest-hit drought areas (Sands 2011).

Rinse and repeat.  Social unrest and violence led to war, oil production dropped further, so there is even less money to end unrest with subsidized food and energy or more employment, aid farmers, and build desalination plants.

Syria, once able to feed its people, now depends on 4 million tonnes of grain imports at a time when revenues continue to drop.  Syrian oil production didn’t really take off until 1968 when there were 6.4 million people.  Since oil revenues allowed their population to explode, another 13.6 million have been born.

IRAQ

Like Syria, Iraq’s agricultural production has been reduced by heat, drought, heavy rain, water scarcity, rapid population growth, and the inability of government to import food and provide goods and services as oil revenues decline.  ISIS has worsened matters and filled in the gaps of state-level failure.  Peak oil is likely by 2025.  Or sooner given the ongoing war, lack of investment to keep existing production flowing, and low oil prices (Dipaola 2016).

YEMEN 

Like Syria, Iraq, and Iran, Yemen has long faced serious water scarcity issues. The country is consuming water far faster than it is being replenished, an issue that has been identified by numerous experts as playing a key background role in driving local inter-tribal and sectarian conflicts (Patrick 2015).

Yemen is one of the most water-scarce countries in the world. In 2012, the average Yemeni had access to just 140 cubic meters of water a year for all uses and just three years later a catastrophic 86 m3, far below the 1000 m3 level minimum requirement standards.    Cities often only have sporadic access to running water— every other week or so.  Sanaa could become the first capital in the world to run out of water (IRIN 2012).

Yemen reached peak oil production in 2001, declining from 450,000 barrels per day (bpd) to 100,000 bpd in 2014, and will be zero by 2017 (Boucek 2009).   This has led to a drastic decline in Yemen’s oil exports, which has eaten into government revenues, 75% of which had depended on oil exports. Oil revenues also account for 90% of the government’s foreign exchange reserves. The decline in post-peak Yemen state revenues has reduced the government’s capacity to sustain even basic social investments. When the oil runs out … the capacity to sustain a viable state-structure will completely collapse.

Yemen has 25 million people and an exorbitantly high growth rate and predicted to double by 2050. In 2014 experts warned that within the next decade, these demographic trends would demolish the government’s ability to meet the population’s basic needs in education, health and other essential public services. This is already happening to over 15 million people (Qaed 2014).  Over half the Yemeni population lives below the poverty line, and unemployment is at 40% (60% of young people).

To cope, too many people have turned to growing qat (a mild narcotic) on 40% of Yemen’s irrigated land, increasing water use to 3.9 billion cubic meters (bcm), but the renewable water supply is just 2.5 bcm. The 1.4 bcm shortfall is made up by pumping water from underground water reserves that are starting to run dry.

Energy, overpopulation, drought, water scarcity, poverty, and a government unable to do much of anything without oil revenue is in a downward loop of social tensions, local conflicts and even mass displacements.  This in turn adds to the dynamics of the wider sectarian and political conflicts between the government, the Houthis, southern separatists and al-Qaeda affiliated militants.

Violence undermines food security, feeding back into the downward spiraling loop.  Making matters worse is that rain-fed agriculture has dropped by about 30% since 1970, making Yemen ever more food import dependent at a time when revenues are shrinking. The country now imports over 85% of its food, including 90% of its wheat and all of its rice (World Bank 2014). Most Yemenis are hungry because they can’t afford to buy food, which also rises in price when global prices rise.  The rate of chronic malnutrition as high as 58%, second only to Afghanistan (Arashi 2013).

Epidemic levels of government corruption, mismanagement and incompetence, have meant that what little revenue the government receives ends up in Swiss bank accounts.  With revenues plummeting in the wake of the collapse of its oil industry, the government has been forced to slash subsidies while cranking up fuel and diesel prices. This has, in turn, cranked up prices of water, meat, fruits, vegetables and spices, leading to fuel and food riots (Mawry 2015).

Is Saudi Arabia Next?

Summary: Within the next decade, Saudi Arabia will become especially vulnerable to the downward feedback loop of peak oil.  The most likely date for peak oil is 2028 (Ebrahimi 2015). But because the Saudi exports have been going down since 2005 at 1.4% a year as their own population rises and consumes more and more, world exports could end as soon as 2031 (Brown and Foucher 2008).

Saudi revenues will decline to zero, so the Saudis will be less able to buy their way out of food shortages.  Their own food production will drop as well from drought and water scarcity — the kingdom is one of the most water scarce in the world, at 98 m³ per inhabitant per year.

Most water comes from groundwater, 57% of which is non-renewable, and 88% of it goes to agriculture. Desalination plants produce 70% of the kingdom’s domestic water supplies. But desalination is very energy intensive, accounting for more than half of domestic oil consumption. As oil exports run down, along with state revenues, while domestic consumption increases, the kingdom’s ability to use desalination to meet its water needs will decrease (Patrick 2015; Odhiambo 2016).

According to the Export Land Model (ELM) created by Texas petroleum geologist Jeffrey J Brown and Dr. Sam Foucher, the key issue is the timing of when there will be no more exports because the domestic population of oil producing nations is using it all for domestic consumption.   Brown and Foucher showed that the tipping point to watch out for is when an oil producer can no longer increase the quantity of oil sales abroad because of the need to meet rising domestic energy demand.

Saudi Arabia is the region’s largest energy consumer. Domestic demand has increased 7.5% over the last 5 years, mainly due to population growth. Saudi population may grow from 29 million people now to 37 million by 2030, using ever more oil and therefore less available for export.

Declining Saudi peak oil exports will affect every nation on earth that imports Saudi oil, especially top customers China, Japan, the United States, South Korea, and India.  As Saudi oil declines, there will be few other places oil for importing nations to turn to, since other exporting nations will also be using their oil domestically.

A report by Citigroup predicted net exports would plummet to zero in the next 15 years. This means that 80% of money from oil sales the Saudi state depends on are trending downward, eventually terminally (Daya 2016). In this case, the peak oil production date could happen well before 2028, as well as violent social unrest, since so far, Saudi Arabia’s oil wealth, and its unique ability to maintain generous subsidies for oil, housing, food and other consumer items, has kept civil unrest at bay. Energy subsidies alone make up about a fifth of Saudi’s gross domestic product. But as revenues are increasingly strained by decreasing exports after peak oil, the kingdom will need to slash subsidies (Peel 2013).  Even now a quarter of the Saudi’s live in poverty, and unemployment is 12%, especially young people who have a 30% unemployment level. [Saudi Arabia recently started taxing fuel at the bowsers]

Saudi Arabia is experiencing climate change as temperatures rise in the interior and far less rainfall occurs in the north.  By 2040, local average temperatures are expected to increase by as much as 4 °C at the same time rain levels are falling, resulting in more extreme weather events like the 2010 Jeddah flooding when a year of rain fell in 4 hours.  The combination could dramatically impact agricultural productivity, which is already facing challenges from overgrazing and unsustainable industrial agricultural practices leading to accelerated desertification (Chowdhury 2013).

80% of Saudi Arabia’s food requirements are purchased through heavily subsidized imports.  Without the protection of oil revenue subsidies, and potential rises in the global prices of food (Taha 2014), the Saudi population would be heavily impacted. But with net oil revenues declining to zero—potentially within just 15 years—Saudi Arabia’s capacity to finance continued food imports will be in question.

EGYPT

Like Syria, Egypt has had increasing problems paying for food, goods, and services after peak oil in 1993 while at the same time population keeps growing.   Worse yet, there are no oil revenues at all, because since 2010 the population has been using more oil than what is produced and has had to import oil, with no oil revenues to pay for food, goods, and services.  Two-thirds of Egypt’s oil reserves have likely been depleted and oil produced now is declining at 3.4% a year.

Nor are there revenues coming from natural gas sales made up for the loss of oil revenues.  Over the past decade domestic use nearly doubled to consumption of nearly all the production (Kirkpatrick 2013a).

The Egyptian population since 2000 has grown 21% to 88 million people and isn’t slowing down, with 20 million more expected over the next 10 years.  A quarter are children half of them living in poverty and unemployed  (EI 2012) at the same time the elites have grown wealthier from IMF and World Bank policies.

In the 1960s there were 2800 cubic meters of water per capita, now just 660 – well below the international standard of water poverty of 1000 per person (Sarant 2013).   Water scarcity and population growth lave led to tens of thousands of hectares of farmland to be abandoned.  There is some water that can be obtained, but most farmers can’t afford the price of diesel fuel to power pumps  (Kirkpatrick 2013b)

Egypt was self-sufficient in food production in the 1960s but now imports 70% of its food (Saleh 2013). One of the many reasons Mubarak fell was the doubling of wheat prices in 2011 since half of Egypt’s people depend on food rations.  But the democratically-elected Muslim Brotherhood party and their leader Morsi couldn’t alleviate declining government revenues due to the biophysical realities of food, water, and energy shortages either.  Morsi desperately tried to get a $4.8 billion IMF loan by slashing energy subsidies and raising sales taxes, but the economic crisis made it hard to make the payments and wheat imports dropped to a third of what was imported a year ago.

This led to Morsi being ousted by army chief Abdul Fateh el-Sisi in a coup.  Like his predecessors, El-Sisi has also been unable to meet IMF demands for increased hydrocarbon production and has resorted to unprecedented levels of brutal force to crush protests. He has also rationed electricity, which led to key industries cutting production, leading to further economic losses, declining exports and foreign reserves.  Without more money, energy companies can’t be paid, so energy production continues to drop, and debt goes up, reducing the value of Egyptian currency and higher costs for imports and shortages of energy for industrial production. Egypt’s energy and economy find themselves caught in an amplifying feedback loop (Barron 2016).

How Boko Haram arose in Nigeria

Nigeria’s climate change has led to water and land shortages from desertification, which in turn has led to illness, hunger, and unemployment followed by conflict (Sayne 2011).

Perhaps the Boko Haram wouldn’t have arisen, if the Maitatsine sect in northern Nigeria hadn’t been hit so hard by ecological disasters.  To survive they fanned out to search for food, water, shelter, and work (Sanders 2013).  Niger and Chad refugees from drought and floods also became Boko Haram foot soldiers, some 200,000 displaced farmers and herdsmen.

In northern Nigeria, where Boko Haram is from, about 70% of the population subsists on less than a dollar a day. As noted by David Francis, one of the first western reporters to cover Boko Haram: “Most of the foot soldiers of Boko Haram aren’t Muslim fanatics; they’re poor kids who were turned against their corrupt country by a charismatic leader” (Francis 2014)

The Nigerian military sees a correlation between regional climatic events, and an upsurge in extremist violence: “It has become a pattern; we saw it happen in 2006; it happened again in 2008 and in 2010. President Obasanjo had to deploy the military in 2006 to Yobe State, Borno State and Katsina State. These are some of the states bordering Niger Republic and today they are the hotbeds of the Boko Haram” (Mayah 201).

Drought caused desertification is decreasing food production, in turn leading to “economic decline; population displacement and disruption of legitimized authoritative institutions and social relations.” The net effect was an acceleration of the attractiveness of groups like “Boko Haram and other forms of Jihadi ideology,” resulting in escalating “herder-farmer clashes emanating from the north since 1980s” (Onyia 2015).

The rapid spread of Boko Haram also coincided with Lake Chad’s shrinking from 25,000 square km in 1963 to less than 2500 square km today, mainly due to climate change. At this rate, Lake Chad is will dry up in 20 years, and has already caused millions of people to lose their livelihoods.

The government has exacerbated problems by cutting fuel subsidies, which led to fuel shortages, angering the public who engaged in civil unrest  (Omisore 2014).

A senior Shell official said that crude oil production decline rates are as high as 15–20%.  But Nigeria doesn’t have the money to explore to find more oil to offset this high decline rate. Nigeria’s petroleum resources department said that Nigeria had reached a plateau of production in the Niger Delta and were already going down (Ahmed 2014).

About $15 billion of investment is required just to maintain current production levels and compensate for a natural decline in production of about 250,000 b/d each year. A 2011 study by two Nigerian scholars concluded that “there is an imminent decline in Nigeria’s oil reserve since peaking could have occurred or just about to occur (Akuru and Okoro 2011). A 2013 report backs this up, finding that Nigeria’s crude oil production has decreased since its peak in 2005, largely due to the impact of internal conflicts, leading to the withdrawal of oil companies and lack of investments. Since then production has fluctuated along a plateau. The UK Department for International Development report noted that new offshore fields might bring additional oil on-stream, surpassing the 2005 peak—but also noted that rising domestic demand “at some point in the future may cut into the amount of oil available for export” (Hall et al. 2014).

POPULATION. With Nigeria’s population expected to rise from 160 to 250 million by 2025 and oil accounting for some 96% of export revenue as well as 75% of government revenue, the state has resorted to harsh austerity measures. Sharp reductions in public spending, power cuts, fuel shortages and conditional new loans will probably widen economic inequalities and further stoke the grievances that feed groups like Boko Haram in the North. With domestic oil production decline undermining Nigeria’s oil export revenues and consequent fuel subsidy cuts, the public grows poorer and increases the number of young men more likely to join Islamist terrorist groups.

3) Predictions of when collapse will begin in Middle East, India, China, Europe, Russia, North America

When will  Middle-East oil producing nations fail?

Ahmed says that so far after peak oil production, Middle-Eastern economies have declined as revenues declined, leading to systemic state-failure in roughly 15 years, more or less, depending on how hard hit a nation was by additional (climate-change) factors such as drought, water scarcity, food prices, and overpopulation.

Saudi Arabia, and much of the rest of Arabian Gulf peninsula, may experience state-failure well within 10 to 20 years. If forecasts of Saudi oil depletion are remotely accurate, then by 2030 the country will simply not exist as we know it. Coupled with the accelerating impacts of climate-induced water scarcity, the Kingdom is bound to begin experiencing systemic state-failure at most within 20 years, and probably much earlier.

Marin Katusa, chief energy strategist at Casey Research, reports that “many Middle Eastern countries may stop exporting oil and gas altogether within the next few years, while some already have” (Katusa 2016). Oil analysts at Lux Research estimate that OPEC oil reserves may have been overstated by as much as 70%. True OPEC reserves could be as low as 429 billion barrels, which could mean a global net export crunch as early as 2020 (Lazenby 2016).

The period from 2020 to 2030 will see Middle East oil exporters experiencing a systemic convergence of energy and food crises.

When will India & China collapse?

India and China are widely assumed to be the next superpowers, but at this stage of energy and resource depletion, can’t possibly mimic the exponential growth of the Western world.

India, South Asia, and China face enormous ecological challenges Irregularities in the pattern of monsoon rains and drought are likely to lower food production and increase water scarcity, while higher temperatures will increase the range of vector-borne diseases such as malaria and become prevalent year-round (DCDC 2013). As sea levels rise, millions of people will be displaced permanently.

These impacts will unravel regional political and economic order well within 20 years and manifest at first as civil unrest.  Depending on how the Indian and Chinese states respond, it is likely that these outbreaks of domestic disorder will become more organized, and will eventually undermine state territorial integrity before 2030.  Near-term growth will further undermine environmental health and deplete resources, making these nations even more vulnerable to climate and food crises.

European and Russian collapse timeframe

Within Europe, resource depletion has meant that the European Union as a whole has become increasingly dependent on energy imports from Russia, the Middle East, Central Asia and Africa. Yet exports from these regions will become tighter as major oil producers approach production limits.

The geopolitical turmoil that has unfolded in Ukraine provides a compelling indication that such processes are rapidly moving from the periphery of the global system into the core. For the most part, the Euro-Atlantic core—traditionally representing the most powerful sections of the world system—has insulated itself from global crisis convergence impacts by diversifying energy supply sources. However, there is only so much that diversification can achieve when the total energetic and economic quality of global hydrocarbon resource production is declining.

Post-2030–2045

Faced with these converging crises, the Euro-Atlantic core will continue to see the creation of cheap debt-money through quantitative easing as an immediate solution to generate emergency funds to stabilize the financial system and shore-up ailing industries. This will likely play out in one of these business-as-usual scenarios:

  1. The lower resource quality (EROI) of the global energy system may act as a fundamental geophysical ceiling on the capacity of the economy to grow. It may act as an invisible brake on growth in demand, so fossil fuel prices would remain at chronically low levels, endangering the profitability of the fossil fuel industries. This would lead to an acceleration of the demise of the fossil fuel industries, which could lead to debt-defaults across industries in the financial system. Declining hydrocarbon energy production would cause a self-reinforcing recessionary economic process. This would escalate vulnerability to water, food and energy crises and hugely strain the capacity of European and American states to deliver goods and services to even their own populations, and other nations dependent as much on importing food as they are oil.
  2. Scarcity of net exports on the world market may raise oil prices and provide some sectors of ailing fossil fuel industries to be profitable again. But previous slashing of investments and cutbacks in exploration will mean that only the most powerful sections of the industry would be able to capitalize on this, which means production is unlikely to return to former high levels. Price spikes would trigger economic recession, causing a drop in demand, while lower production levels would exacerbate the economy’s inability to grow substantially, if at all. In effect, the global economy would likely still experience a self-reinforcing recessionary economic process.

In both scenarios, escalating economic crises are likely to invite the Euro-Atlantic core to respond by using debt-money to shore-up as much of the existing core financial and energy industries as possible. Prices spikes and shortages in water, food and energy would be experienced by general populations as a dramatic lowering of purchasing power, leading to an overall decrease in quality of life, an increase in poverty, and a heightening of inequality. This would undermine their internal cohesion, giving rise to new divisive, nationalist and xenophobic movements, and lead states into a tightening spiral of militarization to police domestic order. As instability in the Middle East and elsewhere intensifies, manifesting in further unrest, political violence and terrorist activity, states will also be drawn increasingly into short- sighted military solutions. In particular, scarcity of net oil exports on the world market will heighten geopolitical and military competition to control and/or access the world’s remaining hydrocarbon energy resources. With the Middle East still holding the vast bulk of the world’s reserves, the region will remain a central flashpoint for such competition, even as major producers such as Saudi Arabia approach systemic state-failure due to reaching inevitable production declines.

It is difficult to avoid the conclusion that as we near 2045, the European and American projects will face escalating internal challenges to their internal territorial integrity, increasing the risk of systemic state-failure. Likewise, after 2030, Europe, India, China (and other Asian nations) will begin to experience symptoms of systemic state-failure.

References

Adel, Mohamed. 2016. Eni to Increase Zohr Field Gas Production to 2bn Cubic Feet Per Day by End of 2019. Daily News Egypt, May 9. http://www.dailynewsegypt.com/2016/05/09/ eni-increase-zohr-field-gas-production-2bn-cubic-feet-per-day-end-2019/ .

Agrimoney. 2012. Unrest, Bad Weather Lift Syrian Grain Import Needs. Agrimoney.com, March 14. http://www.agrimoney.com/news/unrest-bad-weather-lift-syrian-grain-import-needs–4278.html

Ahmed, Nafeez Mosaddeq. 2009. The Globalization of Insecurity: How the International Economic Order Undermines Human and National Security on a World Scale. Historia Actual Online 0(5): 113–126.

Ahmed, Nafeez. 2010. A User’s Guide to the Crisis of Civilisation: And How to Save It. London: Pluto Press.

———. 2011. The International Relations of Crisis and the Crisis of International Relations: From the Securitisation of Scarcity to the Militarisation of Society. Global Change, Peace & Security 23(3): 335–355. doi: 10.1080/14781158.2011.601854 .

———. 2013a. Peak Oil, Climate Change and Pipeline Geopolitics Driving Syria Conflict. The Guardian, May 13, sec. Environment. https://www.theguardian.com/environment/earth- insight/2013/may/13/1

———. 2013b. How Resource Shortages Sparked Egypt’s Months-Long Crisis. The Atlantic, August 19. http://www.theatlantic.com/international/archive/2013/08/how-resource-shortagessparked-egypts-months-long-crisis/278802/

———. 2014. Behind the Rise of Boko Haram—Ecological Disaster, Oil Crisis, Spy Games. The Guardian, May 9, sec. Environment. https://www.theguardian.com/environment/earth-insight/2014/may/09/behind-rise-nigeria-boko-haram-climate-disaster-peak-oil-depletion

———. 2015. The US-Saudi War with OPEC to Prolong Oil’s Dying Empire. Middle East Eye. May 8. http://www.middleeasteye.net/columns/us-saudi-war-opec-prolong-oil-s-dyingempire-222413845

———. 2016a. Climate Change Fuels Boko Haram. Women Across Frontiers Magazine. February 29. http://wafmag.org/2016/02/boko-haram-filling-vacuum-nigerias-state-collapses/

———. 2016b. At the Root of Egyptian Rage Is a Deepening Resource Crisis. Quartz. Accessed August 16. http://qz.com/116276/at-the-root-of-egyptian-rage-is-a-deepening-resource-crisis/

———. 2016c. Return of the Reich: Mapping the Global Resurgence of Far Right Power. Investigative Report. London: Tell MAMA and INSURGE Intelligence. https://medium.com/ return-of-the-reich

———. 2016d. FEMA Contractor Predicts ‘Social Unrest’ Caused by 395% Food Price Spikes. Motherboard. Accessed August 21. http://motherboard.vice.com/read/fema-contractor- predicts-social-unrest-caused-by-395-food-price-spikes

Akuru, Udochukwu B., and Ogbonnaya I. Okoro. 2011. A Prediction on Nigeria’s Oil Depletion Based on Hubbert’s Model and the Need for Renewable Energy. International Scholarly Research Notices, International Scholarly Research Notices 2011: e285649. doi: 10.5402/2011/285649 .

Al-Sinousi, Mahasin, and Amira Saleh. 2008. International Expert Warns Of Egypt’s Oil And Gas Reserves Depletion In 2020. Al-Masry Al-Youm, May 17, 1434 edition. http://today.almasryalyoum.com/article2.aspx?ArticleID=105585

Arashi, Fakhri. 2013. Wheat Imports Cause Yemen Heavy Losses—National Yemen. http://nationalyemen.com/2013/03/03/wheat-imports-cause-yemen-heavy-losses/

Aston, T.H., Trevor Henry Aston, and C.H.E. Philpin. 1987. The Brenner Debate: Agrarian Class Structure and Economic Development in Pre-Industrial Europe. Cambridge: Cambridge University Press.

Aucott, Michael L., and Jacqueline M. Melillo. 2013. A Preliminary Energy Return on Investment Analysis of Natural Gas from the Marcellus Shale. Journal of Industrial Ecology 17(5): 668– 679. doi: 10.1111/jiec.12040 .

Azevedo, Ligia B., An M. De Schryver, A. Jan Hendriks, and Mark A.J. Huijbregts. 2015. Calcifying Species Sensitivity Distributions for Ocean Acidification. Environmental Science & Technology 49(3): 1495–1500. doi: 10.1021/es505485m .

Badgley, Catherine, and Ivette Perfecto. 2007. Can Organic Agriculture Feed the World? Renewable Agriculture and Food Systems 22(2): 80–85.

Bardi, Ugo. 2014. Extracted: How the Quest for Mineral Wealth Is Plundering the Planet. Vermont: Chelsea Green Publishing.

Barnett, Tim P., and David W. Pierce. 2008. When Will Lake Mead Go Dry? Water Resources Research 44(3): W03201. doi: 10.1029/2007WR006704

Barron, Robert. 2016. Facing Rumors of Money Troubles, Egypt Denies Tension with Foreign Oil, Gas Firms. Mada Masr. January 27. http://www.madamasr.com/sections/economy/ facing-rumors-money-troubles-egypt-denies-tension-foreign-oil-gas-firms

Berger, Daniel, William Easterly, Nathan Nunn, and Shanker Satyanath. 2013. Commercial Imperialism? Political Influence and Trade during the Cold War. American Economic Review 103(2): 863–896. doi: 10.1257/aer.103.2.863

Berman, Arthur, and Ray Leonard. 2015. Years Not Decades: Proven Reserves and the Shale Revolution. Houston Geological Society Bulletin 57(6): 35–39.

Bhardwaj, Mayank. 2016. Food Imports Rise as Modi Struggles to Revive Rural India. Reuters India. February 2. http://in.reuters.com/article/india-farming-idINKCN0VA3NL

Bindi, Marco, and Jørgen E. Olesen. 2010. The Responses of Agriculture in Europe to Climate Change. Regional Environmental Change 11(1): 151–158. doi: 10.1007/s10113-010-0173-x

Bose, Prasenjit. 2016. A Budget That Reveals the Truth about India’s Growth Story. The Wire. March 2. http://thewire.in/23392/what-the-budget-tells-us-about-indias-growth-story/ .

Boucek, Christopher. 2009. Yemen: Avoiding a Downward Spiral. Carnegie Endowment for International Peace. September. http://carnegieendowment.org/2009/09/10/yemen-avoidingdownward-spiral-pub-23827

Bove, Vincenzo, Leandro Elia, and Petros G. Sekeris. 2014. US Security Strategy and the Gains from Bilateral Trade. Review of International Economics 22(5): 863–885. doi: 10.1111/ roie.12141

Bove, Vincenzo, Kristian Skrede Gleditsch, and Petros G. Sekeris. 2015. ‘Oil above Water’ Economic Interdependence and Third-Party Intervention. Journal of Conflict Resolution, January 27: 0022002714567952. doi: 10.1177/0022002714567952 .

Bove, Vincenzo, and Petros G. Sekeris. 2016. Fueling Conflict: The Role of Oil in Foreign Interventions. IPI Global Observatory. Accessed July 19. https://theglobalobservatory.org/2015/03/civil-wars-oil-above-water-military-intervention/

Brandt, Adam R., Yuchi Sun, Sharad Bharadwaj, David Livingston, Eugene Tan, and Deborah Gordon. 2015. Energy Return on Investment (EROI) for Forty Global Oilfields Using a Detailed Engineering-Based Model of Oil Production. PLOS ONE 10(12): e0144141.

Brown, Jeffrey J., and Samuel Foucher. 2008. A Quantitative Assessment of Future Net Oil Exports by the Top Five Net Oil Exporters. Energy Bulletin. January 8. http://www.resilience.org/stories/2008-01-08/quantitative-assessment-future-net-oil-exports-top-five-net-oil-exporters

Brown, James H., William R. Burnside, Ana D. Davidson, John P. DeLong, William C. Dunn, Marcus J. Hamilton, Norman Mercado-Silva, et al. 2011. Energetic Limits to Economic Growth. BioScience 61(1): 19–26.

Buckley. 2016. Coal Decline Steepens in 2016 in India, China, U.S. Institute for Energy Economics & Financial Analysis. May 16. http://ieefa.org/coal-decline-steepens-2016-2/

Capellán-Pérez, Iñigo, Margarita Mediavilla, Carlos de Castro, Óscar Carpintero, and Luis Javier Miguel. 2014. Fossil Fuel Depletion and Socio-Economic Scenarios: An Integrated Approach. Energy 77: 641–666.

Castillo-Mussot, Marcelo del, Pablo Ugalde-Véle, Jorge Antonio Montemayor-Aldrete, Alfredo de la Lama-García, and Fidel Cruz. 2016. Impact of Global Energy Resources Based on Energy Return on Their Investment (EROI) Parameters. Perspectives on Global Development and Technology 15(1–2): 290–299.

Chen, Shuai, Xiaoguang Chen, and Xu. Jintao. 2016. Impacts of Climate Change on Agriculture: Evidence from China. Journal of Environmental Economics and Management 76: 105–124. doi: 10.1016/j.jeem.2015.01.005

Chowdhury, Shakhawat, and Muhammad Al-Zahrani. 2013. Implications of Climate Change on Water Resources in Saudi Arabia. Arabian Journal for Science and Engineering 38(8): 1959– 1971.

Clarkson, M.O., S.A. Kasemann, R.A. Wood, T.M. Lenton, S.J. Daines, S. Richoz, F. Ohnemueller, A. Meixner, S.W. Poulton, and E.T. Tipper. 2015. Ocean Acidification and the Permo-Triassic Mass Extinction. Science 348(6231): 229–232. doi: 10.1126/science.aaa0193

Cleveland, Cutler J., and Peter A. O’Connor. 2011. Energy Return on Investment (EROI) of Oil Shale. Sustainability 3(11): 2307–2322.

Coleman, Isabel. 2012. Reforming Egypt’s Untenable Subsidies. Council on Foreign Relations. April 6. http://www.cfr.org/egypt/reforming-egypts-untenable-subsidies/p27885

Cook, Benjamin I., Toby R. Ault, and Jason E. Smerdon. 2015. Unprecedented 21st Century Drought Risk in the American Southwest and Central Plains. Science Advances 1(1): e1400082. doi: 10.1126/sciadv.1400082

Coumou, Dim, Alexander Robinson, Stefan Rahmstorf. 2013. Global increases in record-breaking 0668-1.

Csereklyei, Zsuzsanna, and David I. Stern. 2015. Global Energy Use: Decoupling or Convergence? Energy Economics 51: 633–641.

Cunningham, Nick. 2016. Decline of Coal Demand Is ‘irreversible. MINING.com. February 19. http://www.mining.com/web/decline-of-coal-demand-is-irreversible/

Dawson, Terence P., Anita H. Perryman, and Tom M. Osborne. 2014. Modelling Impacts of Climate Change on Global Food Security. Climatic Change 134(3): 429–440. doi: 10.1007/ s10584-014-1277-y.

Daya, Ayesha, and Dana El Baltaji. 2016. Saudi Arabia May Become Oil Importer by 2030, Citigroup Says. Bloomberg.com. Accessed August 11. http://www.bloomberg.com/news/articles/2012-09-04/saudi-arabia-may-become-oil-importer-by-2030-citigroup-says-1-

DCDC. 2013. Regional Survey—South Asia Out to 2040. Strategic Trends Programme. UK Ministry of Defence, Defence Concepts and Doctrines Centre.

Department Of State, Bureau of Public Affairs. 2014. Syria. Press Release|Fact Sheet. U.S. Department of State. March 20. http://www.state.gov/r/pa/ei/bgn/3580.htm

Diffenbaugh, Noah S., Daniel L. Swain, and Danielle Touma. 2015. Anthropogenic Warming Has Increased Drought Risk in California. Proceedings of the National Academy of Sciences 112(13): 3931–3936. doi: 10.1073/pnas.1422385112

Dipaola, Anthony. 2016. Iraq’s Oil Output Seen by Lukoil at Peak as Government Cuts Back. Bloomberg.com. May 19. http://www.bloomberg.com/news/articles/2016-05-19/iraq-s-oiloutput-seen-by-lukoil-at-peak-as-government-cuts-back

Dittmar, Michael. 2016. Regional Oil Extraction and Consumption: A Simple Production Model for the Next 35 Years Part I. BioPhysical Economics and Resource Quality 1(1): 7. doi: 10.1007/ s41247-016-0007-7

Dodge, Robert. 2016. Unconventional Drilling for Natural Gas in Europe. In The Global Impact of Unconventional Shale Gas Development, ed. Yongsheng Wang and William E. Hefley, 97–130. Natural Resource Management and Policy 39. Springer International Publishing.

EASAC. 2014. Shale Gas Extraction: Issues of Particular Relevance to the European Union. European Academies Science Advisory Council.

Ebrahimi, Mohsen, and Nahid Ghasabani. 2015. Forecasting OPEC Crude Oil Production Using a Variant Multicyclic Hubbert Model. Journal of Petroleum Science and Engineering 133: 818– 823.

El. 2012. Youth Are Quarter of Egypt’s Population, and Half of Them Are Poor | Egypt Independent. Egypt Independent. August 12. http://www.egyptindependent.com/news/youth-are-quarter-egypt-s-population-and-half-them-are-poor

EIA. 2016. Petroleum & Other Liquids Weekly Supply Estimates. US Energy Information Administration. http://www.eia.gov/dnav/pet/pet_sum_sndw_dcus_nus_w.htm  .

Evans-Pritchard, Ambrose. 2015. Saudi Arabia May Go Broke before the US Oil Industry Buckles. The Telegraph, August 5, sec. 2016. http://www.telegraph.co.uk/business/2016/02/11/saudi-arabia-may-go-broke-before-the-us-oil-industry-buckles/

Famiglietti, J.S. 2014. The Global Groundwater Crisis. Nature Climate Change 4(11): 945–948.

Farmer, J., M. Doyne, C. Gallegati, A. Hommes, P. Kirman, S. Ormerod, A. Sanchez Cincotti, and D. Helbing. 2012. A Complex Systems Approach to Constructing Better Models for Managing Financial Markets and the Economy. The European Physical Journal Special Topics 214(1): 295–324.

Feely, Richard, Christopher L. Sabine, and Victoria J. Fabry. 2006. Carbon Dioxide and our Ocean Legacy. Pew Trust. http://www.pmel.noaa.gov/pubs/PDF/feel2899/feel2899.pdf

Foster, John Bellamy, Brett Clark, and Richard York. 2010. The Ecological Rift: Capitalism’s War on the Earth. New York: NYU Press.

Fournier, Valérie. 2008. Escaping from the Economy: The Politics of Degrowth. International Journal of Sociology and Social Policy 28(11/12): 528–545.

Francis. 2014. Boko Haram, Al Shabaab and Al Qaeda 2.0—Islamic Extremism in Africa. Humanosphere. May 7. http://www.humanosphere.org/world-politics/2014/05/boko-haram-alshabaab-and-al-qaeda-2-0-islamic-extremism-in-africa/

Friedman, Thomas L. 2013. The Scary Hidden Stressor. The New York Times, March 2. http:// www.nytimes.com/2013/03/03/opinion/sunday/friedman-the-scary-hidden-stressor.html

Fritz, Martin, and Max Koch. 2014. Potentials for Prosperity without Growth: Ecological Sustainability, Social Inclusion and the Quality of Life in 38 Countries. Ecological Economics 108: 191–199.

Gagnon, Nathan, Charles A.S. Hall, and Lysle Brinker. 2009. A Preliminary Investigation of Energy Return on Energy Investment for Global Oil and Gas Production. Energies 2(3): 490– 503.

García-Olivares, Antonio, and Joaquim Ballabrera-Poy. 2015. Energy and Mineral Peaks, and a Future Steady State Economy. Technological Forecasting and Social Change 90, Part B (January): 587–598.

Ghafar, Adel Abdel. 2015. Egypt’s New Gas Discovery: Opportunities and Challenges | Brookings Institution. Brookings. September 10. https://www.brookings.edu/opinions/egypts-new-gasdiscovery-opportunities-and-challenges/

Guilford, Megan C., Charles A.S. Hall, Peter O’Connor, and Cutler J. Cleveland. 2011. A New Long Term Assessment of Energy Return on Investment (EROI) for U.S. Oil and Gas Discovery and Production. Sustainability 3(10): 1866–1887.

Gülen, Gürcan, John Browning, Svetlana Ikonnikova, and Scott W. Tinker. 2013. Well Economics Across Ten Tiers in Low and High Btu (British Thermal Unit) Areas, Barnett Shale, Texas. Energy 60: 302–315.

Hall, Charles A. S., and Kent A. Klitgaard. 2012. Energy and the Wealth of Nations. New York, NY: Springer New York. http://link.springer.com/10.1007/978-1-4419-9398-4

Hall, Charles A.S., Cutler J. Cleveland, and Robert K. Kaufmann. 1992. Energy and Resource Quality: The Ecology of the Economic Process. Niwot, CO: University Press of Colorado

Hall, Charles A.S., Jessica G. Lambert, and Stephen B. Balogh. 2014. EROI of Different Fuels and the Implications for Society. Energy Policy 64: 141–152.

Hallock Jr., John L., Wei Wu, Charles A.S. Hall, and Michael Jefferson. 2014. Forecasting the Limits to the Availability and Diversity of Global Conventional Oil Supply: Validation. Energy 64: 130–153.

Ho, Mae-Wan. 1999. Are Economic Systems Like Organisms? In Sociobiology and Bioeconomics, ed. Peter Koslowski, 237–258. Studies in Economic Ethics and Philosophy. Berlin: Springer.

Holling, C.S. 2001. Understanding the Complexity of Economic, Ecological, and Social Systems. Ecosystems 4(5): 390–405.

Holthaus, Eric. 2014. Hot Zone. Slate, June 27. http://www.slate.com/articles/technology/future_ tense/2014/06/isis_water_scarcity_is_climate_change_destabilizing_iraq.single.html

Homer-Dixon, Thomas. 2011. Carbon Shift: How Peak Oil and the Climate Crisis Will Change Canada (and Our Lives). Toronto: Random House of Canada.

Hook, Leslie. 2013. China’s Appetite for Food Imports to Fuel Agribusiness M&A. Financial Times, June 6.

Hughes, J. David. 2013. Energy: A Reality Check on the Shale Revolution. Nature 494(7437): 307–308.

ICEF. 2016. Growing Chinese Middle Class Projected to Spend Heavily on Education through 2030. ICEF Monitor. http://monitor.icef.com/2016/04/growing-chinese-middle-classprojected-spend-heavily-education-2030/

IEA. 2009. World Energy Outlook. Washington, DC: International Energy Agency.

———. 2015. India Energy Outlook. World Energy Outlook Special Report. International Energy Agency. https://www.iea.org/publications/freepublications/publication/india-energy-outlook2015.html

Inman, Mason. 2014. Natural Gas: The Fracking Fallacy. Nature 516(7529): 28–30.

IRIN. 2008. Bread Subsidies Under Threat as Drought Hits Wheat Production. IRIN. June 30.

———. 2010. Growing Protests over Water Shortages. IRIN. July 27. http://www.irinnews.org/news/2010/07/27/growing-protests-over-water-shortages .

———. 2012. Time Running Out for Solution to Water Crisis. IRIN. August 13. http://www.irinnews.org/analysis/2012/08/13/time-running-out-solution-water-crisis

Jackson, Tim. 2009. Prosperity Without Growth: Economics for a Finite Planet. London: Earthscan.

Jackson, Peter M., and Leta K. Smith. 2014. Exploring the Undulating Plateau: The Future of Global Oil Supply. Philosophical Transactions of the Royal Society of London A: Mathematical, Physical and Engineering Sciences 372(2006): 20120491.

Jancovici, Jean-Marc. 2013. A Couple of Thoughts in the Energy Transition. Manicore. http:// www.manicore.com/anglais/documentation_a/transition_energy.html

Jefferson, Michael. 2016. A Global Energy Assessment. Wiley Interdisciplinary Reviews: Energy and Environment 5(1): 7–15

Johanisova, Nadia, and Stephan Wolf. 2012. Economic Democracy: A Path for the Future? Futures, Special Issue: Politics, Democracy and Degrowth, 44(6): 562–570.

Johnstone, Sarah, and Jeffrey Mazo. 2011. Global Warming and the Arab Spring. Survival 53(2): 11–17.

Kaminska, Izabella. 2014. Energy Is Gradually Decoupling from Economic Growth. FT Alphaville, January 17. http://ftalphaville.ft.com/2014/01/17/1745542/energy-is-gradually-decouplingfrom-economic-growth/

Katusa, Marin. 2016. How to Pocket Extraordinary Profits from Unconventional Oil. Casey Energy Report.

Kavanagh, Jennifer. 2013. Do U.S. Military Interventions Occur in Clusters? Product Page. http://www.rand.org/pubs/research_briefs/RB9718.html

Kelley, Colin P., Shahrzad Mohtadi, Mark A. Cane, Richard Seager, and Yochanan Kushnir. 2015. Climate Change in the Fertile Crescent and Implications of the Recent Syrian Drought. Proceedings of the National Academy of Sciences 112(11): 3241–3246.

King, Carey W. 2015. Comparing World Economic and Net Energy Metrics, Part 3: Macroeconomic Historical and Future Perspectives. Energies 8(11): 12997–12920.

King, Carey W., John P. Maxwell, and Alyssa Donovan. 2015a. Comparing World Economic and Net Energy Metrics, Part 1: Single Technology and Commodity Perspective. Energies 8(11): 12949–12974.

———. 2015b. Comparing World Economic and Net Energy Metrics, Part 2: Total Economy Expenditure Perspective. Energies 8(11): 12975–12996.

Kirkpatrick, David D. 2013a. Egypt, Short of Money, Sees Crisis on Food and Gas. The New York Times, March 30. http://www.nytimes.com/2013/03/31/world/middleeast/egypt-short-of- money-sees-crisis-on-food-and-gas.html

———. 2013b. Egypt, Short of Money, Sees Crisis on Food and Gas. The New York Times, March 30. http://www.nytimes.com/2013/03/31/world/middleeast/egypt-short-of-money-sees-crisison-food-and-gas.html

Klump, Edward, and Jim Polson. 2016. Shale-Gas Skeptic’s Supply Doubts Draw Wrath of Devon. Bloomberg.com. Accessed July 11. http://www.bloomberg.com/news/articles/2009-11-17/shalegas-skeptics-supply-doubts-draw-wrath-of-devon-energy

Kothari, Ashish. 2014. Degrowth and Radical Ecological Democracy: A View from the South— Blog Postwachstum. Postwatchstum, Wuppertal Institute. June 27.

Kundu, Tadit. 2016. Nearly Half of Indians Survived on Less than Rs38 a Day in 2011–2012. http://www.livemint.com/Opinion/l1gVncveq4EYEn2zuzX4FL/Nearly-half-of-Indians-survived-on-less-than-Rs38-a-day-in-2.html

Lagi, Marco, Karla Z. Bertrand, and Yaneer Bar-Yam. 2011. The Food Crises and Political Instability in North Africa and the Middle East.

Lazenby, Henry. 2016. Opec Believed to Overstate Oil Reserves by 70%, Reserves Depleted Sooner. Mining Weekly. Accessed August 22. http://www.miningweekly.com/article/opec-believed-to-overstate-oil-reserves-by-70-reserves-depleted-sooner-2012-10-04

Lelieveld, J., Y. Proestos, P. Hadjinicolaou, M. Tanarhte, E. Tyrlis, and G. Zittis. 2016. Strongly Increasing Heat Extremes in the Middle East and North Africa (MENA) in the 21st Century. Climatic Change 137(1–2): 245–260.

LePoire, David, and Argonne National Laboratory, Argonne, IL, USA. 2015. Interpreting ‘big History’ as Complex Adaptive System Dynamics with Nested Logistic Transitions in Energy Flow and Organization—Emergence: Complexity and Organization. Emergence, March. https://journal.emergentpublications.com/article/interpreting-big-history-as-complexadaptive-system-dynamics-with-nested-logistic- transitions-in-energy-flow-and-organization/

Lesk, Corey, Pedram Rowhani, and Navin Ramankutty. 2016. Influence of Extreme Weather Disasters on Global Crop Production. Nature 529(7584): 84–87. doi: 10.1038/nature16467

Li, Minqi. 2014. Peak Oil, Climate Change, and the Limits to China’s Economic Growth. New York: Routledge.

MacDonald, Gregor. 2010. Think OPEC Exports Won’t Decline? You’re Living In A Dreamworld. Business Insider. August 14. http://www.businessinsider.com/think-opec-exports-wontdecline-youre-living-in-a-dreamworld-2010-8

Matsumoto, Ken’ichi, and Vlasios Voudouris. 2014. Potential Impact of Unconventional Oil Resources on Major Oil-Producing Countries: Scenario Analysis with the ACEGES Model. Natural Resources Research 24(1): 107–119.

Mawry, Yousef. 2015. Yemen Fuel Crisis Ignites Street Riots. Middle East Eye. February 12. http:// www.middleeasteye.net/news/yemen-fuel-crises-ignites-ongoing-street-riots-393941730

May, Robert M., Simon A. Li, Minqi. 2014. Peak Oil, Climate Change, and the Limits to China’s Economic Growth. New York: Routledge.

MacDonald, Gregor. 2010. Think OPEC Exports Won’t Decline? You’re Living In A Dreamworld. Business Insider. August 14. http://www.businessinsider.com/think-opec-exports-wontdecline-youre-living-in-a-dreamworld-2010-8

Matsumoto, Ken’ichi, and Vlasios Voudouris. 2014. Potential Impact of Unconventional Oil Resources on Major Oil-Producing Countries: Scenario Analysis with the ACEGES Model. Natural Resources Research 24(1): 107–119.

Mawry, Yousef. 2015. Yemen Fuel Crisis Ignites Street Riots. Middle East Eye. February 12. http:// www.middleeasteye.net/news/yemen-fuel-crises-ignites-ongoing-street-riots-393941730

May, Robert M., Simon A. Levin, and George Sugihara. 2008. Complex Systems: Ecology for Bankers. Nature 451(7181): 893–895.

Mayah, Emmanuel. 2012. Climate Change Fuels Nigeria Terrorism. Africa Review. February 24. http://www.africareview.com/news/Climate-change-fuels-Nigeria-terrorism/979180-1334472- 4m5dlu/index.html

McGlade, Christophe, Jamie Speirs, and Steve Sorrell. 2013. Unconventional Gas—A Review of Regional and Global Resource Estimates. Energy 55: 571–584.

Meighan, Brendan. 2016. Egypt’s Natural Gas Crisis. Carnegie Endowment for International Peace. January. http://carnegieendowment.org/sada/62534

Moeller, Devin, and David Murphy. 2016. Net Energy Analysis of Gas Production from the Marcellus Shale. BioPhysical Economics and Resource Quality 1(1): 1–13.

Mohr, Steve. 2010. Projection of World Fossil Fuel Production with Supply and Demand Interactions. Callaghan: University of Newcastle.

Mohr, S.H., and G.M. Evans. 2009. Forecasting Coal Production until 2100. Fuel 88(11): 2059– 2067.

———. 2010. Long Term Prediction of Unconventional Oil Production. Energy Policy 38(1): 265–276.

Mohr, S.H., J. Wang, G. Ellem, J. Ward, and D. Giurco. 2015. Projection of World Fossil Fuels by Country. Fuel 141: 120–135

Mora, Camilo, Abby G. Frazier, Ryan J. Longman, Rachel S. Dacks, Maya M. Walton, Eric J. Tong, Joseph J. Sanchez, et al. 2013a. The Projected Timing of Climate Departure from Recent Variability. Nature 502(7470): 183–187.

Mora, Camilo, Chih-Lin Wei, Audrey Rollo, Teresa Amaro, Amy R. Baco, David Billett, Laurent Bopp, et al. 2013b. Biotic and Human Vulnerability to Projected Changes in Ocean Biogeochemistry over the 21st Century. PLOS Biol 11(10): e1001682.

Morgan, Geoffrey. 2016. Average Oil Production to Decline This Year, Grow More Slowly in the Future: CAPP. Financial Post, June 23.

Morrissey, John. 2016. US Central Command and Liberal Imperial Reach: Shaping the Central Region for the 21st Century. The Geographical Journal 182(1): 15–26.

Murphy, David J. 2014. The Implications of the Declining Energy Return on Investment of Oil Production. Philosophical Transactions of the Royal Society of London A: Mathematical, Physical and Engineering Sciences 372(2006): 20130126. doi:10.1098/rsta.2013.0126.

Murphy, David J., and Charles A.S. Hall. 2011. Energy Return on Investment, Peak Oil, and the End of Economic Growth. Annals of the New York Academy of Sciences 1219(1): 52–72.

Nandi, Sanjib Kumar. 2014. A Study on Hubbert Peak of India’s Coal: A System Dynamics Approach. International Journal of Scientific & Engineering Research 9(2).  http://www.academia.edu/9744358/A_Study_on_Hubbert_Peak_of_Indias_Coal_A_System_Dynamics_Approach

Nekola, Jeffrey C., Craig D. Allen, James H. Brown, Joseph R. Burger, Ana D. Davidson, Trevor S. Fristoe, Marcus J. Hamilton, et al. 2013. The Malthusian–Darwinian Dynamic and the Trajectory of Civilization. Trends in Ecology & Evolution 28(3): 127–130. doi: 10.1016/j. tree.2012.12.001

OBG. 2016. New Discoveries for Egyptian Oil Producers. Oxford Business Group. January 27. http://www.oxfordbusinessgroup.com/overview/fresh-ideas-new-discoveries-have-oilproducers-optimistic-about-future

Odhiambo, George O. 2016. Water Scarcity in the Arabian Peninsula and Socio-Economic Implications. Applied Water Science, June, 1–14.

Odum, Howard Thomas. 1994. Ecological and General Systems: An Introduction to Systems Ecology. Niwot, CO: University Press of Colorado.

Omisore, Bolanle. 2014. Nigerians Face Fuel Shortages In the Shadow of Plenty. National Geographic News. April 11. http://news.nationalgeographic.com/news/enerws/ener nigeria-fuel-shortage-oil/

Onyia, Chukwuma. 2015. Climate Change and Conflict in Nigeria: The Boko Haram Challenge. American International Journal of Social Science 4(2)

Owen, Nick A., Oliver R. Inderwildi, and David A. King. 2010. The Status of Conventional World Oil reserves—Hype or Cause for Concern? Energy Policy 38(8): 4743–4749.

Patrick, Roger. 2015. When the Well Runs Dry: The Slow Train Wreck of Global Water Scarcity. Journal—American Water Works Association 107: 65–76.

Patzek, Tad W., Frank Male, and Odum, Howard Thomas. 1994. Ecological and General Systems: An Introduction to Systems Ecology. Niwot, CO: University Press of Colorado.

Omisore, Bolanle. 2014. Nigerians Face Fuel Shortages In the Shadow of Plenty. National Geographic News. April 11. http://news.nationalgeographic.com/news/enerws/ener nigeria-fuel-shortage-oil/

Onyia, Chukwuma. 2015. Climate Change and Conflict in Nigeria: The Boko Haram Challenge. American International Journal of Social Science 4(2). http://www.aijssnet.com/journal/index/329 .

Owen, Nick A., Oliver R. Inderwildi, and David A. King. 2010. The Status of Conventional World Oil reserves—Hype or Cause for Concern? Energy Policy 38(8): 4743–4749.

Patrick, Roger. 2015. When the Well Runs Dry: The Slow Train Wreck of Global Water Scarcity. Journal—American Water Works Association 107: 65–76.

Patzek, Tad W., Frank Male, and Michael Marder. 2013. Gas Production in the Barnett Shale Obeys a Simple Scaling Theory. Proceedings of the National Academy of Sciences 110(49): 19731–19736.

Pearce, Joshua M. 2008. Thermodynamic Limitations to Nuclear Energy Deployment as a Greenhouse Gas Mitigation Technology. International Journal of Nuclear Governance, Economy and Ecology 2(1): 113.

Peel, Michael. 2013. Subsidies ‘Distort’ Saudi Arabia Economy Says Economy Minister. Financial Times. May 7. http://www.ft.com/cms/s/0/f474cf28-b717-11e2-841e-00144feabdc0.html

Phys.org. 2016. Minority Rules: Scientists Discover Tipping Point for the Spread of Ideas. Accessed August 21. http://phys.org/news/2011-07-minority-scientists-ideas.html

Pichler, Franz. 1999. Modeling Complex Systems by Multi-Agent Holarchies. In Computer Aided Systems Theory—EUROCAST’99, ed. Peter Kopacek, Roberto Moreno-Díaz, and Franz Pichler, 154–168. Lecture Notes in Computer Science 1798. Springer Berlin Heidelberg.

Pierce, Charles P. 2016. What Happens When the American Southwest Runs Out of Water? Esquire. June 1. http://www.esquire.com/news-politics/politics/news/a45398/southwest-desertwater-drought/

Pracha, Ali S., and Timothy A. Volk. 2011. An Edible Energy Return on Investment (EEROI) Analysis of Wheat and Rice in Pakistan. Sustainability 3(12): 2358–2391.

Pritchard, Bill. 2016. The Impacts of Climate Change for Food and Nutrition Security: Issues for India. In Climate Change Challenge (3C) and Social-Economic-Ecological Interface-Building. Environmental Science and Engineering. Springer.

Pueyo, Salvador. 2014. Ecological Econophysics for Degrowth. Sustainability 6(6): 3431–3483.

Qaed, Samar. 2014. Expanding Too Quickly? Yemen Times. February 25.

Qi, Ye, Nicholas Stern, Tong Wu, Jiaqi Lu, and Fergus Green. 2016. China’s Post-Coal Growth. Nature Geoscience 9.

Reganold, John P., and Jonathan M. Wachter. 2016. Organic Agriculture in the Twenty-First Century. Nature Plants 2(2): 15221.

Rioux, Sébastien, and Frédérick Guillaume Dufour. 2008. La sociologie historique de la théorie des relations sociales de propriété. Actuel Marx 43(1): 126.

RiskMetrics Group. 2010. Canada’s Oil Sands: Shrinking Window of Opportunity. Ceres, Inc. http://www.ceres.org/resources/reports/oil-sands-2010

Rockström, Johan, Will Steffen, Kevin Noone, Persson Åsa, F. Stuart Chapin, Eric F. Lambin, Timothy M. Lenton, et al. 2009. A Safe Operating Space for Humanity. Nature 461(7263): 472–475.

Ross, John, and Adam P. Arkin. 2009. Complex Systems: From Chemistry to Systems Biology. Proceedings of the National Academy of Sciences 106(16): 6433–6434.

Salameh, M. G. 2012. Impact of US Shale Oil Revolution on the Global Oil Market, the Price of Oil & Peak Oil.

Saleh, Hebah. 2013. Egypt Weighs Burden of IMF Austerity. Financial Times. March 11. http://www.ft.com/cms/s/0/464a9350-8a6d-11e2-bf79-00144feabdc0.html

Sanders, Jim. 2013. The Hidden Force behind Islamic Militancy in Nigeria? Climate Change. The Christian Science Monitor. July 8.

Sands, Phil. 2011. Population Surge in Syria Hampers Country’s Progress | The National. The National, March 6. http://www.thenational.ae/news/world/middle-east/population-surgein-syria-hampers-countrys-progress

Sarant, Louise. 2013. Climate Change and Water Mismanagement Parch Egypt | Egypt Independent. Egypt Independent. February 26. http://www.egyptindependent.com/news/climate-changeand-water-mismanagement-parch-egypt

Sayne, Aaron. 2011. Climate Change Adaptation and Conflict in Nigeria. Special Report. United States Institute of Peace. http://www.usip.org/publications/climate-change-adaptationand-conflict-in-nigeria

Schneider, E.D., and J.J. Kay. 1994. Life as a Manifestation of the Second Law of Thermodynamics. Mathematical and Computer Modelling 19(6): 25–48.

Schneider, François, Giorgos Kallis, and Joan Martinez-Alier. 2010. Crisis or Opportunity? Economic Degrowth for Social Equity and Ecological Sustainability. Introduction to This Special Issue. Journal of Cleaner Production, Growth, Recession or Degrowth for Sustainability and Equity? 18(6): 511–518.

Schrodinger, Erwin. 1944. What Is Life? http://whatislife.stanford.edu/LoCo_files/What-isLife.pdf

Schwartzman, David, and Peter Schwartzman. 2013. A Rapid Solar Transition Is Not Only Possible, It Is Imperative! African Journal of Science, Technology. Innovation and Development 5(4): 297–302.

Shahine, Alaa. 2016. Egypt Had FDI Outflows of $482.7 Million in 2011. Bloomberg.com. Accessed August 16. http://www.bloomberg.com/news/articles/2012-03-25/egypt-had-fdioutflows-of-482-7-million-in-2011-correct-

Shaw, Martin. 2005. Risk-Transfer Militarism and the Legitimacy of War after Iraq. In September 11, 2001: A Turning-Point in International and Domestic Law? ed. Paul Eden and T. O’Donnell. Transnational Publishers. http://sro.sussex.ac.uk/12462/

Simms, Andrew. 2008. The Poverty Myth. New Scientist 200(2678): 49.

Smith-Nonini, Sandy. 2016. The Role of Corporate Oil and Energy Debt in Creating the Neoliberal Era. Economic Anthropology 3(1): 57–67.

Söderbergh, Bengt, Fredrik Robelius, and Kjell Aleklett. 2007. A Crash Programme Scenario for the Canadian Oil Sands Industry. Energy Policy 35(3): 1931–1947.

Steffen, Will, et al. 2015. January 15, 2015. Planetary Boundaries: Guiding Human Development on a Changing Planet. Science.

Stewart, Ian. 2015. Debt-Driven Growth, Where Is the Limit? Deloitte: Monday Briefing. February 2. http://blogs.deloitte.co.uk/mondaybriefing/2015/02/debt-driven-growth-whereis-the-limit.html

Stokes, Doug, and Sam Raphael. 2010. Global Energy Security and American Hegemony. Baltimore: JHU Press. Stott, Peter. 2016. How Climate Change Affects Extreme Weather Events. Science 352(6293): 1517–1518.

Street, 1615 L., NW, Suite 800 Washington, and DC 20036 Media Inquiries. 2014. Attitudes about Aging: A Global Perspective. Pew Research Center’s Global Attitudes Project. January 30. http://www.pewglobal.org/2014/01/30/attitudes-about-aging-a-global-perspective/

Taha, Sharif. 2014. Kingdom Imports 80% of Food Products. Arab News. April 20. http://www.arabnews.com/news/558271

Tainter, Joseph. 1990. The Collapse of Complex Societies. Cambridge: Cambridge University Press.

Tao, Fulu, Masayuki Yokozawa, Yousay Hayashi, and Erda Lin. 2003. Future Climate Change, the Agricultural Water Cycle, and Agricultural Production in China. Agriculture, Ecosystems & Environment 95(1): 203–215.

TE. 2016. Egypt Government Debt to GDP 2002-2016. Trading Economics. http://www.tradingeconomics.com/egypt/government-debt-to-gdp

Terzis, George, and Robert Arp, eds. 2011. Information and Living Systems: Philosophical and Scientific Perspectives. MIT Press. http://www.jstor.org/stable/j.ctt5hhhvb.

Thevard, Benoit. 2012. Europe Facing Peak Oil. Momentum Institute/Greens-EFA Group in European Parliament.  http://www.greens-efa.eu/fileadmin/dam/Documents/Publications/PIC%20petrolier_EN_lowres.pdf

Timms, Matt. 2016. Resource Mismanagement Has Led to a Critical Water Shortage in Asia. World Finance, July 21.

Tong, Shilu et al. 2016. Climate Change, Food, Water and Population Health in China. Bulletin of the World Health Organization, July.

Tranum, Sam. 2013. Powerless: India’s Energy Shortage and Its Impact. India: Sage.

Trendberth, Kevin, Jerry Meehl, Jeff Masters, and Richard Somerville. 2012. Heat Waves and Climate Change. https://www.climatecommunication.org/wp-content/uploads/2012/06/Heat_ Waves_and_Climate_Change.pdf

Tverberg, Gail. 2016. China: Is Peak Coal Part of Its Problem? Our Finite World. June 20.  https://ourfiniteworld.com/2016/06/20/china-is-peak-coal-part-of-its-problem/

UN 2015. World Population Prospects. United Nations Department of Economic & Social Affairs, Population Division.

UN News Center, United Nations News Service. 2012. UN News—Despite End-of-Year Decline, 2011 Food Prices Highest on Record—UN. UN News Service Section. January 12.

Victor, Peter. 2010. Questioning Economic Growth. Nature 468(7322): 370–371.

Vyas, Kejal, and Timothy Puko. 2016. Venezuela Oil Production Drops Sharply in May. Wall Street Journal, June 14, sec. World. http://www.wsj.com/articles/venezuela-oil-productiondrops-sharply-in-may-1465868354

Wang, Jinxia, Robert Mendelsohn, Ariel Dinar, Jikun Huang, Scott Rozelle, and Lijuan Zhang. 2009. The Impact of Climate Change on China’s Agriculture. Agricultural Economics 40(3): 323–337.

Wang, Ke, Lianyong Feng, Jianliang Wang, Yi Xiong, and Gail E. Tverberg. 2016. An Oil Production Forecast for China Considering Economic Limits. Energy 113: 586–596.

Weijermars, Ruud. 2013. Economic Appraisal of Shale Gas Plays in Continental Europe. Applied Energy 106: 100–115. doi: 10.1016/j.apenergy.2013.01.025

Wiedmann, Thomas O., Heinz Schandl, Manfred Lenzen, Daniel Moran, Sangwon Suh, James West, and Keiichiro Kanemoto. 2015. The Material Footprint of Nations. Proceedings of the National Academy of Sciences 112(20): 6271–6676.

Wilkinson, Henry. 2016. Political Violence Contagion: A Framework for Understanding the Emergence and Spread of Civil Unrest. Lloyd’s.   http://www.lloyds.com/~/media/files/news%20and%20insight/risk%20insight/2016/political%20violence%20contagion.pdf

Williams, Selina, and Bradley Olson. 2016. Big Oil Companies Binge on Debt. Wall Street Journal, August 24. http://www.wsj.com/articles/largest-oil-companies-debts-hit-record-high1472031002

Wood, Ellen Meiksins. 1981. The Separation of the Economic and the Political in Capitalism. New Left Review, I 127: 66–95. World Bank. 2014. Future Impact of Climate Change Visible Now in Yemen.

World Bank. November 24. http://www.worldbank.org/en/news/feature/2014/11/24/future-impactof-climate-change-visible-now-in-yemen

Worth, Robert F. 2010. Drought Withers Lush Farmlands in Syria. The New York Times, October 13. http://www.nytimes.com/2010/10/14/world/middleeast/14syria.html

Yaritani, Hiroaki, and Jun Matsushima. 2014. Analysis of the Energy Balance of Shale Gas Development. Energies 7(4): 2207–2227.





Collapse is underway……

5 06 2017

(By the Doomstead Diner)

Due to my High & Mighty position as a Global Collapse Pundit, I am often asked the question of when precisely will Collapse arrive?  The people who ask me this question all come from 1st World countries.  They are also all reasonably well off with a computer, an internet connection, running water and enough food to eat.  While a few of us are relatively poor retirees, even none of us wants for the basics as of yet.  The Diner doesn’t get many readers from the underclass even here in Amerika, much less from the Global Underclass in places like Nigeria, Somalia, Sudan and Yemen.

The fact is, that for more than half the world population, Collapse is in full swing and well underway.  Two key bellweathers of where collapse is now are the areas of Electricity and Food.

This chart was around 16 years ago when I first became a peaknik….

In his seminal 1996 Paper The Olduvai Theory: Sliding Towards a Post-Industrial Stone Age, Richard Duncan mapped out the trajectory of where we would be as the years passed and fossil fuels became more difficult and expensive to mine up.  Besides powering all our cars and trucks for Happy Motoring and Just-in-Time delivery, the main thing our 1st World lifestyle requires is Electricity, and lots of it on demand, 24/7.  Although electricity can be produced in some “renewable” ways that don’t depend on a lot of fossil fuel energy at least directly, most of the global supply of electric power comes from Coal and Natural Gas.  Of the two, NG (NatGas) is slightly cleaner, but either way when you burn them, CO2 goes up in the atmosphere.  This of course is a problem climatically, but you have an even bigger problem socially and politically if you aren’t burning them.  Everything in the society as it has been constructed since Edison invented the Light Bulb in 1879 has depended on electricity to function.

Now, if all the toys like lights, refrigerators big screen TVs etc had been kept to just a few small countries and the rest of the world lived a simple subsistence farming lifestyle, the lucky few with the toys probably could have kept the juice flowing a lot longer.  Unfortunately however, once exposed to all the great toys, EVERYBODY wanted them.  The industrialists also salivated over all the profit to be made selling the toys to everyone.  So, everybody everywhere needed a grid, which the industrialists and their associated banksters extended Credit for “backward” Nation-States all over the globe to build their own power plants and string their own wires.  Now everybody in the country could have a lightbulb to see by and a fridge to keep the food cold.  More than that, the electricity also went to power water pumping stations and sewage treatment plants, so you could pack the Big Shities with even more people who use still more electricity.

This went on all over the globe, today there isn’t a major city or even a medium size town anywhere on the globe that isn’t wired for electricity, although many places that are now no longer have enough money to keep the juice flowing.

Where is the electricity going off first?  Obviously, in the poorest and most war torn countries across the Middle East and Africa.  These days, from Egypt to Tunisia, if they get 2 hours of electricity a day they are doing good.

The Lights Are Going Out in the Middle East

Public fury over rampant outages has sparked protests. In January, in one of the largest demonstrations since Hamas took control in Gaza a decade ago, ten thousand Palestinians, angered by the lack of power during a frigid winter, hurled stones and set tires ablaze outside the electricity company. Iraq has the world’s fifth-largest oil reserves, but, during the past two years, repeated anti-government demonstrations have erupted over blackouts that are rarely announced in advance and are of indefinite duration. It’s one issue that unites fractious Sunnis in the west, Shiites in the arid south, and Kurds in the mountainous north. In the midst of Yemen’s complex war, hundreds dared to take to the streets of Aden in February to protest prolonged outages. In Syria, supporters of President Bashar al-Assad in Latakia, the dynasty’s main stronghold, who had remained loyal for six years of civil war, drew the line over electricity. They staged a protest in January over a cutback to only one hour of power a day.

Over the past eight months, I’ve been struck by people talking less about the prospects of peace, the dangers of ISIS, or President Trump’s intentions in the Middle East than their own exhaustion from the trials of daily life. Families recounted groggily getting up in the middle of the night when power abruptly comes on in order to do laundry, carry out business transactions on computers, charge phones, or just bathe and flush toilets, until electricity, just as unpredictably, goes off again. Some families have stopped taking elevators; their terrified children have been stuck too often between floors. Students complained of freezing classrooms in winter, trying to study or write papers without computers, and reading at night by candlelight. The challenges will soon increase with the demands for power—and air-conditioning—surge, as summer temperatures reach a hundred and twenty-five degrees.

The reasons for these outages vary. With the exception of the Gulf states, infrastructure is old or inadequate in many of the twenty-three Arab countries. The region’s disparate wars, past and present, have damaged or destroyed electrical grids. Some governments, even in Iraq, can’t afford the cost of fueling plants around the clock. Epic corruption has compounded physical challenges. Politicians have delayed or prevented solutions if their cronies don’t get contracts to fuel, maintain, or build power plants.

Now you’ll note that at the end of the third paragraph there, the journalist implies that a big part of the problem is “political corruption”, but it’s really not.  It’s simply a lack of money.  These countries at one time were all Oil Exporters, although not on the scale of Saudi Arabia or Kuwait.  As their own supplies of oil have depleted they have become oil importers, except they neither have a sufficient mercantilist model running to bring in enough FOREX to buy oil, and they can’t get credit from the international banking cartel to keep buying.  Third World countries are being cut off from the Credit Lifeline, unlike the core countries at the center of credit creation like Britain, Germany and the FSoA.  All these 1st World countries are in just as bad fiscal deficit as the MENA countries, the only difference is they still can get credit and run the deficits even higher.  This works until it doesn’t anymore.

Beyond the credit issue is the War problem.  As the countries run out of money, more people become unemployed, businesses go bankrupt, tax collection drops off the map and government employees are laid off too.  It’s the classic deflationary spiral which printing more money doesn’t solve, since the notes become increasingly worthless.  For them to be worth anything in FOREX, somebody has to buy their Government Bonds, and that is precisely what is not happening.  So as society becomes increasingly impoverished, it descends into internecine warfare between factions trying to hold on to or increase their share of the ever shrinking pie.

The warfare ongoing in these nations has knock on effects for the 1st World Nations still trying to extract energy from some of these places.  To keep the oil flowing outward, they have to run very expensive military operations to at least maintain enough order that oil pipelines aren’t sabotaged on a daily basis.  The cost of the operations keeps going up, but the amount of money they can charge the customers for the oil inside their own countries does not keep going up.  Right now they have hit a ceiling around $50/bbl for what they can charge for the oil, and for the most part this is not a profit making price.  So all the corporations involved in Extraction & Production these days are surviving on further extensions of credit from the TBTF banks.  This also is a paradigm that can’t last. The other major problem now surfacing is the Food Distribution problem, and again this is hitting the African countries first and hardest.  It’s a combination problem of climate change, population overshoot and the warfare which results from those issues.

Currently, the UN lists 4 countries in extreme danger of famine in the coming year, Nigeria, Sudan, Somalia and Yemen.  They estimate currently there are 20M people at extreme risk, and I would bet the numbers are a good deal higher than that.

World faces four famines as Trump administration [and Australia] plans to slash foreign aid budget

‘Biggest humanitarian crisis since World War II’ about to engulf 20 million people, UN says, as governments only donate 10 per cent of funds needed for essential aid.

The world is facing a humanitarian crisis bigger than any in living memory, the UN has said, as four countries teeter on the brink of famine.

Twenty million people are at risk of starvation and facing water shortages in Somalia, Nigeria and Yemen, while parts of South Sudan are already officially suffering from famine.

While the UN said in February that at least $4.4 billion (£3.5 bn) was needed by the end of March to avert a hunger catastrophe across the four nations, the end of the month is fast approaching, and only 10 per cent of the necessary funds have been received from donor governments so far.

It doesn’t look too promising that the UN will be able to raise the $4B they say is necessary to feed all those hungry mouths, and none of the 1st World countries is too predisposed to handing out food aid when they all currently have problems with their own social welfare programs for food distribution.  Here in the FSoA, there are currently around 45M people on SNAP Cards at a current cost around $71B.  The Repugnants will no doubt try to cut this number in order to better fund the Pentagon, but they are not likely to send more money to Somalia.

Far as compassion for all the starving people globally goes in the general population, this also appears to be decreasing, although I don’t have statistics to back that up. It is just a general sense I get as I read the collapse blogosphere, in the commentariats generally.  The general attitude is, “It’s their own fault for being so stupid and not using Birth Control.  If they were never born, they wouldn’t have to die of starvation.”  Since they are mostly Black Africans currently starving, this is another reason a large swath of the white population here doesn’t care much about the problem.

There are all sorts of social and economic reasons why this problem spiraled out of control, having mainly to do with the production of cheap food through Industrial Agriculture and Endless Greed centered on the idea of Endless Growth, which is not possible on a Finite Planet.

More places on Earth were wired up with each passing year, and more people were bred up with each passing year.  The dependency on fossil fuels to keep this supposedly endless cycle of growth going became ever greater each year, all while this resource was being depleted more each year.  Eventually, an inflection point had to be hit, and we have hit it.

The thing is, for the relatively comfortable readers of the Doomstead Diner in the 1st World BAU seems to be continuing onward, even if you are a bit poorer than you were last year. 24/7 electricity is still available from the grid with only occasional interruptions.  Gas is still available at the pump, and if you are employed you probably can afford to buy it, although you need to be more careful about how much you drive around unless you are a 1%er.  The Rich are still lining up to buy EVs from Elon Musk, even though having a grid to support all electric transportation is out of the question.  The current grid can’t be maintained, and upgrading to handle that much throughput would take much thicker cables all across the network.  People carry on though as though this will all go on forever and Scientists & Engineers will solve all the problems with some magical new device.  IOW, they believe in Skittle Shitting Unicorns.

That’s not going to happen, however, so you’re back to the question of how long will it take your neighborhood in the UK or Germany or the FSoA to look like say Egypt today?  Well, if you go back in time a decade to Egypt in 2007, things were still looking pretty Peachy over there, especially in Tourist Traps like Cairo.  Terrorism wasn’t too huge a problem and the government of Hosni Mubarak appeared stable.  A decade later today, Egypt is basically a failed state only doing marginally better than places like Somalia and Sudan.  The only reason they’re doing as well as they are is because they are in an important strategic location on the Suez Canal and as such get support from the FSoA military.

So a good WAG here for how long it will take for the Collapse Level in 1st World countries to reach the level Egypt is at today is about a decade.  It could be a little shorter, it could be longer.  By then of course, Egypt will be in even WORSE shape, and who might still be left alive in Somalia is an open question.  Highly unlikely to be very many people though.  Over the next decade, the famines will spread and people will die, in numbers far exceeding the 20M to occur over the next year.  After a while, it’s unlikely we will get much news about this, and people here won’t care much about what they do hear.  They will have their own problems.

The original article can be found at the Doomstead Diner here: Dimming Bulb 3: Collapse Has ARRIVED!


A very interesting article by the folks at Doomstead Diner.  While their forecast of collapse could be off a few years, it seems as if they are looking at the same time-frame the Hills Group and Louis Arnoux are projecting for the Thermodynamic oil collapse.

Lastly, people need to realize COLLAPSE does not take place in a day, week, month or year.  It takes place over a period of time.  The folks at Doomstead Diner are making the case that it has ARRIVED.  It is just taking time to reach the more affluent countries will good printing presses.

So… it is going to be interesting to see how things unfold over the next 5-10 years.





Ugo Bardi on the end of cars…..

25 05 2017

The Coming Seneca Cliff of the Automotive Industry: the Converging Effect of Disruptive Technologies and Social Factors

This graph shows the projected demise of individual car ownership in the US, according to “RethinkX”. That will lead to the demise of the automotive industry as we know it since a much smaller number of cars will be needed. If this is not a Seneca collapse, what is? 



Decades of work in research and development taught me this:

Innovation does not solve problems, it creates them. 

Which I could call “the Golden Rule of Technological Innovation.” There are so many cases of this law at work that it is hard for me to decide where I should start from. Just think of nuclear energy; do you understand what I mean? So, I am always amazed at the naive faith of some people who think that more technology will save us from the trouble created by technology (the most common mistake people make is not to learn from mistakes).

That doesn’t mean that technological research is useless; not at all. R&D can normally generate small but useful improvements to existing processes, which is what it is meant to do. But when you deal with breakthroughs, well, it is another kettle of dynamite sticks; so to say. Most claimed breakthroughs turn out to be scams (cold fusion is a good example) but not all of them. And that leads to the second rule of technological innovation:

Successful innovations are always highly disruptive

You probably know the story of the Polish cavalry charging against the German tanks during WWII. It never happened, but the phrase “fighting tanks with horses” is a good metaphor for what technological breakthroughs can do. Some innovations impose themselves, literally, by marching over the dead bodies of their opponents. Even without such extremes, when an innovation becomes a marker of social success, it can diffuse extremely fast. Do you remember the role of status symbol that cell phones played in the 1990s?

Cars are an especially good example of how social factors can affect and amplify the effects of innovation. I discussed in a previous post on Cassandra’s Legacy how cars became the prime marker of social status in the West in the 1950s, becoming the bloated and inefficient objects we know today. They had a remarkable effect on society, creating the gigantic suburbs of today’s cities where life without a personal car is nearly impossible.

But the great wheel of technological innovation keeps turning and it is soon going to make individual cars as obsolete as would be wearing coats made of home-tanned bear skins. It is, again, the combination of technological innovation and socioeconomic factors creating a disruptive effect. For one thing, private car ownership is rapidly becoming too expensive for the poor. At the same time, the combination of global position systems (GPS), smartphones, and autonomous driving technologies makes possible a kind of “transportation on demand” or “transportation as a service” (TAAS) that was unthinkable just a decade ago. Electric cars are especially suitable (although not critically necessary) for this kind of transportation. In this scheme, all you need to do to get a transportation service is to push a button on your smartphone and the vehicle you requested will silently glide in front of you to take you wherever you want. (*)

The combination of these factors is likely to generate an unstoppable and disruptive social phenomenon. Owning a car will be increasingly seen as passé, whereas using the latest TAAS gadgetry will be seen as cool. People will scramble to get rid of their obsolete, clumsy, and unfashionable cars and move to TAAS. Then, TAAS can also play the role of social filter: with the ongoing trends of increasing social inequality, the poor will be able to use it only occasionally or not at all. The rich, instead, will use it to show that they can and that they have access to credit. Some TAAS services will be exclusive, just as some hotels and resorts are. Some rich people may still own cars as a hobby, but that wouldn’t change the trend.

To have some idea of what a TAAS-based world can be, you might read Hemingway’s “Movable Feast”, a story set in Paris in the 1920s. There, Hemingway describes how the rich Americans in Paris wouldn’t normally even dream of owning a car (**). Why should they have, while when they could simply ride the local taxis at a price that, for them, was a trifle? It was an early form of TAAS. Most of the Frenchmen living in Paris couldn’t afford that kind of easygoing life and that established an effective social barrier between the haves and the have-nots.

As usual, of course, the future is difficult to predict. But something that we can say about the future is that when changes occur, they occur fast. In this case, the end result of the development of individual TAAS will be the rapid collapse of the automotive industry as we know it: a much smaller number of vehicles will be needed and they won’t need to be of the kind that the present automotive industry can produce. This phenomenon has been correctly described by “RethinkX,” even though still within a paradigm of growth. In practice, the transition is likely to be even more rapid and brutal than what the RethinkX team propose. For the automotive industry, there applies the metaphor of “fighting tanks with horses.”

The demise of the automotive industry is an example of what I called the “Seneca Effect.” When some technology or way of life becomes obsolete and unsustainable, it tends to collapse very fast. Look at the data for the world production of motor vehicles, below (image from Wikipedia). We are getting close to producing a hundred million of them per year. If the trend continues, during the next ten years we’ll have produced a further billion of them. Can you really imagine that it would be possible? There is a Seneca Cliff waiting for the automotive industry.

(*) If the trend of increasing inequality continues, autonomous driven cars are not necessary. Human drivers would be inexpensive enough for the minority of rich people who can afford to hire them.

(**) Scott Fitzgerald, the author of “The Great Gatsby” is reported to have owned a car while living in France, but that was mainly an eccentricity.





The end of the Middle East

14 03 2017

I have to say, I am seriously chuffed that Nafeez Ahmed is calling it, as I have been for years now…. In a lengthy but well worth reading article in the Middle East Eye, Nafeez explains the convoluted reasons why we have the current turmoil in Iraq, Yemen, and Syria. He doesn’t mention Egypt – yet – but to be fair, the article’s focus in on Mosul and the implications of the disaster unfolding there……

It never ceases to amaze me how Egypt has managed to stay off the news radar. Maybe the populace is too starved to revolt again….

After oil, rice and medicines, sugar has run out in Egypt, as the country has announced a devaluation of 48% of its currency. In Egypt, about 68 million of the total 92 million people receive food subsidized by the State through small consumer stores run by the Ministry of supply and internal trade. After shortages of oil, rice and milk, and even medicines, now sugar scarcity has hit the country. Nearly three quarters of the population completely rely on the government stores for their basic needs.

Egypt produces 2 million tons of sugar a year but has to import 3 million to face domestic demand. However imports have become too expensive.  The country is expected to receive a loan of 12 billion dollars (11 billion euros) from the International monetary Fund (IMF) to tackle its food scarcity. The price for sugar in supermarkets and black markets are skyrocketing as well, with a kilogram costing around 15 pounds. If available, one could get sugar from subsidized government stores for 0.50 euros per kilo.

Nafeez goes into great and interesting detail re the dismaying shenanigans going on in nafeezIraq and Syria at the moment. I’ll leave it to you to go through what he wrote on the Middle East Eye site on those issues, but what struck me as relevant to what this blog is about is how well they correlate with my own thoughts here…..:

Among my findings is that IS was born in the crucible of a long-term process of ecological crisis. Iraq and Syria are both experiencing worsening water scarcity. A string of scientific studies has shown that a decade-long drought cycle in Syria, dramatically intensified by climate change, caused hundreds and thousands of mostly Sunni farmers in the south to lose their livelihoods as crops failed. They moved into the coastal cities, and the capital, dominated by Assad’s Alawite clan. 

Meanwhile, Syrian state revenues were in terminal decline because the country’s conventional oil production peaked in 1996. Net oil exports gradually declined, and with them so did the clout of the Syrian treasury. In the years before the 2011 uprising, Assad slashed domestic subsidies for food and fuel.

While Iraqi oil production has much better prospects, since 2001 production levels have consistently remained well below even the lower-range projections of the industry, mostly because of geopolitical and economic complications. This weakened economic growth, and consequently, weakened the state’s capacity to meet the needs of ordinary Iraqis.

Drought conditions in both Iraq and Syria became entrenched, exacerbating agricultural failures and eroding the living standards of farmers. Sectarian tensions simmered. Globally, a series of climate disasters in major food basket regions drove global price spikes. The combination made life economically intolerable for large swathes of the Iraqi and Syrian populations.

Outside powers – the US, Russia, the Gulf states, Turkey and Iran – all saw the escalating Syrian crisis as a potential opportunity for themselves. As the ensuing Syrian uprising erupted into a full-blown clash between the Assad regime and the people, the interference of these powers radicalised the conflict, hijacked Sunni and Shia groups on the ground, and accelerated the de-facto collapse of Syria as we once knew it.  

AND…..

Meanwhile, across the porous border in Iraq, drought conditions were also worsening. As I write in Failing States, Collapsing Systems, there has been a surprising correlation between the rapid territorial expansion of IS, and the exacerbation of local drought conditions. And these conditions of deepening water scarcity are projected to intensify in coming years and decades.

An Iraqi man walks past a canoe siting on dry, cracked earth in the Chibayish marshes near the southern Iraqi city of Nasiriyah in 2015 (AFP)

The discernable pattern here forms the basis of my model: biophysical processes generate interconnected environmental, energy, economic and food crises – what I call earth system disruption (ESD). ESD, in turn, undermines the capacity of regional states like Iraq and Syria to deliver basic goods and services to their populations. I call this human system destabilisation (HSD).

As states like Iraq and Syria begin to fail as HSD accelerates, those responding – whether they be the Iraqi and Syrian governments, outside powers, militant groups or civil society actors – don’t understand that the breakdowns happening at the levels of state and infrastructure are being driven by deeper systemic ESD processes. Instead, the focus is always on the symptom: and therefore the reaction almost always fails entirely to even begin to address earth system sisruption.

So Bashar al-Assad, rather than recognising the uprising against his regime as a signifier of a deeper systemic shift – symptomatic of a point-of-no-return driven by bigger environmental and energy crises – chose to crackdown on his narrow conception of the problem: angry people.

Even more importantly, Nafeez also agrees with my predictions regarding Saudi Arabia…

The Gulf states are next in line. Collectively, the major oil producers might have far less oil than they claim on their books. Oil analysts at Lux Research estimate that OPEC oil reserves may have been overstated by as much as 70 percent. The upshot is that major producers like Saudi Arabia could begin facing serious challenges in sustaining the high levels of production they are used to within the next decade.

Another clear example of exaggeration is in natural gas reserves. Griffiths argues that “resource abundance is not equivalent to an abundance of exploitable energy”.

While the region holds substantial amounts of natural gas, underinvestment due to subsidies, unattractive investment terms, and “challenging extraction conditions” have meant that Middle East producers are “not only unable to monetise their reserves for export, but more fundamentally unable to utilise their reserves to meet domestic energy demands”. 

Starting to sound familiar..? We are doing the exact same thing here in Australia…. It’s becoming ever more clear that Limits to Growth equates to scraping the bottom of the barrel, and the scraping sounds are getting louder by the day.

And oil depletion is only one dimension of the ESD processes at stake. The other is the environmental consequence of exploiting oil.

Over the next three decades, even if climate change is stabilised at an average rise of 2 degrees Celsius, the Max Planck Institute forecasts that the Middle East and North Africa will still face prolonged heatwaves and dust storms that could render much of the region “uninhabitable”. These processes could destroy much of the region’s agricultural potential.

Nafeez finishes with a somewhat hopeful few paragraphs.

Broken models

While some of these climate processes are locked in, their impacts on human systems are not. The old order in the Middle East is, unmistakably, breaking down. It will never return.

But it is not – yet – too late for East and West to see what is actually happening and act now to transition into the inevitable future after fossil fuels.

The battle for Mosul cannot defeat the insurgency, because it is part of a process of human system destabilisation. That process offers no fundamental way of addressing the processes of earth system disruption chipping away at the ground beneath our feet.

The only way to respond meaningfully is to begin to see the crisis for what it is, to look beyond the dynamics of the symptoms of the crisis – the sectarianism, the insurgency, the fighting – and to address the deeper issues. That requires thinking about the world differently, reorienting our mental models of security and prosperity in a way that captures the way human societies are embedded in environmental systems – and responding accordingly.

At that point, perhaps, we might realise that we’re fighting the wrong war, and that as a result, no one is capable of winning.

The way the current crop of morons in charge is behaving, I feel far less hopeful that someone will see the light. There aren’t even worthwhile alternatives to vote for at the moment…  If anything, they are all getting worse at ‘leading the world’ (I of course use the term loosely..), not better. Nor is the media helping, focusing on politics rather than the biophysical issues discussed here.