Climbing The Ladder Of Awareness

12 02 2019

By Paul Chefurka

Oct 20, 2012 | Society In Decline 

When it comes to our understanding of the unfolding global crisis, each of us seems to fit somewhere along a continuum of awareness that can be roughly divided into five stages:

  1. Dead asleep. At this stage there seem to be no fundamental problems, just some shortcomings in human organization, behaviour and morality that can be fixed with the proper attention to rule-making. People at this stage tend to live their lives happily, with occasional outbursts of annoyance around election times or the quarterly corporate earnings seasons.
  2. Awareness of one fundamental problem. Whether it’s Climate Change, overpopulation, Peak Oil, chemical pollution, oceanic over-fishing, biodiversity loss, corporatism, economic instability or sociopolitical injustice, one problem seems to engage the attention completely. People at this stage tend to become ardent activists for their chosen cause. They tend to be very vocal about their personal issue, and blind to any others.
  3. Awareness of many problems. As people let in more evidence from different domains, the awareness of complexity begins to grow.  At this point a person worries about the prioritization of problems in terms of their immediacy and degree of impact. People at this stage may become reluctant to acknowledge new problems – for example, someone who is committed to fighting for social justice and against climate change may not recognize the problem of resource depletion.  They may feel that the problem space is already complex enough, and the addition of any new concerns will only dilute the effort that needs to be focused on solving the “highest priority” problem.
  4. Awareness of the interconnections between the many problems. The realization that a solution in one domain may worsen a problem in another marks the beginning of large-scale system-level thinking. It also marks the transition from thinking of the situation in terms of a set of problems to thinking of it in terms of a predicament. At this point the possibility that there may not be a solution begins to raise its head.People who arrive at this stage tend to withdraw into tight circles of like-minded individuals in order to trade insights and deepen their understanding of what’s going on. These circles are necessarily small, both because personal dialogue is essential for this depth of exploration, and because there just aren’t very many people who have arrived at this level of understanding.
  5. Awareness that the predicament encompasses all aspects of life.  This includes everything we do, how we do it, our relationships with each other, as well as our treatment of the rest of the biosphere and the physical planet. With this realization, the floodgates open, and no problem is exempt from consideration or acceptance. The very concept of a “Solution” is seen through, and cast aside as a waste of effort.

For those who arrive at Stage 5 there is a real risk that depression will set in. After all, we’ve learned throughout our lives that our hope for tomorrow lies in  our ability to solve problems today.  When no amount of human cleverness appears able to solve our predicament the possibility of hope can vanish like a the light of a candle flame, to be replaced by the suffocating darkness of despair.

How people cope with despair is of course deeply personal, but it seems to me there are two general routes people take to reconcile themselves with the situation.  These are not mutually exclusive, and most of us will operate out of some mix of the two.  I identify them here as general tendencies, because people seem to be drawn more to one or the other.  I call them the outer path and the inner path.

If one is inclined to choose the outer path, concerns about adaptation and local resilience move into the foreground, as exemplified by the Transition Network and Permaculture Movement. To those on the outer path, community-building and local sustainability initiatives will have great appeal.  Organized party politics seems to be less attractive to people at this stage, however.  Perhaps politics is seen as part of the problem, or perhaps it’s just seen as a waste of effort when the real action will take place at the local level.

If one is disinclined to choose the outer path either because of temperament or circumstance, the inner path offers its own set of attractions.

Choosing the inner path involves re-framing the whole thing in terms of consciousness, self-awareness and/or some form of transcendent perception.  For someone on this path it is seen as an attempt to manifest Gandhi’s message, “Become the change you wish to see in the world,” on the most profoundly personal level.  This message is similarly expressed in the ancient Hermetic saying, “As above, so below.” Or in plain language,  “In order to heal the world, first begin by healing yourself.”

However, the inner path does not imply a “retreat into religion”. Most of the people I’ve met who have chosen an inner path have as little use for traditional religion as their counterparts on the outer path have for traditional politics.  Organized religion is usually seen as part of the predicament rather than a valid response to it. Those who have arrived at this point have no interest in hiding from or easing the painful truth, rather they wish to create a coherent personal context for it. Personal spirituality of one sort or another often works for this, but organized religion rarely does. It’s worth mentioning that there is also the possibility of a serious personal difficulty at this point.  If someone cannot choose an outer path for whatever reasons, and is also resistant to the idea of inner growth or spirituality as a response the the crisis of an entire planet, then they are truly in a bind. There are few other doorways out of this depth of despair.  If one remains stuck here for an extended period of time, life can begin to seem awfully bleak, and violence against either the world or oneself may begin to seem like a reasonable option.  Please keep a watchful eye on your own progress, and if you encounter someone else who may be in this state, please offer them a supportive ear.

From my observations, each successive stage contains roughly a tenth of the number people as the one before it. So while perhaps 90% of humanity is in Stage 1, less than one person in ten thousand will be at Stage 5 (and none of them are likely to be politicians).  The number of those who have chosen the inner path in Stage 5 also seems to be an order of magnitude smaller than the number who are on the outer path.

I happen to have chosen an inner path as my response to a Stage 5 awareness. It works well for me, but navigating this imminent (transition, shift, metamorphosis – call it what you will), will require all of us – no matter what our chosen paths – to cooperate on making wise decisions in difficult times.

Best wishes for a long, exciting and fulfilling  journey.

Heavy Oil Shock……

25 11 2018

paris fuel riots 2.jpg.jpg

As the French government increases taxes on petrol and diesel to encourage people to switch to ‘cleaner’ transport, as if they can afford to just dump the cars they now own to buy something really expensive…..  this is what collapse looks like, no doubt about it. And it’s spreading to Belgium…

paris fuel riots.jpg

How long before Alice’s “When Trucks Stop” scenario comes to realisation..?

For all the talk about electric cars and renewable electricity, global oil production rose above 100 million barrels a day last month.  For all the policy pronouncements to the contrary, the stark reality remains that our insatiable demand for oil, the products of oil, and all of the stuff that we transport with oil continues to drive up demand.

From Consciousness of Sheep…..

There is, however, a big problem with that 100mbb/d figure that has yet to make it to the forefront of media and political debate.  This is that not all oil is equal.  This ought to be obvious enough to anyone living in my part of the world; where our economic history was shaped by the difference between the low-quality bituminous coal at the east of the South Wales coalfield and the high-quality anthracite coal in the west.  The same issues are true for oil.  On the one hand there is the sweet crude from fields in Texas, Libya, Saudi Arabia and the Gulf States; on the other there are the ultra-light condensates fracked out of the shale plays, the bitumen boiled out of Canadian tar sands and the high-sulphur toxic stew being extracted in Kazakhstan.  The former powered the unprecedented burst of global industrial expansion between 1953 and 1973.  The latter are the dregs that humanity will have to get by on in the future.

Not, of course, that this has been a problem so far.  Those older oil fields are still producing – although many are past their peak – and with a little tweaking of the set-up, refineries can manage blends of heavy and light oils that approximate the sweet crude they were designed for.  But there are limits to the tweaking.  And as the world comes to depend increasingly on blends of too light and too heavy oils, refineries will not be able to supply enough of the fuels that we have built the global economy upon.

Refining uses a combination of heat and chemistry to “crack” the molecule chains in the crude oil into various lengths according to the fuel being produced – butane and petrol (gasoline) are the lightest, kerosene and diesel in the middle and the heaviest are fuel oils used in shipping and building heating.  And while you and I might value the lighter fuels for sparking up a barbecue or powering a car, for the global transportation system it is the middle and heavier fuels that are the most important.  Most important of all, of course, is the diesel oil that powers all of the heavy machinery and trucks that are essential to the extractive processes that convert naturally occurring materials into the resources used to manufacture all of the stuff – including our food – which we consume.

Simply looking at total global oil production, then, is only part of the story.  What we also need to know is what fuel products those 100 mbb/d are being converted into.  This is where a recent post on The Oil Crash blog should ring alarm bells.  Drawing on data from the JODI database, they show that:

“Since 2007 (and therefore before the official start of the economic crisis) the production of other [heavy] fuel oils is in decline and also seems perfectly consolidated…

“The fact is that if you have made changes in the refineries to crack more oil molecules and get other lighter products (and that is why less heavy fuel oil is produced), those molecules that used to go to heavy fuel oil should now go to other products. It follows, taking into account the added value of fuels with longer molecules, that these heavy fuel oils are being cracked especially to generate diesel and possibly more kerosene for airplanes and eventually more gasoline.”

Heavy oil production
Heavy fuel production

Concern about peak oil was always, ultimately a concern about peak diesel because of its central role in the global economy.  However, producing ever less heavy oils to maintain the output of diesel and kerosene (and eventually petrol) can only be a temporary solution.   Indeed, the JODI data shows an alarming decline in diesel fuel production since 2015:

Diesel fuel production

“That is why, dear reader, when you are told that the taxes on your diesel car will be raised in a brutal way, now you will know why.  Because they prefer to adjust these imbalances with a mechanism that seems to be a market (although this is actually less free and more intervened) to explain the truth. The fact is that from now on what can be expected is a real persecution against cars with internal combustion engines (gasoline will continue for a few years longer than diesel).”

To add to our woes, the decline in heavy oil production is compounded by new regulations that will dramatically increase demand for diesel just as the industry’s ability to produce it is in decline.  As Nick Cunningham at Business Insider reported back in July:

“A research paper from economist and oil market watcher Philip K. Verleger predicts there could be a shortage of low-sulfur diesel fuel in 2020 as a result of regulations from the International Maritime Organization (IMO) aimed at cutting sulfur emissions…

“Up until now, the maritime industry has been burning the residual fuel oil left over after the refining process. Fuel oil is the bottom of the barrel – it’s the cheapest, most viscous and dirtiest part of the barrel.”

The choice facing the shipping industry is whether to invest in expensive scrubbers and filters designed to capture sulphur that would otherwise escape into the atmosphere or whether to make much cheaper engine alterations in order to run ships on diesel.  It is difficult to argue with Cunningham assessment:

“By 2020, diesel production will need to rise by at least seven percent, according to Philip K. Verleger, on top of the three percent increase needed for road transport and other uses. All of it will need to be low-sulfur.”

If ship owners switch fuels, we are looking at a global oil price above $200 per barrel; with diesel fuel being priced well above anything ordinary working people can afford for powering cars; and other fuels following close behind.  This will impact British and American motorists far harder than those in Europe because of our systematic neglect of public transport and our insistence in building out into the suburbs.  The broader question, however, is whether the current strategy of relying on a combination of fuel taxes and higher prices is a sensible approach to diesel shortages.

Prices and taxes most often result in the misallocation of resources.  This is most obvious when we contrast the suffering of millions of people in poorer countries against the frivolous consumption of the fortunate top ten percent of the global population living in the G7 states.  However, because the growth in global energy consumption has allowed billions of people to experience an increase in their standard of living in the years since World War Two, the misallocation has appeared to be less urgent (to those in the developed states).  In the event that strategic fuel production falls – as it appears to be doing – continued misallocation will accelerate the process of collapse.

For example, most farmers depend upon diesel-powered machinery to maintain yields.  Unfortunately, many of those same farmers are already struggling to remain in business despite already receiving subsidies from the state.  And while there are some alternative power sources (batteries, biogas, hydrogen) for light vehicles, there is no means by which heavy diesel machinery and haulage vehicles can be substituted.  Thus, if diesel prices rise, either food prices rise accordingly or (and most likely both) farmers go out of business.  At the same time, however, the very richest one percent of the population is likely to regard the rise in diesel prices as a good thing since it will remove much of the road congestion they experience without preventing them from driving and flying.

The alternative would be to develop and implement a rationing scheme based on the need to maintain critical infrastructure (including food production) even if this comes at the expense of limiting private vehicle use and severely restricting commercial air travel.  In practice, unfortunately, our response to this looming fuel crisis is more likely to follow the pattern of our response to climate change; with powerful lobbies paying to distract our attention, large numbers denying the crisis exists, and most of those who acknowledge the crisis grasping at techno-utopian pseudo-solutions like electric cars and windmills.

All I can say is hold onto your hats because when oil prices spike above $200 and our ability to consume collapses, we are going to witness economic and social dislocation on a scale that will make Brexit and the policies of Donald Trump that everyone seems so exercised about look trivial.

As an aside, I currently have three French wwoofers, and you better believe they are right on top of collapse and planning all sorts of things to get ready, not least coming here to learna trick or two. I’m so proud of being able to teach them stuff…..

If the embedded video doesn’t show English subtitles, they are available at youtube….

Peak Oil & Drastic Oil Shortages Imminent: IEA

24 11 2018

While the IEA got a lot of coverage for its World Energy Outlook 2018 (WEO 18), there might be a little snippet that got way underappreciated. (from Cleantechnica)

On page 159 of its Outlook, accessible only behind a payment barrier, the following graph can be found:


It is clear to see that Peak Oil will be hit well before 2020, while demand keeps on rising, unless the world’s Oil Majors and State Owned Oil Companies would massively invest in new exploration, according to the IEA.

However, the Oil Majors did already heavily spend on new oil exploration in the years after 2000, where a fossil fuel hype with an accompanying coal boom lead up to an oil price of over $150 in 2008. While this oil price proved unsustainable for a crashing world economy, this oil exploration boom lead to very little new findings in the big scheme of things:

So what does that mean?

It means that a collapse of oil supply to half of its current size within only six years simply cannot be compensated by new oil findings and certainly not by unconventional oil sources like oil sands and fracking. That the Oil Majors did not pick up with new oil exploration after the oil price rose again to $100 per barrel in the years after 2008 is another sign that the world is already “overexplored,” as geologists put it. Instead the Oil Majors concentrated on a stock buyback, knowing full well that further exploration would be a waste of money while they are sitting on oil that will become very valuable even though the amount of oil they will extract will decline significantly.

In summary, the Oil Majors and State Owned Oil Companies (in this field notably the Initial Public Offering (IPO) of Saudi-Aramco, the world’s biggest oil company, has been scrubbed) are waiting for an oil price bonanza to happen, while the IEA is very concerned about future oil supply.

While the IEA has no credibility left when it comes to renewables (see following graph), because its forecasts historically have all been absurdly wrong, the IEA should possess some knowledge in the oil business and especially concerning the decline rates of existing conventional fields, which have been studied in depths for decades.

Notably the Peak Oil graph from the IEA (first graph in this article) has been unearthed by the Association of Study of Peak Oil and Gas (ASPO), which as an organization has itself published multiple studies on Peak Oil. While ASPO has put Peak Oil sooner than the IEA, in its latest study already at 2011 for conventional crude, it is remarkable that the IEA refuted this claim back then with the statement that Peak Oil would not be reached before 2020. Well, it surely looks like they corrected that statement for themselves now.

So what does that mean for investors in oil and the world economy?

Surely there could a handsome profit be made by riding the coming oil shortages, but one has to keep in mind that while the oil price may go through the roof, the barrels that can be sold also shrink fast and drastically. So there remains the question of how high the profits of the Oil Majors will rise and how much will this be appreciated by the stock price for these clearly dying companies. Furthermore, with these rapid stock swings, you compete with banking supercomputers that act in a millisecond timeframe, so you would have to be alert night and day for the point when the crash will come because of the world economy not being able to take the oil price anymore. As a conservative long term investor, this can only mean to get out of these stocks as soon as possible, while risk-loving investors can try to make a quick buck on the coming stock volatility, with the world economy crashing a couple of times due to ongoing undersupply in oil.

For the climate, this is excellent news, because the adoption of electric vehicles and clean transport in general will get a major boost and surely blow all current predictions out of the water. As an investor this is imho, where your money should be.

About the author: Dr. Harry Brinkmann got a Ph. D. in Physics in the working group “Applied Physics” from the Justus-Liebig-University in Gießen. In his free time he is contributing to working groups of Bündnis90/Die Grünen such as Bundesarbeitsgemeinschaft Energie (Federal working group energy) and likes arguing with people online over energy solutions and a sustainable future. Based in Berlin, he also writes and publishes German novels. 

What’s happened to Peak Oil since Peak Oil….

2 10 2018

The latest news that Mexico has this month switched from being a net oil exporter to a net oil importer prompted me to do some more research on what stage we all are with Peak Oil…….  and as expected, the news are not good. Since the peak of conventional oil in 2005, ALL the major producing nations except for Iraq and the US have been producing less and less in real terms, and let’s face it, half the US’ production is unviable shale oil which since the GFC has lost the oil industry $280 billion and counting…..

Meanwhile, pundits on TV are expressing disbelief at how the price of fuel is skyrocketing in Australia (with our dollar struggling to remain above $US0.70) while oil is simultaneously surging under all sorts of pressures.

Crude_prod_changes_2005-May_2018Fig 2: Crude production changes between 2005 and 2018 by country

Group A
Countries where average oil production Jan-May 2018 was lower than the average in 2005. At the bottom is Mexico with the highest rate of decline. This group started to peak in 1997, entering a long bumpy production plateau at around 25 mb/d, ending – you guessed it – in 2005. This is down now to 16 mb/d, a decline of 700 kb/d pa (-2.8% pa).

Decline-group_1994-May2018Fig 3: Group A countries

Group B

Countries where average oil production Jan-May 2018 was higher than the average in 2005. At the top of the stack are Iraq and the US, where growth was highest. Group B compensated for the decline in group A and provided for growth above the red dashed line in Fig 1.
The 2018 data have not been seasonally adjusted.
In group B we have a subgroup of countries which peaked after 2005

Crude_post-2005-peaking_1994-May2018Fig 4: Countries peaking after 2005

A production plateau above 7 mb/d lasted for 6 years between 2010 and 2016. The average was 7.1 mb/d, around +1.8 mb/d higher than in 2005. Another country in this subgroup is China, here shown separately because of its importance and consequences.

Cumulative_crude_prod_changes_2005-May_2018Fig 13: Cumulative crude production changes since 2005

This is a cumulative curve of Fig 2 with changes in ascending order (from negative to positive). On the left, declining production from group A adds up to -9 mb/d (column at Ecuador). Then moving to the right, countries with growing production reduce the cumulative (still negative) until the system is in balance (column at Canada). Only Iraq and the US provide for growth.

According to Crude Oil Peak, where all the above charts came from, the only viable conclusion is…..:

Assuming that the balancing act between declining and growing countries continues (from Mexico through to Canada) the whole system will peak when the US shale oil peaks (in the Permian) as a result of geology or other factors and/or lack of finance in the next credit crunch and when Iraq peaks due to social unrest or other military confrontation in the oil producing Basra region. There are added risks from continuing disruptions in Nigeria and Libya, steeper declines in Venezuela and the impact of sanctions on Iran.

Assuming that the balancing act between declining and growing countries continues (from Mexico through to Canada) the whole system will peak when the US shale oil peaks (in the Permian) as a result of geology or other factors and/or lack of finance in the next credit crunch and when Iraq peaks due to social unrest or other military confrontation in the oil producing Basra region. There are added risks from continuing disruptions in Nigeria and Libya, steeper declines in Venezuela and the impact of sanctions on Iran.

To top it off, here’s a video clip of this guy I’ve never heard of before but which, whilst not peak oil specific, seems on the money to me…….


23 08 2018

By Alice Friedemann, originally published by Energy Skeptic

Since there’s nothing that can be done about climate change, because there’s no scalable alternative to fossil fuels, I’ve always wondered why politicians and other leaders, who clearly know better, feel compelled to deny it. I think it’s for exactly the same reasons you don’t hear them talking about preparing for Peak Oil.

1) Our leaders have known since the 1970s energy crises that there’s no comparable alternative energy ready to replace fossil fuels. To extend the oil age as long as possible, the USA went the military path rather than a “Manhattan Project” of research and building up grid infrastructure, railroads, sustainable agriculture, increasing home and car fuel efficiency, and other obvious actions.

Instead, we’ve spent trillions of dollars on defense and the military to keep the oil flowing, the Straits of Hormuz open, and invade oil-producing countries. Being so much further than Europe, China, and Russia from the Middle East, where there’s not only the most remaining oil, but the easiest oil to get out at the lowest cost ($20-22 OPEC vs $60-80 rest-of-world per barrel), is a huge disadvantage. I think the military route was chosen in the 70s to maintain our access to Middle East oil and prevent challenges from other nations. Plus everyone benefits by our policing the world and keeping the lid on a world war over energy resources, perhaps that’s why central banks keep lending us money.

2) If the public were convinced climate change were real and demanded alternative energy, it would become clear pretty quickly that we didn’t have any alternatives. Already Californians are seeing public television shows and newspaper articles about why it’s so difficult to build enough wind, solar, and so on to meet the mandated 33% renewable energy sources by 2020.

For example, last night I saw a PBS program on the obstacles to wind power in Marin county, on the other side of the Golden Gate bridge. Difficulties cited were lack of storage for electricity, NIMBYism, opposition from the Audubon society over bird kills, wind blows at night when least needed, the grid needs expansion, and most wind is not near enough to the grid to be connected to it. But there was no mention of Energy Returned on Energy Invested (EROEI) or the scale of how many windmills you’d need to have. So you could be left with the impression that these problems with wind could be overcome.

[ED: read this about the impossibility of California going 100% renewables]

I don’t see any signs of the general public losing optimism yet. I gave my “Peak Soil” talk to a critical thinking group, very bright people, sparkling, interesting, well-read, thoughtful, and to my great surprise realized they weren’t worried until my talk, partly because so few people understand the Hirsch 2005 “liquid fuels” crisis concept, nor the scale of what fossil fuels do for us. I felt really bad, I’ve never spoken to a group before that wasn’t aware of the problem, I wished I were a counselor as well. The only thing I could think of to console them was to say that running out of fossil fuels was a good thing — we might not be driven extinct by global warming, which most past mass extinctions were caused by.

3) As the German military peak oil study stated, when investors realize Peak Oil is upon us, stock markets world-wide will crash (if they haven’t already from financial corruption), as it will be obvious that growth is no longer possible and investors will never get their money back.

4) As Richard Heinberg has pointed out, there’s a national survival interest in being the “Last Man (nation) Standing“. So leaders want to keep things going smoothly as long as possible. And everyone is hoping the crash is “not on my watch” — who wants to take the blame?

5) It would be political suicide to bring up the real problem of Peak Oil and have no solution to offer besides consuming less. Endless Growth is the platform of both the Republican and Democratic parties. More Consumption and “Drill, Baby, Drill” is the main plan to get out of the current economic and energy crises.

There’s also the risk of creating a panic and social disorder if the situation were made utterly clear — that the carrying capacity of the United States is somewhere between 100 million (Pimentel) and 250 million (Smil) without fossil fuels, like the Onion’s parody “Scientists: One-Third Of The Human Race Has To Die For Civilization To Be Sustainable, So How Do We Want To Do This?

There’s no solution to peak oil, except to consume less in all areas of life, which is not acceptable to political leaders or corporations, who depend on growth for their survival. Meanwhile, too many problems are getting out of hand on a daily basis at local, state, and national levels. All that matters to politicians is the next election. So who’s going to work on a future problem with no solution? Jimmy Carter is perceived as having lost partly due to asking Americans to sacrifice for the future (i.e. put on a sweater).

I first became aware of this at the 2005 ASPO Denver conference. Denver Mayor Hickenlooper pointed out that one of his predecessors lost the mayoral election because he didn’t keep the snow plows running after a heavy snow storm. He worried about how he’d keep snow plows, garbage collection, and a host of other city services running as energy declined.

A Boulder city council member at this conference told us he had hundreds of issues and constituents to deal with on a daily basis, no way did he have time to spend on an issue beyond the next election.

Finally, Congressman Roscoe Bartlett told us that there was no solution, and he was angry that we’d blown 25 years even though the government knew peak was coming. His plan was to relentlessly reduce our energy demand by 5% per year, to stay under the depletion rate of declining oil. But not efficiency — that doesn’t work due to Jevons paradox.

The only solution that would mitigate suffering is to mandate that women bear only one child. Fat chance of that ever happening when even birth control is controversial, and Catholics are outraged that all health care plans are now required to cover the cost of birth control pills. Congressman Bartlett, in a small group discussion after his talk, told us that population was the main problem, but that he and other politicians didn’t dare mention it. He said that exponential growth would undo any reduction in demand we could make, and gave this example: if we have 250 years left of reserves in coal, and we turn to coal to replace oil, increasing our use by 2% a year — a very modest rate of growth considering what a huge amount is needed to replace oil — then the reserve would only last 85 years. If we liquefy it, then it would only last 50 years, because it takes a lot of energy to do that.

Bartlett was speaking about 250 years of coal reserves back in 2005. Now we know that the global energy from coal may have peaked last year, in 2011 (Patzek) or will soon in 2015 (Zittel). Other estimates range as far as 2029 to 2043. Heinberg and Fridley say that “we believe that it is unlikely that world energy supplies can continue to meet projected demand beyond 2020.” (Heinberg).

6) Political (and religious) leaders gain votes, wealth, and power by telling people what they want to hear. Several politicians have told me privately that people like to hear good news and that politicians who bring bad news don’t get re-elected. “Don’t worry, be happy” is a vote getter. Carrying capacity, exponential growth, die-off, extinction, population control — these are not ideas that get leaders elected.

7) Everyone who understands the situation is hoping The Scientists Will Come up With Something. Including the scientists. They’d like to win a Nobel prize and need funding. But researchers in energy resources know what’s at stake with climate change and peak oil and are as scared as the rest of us. U.C.Berkeley scientists are also aware of the negative environmental impacts of biofuels, and have chosen to concentrate on a politically feasible strategy of emphasizing lack of water to prevent large programs in this from being funded (Fingerman). They’re also working hard to prevent coal fired power plants from supplying electricity to California by recommending natural gas replacement plants instead, as well as expanding the grid, taxing carbon, energy efficiency, nuclear power, geothermal, wind, and so on — see for what else some of UCB’s RAEL program is up to. Until a miracle happens, scientists and some enlightened policy makers are trying to extend the age of oil, reduce greenhouse gases, and so on. But with the downside of Hubbert’s curve so close, and the financial system liable to crash again soon given the debt and lack of reforms, I don’t know how long anyone can stretch things out.

8) The 1% can’t justify their wealth or the current economic system once the pie stops expanding and starts to shrink. The financial crisis will be a handy way to explain why people are getting poorer on the down side of peak oil too, delaying panic perhaps.

Other evidence that politicians know how serious the situation is, but aren’t saying anything, are Congressman Roscoe Bartlett’s youtube videos (Urban Danger). He’s the Chairman of the peak oil caucus in the House of Representatives, and he’s saying “get out of dodge” to those in the know. He’s educated all of the representatives in the House, but he says that peak oil “won’t be on their front burner until there’s an oil shock”.

9) Less than one percent of our elected leaders have degrees in science. They’re so busy raising money for the next election and their political duties, that even they may not have time to read enough for a “big picture view” of (systems) ecology, population, environment, natural resources, biodiversity / bioinvasion, water, topsoil and fishery depletion, and all the other factors that will be magnified when oil, the master resource that’s been helping us cope with these and many other problems, declines.

10) Since peak fossil fuel is here, now (we’re on a plateau), there’s less urgency to do something about climate change for many leaders, because they assume, or hope, that the remaining fossil fuels won’t trigger a runaway greenhouse. Climate change is a more distant problem than Peak Oil. And again, like peak oil, nothing can be done about it. There’s are no carbon free alternative liquid fuels, let alone a liquid fuel we can burn in our existing combustion engines, which were designed to only use gasoline. There’s no time left to rebuild a completely new fleet of vehicles based on electricity, the electric grid infrastructure and electricity generation from windmills, solar, nuclear, etc., are too oil dependent to outlast oil. Batteries are too heavy to ever be used by trucks or other large vehicles, and require a revolutionary breakthrough to power electric cars.

11) I think that those who deny climate change, despite knowing it is real, are thinking like chess players several moves ahead. They hope that by denying climate change an awareness of peak oil is less likely to occur, and I’m guessing their motivation is to keep our oil-based nation going as long as possible by preventing a stock market crash, panic, social disorder, and so on.

12) Politicians and corporate leaders probably didn’t get as far as they did without being (techno) optimists, and perhaps really believe the Scientists Will Come Up With Something. I fear that scientists are going to take a lot of the blame as things head South, even though there’s nothing they can do to change the laws of physics and thermodynamics.


We need government plans or strategies at all levels to let the air out of the tires of civilization as slowly as possible to prevent panic and sudden discontinuities.

Given history, I can’t imagine the 1% giving up their wealth (especially land, 85% of which is concentrated among 3% of owners). I’m sure they’re hoping the current system maintains its legitimacy as long as possible, even as the vast majority of us sink into 3rd world poverty beyond what we can imagine, and then are too poor and hungry to do anything but find our next meal.

Until there are oil shocks and governments at all levels are forced to “do something”, it’s up to those of us aware of what’s going on to gain skills that will be useful in the future, work to build community locally, and live more simply. Towns or regions that already have or know how to implement a local currency fast will be able to cope better with discontinuities in oil supplies and financial crashes than areas that don’t.

The best possible solution is de-industrialization, starting with Heinberg’s 50 million farmers, while also limiting immigration, instituting high taxes and other disincentives to encourage people to not have more than one child so we can get under the maximum carrying capacity as soon as possible.

Hirsch recommended preparing for peak 20 years ahead of time, and we didn’t do that. So many of the essential preparations need to be at a local, state, and federal level, they can’t be done at an individual level. Denial and inaction now are likely to lead to millions of unnecessary deaths in the future. Actions such as upgrading infrastructure essential to life, like water delivery and treatment systems (up to 100 years old in much of America and rusting apart), sewage treatment, bridges, and so on. After peak, oil will be scarce and devoted to growing and delivering food, with the remaining energy trickling down to other essential services — probably not enough to build new infrastructure, or even maintain what we have.

I wish it were possible for scientists and other leaders to explain what’s going on to the public, but I think scientists know it wouldn’t do any good given American’s low scientific literacy, and leaders see the vast majority of the public as big blubbering spoiled babies, like the spaceship characters on floating chairs in Wall-E, who expect, no demand, happy Hollywood endings.


If you want an article to send to a denier you know, it would be hard to do better than Donald Prothero’s “How We Know Global Warming is Real and Human Caused“.

Fingerman, Kevin. 2010. Accounting for the water impacts of ethanol production. Environmental Research Letters.

Heinberg, R and Fridley, D. 18 Nov 2010. The end of cheap coal. New forecasts suggest that coal reserves will run out faster than many believe. Energy policies relying on cheap coal have no future. Nature, vol 468, pp 367-69.

Patzek, t. W. & Croft, G. D. 2010. A global coal production forecast with multi-Hubbert cycle analysis. Energy 35, 3109–3122.

Pimentel, D. et al. 1991. Land, Energy, and Water. The Constraints Governing Ideal U.S. Population Size. Negative Population Growth.

Smil, V. 2000. Enriching the Earth: Fritz Haber, Carl Bosch, and the Transformation of World Food Production. MIT Press.

Urban Danger. Congressman Roscoe Bartlett youtube videos:

Zittel, W. & schindler, J. energy Watch Group, Paper no. 1/07 (2007); available at http://

Money trees are magical; energy trees are not

9 08 2018

Another excellent post from the Consciousness of Sheep……..  a bit anglo-centric, but easily applies to anywhere not least Australia.


Equating money with wealth is among the most dangerous delusions currently afflicting humanity.

This is, perhaps, understandable given that so few people now have access to money in the quantities needed to improve their lives.

Government, meanwhile, effectively lies when it points to the various pots of money that it has allocated to this or that infrastructure, entitlement or service.  This is mendacious because money from central government is allocated as a block grant to local government and other public bodies.  In total, these public bodies lack the income to fund their legal responsibilities.  As a result, money that was theoretically allocated to provide for such things as mental health beds, fixing potholes and a host of other discretionary activities is actually deployed in firefighting the collapse of mandatory services like child welfare or social care for the elderly.

The solution to this for many in the political sphere is to loosen the purse strings.  Quite correctly, they identify the central flaw in the pronouncements of duplicitous politicians like Theresa May and Phillip Hammond; who tell us that “there isn’t a magic money tree.”  Because… well… actually, yes there is.  It’s called the Bank of England.  And were politicians to instruct it to do so, it can spirit into existence as much new currency as it likes.

The conventional way in which central banks spirit money into existence is via the issuance of government debt.  Government issues a bond (called a Gilt-Edged Security in the UK) which is auctioned to a closed group of banks and financial institutions.  The central bank then spirits new money into existence and uses it to buy these bonds back.  That new money then enters the economy via the financial sector.

This, of course, is no more than tradition.  There is nothing to prevent the central bank from conjuring new money out of thin air and then distributing it directly into the bank accounts of every citizen.  Indeed, this is one of the points made by those who favour some form of Universal Basic Income as an alternative to the UK’s overly bureaucratic and increasingly ineffective social security system.  The reason that money is not created in this way is simply that channelling it through the banking and financial system favours the wealthy and powerful at the expense of the wider population.

Midway between the current practice of handing new money to the already wealthy – who get to enjoy it before inflation devalues it – and channelling it directly to the people, is the proposed creation of a national investment bank.  Whereas feeding new money to the already wealthy serves only to inflate asset bubbles in unproductive areas like property, fine art and collectibles, an investment bank could provide funding for national infrastructure development.  This, in turn, would provide new jobs as well as enhancing the productivity of the economy as a whole.

The only requirement of any of these forms of currency creation is that the government removes sufficient money from the economy through taxation to prevent inflation running out of control.  Herein, however, is the problem that has vexed governments down the ages.  Exactly how much money does the government need to remove from the economy to prevent inflation?

The current practice of giving new money to the already wealthy requires very little government action.  The central bank practice of raising interest rates is considered sufficient.  This is because, like taxes, debt repayment is a means of removing currency from the economy.  Just as banks create new currency when they make loans, so currency is destroyed when loans are repaid.  When the interest rate rises, an additional proportion of the currency in circulation has to be destroyed in order to pay the higher charge.

Once governments start moving new currency directly into the economy – either through investment banks or direct transfers to people’s bank accounts – taxation has to be adjusted accordingly in order to prevent the money supply growing too high and causing inflation.

The problem is that just as central banks cause financial crises by raising interest rates beyond the point where creditors begin to default; governments have a habit of causing crises by allowing too much new currency to be created.  It is all too easy for politicians – who need to get re-elected – to promise new investments in popular services – without thinking about the impact of that new spending on the broader economy.  In the 1970s, the impact of this kind of currency creation was so great that governments around the world handed control of their money supply to the banking sector; and passed legislation and entered into treaties (like Maastricht) that forbid direct government money printing (states are permitted to bail out banks, but not businesses or citizens).

The inflation of the 1970s is explained in economics textbooks as being the result of profligate governments playing fast and loose with their national economies.  The difficulty with that explanation, however, is that exactly the same money creation policies kick-started the greatest economic expansion the world has ever seen.  The post-war Marshall Aid programme which printed new dollars into existence in order to rebuild the shattered economies of Western Europe and Japan, together with the spending programme of Britain’s Labour government (which didn’t receive Marshall Aid), paved the way for the twenty-year boom 1953-73.  With western growth rates similar to those claimed by modern China, states using newly created currency to invest in and grow the economy became the economic orthodoxy for three decades.

If the supposed relationship between money printing and economic growth and crisis is beginning to sound like a false correlation to you, it is because it is.  It is what I refer to as “the Keynesian paradox.”

Having witnessed the austerity, depression and eventual rise of fascism in the aftermath of the First World War, economist John Maynard Keynes argued that the big mistake made in 1919 was for governments to return to the economic orthodoxy of the pre-war years.  This had resulted in austerity policies at home and the imposition of reparations on the defeated enemy.  What Keynes argued for was close to what the US delivered in 1945, when it realised its best protection against the Soviet Union was a prosperous, interconnected western bloc.

Keynes’ proposition was straightforward enough: if you give newly created money to a wealthy person, they will exchange it for some form of unproductive asset – a house, a piece of art, a vintage car, etc.  If, on the other hand, you give the same new money to a poor person, they will spend it all more or less immediately – on necessities like food, rent, fuel and clothing.  In this way, new currency distributed to the poor would quickly circulate around the economy; stimulating growth.

Keynes was correct in terms of money flows but wrong about growth.  Indeed, there was a period in European history – the years following the colonisation of the Americas – when a sudden influx of new money (in the form of the gold and silver shipped back to Spain) had exactly the opposite effect.  Without the influx of precious metals from the Americas, the Hapsburg Empire might have gone on to become the United States of Europe.  Instead, it experienced a prolonged and ruinous period of inflation that resulted in internal revolt and division.  In effect, the sudden influx of precious metals had the effect of devaluing the gold and silver (and money based upon it) already in circulation; manifesting as rapidly rising prices across the economy.

More recently, excessive money printing (in order to inflate away reparation debt) in Germany resulted in the runaway inflation of 1924 that helped propel Hitler and the Nazis onto the world stage.

This is the Keynesian Paradox.  An economic policy (Marshall Aid) that patently kick-started the largest economic boom in history, also created the inflation of the sixteenth century and the stagflation of the 1970s.

Might this suggest that there was some deeper factor common to sixteenth century Europe and the 1970s that was absent or opposite to conditions in the late 1940s?  What else happened in the 1970s?  The world experienced a major oil shock as US reserves were no longer sufficient to regulate global oil prices.  In the aftermath of the Second World War, global oil production grew exponentially; fuelling the boom.  That came to an end in 1973:

World oil production exponential-linear
Source: The Oil Drum/COS

In the period since 1973, oil production has continued to grow; but growth has been linear.  The result is that the rates of growth enjoyed in the west between 1953 and 1973 are never coming back.  Indeed, much of the oil we are adding to the mix today is expensive; giving it a much lower value to the economy than the oil being produced in the aftermath of the Second World War.

One of Keynes’ contemporaries – English Nobel Prize-winning chemist Frederick Soddy – understood this far better than Keynes:

“Still one point seemed lacking to account for the phenomenal outburst of activity that followed in the Western world the invention of the steam engine, for it could not be ascribed simply to the substitution of inanimate energy for animal labour. The ancients used the wind in navigation and drew upon water-power in rudimentary ways. The profound change that then occurred seemed to be rather due to the fact that, for the first time in history, men began to tap a large capital store of energy and ceased to be entirely dependent on the revenue of sunshine…

“Then came the odd thought about fuel considered as a capital store, out of the consumption of which our whole civilisation, in so far as it is modern, has been built. You cannot burn it and still have it, and once burnt there is no way, thermodynamically, of extracting perennial interest from it. Such mysteries are among the inexorable laws of economics rather than of physics. With the doctrine of evolution, the real Adam turns out to have been an animal, and with the doctrine of energy the real capitalist proves to be a plant. The flamboyant era through which we have been passing is due not to our own merits, but to our having inherited accumulations of solar energy from the carboniferous era, so that life for once has been able to live beyond its income. Had it but known it, it might have been a merrier age!”

The economic expansion that Soddy correctly attributed to the fossilised sunlight locked up in coal deposits was to be multiplied a hundredfold by the oil-based expansion that followed the Second World War.  And indeed, had we known that it was oil rather than one or other version of politics or economics that was responsible for our brief period of prosperity, our age too might have been merrier.

In this, the sixteenth century Europeans might have had something to tell us; because they also experienced an energy crisis.  Given that this was a period when economies ran entirely on renewable energy, there is a corrective here too for those who imagine that returning to some pre-industrial idyll might be our salvation.  Sixteenth century Europeans chopped down their forests at a much faster rate than the trees could be regrown.  As historian Clive Ponting notes:

“A timber shortage was first noticed in Europe in specialised areas such as shipbuilding… In the 1580s when Philip II of Spain built the armada to sail against England and the Dutch had to import timber from Poland… Local sources of wood and charcoal were becoming exhausted – given the poor state of communications and the costs involved it was impossible to move supplies very far.  As early as 1560 the iron foundries of Slovakia were forced to cut back production as charcoal supplies began to dry up.  Thirty years later the bakers of Montpellier in the South of France had to cut down bushes to heat their ovens because there was no timber left in their town…”

Creating new currency – in this case the new precious metals from the Americas – into an economy that has outrun its energy supplies could only result in inflation because without sufficient energy there could be no economic growth.  Only when new sources of energy – in this case, coal from the Severn Valley – can be brought into production does the economy recover and a new round of economic growth begin.

When western states printed new currency into existence to rebuild their war-torn economies in the years after 1945, they did so while almost all of the planet’s oil deposits were still in the ground.  Much of the new currency was invested into economic activities that required oil for manufacture and/or transportation.  That, in turn, meant that a proportion of the new currency found its way into the accounts of the big oil companies; who used it to open up the vast oil reserves around the planet.  It was this cheap, abundant reserve of oil that allowed for massive currency creation without generating inflation.  It was precisely at the point when money creation overshot oil production that the inflation of the 1970s set in.

Fast-forward to the very different world of 2018: World production of “conventional” crude oil peaked in 2005.  The resulting inflation – followed by the inevitable interest rate rises – triggered the worst financial collapse in living memory.  Oil production is still, just about, increasing; but only at great expense.  Low quality and expensive oil from fracking, tar sands and ultra-deep water is keeping the economy going; but only at the cost of obliging us – businesses and households – to devote a greater part of our income to energy (either directly or through the energy embodied in the goods and services we purchase).

Unlike money trees, there is nothing magical about oil (which, a handful of electric cars aside, still powers almost all of our agricultural, industrial and transportation vehicles and machinery).  Even now, there is more oil beneath the ground than we have used so far.  But most of what is left is going to stay in the ground simply because it is too expensive (i.e. it requires too much energy) to extract.

Alternative energy sources do not really exist, other than by sleight of hand.  Most often, this is done simply by conflating electricity with energy.  But the crisis we face is primarily a liquid fuel crisis.  As such, the electrical energy generated by a wind turbine or a nuclear plant is irrelevant.  What has actually happened has nothing to do with ending our use of fossil fuels.  Rather, states around the world have turned to alternative fossil fuels – coal and gas – together with renewables and nuclear to free up the remaining extractable oil for use in industry, agriculture and transportation.  Oil consumption, however, continues to rise, because without it growth would end and the mountain of debt-based currency would collapse around our ears.

This brings us back to the money question.  There is a growing belief that the solution to our problems will come in the form of a switch from austerity economics to an expansionary policy based on distributing newly created currency via investment banks and/or universal basic incomes.  This, however, is highly unlikely to succeed until or unless we find a means of massively increasing the energy available (at the point of use) to the economy to counteract the decline in affordable oil that is beginning to emerge (replacing unaffordable oil with unaffordable renewables doesn’t really count).

Politically, the demand for an end to austerity is becoming irresistible.  We already see its manifestation in Brexit, the election of Donald Trump and the rise of populist (right and left) parties across Europe.  Around the world, the people have put the elites on notice that they will no longer tolerate an economy in which a tiny handful of kleptocrats continue to accumulate wealth via a rigged financial system while everyone else sees their standard of living plummet.

The mistake, however, would be to assume that simply printing currency will solve the problem.  Without useable energy to back it up, new currency is worthless.  Its only role is to steal a fraction of all of the currency already in circulation.  This may have small benefits if channelled to ordinary people, since it will be the accumulated currency of the wealthy that is devalued the most – a kind of hidden tax.  But the ensuing price increases are far more likely to be experienced by those at the bottom of the income scale; as their ability to pay for necessities is rapidly eroded.

The crisis of our age, then, is not to pick the fruit of the magic money tree; but to discover the location of the magic energy tree whose fruit has fertilised the money tree for the past 250 years.  Sadly, that magic (fossilised sunlight) energy tree has shrivelled with age.  We may never see its like again.

Peak Shale Oil?

26 07 2018

The largest shale oil producer in the Permian spent $264 million more than they made from operations drilling 63 new wells in the Permian and only added a net 9,000 barrels per day of oil equivalent.  Now, how economical is that???

From SRSRocco’s website…..


While the U.S. reached a new record of 11 million barrels of oil production per day last week, the top five shale oil fields also suffered the highest monthly decline rate ever.  This is bad news for the U.S. shale industry as it must produce more and more oil each month, to keep oil production from falling.

According to the newest EIA Drilling Productivity Report, the top five U.S. Shale Oil fields monthly oil decline rate is set to surpass a half million barrels per day in August.  Thus, the companies will have to produce at last 500,000 barrels of new oil next month just to keep production flat.

Here are the individual shale oil field charts from the EIA’s July Drilling Productivity Report:


The figures that are shown above the UP arrow denote the forecasted new production added next month while the figures above the DOWN arrow provide the monthly legacy decline rate.  For example, the chart on the bottom right-hand side is for the Permian Region.  The EIA forecasts that the Permian will add 296,000 barrels per day (bpd) of new shale oil production in August, while the existing wells in the field will decline by 223,000 bpd.

If we add up these top five shale oil fields monthly decline rate for August will be 503,000 bpd.  Thus, the shale oil companies must produce at least 503,000 bpd of new oil supply next month just to keep production from falling.  And, we must remember, this decline rate will continue to increase as shale oil production rises.

We can see this in the following chart below.  Again, according to the EIA’s figures, the top five U.S. shale oil fields monthly legacy decline rate increased from 398,000 bpd in January to 503,000 bpd for August:

In just the first seven months of 2018, the total monthly decline rate from these top shale fields increased by 26%.  These massive decline rates are the very reason the shale oil and gas companies are struggling to make money.  A perfect example of this is PXD, Pioneer Resources.  Pioneer is the largest shale oil producer in the Permian.  According to Pioneer’s Q1 2018 Report:

Producing 260 thousand barrels oil equivalent per day (MBOEPD) in the Permian Basin, an increase of 9 MBOEPD, or 3%, compared to the fourth quarter of 2017; first quarter Permian Basin production was at the top end of Pioneer’s production guidance range of 252 MBOEPD to 260 MBOEPD; as previously announced, freezing temperatures in early January resulted in production losses of approximately 6 MBOEPD; Permian Basin oil production increased to 170 thousand barrels of oil per day (MBOPD); 63 horizontal wells were placed on production.

Pioneer spent $818 million on capital expenditures (CapEx) for additions to oil and gas properties (drilling and completion costs) during Q1 2018, brought on 63 horizontal wells in the Permian, and only added 9,000 barrels per day of oil equivalent over the previous quarter.  So, how much Free Cash Flow did Pioneer make with oil prices at the highest level in almost four years??  Well, you’re not going to believe me… so here is Pioneer’s Cash Flow Statement below:

Pioneer reported $554 million in cash from operations and spent $818 million drilling and completing oil wells in the Permian and a few other locations.  Thus, Pioneer’s Free Cash Flow was a negative $264 million.  However, Pioneer spent an additional $51 million for additions to other assets and other property and equipment shown right below the RED highlighted line for a total of $869 million in total CapEx spending.  Total net free cash flow for Pioneer is -$315 million if we include the additional $51 million.

Therefore, the largest shale oil producer in the Permian spent $264 million more than they made from operations drilling 63 new wells in the Permian and only added a net 9,000 barrels per day of oil equivalent.  Now, how economical is that???

How long can this insanity go on??

If we look at the Free Cash Flow for some of the top shale energy companies in Q1 2018, here is the result:

Of the ten shale companies in the chart above (in order: Continental, EOG, Whiting, Concho, Marathon, Oasis, Occidental, Hess, Apache & Pioneer), only three enjoyed positive free cash flow, while seven suffered negative free cash flow losses.  The net result of the group was a negative $455 million in free cash flow.  

Even with higher oil prices, the U.S. shale energy companies are still struggling to make money.

So, the question remains.  What happens to these shale oil companies when the oil price falls back towards $30 when the stock market drops by 50+% over the next few years??  And how is the U.S. Shale Energy Industry going to pay back the $250+ billion in debt??