Why we are so bad at dealing with Limits to Growth..

15 05 2016

ilargi

Raul Ilargi

I know I am prone to say “this is the best thing I have read in years”, but honestly, this essay by Ilargi of The Automatic Earth fame is something else……  read and enjoy, and share widely.  Originally published here…. and republished with the intent of spreading the word.

 

“As individuals we need to drastically reduce our dependence on the runaway big systems, banking, the grid, transport etc., that we ourselves built like so many sorcerers apprentices, because as societies we can’t fix the runaway problems with those systems, and they are certain to drag us down with them if we let them.”

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

I came upon this quote a few weeks ago in an interview that Der Spiegel had with Dennis Meadows, co-author of the Limits to Growth report published by the Club of Rome 40 years ago. Yes, the report that has been much maligned and later largely rehabilitated. But that’s not my topic here, and neither is Meadows himself. It’s the quote, and it pretty much hasn’t left me alone since I read it.

Here’s the short version:

[..] … we are going to evolve through crisis, not through proactive change.

And here it is in its context:

‘Limits to Growth’ Author Dennis Meadows ‘Humanity Is Still on the Way to Destroying Itself’

SPIEGEL ONLINE: Professor Meadows, 40 years ago you published “The Limits to Growth” together with your wife and colleagues, a book that made you the intellectual father of the environmental movement. The core message of the book remains valid today: Humanity is ruthlessly exploiting global resources and is on the way to destroying itself. Do you believe that the ultimate collapse of our economic system can still be avoided?

Meadows: The problem that faces our societies is that we have developed industries and policies that were appropriate at a certain moment, but now start to reduce human welfare, like for example the oil and car industry. Their political and financial power is so great and they can prevent change. It is my expectation that they will succeed. This means that we are going to evolve through crisis, not through proactive change.

I don’t really think that Dennis Meadows understands how true that is. I may be wrong, but I think he’s talking about a specific case here . While what he makes me ponder is that perhaps this is all we have, and always, that it’s a universal truth. That we can never solve our real big problems through proactive change. That we can only get to a next step by letting the main problems we face grow into full-blown crises, and that our only answer is to let that happen.

And then we come out on the other side, or we don’t, but it’s not because we find the answer to the problem itself, we simply adapt to what there is at the other side of the full-blown crisis we were once again unable to halt in its tracks. Adapt like rats do, and crocodiles, cockroaches, no more and no less.

This offers a nearly completely ignored insight into the way we deal with problems. We don’t change course in order to prevent ourselves from hitting boundaries. We hit the wall face first, and only then do we pick up the pieces and take it from there.

Jacques Cousteau was once quite blunt about it:

The road to the future leads us smack into the wall. We simply ricochet off the alternatives that destiny offers: a demographic explosion that triggers social chaos and spreads death, nuclear delirium and the quasi-annihilation of the species… Our survival is no more than a question of 25, 50 or perhaps 100 years.

Without getting into specific predictions the way Cousteau did: If that is as true as I suspect it is, the one thing it means is that we fool ourselves a whole lot. The entire picture we have created about ourselves, consciously, sub-consciously, un-consciously, you name it, is abjectly false. At least the one I think we have. Which is that we see ourselves as capable of engineering proactive changes in order to prevent crises from blowing up.

That erroneous self-image leads us to one thing only: the phantom prospect of a techno-fix becomes an excuse for not acting. In that regard, it may be good to remember that one of the basic tenets of the Limits to Growth report was that variables like world population, industrialization and resource depletion grow exponentially, while the (techno) answer to them grows only linearly.

First, I should perhaps define what sorts of problems I’m talking about. Sure, people build dams and dikes to keep water from flooding their lands. And we did almost eradicate smallpox. But there will always be another flood coming, or a storm, and there will always be another disease popping up (viruses and bacteria adapt faster than we do).

In a broader sense, we have gotten rid of some diseases, but gotten some new ones in return. And yes, average life expectancy has gone up, but it’s dependent entirely on the affordability and availability of lots of drugs, which in turn depend on oil being available.

And if I can be not PC for a moment, this all leads to another double problem. 1) A gigantic population explosion with a lot of members that 2) are, if not weaklings, certainly on average much weaker physically than their ancestors. Which is perhaps sort of fine as long as those drugs are there, but not when they’re not.

It’s quite simple, isn’t it? Increasing wealth makes us destroy ancient multi-generational family structures (re: the nuclear family, re: old-age homes), societal community structures (who knows their neighbors, and engages in meaningful activity with them?), and the very planet that has provided the means for increasing our wealth (and our population!).

And in our drive towards what we think are more riches, we are incapable of seeing these consequences. Let alone doing something about them. We have become so dependent, as modern western men and women, on the blessings of our energy surplus and technology that 9 out of 10 of us wouldn’t survive if we had to do without them.

Nice efforts, in other words, but no radical solutions. And yes, we did fly to the moon, too, but not flying to the moon wasn’t a problem to start with.

Maybe the universal truth I suspect there is in Meadows’ quote applies “specifically” to a “specific” kind of problem: The ones we create ourselves.

We can’t reasonably expect to control nature, and we shouldn’t feel stupid if we can’t (not exactly a general view to begin with, I know). And while one approach to storms and epidemics is undoubtedly better than another, both will come to back to haunt us no matter what we do. So as far as natural threats go, it’s a given that when the big one hits we can only evolve through crisis. We can mitigate. At best.

However: we can create problems ourselves too. And not just that. We can create problems that we can’t solve. Where the problem evolves at an exponential rate, and our understanding of it only grows linearly. That’s what that quote is about for me, and that’s what I think is sorely missing from our picture of ourselves.

In order to solve problems we ourselves create, we need to understand these problems. And since we are the ones who create them, we need to first understand ourselves to understand our problems.

Moreover, we will never be able to either understand or solve our crises if we don’t acknowledge how we – tend to – deal with them. That is, we don’t avoid or circumvent them, we walk right into them and, if we’re lucky, come out at the other end.

Point in case: we’re not solving any of our current problems, and what’s more: as societies, we’re not even seriously trying, we’re merely paying lip service. To a large extent this is because our interests are too different. To a lesser extent (or is it?) this is because we – inadvertently – allow the more psychopathic among us to play an outsize role in our societies.

Of course there are lots of people who do great things individually or in small groups, for themselves and their immediate surroundings, but far too many of us draw the conclusion from this that such great things can be extended to any larger scale we can think of. And that is a problem in itself: it’s hard for us to realize that many things don’t scale up well. A case in point, though hardly anyone seems to realize it, is that solving problems itself doesn’t scale up well.

Now, it is hard enough for individuals to know themselves, but it’s something altogether different, more complex and far more challenging for the individuals in a society, to sufficiently know that society in order to correctly identify its problems, find solutions, and successfully implement them. In general, the larger the scale of the group, the society, the harder this is.

Meadows makes a perhaps somewhat confusing distinction between universal and global problems, but it does work:

You see, there are two kinds of big problems. One I call universal problems, the other I call global problems. They both affect everybody. The difference is: Universal problems can be solved by small groups of people because they don’t have to wait for others. You can clean up the air in Hanover without having to wait for Beijing or Mexico City to do the same.

Global problems, however, cannot be solved in a single place. There’s no way Hanover can solve climate change or stop the spread of nuclear weapons. For that to happen, people in China, the US and Russia must also do something. But on the global problems, we will make no progress.

So how do we deal with problems that are global? It’s deceptively simple: We don’t.

All we need to do is look at the three big problems – if not already outright crises – we have right now. And see how are we doing. I’ll leave aside No More War and No More Hunger for now, though they could serve as good examples of why we fail.

There is a more or less general recognition that we face three global problems/crises. Finance, energy and climate change. Climate change should really be seen as part of the larger overall pollution problem. As such, it is closely linked to the energy problem in that both problems are direct consequences of the 2nd law of thermodynamics. If you use energy, you produce waste; use more energy and you produce more waste. And there is a point where you can use too much, and not be able to survive in the waste you yourself have produced.

Erwin Schrödinger described it this way, as quoted by Herman Daly:

Erwin Schrodinger [..] has described life as a system in steady-state thermodynamic disequilibrium that maintains its constant distance from equilibrium (death) by feeding on low entropy from its environment — that is, by exchanging high-entropy outputs for low-entropy inputs. The same statement would hold verbatim as a physical description of our economic process. A corollary of this statement is an organism cannot live in a medium of its own waste products.

The energy crisis flows seamlessly into the climate/pollution crisis. If properly defined, that is. But it hardly ever is. Our answer to our energy problems is to first of all find more and after that maybe mitigate the worst by finding a source that’s less polluting.

So we change a lightbulb and get a hybrid car. That’s perhaps an answer to the universal problem, and only perhaps, but it in no way answers the global one. With a growing population and a growing average per capita consumption, both energy demand and pollution keep rising inexorably. And the best we can do is pay lip service. Sure, we sign up for less CO2 and less waste of energy, but we draw the line at losing global competitiveness.

The bottom line is that we may have good intentions, but we utterly fail when it comes to solutions. And if we fail with regards to energy, we fail when it comes to the climate and our broader living environment, also known as the earth.

We can only solve our climate/pollution problem if we use a whole lot less energy resources. Not just individually, but as a world population. Since that population is growing, those of us that use most energy will need to shrink our consumption more every passing day. And every day we don’t do that leads to more poisoned rivers, empty seas and oceans, barren and infertile soil. But we refuse to even properly define the problem, let alone – even try to – solve it.

Anyway, so our energy problem needs to be much better defined than it presently is. It’s not that we’re running out, but that we use too much of it and kill the medium we live in, and thereby ourselves, in the process. But how much are we willing to give up? And even if we are, won’t someone else simply use up anyway what we decided not to? Global problems blow real time.

The more we look at this, the more we find we look just like the reindeer on Matthew Island, the bacteria in the petri dish, and the yeast in the wine vat. We burn through all surplus energy as fast as we can find ways to burn it. The main difference, the one that makes us tragic, is that we can see ourselves do it, not that we can stop ourselves from doing it.

Nope, we’ll burn through it all if we can (but we can’t ’cause we’ll suffocate in our own waste first). And if we’re lucky (though that’s a point of contention) we’ll be left alive to be picking up the pieces when we’re done.

Our third big global problem is finance slash money slash economy. It not only has the shortest timeframe, it also invokes the highest level of denial and delusion, and the combination may not be entirely coincidental. The only thing our “leaders” do is try and keep the baby going at our expense, and we let them. We’ve created a zombie and all we’re trying to do is keep it walking so everyone including ourselves will believe it’s still alive. That way the zombie can eat us from within.

We’re like a deer in a pair of headlights, standing still as can be and putting our faith in whoever it is we put in the driver’s seat. And too, what is it, stubborn, thick headed?, to consider the option that maybe the driver likes deer meat.

Our debt levels, in the US, Europe and Japan, just about all of them and from whatever angle you look, are higher than they’ve been at any point in human history, and all we’ve done now for five years plus running is trust a band of bankers and shady officials to fix it all for us, just because we’re scared stiff and we think we’re too stupid to know what’s going on anyway. You know, they should know because they have the degrees and/or the money to show for it. That those can also be used for something 180 degrees removed from the greater good doesn’t seem to register.

We are incapable of solving our home made problems and crises for a whole series of reasons. We’re not just bad at it, we can’t do it at all. We’re incapable of solving the big problems, the global ones.

We evolve the way Stephen Jay Gould described evolution: through punctuated equilibrium. That is, we pass through bottlenecks, forced upon us by the circumstances of nature, only in the case of the present global issues we are nature itself. And there’s nothing we can do about it. If we don’t manage to understand this dynamic, and very soon, those bottlenecks will become awfully narrow passages, with room for ever fewer of us to pass through.

As individuals we need to drastically reduce our dependence on the runaway big systems, banking, the grid, transport etc., that we ourselves built like so many sorcerers apprentices, because as societies we can’t fix the runaway problems with those systems, and they are certain to drag us down with them if we let them.





After capitalism, what comes next? For a start, ethics

31 07 2015

Jenny Cameron, University of Newcastle; Katherine Gibson, University of Western Sydney, and Stephen Healy, University of Western Sydney

If the comments generated by the recent publication of excerpts from Paul Mason’s forthcoming book, Postcapitalism: A Guide to Our Future, are anything to go by, its release at the end of the month should kick up a storm.

Mason’s book is about a seismic economic shift already underway, one that is as profound as the transformation from feudalism to capitalism. In the excerpts, Mason observes that:

… whole swaths of economic life are beginning to move to a different rhythm.

The shift is evidenced by developments such as collaborative production and the sharing economy. Mason attributes this economic transformation to advances in information technology, particularly the global networks of people and ideas that are now possible.

Such large-scale pronouncements inevitably generate an equally strong pushback, albeit in very different ways. For example, some comments on the published excerpts align with Fredric Jameson’s observation that sometimes for the Left:

… it is easier to imagine the end of the world than to imagine the end of capitalism.

Other comments are more aligned with climate-change denialism and the sentiment that “it is easier to desire the end of the world than to desire the end of capitalism”.

For those of us who research and practise in the area of what might be called “diverse economies”, Mason’s provocations are welcome. They help to shed light on the array of economic activities that are usually ignored in discussions about economics and they provide an opportunity to debate our economic future.

Enabling but not guaranteeing a better future

Mason’s is a technologically focused vision of transformation. Information technology provides both the catalyst and the means for transitioning from capitalism to a new post-capitalist world. This world will be characterised by “a new way of living” and “new values and behaviours” as unrecognisable to us today as the gritty world of belching factories and waged work would have been to the landed gentry and tenant farmers of pre-industrial Europe.

But there is one important difference between Mason’s post-capitalism and the capitalist and feudal systems that preceded it. The reshaped economic system will, according to Mason, offer hitherto unrealised economic freedoms and liberties with:

… the whole of human intelligence one thumb-swipe away.

There is no doubt that information technology is transforming the lives we can now lead. But technology does not in and of itself guarantee a better future. The much-vaunted “successes” of the sharing economy do not necessarily improve the precarious and exploitative working conditions of those who sign up. For instance, drivers are finding this with Uber, the app-based ride-service that is networked across 58 countries and had, in December 2014, an estimated value of US$41 billion.

Where information technology is generating better futures it seems to rest on explicit ethical commitments that are developed independent of online apps and cyber networks.

For example, in Japan, Fureai Kippu (literally “ticket for a caring relationship”) is based on a commitment to caring for the elderly. Volunteers earn “time credits” by providing care to elderly people. They can transfer these credits to relatives or friends who need care, or they can save the credits for their own future use.

Fureai Kippu emerged in the 1980s, building on a tradition of volunteerism and reciprocal assistance. Technological advances have enabled the network to spread geographically. There are now schemes in London, Los Angeles and Switzerland, and credits earned in these locations can be transferred to relatives or friends elsewhere, including Japan.

Mayumi Hayashi talks about the successes of Fureai Kippu in providing elderly care in Japan.

Technology is augmenting relations of care for others. Technology does not bring these relations into being.

The ethics of the new economies

In our research on the diverse economic practices that exist outside the purview of mainstream economics, we find people are forging new types of economies around six ethical concerns:

  • What do we need to survive well?
  • What happens to surplus, or what is left over after our survival needs have been met?
  • How do we act responsibly to those whose inputs help us to survive well (whether other people or the environment)?
  • How much and what do we consume in order to survive well?
  • How do we care for the commons – the gifts of nature and intellect that we rely on?
  • How do we invest so that future generations can also live well?

For us, these are the different rhythms around which new forms of economic life are taking shape. Like Mason we see these new forms as the building blocks of a “post-capitalist” world (as we wrote about almost ten years ago in A Postcapitalist Politics). Unlike Mason, we see innovations in information technology and networking as supporting rather than driving the economic changes that will be needed.

Our route to post-capitalism foregrounds the ethical dimensions of economic life, and how technologies and regimes of governance might:

  1. Foster less “me”- and “now”-focused subjects of history;
  2. Support more responsible interactions with the ecologies in which we live.

Mason rightly points out that post-capitalism calls forth new types of human beings. He looks to:

… young people all over the world breaking down 20th-century barriers around sexuality, work, creativity and the self.

While we too welcome the widespread acceptance of transformations that feminist and queer politics initiated, there is a worrying undertone of hyper-individualism and libertarianism if we limit ourselves to these examples.

We find glimpses of post-capitalist subjects on a wider canvas of how people are transforming the ways they take responsibility for other humans and “earth others” (or what Pope Francis calls our common home). Think, for example, of the workers in Argentina who, after recovering rundown factories in the 2000s, said things such as:

The factory isn’t ours. We are using it, but it belongs to the community … The profits shouldn’t go to us … but to the community.

We find glimpses in how the people of Norway manage their sovereign wealth fund by foregrounding the well-being of future generations. As one Norwegian economist explained:

We cannot spend this money now; it would be stealing from future generations.

Instead funds are invested for the future and increasingly in investments, such as clean-energy technologies, that will also benefit environmental futures.

Technology and networks in themselves are not liberation. But they can serve to sensitise us to the indivisible nature of people and planet, and to amplify our capacities to empathise, work together and find a way forward on a planet that is damaged, but not beyond repair. In our view, this is the post-capitalism our present circumstances require.

The Conversation

Jenny Cameron is Associate Professor, School of Environmental and Life Sciences at University of Newcastle.
Katherine Gibson is Professor of Economic Geography, Institute for Culture and Society at University of Western Sydney.
Stephen Healy is Senior Research Fellow, Institute for Culture and Society at University of Western Sydney.

This article was originally published on The Conversation.
Read the original article.





“As Capitalism’s Crisis Deepens, Thoughts of Socialism Return Again”

28 05 2015

I found this totally captivating, AND educational……  he doesn’t address everything we discuss here on DTM, but this is well worth making a big jug of coffee to listen to….  enjoy!

These programs begin with 30 minutes of short updates on important economic events of the last month. Then Prof. Wolff analyzes several major economic issues. For May 13th, these will include:

  1. Socialisms Vary: Bernie Sanders to Hugo Chavez to Francois Hollande and Beyond
  2. Socialism, Communism, and the Role of the State
  3. Marxism and Socialism




We will never again have as much energy as now – it’s time to adapt

5 03 2015

LOOK…..  it’s not just me anymore, the concept might be going viral soon…!

The Conversation

By Patrick Moriarty, Monash University

In the year 1800, the world used only about 10 million tonnes of coal – renewable energy, mainly biomass, dominated world’s energy supply.

By 2013, fossil fuels together supplied more than 11 billion tonnes of coal equivalent, or 87% of global commercial energy. Renewable energy sources supplied under 9% and nuclear power the remainder.

In the coming decades, fossil fuel depletion and the need to respond to climate change will ensure that fossil fuel use will fall. Because it is unlikely that either renewable or nuclear energy can take over the dominant role fossil fuels presently enjoy, I argue that the energy available to humanity will decline, and we will need to adapt to a lower energy future.

Fossil fuels’ twin constraints

The likely future production profile for fossil fuels is controversial. Nevertheless, even the International Energy Agency now accepts that peak production for conventional oil has already occurred. One recent study even argues that if business-as-usual fossil fuel use continues, combined use could peak in a decade or so.

Unconventional fossil fuel resources are probably large. However, their monetary, environmental, and carbon dioxide costs per unit of energy delivered are much larger than for conventional fuels, limiting their future use.

Especially in the US, much hope has been placed on unconventional (tight) gas, extracted by fracking. But a recent study of tight gas fields casts doubt on this optimism. Actual gas production could in future be much lower than official US forecasts. It could even peak in the next decade or so, then decline rapidly.

If the world does take climate change seriously, we would then have to leave most fossil fuels in the ground, which would be bad news indeed for fossil fuel corporations.

Could nuclear energy fill the gap?

Global nuclear output locally peaked in 2006, and was still below that value in 2013. Nuclear’s share of global electricity peaked at 17% in 1993, and by 2013 had fallen to 11%. Even the US Energy Information Administration doesn’t expect much improvement; they forecast average annual growth of 2.5% for nuclear power globally out to 2040, compared with 1.5% for all energy sources.

A key problem in rapidly expanding nuclear output is an ageing reactor fleet – in mid-2013 the weighted average age for reactors was 28 years, and rising. Over 190 nuclear plants (45%) worldwide have operated for 30 years or more. Given this ageing nuclear fleet, much new construction will be needed merely to replace retiring plants, and will not add to net capacity.

Nuclear energy is also very expensive. The cost of a 1000 megawatt plant in the US in 2009 was estimated at US$9 billion. Decommissioning old plants adds a further heavy cost, and could take decades.

The UK government now estimates that clean-up costs for the Sellafield reprocessing plant alone will be £80 billion. And despite nearly 60 years of commercial nuclear power, no permanent waste disposal repositories are in operation.

A final point. Uranium reserves may not be sufficient to support for long even a modest upturn in nuclear power, should it ever occur.

Renewable energy: essential but limited

The world has a variety of renewable sources available. Bio-mass and hydro-power are the two leading ones, but wind, geothermal, tidal and solar energy all presently contribute to global energy supply.

The only abundant renewable sources are wind and solar energy (and Australia is well supplied with both), but both are intermittent energy sources: they don’t generate without wind or sunlight. Hence reliance on renewables, not only for electricity but for other energy uses, will require conversion and storage of these intermittent energy sources.

This need for conversion and storage will raise renewable costs for each unit of energy delivered to the consumer. There is however, a further problem. Obviously, for any energy source to be viable, it must produce more energy output than the various energy inputs needed to construct and operate it – the energy ratio must be much greater than one. This ratio is already lower for renewable than for fossil fuel sources, and the need for energy storage and conversion will further lower it.

All energy sources have environmental costs, including renewable energy. Those for large hydro systems are well-known. Bio-energy crops such as ethanol from corn compete with crops grown for food for water and fertile soils. The adverse effects of these two renewable sources are better-known mainly because their output is highest.

Our low-energy future

The world will eventually have to rely again on renewable energy sources, just as it did at the start of the fossil fuel era around 1800. There is a big difference this time: in 1800 the world’s population was only about a billion. Today it is 7.3 billion, and still rising. We’ll never again have the high-energy society of the carbon civilisation.

Instead we’ll have to prepare for a low-energy future. Improving technical efficiency of energy use can help, but so far has not prevented global energy use from steadily rising.

Using less energy means less use of equipment — vehicles, air-conditioning, and other household appliances. Buildings will need to use passive solar energy more for heating, cooling, and even lighting, and generate some power from rooftop solar systems. Gardens could grow more fruit and vegetables. Households in dry regions can install tanks for rainwater.

What changes are needed for cities and their transport systems? For transport we must shift from our obsession with vehicular mobility to a focus on accessibility. Public transport will need to increase its share of a much smaller vehicular travel task. Activities will need to be more localised. Non-motorised modes can then be a major form of urban travel.

So we’ll need social efficiency improvements – we’ll need to rediscover ways of satisfying our needs with less use of energy-using devices. We can learn from earlier generations – how did they cope with far lower energy levels? We might even have something to learn from the more creative practices of presently low-energy societies.

The Conversation

This article was originally published on The Conversation.
Read the original article.





“Transition Engineering: the Job of Change”

14 02 2015

More from Susan Krumdieck on her favourite subject, Transition Engineering.

Published on Oct 28, 2014

On July 19th 2014, more than 140 professional engineers and university students attended the fourth annual Engineering Change humanitarian engineering conference at the University of Canterbury. Engineering Change is the national conference for Engineers Without Borders New Zealand.





For most people, growth is already over……

24 10 2014

I know I often post videos here that I describe as brilliant or other terms to that effect.  THIS one clearly outshines them all, notwithstanding a slightly unsastifying end and question time…..  THIS video should be compulsory viewing.  This video also told me my brain is wired differently to almost everyone else on the planet!

https://i2.wp.com/www.postcarbon.org/wp-content/uploads/2014/08/Nate_Hagens-1.jpg

Nate Hagens

Nate Hagens is a well-known speaker on the big picture issues facing human society. Before watching this, I had no idea he had done the whole “wolf of Wall Street” thing in his early 20’s… that he was President of Sanctuary Asset Management and a Vice President at the investment firms Salomon Brothers and Lehman Brothers. If you need a shining light on how to reform yourself, Nate is the one..!

Until recently he was lead editor of The Oil Drum, one of the most popular and highly-respected websites for analysis and discussion of global energy supplies and the future implications of energy decline. Nate is currently on the Boards of Post Carbon Institute, Bottleneck Foundation, IIER and Institute for the Study of Energy and the Future.

Nate’s presentations address the opportunities and constraints we face after the coming end of economic growth. On the supply side, Nate focuses on the interrelationship between debt-based financial markets and natural resources, particularly energy. On the demand side, Nate addresses the evolutionarily-derived underpinnings to status, addiction, and our aversion to acting about the future and offers suggestions on how individuals and society might better adapt to what’s ahead. Ultimately, Nate’s talks cover the issues relevant to propelling our species (and others) into deep time.

He has appeared on PBS, BBC, ABC and NPR, and has lectured around the world. He holds a Masters Degree in Finance from the University of Chicago and a PhD in Natural Resources from the University of Vermont.

This presentation, Limits to Growth: Where We Are and What to Do About It” goes for an hour and a half……  but it’s the ride of a lifetime.

Enjoy……





Where is the price of oil heading?

6 10 2014

In the sidebar at right of this blog is a live WTC (West Texas Crude) price chart.  I’ve been watching it intently because WTC has been in the low 90’s for some time, and has actually gone under it as I write.  What is going on?  There is a lot of debate about this all over the internet at the moment too….  is this a ‘sign’ that the October financial heebee jeebies are about to strike, again?

Take a look at this chart (lifted from Nicole Foss’ website)

https://i0.wp.com/www.theautomaticearth.com/wp-content/uploads/2014/10/OilBreakevenPrices.png

Data from Reuters, IEA, Deutsche Bank and Bloomberg

At the current $90 price, not even Saudi Arabia (which has just posted its first deficit) can break even.  So what is causing this collapse in the oil price?

There is much speculation that ‘someone’ wants to punish Putin for his demeanours in the Ukraine, but if this ‘someone’ is American, then they are seriously hurting the shale oil companies there who can’t even make a profit when oil is at $100….  Or is this someone’s way of ensuring, if you can even put it that way, that GFC MkII doesn’t happen…… yet?  Are we seeing short-term trends? Ironically, the current prices – and remember, oil dropped to $40 in 2008 – are set to cause such mayhem in production and investment due to the fact that much has changed in the oil industry since 2008, that prices must go up again no matter what the economy does.  We are seeing the proverbial rock and a hard place today…….

There is also much confusion in the media, as Ilargi explains:

How reliable are OPEC numbers? Are those just the ones members themselves report? Saudi Arabia has a deficit, AND they cut prices, AND they cut production? I can’t say I’ve figured out either the real actions, or the reasons behind them, but that doesn’t make any sense as a stand-alone set of facts. So why do they do it, if they do, if these things are accurate? We’ve yet to find out.

Saudi enjoys some of the lowest production costs, excluding capital expenditure on new projects, in the region of $2 per barrel, giving it a large margin to soak up a sudden drop-off in price. This compares with estimated production costs in the North Sea which are in the region of $50 per barrel, according to Oil & Gas UK figures.

The graph puts Saudi production costs at $90 per barrel, and the Telegraph, which published the graph, puts it at $2? Please explain, guys. Is that $88 per barrel in “capital expenditure on new projects”?

But then again, today’s modern media just copy/paste stuff without ever checking their facts, the people who put articles in these papers are usually totally ignorant of facts.  I was just shown an article in the Cairns Post (Nth Qld) claiming a new solar farm was going to be built near Cooktown, one of the highest rainfall places in Australia, illustrating the story with a solar thermal plant that would only be built in a desert somewhere.  Then adding that this would alleviate post cyclonic blackouts (told you it rains a lot there!) because the solar plant would be more reliable…….  Hello?  Power goes down when the grid goes down from downed power lines, not because power generators are blown away!  FAIL….  Believe nothing you read in mainstream media is my new motto.  But I digress….

Ilargi continues with……:

Fracking has helped the US achieve its highest oil production levels since 1986 over the last two months at a rate of 8.5m bpd. The threat of a full lifting of the ban on exports has also helped the US to drive down the price and potentially cripple the Russian economy. Moscow is largely dependent on crude sales for foreign currency earnings and oil trading at around $80 per barrel for a period of months could bring the country to its knees.

Something tells me that Putin is far more aware of the reality of the shale industry than Americans are. Which is that shale oil has a present, but no future.

[..] if Opec fails to cut production in response to the current trend in falling oil prices then around 9% of US “tight oil” output would be immediately rendered uneconomic at a level of $90 per barrel. This figure would rise to 39% should prices slump as low as $80 per barrel.

Again, I don’t believe this for a second. It may be true is you exclude capital costs, but what if you include them, as in normal accounting, and what happens when interest rates rise, in an industry that’s borrowed itself up to its infinity and beyond?

Cute article, nice try, but in the end it leaves far too many questions.

Yep……  oil’s future is in serious doubt if these shennanigans continue, and as a result, so will the future of renewables.

Watch this space.