EIA Quarterly Crude + Condensate Production Data

The EIA publishes all kinds of energy production data but I collect and chart only Crude + Condensate data. But that comes in three flavors, monthly, quarterly and yearly. I decided to chart the quarterly data and see if that looks any clearer than the monthly data.

Quarterly C+C production in kb/d. The last quarter, 3rd, ends September 2013.

World

World C+C production has increased 2 million barrels per day since the 2nd quarter of 05. Who were the big gainers that caused this 2 million barrel per day increase?

World Less USA

Turns out it was all USA.

Non-OPEC is up about 1.5 million barrels per day since the second quarter of 2005.

Non-OPEC

However Non-OPEC less USA is down about 750 kb/d since 2005 and down 1.25 million barrels per day since peaking in the last quarter of 2010.

Non-OPEC Less USA

World crude oil production outside the USA has clearly peaked. It is only the shale oil bubble that is keeping peak oil from being obvious to the rest of the world.

The EIA’s Monthly Energy Review is out with the US production figures through December. This enabled me to plot the US quarterly production through the last quarter of 2013 in kb/d.

United States

This data enabled me to average US production for the entire year of 2013. That figure turned out to be 7,492,583 barrels per day, subject to revision of course. That turned out to be 263 kb/d below what AEO 2014 had predicted.

AEO 2014

This means that the prediction above made by the EIA’s AEO 2014 is already over a quarter of a million barrels per day below prediction.

Another chart of interest would be OPEC C+C. This chart is though the 4th quarter of 2013, that is through December 2013.

OPEC C+C

Opec C+C in the 4th quarter of 2013 averaged 31,479 kb/d. That is 1,700 bp/d below the peak which was the second quarter of 2012 which averaged 33,179 kb/d.

All OPEC data through the 3rd quarter of 2013 is from the EIA. The last quarter of data was taken from the OPEC MOMR then I added 1.9 mb/d of condensate which is about the OPEC average for condensate production. Or more correctly 1.9 mb/d is the approximate difference between the EIA’s C+C data and OPCE MOMR’s Crude Only data for the last couple of years.

Switching gears to Weekly Production, will the trend continue? The last data point is for week ending January 24th. The data is kb/d.

Weekly C+C

This entry was posted in Uncategorized and tagged , , , . Bookmark the permalink.

255 Responses to EIA Quarterly Crude + Condensate Production Data

  1. Euan Mearns says:

    On Energy Matters

    OPEC crude oil production capacity

    When will the USA stop growing production?

    • Well the EIA’s AEO 2014 has growth stopping at the end of 2016, plateauing, then the decline starting in 2020. I am predicting the peak in 2015 and the decline starting in 2016 or 2017.

      That IEA OPEC spare capacity chart is a joke. All OPEC nations, with the possible exception of Saudi Arabia, are producing flat out, and I believe even Saudi is very close to maximum capacity. Of course Libya and Iran could produce more if peace suddenly broke out in Libya and sanctions were lifted on Iran. But that is not spare capacity right now.

      • Calhoun says:

        I have read that there is some question as to how much Iranian production would go up if sanctions were lifted. The writer, I don’t remember who, was skeptical that they could produce and export much more than they are now. Ron, I wonder if you have any opinions on that?

        • Calhoun, I doubt that Iran could produce very much more oil at all if sanctions were lifted. Look at the Timeline: Sanctions on Iran.

          August 2010 – EU prohibits the creation of joint ventures with enterprises in Iran engaged in oil and natural gas industries, as well as the import and export of arms and equipment related to nuclear activities. The sale, supply, and transfer of equipment and technology used for natural gas production is also banned.

          November 2011 – The US, UK and Canada announce bilateral sanctions on Iran. While the US expands sanctions to companies that aid Iran’s oil and petrochemical industrials, the UK mandates all British financial institutions stop doing business with Iranian counterparts.

          January 2012 – US imposes sanctions on Iran’s central bank, the main clearing-house for its oil export profits. Iranian in turn threatens close off the transport of oil through the Strait of Hormuz.

          The European Union announces an oil embargo on Iran unless it curtails its nuclear programme.

          June 2012 – US bans the world’s banks from completing oil transactions with Iran, and exempts seven major customers – India, South Korea, Malaysia, South Africa, Sri Lanka, Taiwan and Turkey – from economic sanctions in return for their cutting imports of Iranian oil.

          July 2012 – EU ban of Iranian oil exports takes effect.

          Now look at a chart of Iranian crude oil production:
          Iran photo Iran_zpsffadb823.png
          I have drawn a trend line showing the trend before sanctions. The first arrow shows the month sanctions were first announced. The second arrow shows the month the sanctions went into effect.

          Of course US bank sanctions started in November 2011 but the decline in Iranian oil production had started well before that point. So draw your own conclusions from the chart as to what they might produce if sanctions were lifted. But in my opinion they will not get to within half a million barrels per day of 2010 levels which were around 3.75 mb/d.

          • Watcher says:

            That’s a good chart, but I presume it’s from US sources. There is incentive to show sanction impact. Iranian sources do not show the same effect, as I recall. The US sources would not track the transactions done with Turkey as financial conduit that were just revealed this past week.

            IOW, you’re right. Huge exaggeration of claimed increases of what would come on the market from Iran. It’s already on the market.

            • No, it’s not from US sources, it’s from the OPEC Monthly Oil Market report. OPEC compiles their data from “secondary sources”. I think that is a composite of several sources such as Platts. They also post data from “direct communication” where Iran does show exaggerated production. But I covered that in a post a couple of weeks ago.

              I really don’t think the EIA would fudge the data just to show exaggerated effects of sanctions.

  2. Euan Mearns says:

    That IEA OPEC spare capacity chart is a joke.

    Yes and no. There is a full quota of Libyan spare capacity in there, but not much for Iran. And the rise in spare capacity post 2008 is real. And Saudi has built new capacity – Khurais and Manifa. I agree its only a half truth, I’d guess overestimated by 2 Mbpd.

    Your chart posting option is neat, though limited. How did you get hold of that? A plugin?

    • And Saudi has built new capacity – Khurais and Manifa.

      Khurais went on line in May 2009 and has been in full production for some time now. Manifa went on line in March 2013 and will reach full production sometime this year. These two projects have enabled Saudi to replace declines in her old giant fields. Production from Khurais and Manifa can in no way be considered “excess capacity”.

      Saudi Arabia, in the summer of 2008, was producing at full capacity of around 9.5 mb/d. With the aid of Khurais and later Manifa, they managed to reach 10.11 mb/d in August of 2013. But their old fields are now in decline, just how steep is that decline is open to debate but I would bet it is in excess of 5% and could be as high as 8%. But 5% comes to half a million barrels per year. Khurais and Manifa can keep them in excess of 9 mb/d for a year or two but no longer.

      You don’t seriously believe that OPEC countries with the possible exception of SA are not producing flat out do you? Really Euan? Most of the other OPEC countries are claiming to be producing more oil than OPEC’s “secondary sources” say they are producing.

      Also eight of the OPEC nations are in serious decline. Only SA, Kuwait, UAE and Iraq have shown any increase in the last few years and they are all looking a little toppy. Why would these countries allow serious decline if they have spare capacity. And why the increase from the UAE and Kuwait lately? They were increasing while the others were in decline. And Kuwait has been bragging for years that they were implementing “Project Kuwait” which would increase production substantially. They did manage that but their production has been flat for almost two years now.

      • Euan Mearns says:

        Ron, don’t shoot me I am merely the messenger ;-) Here’s what I wrote in my post..

        OPEC total production capacity stands at 35 Mbpd, a plateau level first reached in 2009. Only Saudi Arabia has significant, tangible spare capacity that can be called upon to iron out the swings in global oil supply. In the supply crisis of July 2008, Saudi spare capacity stood at 1.1 Mbpd, in November 2013 it was 2.7 Mbpd.

        Khurais and Manifa add 2.1 Mbpd capacity and only 1.6 Mbpd has been booked. Onshore, actual declines following interventions will be <5%.

  3. Dennis Coyne says:

    Hi Euan,

    It is a plugin found at

    http://tommcfarlin.com/comment-images/

    and it is indeed limited to one chart per comment, though you can put a couple of charts in a word document and then use a screenshot to combine them into a single chart. If you find a better plugin let us know.

    Dennis

  4. Euan Mearns says:

    The USA from IEA, data to No 2013. The growth is less spectacular when chart is zero scaled.

    • SRSrocco says:

      Euan,

      Nice chart. On the other hand, when we look at the historic graph of U.S. crude & condensate, we can see just how different the present shale oil increase compares to the 1930-1970 period. The U.S. averaged an increase of about 2.5 million barrels a day during that 40 year time period.

      However, the increase in shale oil has grown overall U.S. production nearly 2.5 million barrels a day in only 4 years — less than half the time as before. The 1930-1970 oil production increase was more linear, whereas the present graph represents more an exponential one. What goes up exponentially… comes down the same way.

      steve

      • SRSrocco says:

        CLARIFICATION:

        The U.S. increased oil production during the 1930-1970 time period 2.5 mbd per decade.

        steve

        • SRSrocco says:

          Actually, the increase in U.S. oil production from 1930-1970 averaged about 1.87 mbd, not the 2.5 mbd. Thus, it makes the 2010-2014 increase of 2.5 mbd, look even more dramatic.

          steve

      • Euan Mearns says:

        SR – this needs to be normalised to size of drilling fleet and feet drilled. The US land rig fleet has grown to some 2000 units – it grew so big to try and combat the declines in conventional oil and gas plays. And then shale was suddenly discovered. The whole lot went over to drill shale gas and then shale oil. In conventional plays there is a lot of wasted effort. Geologists and geophysicists need to identify a target to drill, and sometimes it works, targets were getting smaller and smaller as were rewards. In shale, you are guaranteed a small reward every time – until you run out of rich shale to drill.

        What I’m waiting to see is whether or not the rig fleet grows to 4000 units. Ain’t going to happen at $100 / bbl but at $150 who knows?

        • SRSrocco says:

          Euan,

          I agree with you as it pertains to the equation: oil production/drilling rigs. However, it doesn’t change the fact that exponential increases tend to be short-lived and they decline in the same fashion — with or without the 2,000 drilling rigs… No?

          When I spoke to Bill Powers (energy analyst) last week, he told me that his buddy who works for a company that builds drilling rigs in Edmonton, Canada… said that all the new rigs were going to British Columbia to produce oil there to be exported to Asia.

          I don’t know if we will ever see $150 a barrel for an extended period. The U.S. and world just can’t afford that price. I believe the huge injections of QE liquidity by the FED has allowed the U.S. and other countries to purchase a percentage of oil that it cannot afford.

          Also, the $20 billion Taper by the FED over past several months is only a POLITICAL stunt. We are going to see that policy turn around at some point in time with an even larger amount of monthly QE.

          This is the problem. Huge amounts of QE liquidity with hundreds of trillions of dollars in the Interest Rate Swap market, have distorted this economy into something quite anomalous. The ultra-low interest rates have allowed many shale energy companies to continue Business as Usual as they can finance record debt cheaply.

          Again, oil prices over $120 prove to be disastrous for the global economy.

          steve

          • Dennis Coyne says:

            Hi Steve,

            It has been more of a parabolic x^2 shape, since May 2011 the rise in US output has been linear, steeper than the past for sure, but not exponential for the US as a whole. See chart.

            • SRSrocco says:

              Dennis,

              Thanks for the added benefit of your excellent math. Yes, I realize that the present U.S. oil production graph is not exponential, that is why I labeled it as “Nearly Exponential.”

              I just thought it was interesting to compare the present 4 year trend to the 1930-1970 time period.

              steve

              • KLR says:

                Now, another thing that comes to mind is how the shale boom is impacting conventional production, or other forms of unconventional. Ron’s work showing how UDW comes to mind, how about other parts of the world? Obviously the rest of non-OPEC is in sad shape, is that owing to the allure of drilling tight formations?

            • Dennis Coyne says:

              Hi Steve,

              I liked your chart a lot because it gives the big picture. I just wanted you to be careful about “nearly exponential”, which could really mean anything. The rise is linear since May 2011, but the rate of increase (slope of the line) is quite a bit faster than the past.

          • Dennis Coyne says:

            “Again, oil prices over $120 prove to be disastrous for the global economy.”

            Hi Steve,

            I thought in 2003 that oil prices over $75/barrel(in 2003 $, about triple the 2002 price level) would crash the economy because in 1981 real oil prices above $75/barrel (2003$) caused a severe recession. It turns out that although this prediction looked correct in 2008, prices have now stabilized above this level and the world economy is slowly recovering despite the best efforts of governments in the US and Europe to keep their economies in a recession by refusing to use fiscal policy appropriately. Note that the 12 month average of real oil prices in 2003$ have been above $75/barrel since the 3rd quarter of 2011.

            Now we have people claiming that there is very likely an oil price level (between $120 and $147 in 2008$) that will send the economy into a tailspin, if it is breached. I would argue that it depends to a large degree on how quickly we go from present price levels to some higher price level.

            I am going to shift now to talking in terms of 2008 $ rather than 2003 $, the 12 month average trailing oil price level is currently $79/barrel in 2003$ and $92/barrel in 2008 $.

            If real oil prices rise by 1.5% per month on average from Jan 2014 to Jan 2020 (this would be the trend, they will of course fluctuate up and down as always), then in Sept 2016 real oil prices reach $150/barrel (in 2008$) and in Jan 2020 would be over $270/barrel (2008$). I contend that this relatively slow rise in prices (slower than the 2002 to 2007 rate of price increase) is not likely to cause a severe recession because the economy will have time to adjust as the prices rise. See chart below.

            • in Jan 2020 would be over $270/barrel (2008$). I contend that this relatively slow rise in prices (slower than the 2002 to 2007 rate of price increase) is not likely to cause a severe recession because the economy will have time to adjust as the prices rise.

              Dennis, the time it takes would not make any difference whatsoever. If your inflation increased by 1.5% per month while your income stayed flat, then in 6 years you would have about 30% the purchasing power you had before. But you would have had time to adjust so it would not cause a hardship?

              February 1st 2011 Brent hit $100 a barrel and has been above that point ever since, three years. Is that having an effect on growth? I think so:
              The US Economy Is Growing Much Slower Than You Think

              Growth has been all QE, which was simply the government printing money and also people spending their savings. In fact there has been no growth at all. And there are more people unemployed today than there were in 2009, or would be if they counted those who have stopped looking for work and the millions who are working at minimum wage instead of the high paying jobs thy had before the recession.

              • KC says:

                Dennis, Ron:

                I can speak directly from experience on this one.

                I lost my job in June 2012, continuing the job search, fruitlessly until now. I got a short contract assignment, 3 months, early last year. Since then I haven’t found anything else. I put out at least several resumes every day, and still, nothing. My experience and credentials are excellent; as are the companies on my resume all high-caliber pedigrees, consistently in the top 5 Fortune 500 and ranked in the top 10 best places to work in America. And still, I cannot find a job.

                I worked for a few months at a five-star hotel, five times below my earning potential. Since then I am still looking for work. I cannot get even a job at McDonald’s or Starbucks – I am “overqualified”.

                Sometimes when I apply for jobs, I can see how many others are applying for the same job, as well as the demographic profiles of the applicant population. Usually I see between 50 and 100 people applying for these jobs – mid-level non-management experienced – and many of them are worse off than me. Almost all of us have at least a bachelor’s degree, though few of us, including myself, are bachelors of science. These days I find that most degreed professionals have Bachelor of Arts degrees, to which I have to ask, what is the point? But anyway, I digress. Many also have masters degrees and even PhD degrees. All of us applying for the same job.

                Meanwhile I am burning through my life savings.

                It is a mess.

                To me, it doesn’t matter if inflation is at 0%, 1.5%, 5%, 10%, whatever. To me, everything is expensive because I have no income to drive my purchasing power. And still, every day everything is more expensive, at least for me.

    • KLR says:

      That chart is great, I cracked up laughing for some reason. Showing the oil boom against the US flag is just so ra-ra-ra. You should post that over at freerepublic.com, they’d nominate you for something.

  5. John says:

    I personally think it is too early to call ‘peak’ for the world. I don’t deny that we mustn’t be far off but I think I’d need to see a few years of solid decline before getting too excited about things.

    The tight oil has been quite a remarkable boom for the US, I can understand we the cornucopian’s have been getting so excited when you look at the rate of production increase in the last few years. Shame, most probably extrapolate the current rate of increase as a sure thing.

    • Doug Leighton says:

      John,

      I agree, sort of. There’s an amazing degree of momentum within man’s efforts to maintain the status quo (And, to Hell with the planet, of course). On the other hand, we’re facing unknowns. It would be nice to have more accurate reserve figures, precise average global depletion rates and know how much more can really be squeezed out of existing deposits as a small difference with these makes for a large alteration to forecasts and projections. So, it’s just wait-and-see, or wait-and-stew, I guess.

      • John says:

        Yeah, I wish I knew how things will play out in the financial system as I would like to build a house on a small patch of land I’ve purchased. The thought of having to take out a mortgage at a time like this is daunting to say the least!

        How many more years can BAU kick on… I see John M Greer predicted slow decline & folk like Kunstler touting imminent collapse! Wish I had a crystal ball that worked :-p

    • TechGuy says:

      “I personally think it is too early to call ‘peak’ for the world. I don’t deny that we mustn’t be far off but I think I’d need to see a few years of solid decline before getting too excited about things.”

      Peak Diesel almost certainly close at hand. Perhaps if other nations join in LTO fracking, Oil Production declines can be deferred. However since LTO is poor for diesel and other heavy distillates, its unlikely to see a sustained production or growth. Diesel is probably the most important since it the transport fuel that powers the global economy. Everything grown or manufactured is shipped using diesel.

      Fracking and LTO has turn the long term assumption (at least mine) that the supply of fossil fuels would shift from lighter fuels (gasoline) to heavy fuels as the world depleted its supply of light sweet crude first switched use heavy-sour crudes since demand for heavy-sour was low.

      FWIW: Because drillers dumped NatGas for LTO, I was expecting that production would have dropped like a rock, but the exact opposite has happened. If you look at this article below, it shows that NatGas Production as doubled since the switch from NatGas Drilling to LTO. I guess they are producing lots and lots of NatGas from LTO drilling.

      http://www.aei-ideas.org/2013/03/us-gas-rigs-have-fallen-by-75-since-2008-and-yet-gas-production-has-increased-to-record-high-levels/

  6. John, it is not as uncertain as you seem to believe. Without the US we have been on a plateau since 2004. So the real question outside the US is not when we will peak but rather when will we fall off this undulating plateau?

    Also declines come for different reasons. If we have a serious world wide recession and the bottom drops out of the oil market, we will have a decline like the one in late 2008. Then even with that half assed recovery we had, oil production recovered also. However if the economy does not recover then oil production will not recover either. However if we have a decline with prices still above $100 a barrel then you can make a safe bet that there will be no recovery from such a high priced decline.

    But my point was it now all seems to depend on a bubble that must burst, the US shale oil bubble. That will peak and start to decline withing two years. And with oil production already starting to slip in most countries, a US production slide will be the coup de grâce for the cornucopian exuberance we have been flooded with these last couple of years.

    • Doug Leighton says:

      Well put, I agree completely Ron.

    • John says:

      That’s just it Ron, I know we’re on the plateau, I just wonder how many years we have up here to enjoy the view before the down-slope starts! Could we stay here for 5, 10, 15 years? I have no idea.

      Peak oil is fascinating, slow motion train crash. Great site BTW.

      • No offense John, but if you think we could stay on this undulating plateau for 15 years then you are correct, you really do have no idea.

        But I follow production of every oil production very closely, and I do have an idea. I think there is a 60% chance that crude oil production will peak within the next two years, and a 99% chance that it will peak within this decade.

        But as Montaigne said: I should not speak so boldly if it were my due to be believed.

        • coffeeguyzz says:

          Greetings, Mr. Patterson. You probably have surmised that I do not subscribe to the view that the US will plateau/decline in oil production in the next few decades (yes, decades) from the few postings I have made. The biggest driver for my views is the non-ideological, voluminous data that the oil industry constantly puts forth – particularly in the exploration/production arena … with the focus on the rapid development and introduction of new technology.
          The poster above correctly points out, IMHO, how diesel fuel is not positively impacted in the main by the production of LTO. He may be unaware of how rapidly ALL transportation modes – especially commercial trucks, trains, ships, and soon passenger vehicles are being transitioned to consume nat gas, a far cleaner fuel to burn, as well as costing less than half the price of diesel.
          The Bakken field, the Eagle Ford and the Niobrara are just starting to be downspaced with expected yields per acre looking to possibly quintuple as wells are drilled way closer to each other, deeper pay zones starting to be accessed, and newer completion/stimulation processes vastly improving recovery (easily on the order of 100%/200%.
          As wells are now being drilled in as little as 6 days (Andarko in the Niobrara), rigs ‘walking’ a few feet on a pad to start to spud a new well in a few hours versus the 5 days of just a few years ago, the space-age precision of locating and categorizing hydrocarbons with the latest micro-seismic tools, the overall production of hydrocarbons will undoubtedly show a significant increase in the coming years from US shale resources.
          The Permian, with its 90 year history of producing 29 billion barrels of oil, is just now starting to incorporate horizontal drilling and experts in the field predict it will produce far more in the future than in the past. On a global scale, the fact that China has invested billions in the US shale plays shows their intent on transferring their on-the-ground knowledge to the development of their own vast shale resources (much bigger than the US’, btw).
          Australia and Argentina are preparing to follow their own development/recovery in the near future.
          The operational indices, coupled with the known resources, would seem to validate the EIA’s recent projections of adequate oil/nat gas supply for many years to come.

  7. Patrick R says:

    Shale is the only glue holding the ‘business as usual’ lie together. Gonna get interesting. The effect on global price of the US re-entering the market as a volume buyer if Shale does decline steeply in a couple of years will be extreme and un- stoppable. Complete global economy wrecker, will make 2008 price movements look like a little blip. A preamble. Which is surely what they were.

    What could conceivably prevent this? Shale going on indefinitely through more areas being exploited, over and over? Love and hugs breaking out all over the ME, with Iran and Iraq stumping up double volumes? Where else?, not the US arctic now Shell have slunk off? Pre-salt got two years to turn into a gusher? Now how’s Russia on the decline continuum?

    Which outcomes are more likely? I agree human society has an amazing ability to keep things going past their true viability, but that just makes for a bigger mess when that momentum meets reality further down the road.

    • Doug Leighton says:

      Patrick,

      You’re away to negative. When the global economy collapses, global warming will be reduced (maybe) and we won’t all be fried — as quickly!

    • SRSrocco says:

      Patrick,

      My website focuses on how ENERGY will impact the precious metals, mining and overall economy. You should see how much more diesel the top 5 gold miners are consuming to extract gold out of the ground. If you look at the table, you can see that diesel costs per ounce of gold have doubled from 2010 to 2012.

      I thought I was really on to something at my site the SRSrocco Report as very few in the precious metal & mining industry understand the implications of peak oil. However, after I spend the past month looking at the subject of CLIMATE CHANGE.. well, everything now seems a bit meaningless…LOL

      Of course I am still going to look into these matters, but it looks like we have now set off 28 positive feedback loops in the North & Arctic that will increase methane releases exponentially, pushing the global temperatures up much higher than previously forecasted.

      So, in that vein… we have run out the clock.

      steve

      • Flakmeister says:

        SRS,
        very interesting chart for diesel use in gold mining….

        As for AGW vs. Peak Oil, my fear is that combination of lower supply for Ag combined with AGW induced crop failures will result in massive famines by 2040….

        Think of them as as the Bobsey Twins of the Apocalypse…

        • SRSrocco says:

          Flak,

          You may be correct, if Climate Change doesn’t beat peak oil to the punch. What people don’t realize is that the huge warming taking place in the Arctic (4-6 times the global average) is screwing up the Jet Stream Mechanics.

          That is why we are seeing these tremendous Polar Vortex Storms hitting the North East. Warming in the Arctic is creating blocking patterns in the Jet Stream included huge waves that reach areas to the south that it normally does not. The Arctic is experiencing +20C anomalies while Canada and the NorthEast are getting hit with the opposite.

          I just read an update that Canada & the U.S will be experiencing -40C temperatures Feb 6th. Welcome to the new crazy climate.

          We are going to be witnessing hotter and longer droughts on top of torrential rain storms that drop 6-12 months of rainfall in an area in a few days. This is due to the Jet Stream slowing. This will cause havoc to the farming industry.

          I believe climate change goes exponential from here. Any doubters will more than likely have to bit their tongue as things go increasingly haywire within the next decade.

          steve

        • Patrick R says:

          Gold mining is a crazy business; effectively turning extremely useful fossil fuels into a useless metal, while frying the biosphere.

          It will stop, or at least more and more mines will shut as they slide into negative cost benefit. Your chart illustrates that perfectly.

          Energy is real wealth.

          • SRSrocco says:

            Patrick,

            I actually agree with you. The reason why gold and silver have been money for thousands of years is due to their ability to store ECONOMIC ENERGY. I am not going to get into a debate about Fiat currency vs. money, but to say that human & animal labor were used to extract gold and silver up until the 1800’s.

            As ore grades declined in the mining of both metals, oil came on the scene at just the right time to allow the extraction to continue. Mining gold used to be much less destructive on the environment, but today… its horrible.

            Anyhow… I say, pick ya poison. It really doesn’t matter anymore as there is no way to stop “Runaway Global Warming.” The C02 in the atmosphere right now will stay at this level for hundreds or a thousand years before it declines.

            There seems to be no way to reverse this monster. The irony of it all is having to listen to individuals who keep regurgitating that Global Warming is not a problem, when the data shows a human level extinction event could be possible within the next 20-50 years…..LOL.

            steve

            • Jamesneo says:

              Hi steve, dun need to be hysterical about the climate change. Yes there are a lot of positive feedback for the problem to go worse but there are many negative feedback loop that will also spring into action preventing it to cause any extinction event. What will happened is a slow deterioration of problem over the whole of this century. The main problem is how devastating is the conflux of climate change with peak energy and debt collapse. Even then, I still favor Greer’s slow collapse based on my scientific understanding of thermodynamics and kinetics.

  8. Kam says:

    The EIA’s Monthly Energy Review says that US crude production in November was 8,002 kbpd, but monthly data says it was only 7,768 kbpd (http://www.eia.gov/dnav/pet/pet_crd_crpdn_adc_mbblpd_m.htm) and these both were released on 30th January.

    • Kam, you are correct, different departments of the EIA come up with totally different production numbers for the USA. I have no idea why this is the case. But if anyone has the answer to this apparent contradiction please inform us of what it is.

      • Kam says:

        Maybe last two months in the EIA’s Monthly Energy Review are just calculated from EIA’s weekly crude production data? It seems like that to me.

        • Nope, that don’t work. November production comes to 7,994 kb/d when you do that. That is close to 8,002 but a long way from 7,768.

          At first I thought one might be using Crude only and the other C+C. But if you go back to January of 1973 they both have the same number.

          • Kam says:

            IMO 7,768 kbpd is real data, and 8,002 kbpd is a guess from EIA’s weekly data. December 8,101 kbpd is also from weekly data.

    • I don’t think it is taken from weekly data but there is a definite difference between:
      Crude Oil Production *
      And:
      Monthly Energy Review **
       photo Difference1_zps344cd6ea.png
      They are exactly the same starting from day one for both data sets through December 2011. Then they start to differ, slightly at first then in November 2013 they really differ. Only the Monthly Energy Review has December data but I would bet that will differ just as much, if not more than, November.
       photo Difference2_zpse518a24f.png

      If you look at the PDF version of the Monthly Energy Review you will see either an R (revised) or an RE (revised estimate) or just an E (estimate) after all data since January 2012. When all those estimates and revisions are finished, they both will likely match.

  9. Old farmer mac says:

    Ron , these charts are the best ones I have ever seen for use in explaining the state of the oil industry to a person who is has a little bit of training in the line of running a business.

    But they don’t quite get the whole story across; one thing is lacking.

    And that thing is another set of charts showing how much money the industry has sunk into just basically holding production steady for the last eight or ten years with the charts going back as far as possible showing how much they spent in the past- meaning the part of the past previous to 2005 of course.

    I know of course that you have your hands more than full as it is,and that this sort of data is outside you area of expertise.

    But I’m hoping somebody here can post links to any charts of this sort as might be available.

    Thanks in advance, everybody.

  10. aws. says:

    EIA : Natural Gas Weekly Update

    for week ending January 29, 2014 | Release Date: January 30, 2014

    • Jeffrey J. Brown says:

      As best that I can tell, the Marcellus produced about 8 BCF/day in 2013.

      Citi Research estimates that the 2013 decline rate from overall existing US natural gas production was about 24%/year (all sources–dry gas wells, wet gas, associated gas). This would be the estimated percentage decline from 2012 to 2013, if no new wells were completed in 2013.

      Using the (processed) dry gas metric, the EIA shows that the US produced about 66 BCF/day in 2013. Based on the Citi Research estimate, we need about 16 BCF/day of new production every year, in order to maintain a processed dry natural gas production rate of 66 BCF/day.

      Or, in order to maintain 66 BCF/day, we would need to put on line the productive equivalent of the 2013 production from the Marcellus every 6 months. So, over a 10 year time period, we would to put on line twenty (20) times the productive equivalent of the 2013 production from the Marcellus–just to maintain 66 BCF/day for 10 years.

  11. Tim E. says:

    You can print Fiat, but you can’t print Propane – OR Crude.

    Propane shortages worsen; dealer stops making deliveries on contracts

    The propane crisis deepened Friday, with some Wisconsin residents who use propane for heating saying they’ve been left in the cold. State officials are investigating reports that some suppliers haven’t honored prepaid contracts. Meanwhile, the price of the fuel has more than tripled in recent weeks.

    Some dealers are limiting deliveries to 100 gallons per customer so they can meet the needs of as many people as possible. In very cold weather, someone could burn through 100 gallons in a couple of weeks depending on how warm they keep their home and how well it’s insulated.

    Sandy Buhs, who owns a small business in Minocqua, said her propane supplier would not honor a contract she had for fuel at $1.19 per gallon and now wants to charge $5.29 per gallon. “I am going to wait a couple of weeks and see if the price gets any better because there’s no way I am going to pay more than $500 for 100 gallons,” Buhs said.

    The state’s Division of Energy Services fielded more than 5,000 calls this week, with those calls split between customers trying to find a supplier with propane to sell and those seeking help paying for propane, said Chris Schoenherr, deputy secretary of the Department of Administration. As of Thursday, he said, the state had sent $8.5 million to counties to distribute the federal energy assistance dollars. A total of $900,000 in energy aid has been distributed to about 1,500 people, who received an average of about $600.

    The weather service is forecasting low temperatures to fall below zero by Sunday night across south central and southeast Wisconsin, with wind chills near 20 below zero. Even colder air is set to pour across the state midweek. The forecast calls for low temperatures of 10 to 15 degrees below zero Wednesday night into Thursday morning across much of Wisconsin. Wind chills across the state could fall to 25 to 30 below zero during that time, Marquardt said.

    Will this become the New Normal?

  12. aws. says:

    Rowan Fights Second [GOM] Well Blowout in a Year at Same Site

    By David Wethe, Bloomberg, Jan 31, 2014 3:49 PM ET

    The blowout at a natural gas well in the Gulf of Mexico yesterday is the second time in a year Rowan Companies Plc (RDC) has lost control while drilling at the same location with the same rig.

    — snip —

    While federal regulators and oil companies emphasize their heightened vigilance in offshore safety, there were more loss-of-control incidents at wells in the Gulf of Mexico last year than at any time since at least 2006, the first year such data was published by the safety bureau. There were nine loss-of-well-control incidents last year, compared with four in 2012, eight in 2008 and two in 2006.

  13. aws. says:

    Designer hailed as next Dyson for compressor blade discovery

    A British invention can cut energy costs by up to 20pc

    Rebecca Burn-Callander, Enterprise Editor, Telegraph.co.uk, 2:01AM GMT 20 Jan 2014

    Mr Lindsey decided to set his sights on the water industry. Sewage processing is very energy-intensive. Waste water is cleaned using aeration, whereby air is pumped into tanks to encourage the growth of bacteria that then consume waste matter. Over 1pc of the UK’s total energy consumption goes on waste water treatment, and well over half of that goes on blowers alone.

    But finding a big water company to take a chance on your untried technology – on an industrial scale, too – can be tricky. Luckily, Lontra’s green credentials opened doors at the Carbon Trust, which helped to broker a deal with Severn Trent to test the technology in one of the company’s blowers.

    In November 2012, a prototype Blade Compressor went into a Severn Trent production plant at Worcester sewage works. The water group originally agreed to keep the prototype installed for a limited period, but the trial was so successful that chief executive Tony Wray decided to keep it running. The machine has now logged more than 10,000 hours.

    In his annual results statement last year, Mr Wray credited the Lontra technology for a 3pc reduction in the firm’s electricity bill. He added that if all of Severn Trent’s blowers were equipped with the Blade Compressor, its £9m spend on energy would shrink by £1.8m.

  14. aws. says:

    The path not taken…

    The principal designer of the house that inspired the global Passivhaus movement reflects on the project that started it all.

    Harold Orr introduced us to some of the most essential components of durable and energy efficient homes. Here is a look back at the house he designed that revolutionized the housing industry.

    Ecohome | Harold Orr | Posted on Sunday, October 27, 2013 – 2:14pm

    While developing pages on passive heating and cooling for Ecohome, we were in contact with Harold Orr, a world-renowned environmental engineer and pioneer of the very concept of ‘green building’.

    He was one of the principal designers of the Saskatchewan Conservation House, which in 1977 acted as a laboratory for the development of many previously unheard of building techniques that are now standard on the best performing houses in the world.

    The Saskatchewan Conservation House is credited as being the catalyst behind the Canadian R-2000 program as well as the PassivHaus program that started in Germany and spread across the globe.

    Here is a presentation Harold recently gave on the Saskatchewan Conservation House [at the Passive House North Conference], which he has graciously allowed us to republish. His contributions to the building industry are immeasurable, read his full biography here.

    The Saskatchewan Conservation House in Retrospect

    by Harold Orr

    If you were to wake up today, get in your car to go to work, found that you need gas for the car, proceed to your favourite service station and find that the price of gas has doubled from yesterday. You look across the street and find the competitor has the same price. What do you do?

    1. You complain to the service station attendant!
    2. You fill your tank 1/2 full.
    3. You call your Member of Parliament and complain loudly!
    4. You buy a bicycle.

    This is essentially what happened in 1973 when the OPEC countries raised the price of crude oil. Everyone was up in arms over the sudden increase in price and everyone started to look for ways to reduce energy costs.

    The Saskatchewan Provincial Government asked their research arm the Saskatchewan Research Council (SRC) to “Design and Build a Solar House appropriate for Saskatchewan”. Since the SRC had at that time no people with expertise in building they asked people involved in building research, and building construction to sit on a committee to fulfill this request of the Government.

    A committee was formed from knowledgeable people and this committee proceeded to design the “Solar House Appropriate for Saskatchewan”. The committee consisted of:

    — snip —

    Because of our cold climate 11,000 Degree days (6,003 DD), very small solar gains in the winter months and a very low sun angle, the solar gain that we get from November to March is very small and this is the time we need the heat for our homes.

    So can you store heat from the summer to heat the house in the winter? The solar storage would have to be very large and very well insulated. As a committee we examined these problems and came to the conclusion that solar heating of a home in Saskatchewan was not appropriate, but we could and would build a Conserving House appropriate for Saskatchewan

    If we’d built to this level for the last three decades people wouldn’t be desperately trying to find or pay for propane. And a great deal of pollution would never have ended up in our rivers, lakes and atmosphere. Man are we stupid!

  15. aws. says:

    California’s Sierra Snowpack Only 12% of Average, a Record Low

    By: Dr. Jeff Masters, 4:32 PM GMT on January 31, 2014 +47

    California’s first significant snow storm of 2014 hit the Sierras on Wednesday and Thursday, dumping up to 2 feet of snow, with a melted water equivalent of up to two inches. However, this modest snowstorm was not enough to keep the Sierra snowpack from recording its lowest snow amounts in more than 50 years of record keeping during Thursday’s Sierra Snow Survey. The survey found a snow pack that was only 12% of normal for this time of year. Until Thursday, the lowest statewide snowpack measurement at this time of year was 21% of average, in 1991 and 1963, according to the Los Angeles Times. Since snowpack in the Sierras forms a crucial source of water for California, the dismal snow survey results are a huge concern.

  16. aws. says:

    January was England’s wettest winter month in almost 250 years

    Last month’s seasonal total was higher than any since 1767 and three times the average level

    Damian Carrington The Observer, Saturday 1 February 2014 15.24 GMT

    The deluge that has engulfed southern and central England in recent weeks is the worst winter downpour in almost 250 years, according to figures from the world’s longest-running weather station.

    The rainfall measured at the historic Radcliffe Meteorological Station at Oxford University in January was greater than for any winter month since daily recording began there in 1767, and three times the average amount.

    The latest Met Office data shows that the region from Devon to Kent and up into the Midlands suffered its wettest January since its records began in 1910.

    But Ian Ashpole, the Radcliffe Meteorological Observer, said: “The Radcliffe measurements more than double the length of the Met Office record and give us a better grip on how things are changing.”

  17. KC says:

    Hi all – I’m at a concert in NYC – Red Hot Chili Peppers – and… it’s packed, with lotsa people paying $350+ for tix. Otherwise people in New York are basically oblivious to what’s going on the real world. For most here, the world – indeed, the universe – revolves around Manhattan.

    I was thinking for five seconds about that American flag in the chart above. If you read between the lines, you see a flag in tattered shreds….

    • KC says:

      Follow-up after the concert… I paid nothing for the show – otherwise I would not have gone. But, taking the subway back to our parking spot, we bumped into a cuppla dudes that paid $400 EACH for tix.

      Like I said before… “I found myself in a dark wood, for the right way was lost….” (Dante)

  18. I’ve never heard this before.

    US domination of oil markets a pipe dream

    I agree, it’s a pipe dream, but that’s not what I am talking about. From the article:

    The quality of the produced tight oil varies even from the same field and usually contains more solids and waxy molecules. It is usually blended with conventional crude oil to be refined.

    But because it is very light and waxy it tends to create the condition for asphaltene deposition, which fouls refining equipment of exchangers, desalters and furnaces. While the free sulphur in tight oil is very low, an advantage, dissolved hydrogen sulphide and mercaptans are present and usually enhance corrosion in the crude oil distillation units. These problems are not yet widely known or realised but their impact will increase as tight oil production increases further…..

    Asphaltenes? From Wiki:

    Asphaltenes in the form of asphalt or bitumen products from oil refineries are used as paving materials on roads, shingles for roofs, and waterproof coatings on building foundations.

    Very light means that it is mostly the very short stuff, the very smallest molecules. But asphaltenes are the very largest molecules. Mostly the smallest molecules but also a lot of the very largest? How is this possible?

    • DrTskoul says:

      When they mix light oil in their general crude slate, they might get enough light molecules that reduce the solubility if he heavy ones within the cruse slate they are running. Hence precipitation and fouling . This is called incompatibility. As an aside the method to clean solids from a bitumen stream is to mix in a light molecule ( eg pentane, hexane, heptane, etc) let the asphaltenes settle and carry all the solid (clay) particles with them ( paraffin ice froth treatment ). Same idea used in a controlled way.

      • You seem to be saying asphaltenes are simply mixed with the light tight oil? Is that correct? The article implied that they are in the oil when it comes out of the ground. That is my question, does the Bakken and Eagle Ford oil “naturally” contain enough asphaltenes to clog up the works?

    • aws. says:

      Innovative solutions for processing shale oils

      07.01.2013 | Sandu, C., Baker Hughes, Sugar Land, Texas; Wright, B., Baker Hughes, Sugar Land, Texas

      New monitoring protocols can provide advance warning of any negative aspects of shale oil processing, thus enabling the refiner to take corrective measures early.

      The refining of shale oil (also known as tight oil) extracted through fracturing from fields such as Eagle Ford, Utica and Bakken has become prevalent in many areas of the US. Although these oils are appealing as refinery feedstocks due to their availability and low cost, processing can be more difficult.

      The quality of the shale oils is highly variable. These oils can be high in solids with high melting point waxes. The light paraffinic nature of shale oils can lead to asphaltene destabilization when blended with heavier crudes. These compositional factors have resulted in cold preheat train fouling, desalter upsets, and fouling of hot preheat exchangers and furnaces. Problems in transportation and storage, finished-product quality, as well as refinery corrosion, have also been reported. Operational issues have led to cases of reduced throughput and crude unit shutdowns. The problems encountered with shale oil processing and possible prediction and control strategies will be presented.

      … from the source. : )

      • Thanks aws, that link has a wealth of information. I will need to study it for a while. But at first glance it would seem that Bakken oil is not like Eagle Ford oil at all. They should not even go by the same name. It appears that Bakken oil does have some asphaltenes in it, .41 percent by weight and over four times as much as Eagle Ford oil. Also Eagle oil is much lighter. However it seems to vary greatly from place to place in the Eagle Ford shale.

  19. Gail Tverberg posted this on her blog on January 29th and already there are 420 replies, including her responses of course. But that has to be some kind of record. But I would like to hear what posters here think about the article.

    A Forecast of Our Energy Future; Why Common Solutions Don’t Work

    • Andy Hamilton says:

      Gail has become increasingly pessimistic in the last few months. While not disagreeing with her overall hypothesis (her work on the interface between finance and energy is particularly convincing) I feel that the authorities will somehow keep the show on the road for a little longer than she predicts.

      • Not just the authorities but momentum. Things persist. Also trying to understand what might be the flaw in this kind of extreme doomerism [while generally accurate] I think the fact that declines, or even collapses, like their reverse; booms, are not synchronous could be the answer. By which I mean even in a highly interdependent world different economies become vulnerable a lot earlier. So what Gail sees as a single shark fin collapse is more likely to be made up of a series of time separated different shaped curves that accommodate all sorts of varying reactions and responses while stepping away from last century’s paradigms .

        Ugo Bardi claims that Italy is now on the downslope because that economy cannot grow with oil >$40. There are other examples. Both Turkey and Argentina look highly vulnerable. I know Gail would claim that these problems will spread and bring the whole house of cards down. But I look at that chart above and don’t see it as credible. What mechanism causes the drop off of renewable generation? I think that is too steep even for oil globally. I just can’t shake the feeling that the picture she paints is too linear, too tidy [in its chaos]. I pick a much more unpredictable and volatile interplay between resources and finance as we deal with declining EROEI and pollution problems [limits to growth].

        The world of cheap surplus energy is coming to an end and with it growth. Long live the [post-growth] world.

        Which is to say that this is an end but not the end.

        Bardi on Italy: http://cassandralegacy.blogspot.co.nz/2014/01/italys-slow-collapse-how-declining.html

    • Tom Fugate says:

      Gail is predicting a major collapse in a few months to a couple of years. If so I expect energy production to drop to near zero as countries collapse into chaos. Since no one is prepared to “go medieval” like Jim Kunstler talks about this is a prescription for near term human extinction or near extinction. I hope Andy Hamilton is right and they can keep the show going for while. I am sure they are going to try.

      • I do expect the world to collapse into chaos but not any way soon. That stage, I believe, is at least two decades away. But I would like to make one very important point about human extinction. That is just not going to happen, not in the next few thousand years or so anyway. People who make that claim simply do not understand why a species go extinct. A species goes extinct because their numbers, for whatever reason, dwindle to so few that they cannot meet and mate often enough to keep the species going. And also because the niche they occupy is too small and too vulnerable. Human numbers are massive and their niche is everywhere on earth except Antarctica.

        The collapse will be devastating, billions will die. It will, very likely, take decades to play out. But there will be survivors. The human species is in no danger of going extinct.

        • Tom Fugate says:

          If it was just economic collapse and loss of energy we were facing then I would agree, there will be survivors. But that combined with abrupt climate, which appears to be happening, has the potential to cause human extinction in my opinion.

        • Tom Fugate says:

          Oops, almost forgot radiation from 430 Fukushimas when the grids go down. Three strikes and you are out. But maybe some goat herders in the Andes …

    • clifman says:

      While I greatly appreciate the work she has done to draw the connection between finance and energy, Gail is extremely negative on renewables. There is a rebuttal of her critique of renewables on the Doomstead Diner/Collapse Cafe: http://www.doomsteaddiner.net/blog/2014/01/29/a-rebuttal-of-gail-tverbergs-10-reasons-renewable-energy-is-a-problem/
      I fall somewhere between the two positions. I think Gail is irrationally harsh on renewables, and makes too much of their reliance on FF for build-out. On the other hand, the DD/CC position is a bit overly optimistic. One example would be pinning said optimism on the high growth rates of renewables, while making too little of the fact that they are growing from tiny bases. FFs still make up by far the lions share of global energy use. If they tank, ‘the economy’ tanks, and intalled renewables will only help ease the descent. Of course if the economy tanks first, the FF output also tanks… It’s a complex interplay, as Gail is good at describing. But it’s probably not quite as fragile as she paints in that graphic and accompanying post – perhaps almost…

      • On renewables I come down squarely on Gail’s side. It would take up way too much space to give you my reasons but if you are interested in a book that points out exactly why renewables will not do the trick then you could do no better than read this book:

        Tumbling Tide: Population, Petroleum, and Systemic Collapse by Peter Goodchild

        He gives several reasons but his main argument is that renewables depend largely upon fossil fuels for production and maintenance. And the renewables that produce electricity, wind and solar, does not produce food. Food production, chemical fertilizers, pesticides, and other things, depend almost entirely on fossil fuels.

        And as far as the renewables that produce fuel like ethanol and palm oil, in the grand scheme of things they are far more destructive than anything. They take up land that could produce food and, as far as palm oil goes, they destroy the forest habitat where many endangered species live.

        • Watcher says:

          It would be useful to find someone who works at a hydroelectric plant and find out what their spare parts consumption is. When transport gets rationed to food, that’s the end for spare parts.

    • Kum Dollison says:

      That chart of Gail Tverberg’s is about the silliest thing I’ve ever seen. No wonder the “peak oil” community is looked upon as a bunch of nuts.

      • mike says:

        If you had bothered to read Gail’s article, you would find that she’s not a “peak oilist.” She’s following the lead of the “Limits to Growth” movement of Meddows, et al., not King Hubbert and his peak oil hypothesis. Her point of view is financial and doesn’t rely on peak oil arguments.

        • Kum Dollison says:

          I’ve been reading Gail on the Oil Drum for years. Look at “Coal” on that chart, and tell me that’s not silly.

          She’s, also, always been “dead wrong” on Renewables.

    • Verwimp says:

      I do not believe Gail’s graph. Just because the entire world economy is a too large ship to change course immediately. I see this kind of charts happening in individual countries; one country at a time. The countries that fall into civil unrest, political instability, financial collapse or civil war give the core countries extra time to adapt to an energy scarse future. There are a lot of countries that will go under before it’s “our” turn. See the events in Kiev, Bankok, CAR, Turkey, Argentina, … In every corner of the world the weakest links are breaking. But they are not links in a chain. They are links in a network. Where a chain would break by the demise of one link, the network will persist for a long time: it will shrink slowly.

  20. KC says:

    Hi Ron –

    I read Gail’s post.

    Though none of us can predict with certainty exactly when the crunch will begin, of course (as oft discussed, likely it has already begun), almost everybody here on this site agrees that it will become much more evident between Q3 2014 and 2017, and most of us believe it will begin early in that timeframe, probably between to Q3 2014 and Q2 2015.

    Similarly, though we may not agree as to the particular nuances of the downslope, most of us can agree on the approximate shape and severity over time, likely being the most severe between 2015 and 2025. Whether we see a dramatic collapse in production, and/or extreme demand destruction, or that it be a stair-stepped series of events, a la 2007/8, we still, mostly, agree that it will likely involve a much lesser quality of life on the way down. Perhaps it may be true that in the end, quality of life will improve some decades out– that’s hard to say, perhaps a quaint lifestyle that we read of in books of the genre. We also agree that populations will tend to contract sharply and in dramatic fashion. I don’t mean to suggest that I believe it will be apocalypse and everybody will die in a few weeks like the books of the genre suggest (maybe so, I don’t know), but almost certainly, many millions, probably billions, of people will perish over that ten year period.

    In any case, I am most interested in the actions that we might take today to mitigate the effects of the downslope, regardless of its exact timing or shape. I can appreciate Gail’s message, though I did not see much there in the way of “what to do now” or “what to do next” in the face of that future of dwindling energy. In fact I am having a hard time even finding anybody locally that is remotely interested in the subject.

    I realize common sense dictates many things that we can do right now, and many such suggestions are out there all over the ‘net. I am curious to know of the things that may be done by individuals at home, that I or we might not already be doing, and what are those strategies and tactics most likely to be successful. Permaculture comes to mind; I’m already doing that, to some extent. So do rocket stoves, and I’m already playing with those too. You may imagine lots of other things I might be doing or that I have in mind. I’m just curious if I am missing something, or if there might be a better way of doing this or that, maybe a more cost-effective means of doing it, etc.

    Getting back to Gail’s post and Ron’s question…. The fireworks begin late 2014 or early 2015. Hopefully by then we have done all that we can, at least all that can be done until it begins, and we will sit at the sidelines to observe the show.

    • Watcher says:

      “I don’t mean to suggest that I believe it will be apocalypse and everybody will die in a few weeks like the books of the genre suggest (maybe so, I don’t know), but almost certainly, many millions, probably billions, of people will perish over that ten year period.”

      I have noticed folks focused and knowledgeable about matters oil tend to somewhat contort themselves into foreseeing a gentle gradual painless manifestation of mass death. It’s very weird.

      If billions are going to die, they aren’t going to go quietly. If your neighbor has oil you need to feed your people, you try to take it. If you don’t think you can take it from them, then you find some other neighbor who is consuming oil you need and you “suppress their consumption”, which is delightfully gentle phrasing for “nuke their ports and refineries, and if not queasy (meaning, if you’ve manufactured an appropriate atrocity to avenge), their oil consuming cities”.

      The community will recoil in horror from such a thing. But if they’re hungry, or their kids are hungry, they’ll push the button.

    • TechGuy says:

      “In any case, I am most interested in the actions that we might take today to mitigate the effects of the downslope, regardless of its exact timing or shape.”

      Here is my short list, of stuff you can do while resources are still reasonably inexpensive and available:

      1. Be more efficient with the resources you have available. Insulate, insulate, insulate your home. It will help with both winter heating and summer cooling. Even if an energy crunch is many years away, fossil fuels are already expensive, and they are not going to get cheaper! If you’re building a new home you can install hydronic radiant heating which heats your home more evenly and you can use solar thermal since hydronic radiant heating can a lower water temperature. Add storm windows to your windows which will provide an air gap to decrease thermal losses as well as protect your windows from storm damage. Ditch Summer air conditional and become accustom to using fans instead.

      2. Upgrade your home to use low or zero maintenance materials. Replace your shingle roof with a metal roof since it probably won’t need to be replaced in your lifetime. Use low maintenance siding either hardie board (preferred) or aluminum siding, or vinyl siding. Ditch carpeting for tile or hardwood floors.

      3. Relocate to a rural region as the costs in urban regions will soar. Unemployment and crime will also soar as goods and services that depend on cheap energy disappear. Many jobs are already disappearing because of today high energy costs. Even if an energy crisis is decades away, a Debt crisis is just years or perhaps even months away. The US federal gov’t and the majority of state\local gov’ts are insolvent. This is also true in just about every industrialize nation. Rural land will be cheaper and you will be able to purchase many more acres to grow food, abundant wood for heating, construction, etc. Locate to a region with moderate temperatures. Avoid regions exposed to extreme weather (northern regions, hurricanes, tornados, etc). Northern regions can be difficult to completely self-reliant on food since crops can be lost from early or late frosts. The more north you locate, the shorter the growing season and the risks for weather related crop losses increase.

      4. Learn how to repair and maintain your stuff. Your HVAC system, plumbing, electrical, vehicles, and any machinery you have. You will need to become self reliant for the majority of your stuff. Set up a machine shop so you have the tools needed to maintain your stuff. Learn how to Weld, run a vertical mill, lathe, etc. Instead of watching TV, watch youtube videos on machining (Keith Fenner, Tublicain, MIT Machine Shop videos, etc). Maintain a maintenance logbook and file draw or cabinet, to track and document procedures for your stuff. Keep a file with the operators and repair manuals so they are readily accessible when you need them. Today many appliances and machines put the documentation on the Web, but what if the Web is inaccessible. Have a local copy, preferable a hard copy available. Learn Woodworking and have the essential tools (table saw, jig saw, sanders, hand saws, planes, clamps, measuring tool, etc).

      5. Stock up on consumables and spare parts for your machines. Keep spare items like plumbing parts (valves, copper\PVC pipe, pipe fittings, circulating pump for your heating system, etc). What ever items that you can’t live without, have spares. Spare clothing, shoes, detergent, lubercants, imported spices that do not spoil (cinnamon and pepper for example).

      6. Install backup system for your critical needs. Have a backup generator to provide electricity when it become unavailable. The EPA has just changed the regulations on all US coal fired plants that must meet the same emissions levels as NatGas power plants which is impossible, unless the law is changed, by 2022 all coal fired plants will need to be shutdown. The US gets about 43% of its electricity from coal. Needless to say, electricity is going to get a whole lot more expensive and probably alot less reliable. You’ll need a decent generator to run power tools (electric welding equipment, power tools) and a solar power system isn’t going to have enough power to run it. Have a backup heating system if you need electricity, oil or natgas, so that in the event you lose access to a critical resource you can still heat your home.

      7. Learn how to store and preserve food. Set up a root cellar to store root crops to be consumed during winter months. learn how to can foods. Consider that you will always need to have more than one years supply of food. You will always need to grow much more food than you need because there will be times when weather, disease, or infestations will damage your crops. You cannot assume every growing season will be perfect or like the last season. Do not rely on Permaculture for your food production if your survival depends on it. Be prepared with fertilizer, pesticides and any other resources you can access to avoid problems. You don’t have to use them every time or every year, but there will be times when sh*t happens. Build a green house so you can extend your growing system. Plant food perennials: Fruit & nut trees, grape vines, berry bushes.

      • Verwimp says:

        I agree only partly with your number one. When your home is insulated, you are consuming less energy. When you get used to live by the seasons, shower cold, et cetera, you are consuming no energy. You will understand climatisation of your home is less “essential” then you think it is.

  21. Patrick R says:

    I strongly recommend looking at Ugo Bardi’s description of Italy on the down slope of the curve. Post peak life is going to disappoint doomers; it is here already in a number of economies and in a number of geographies within pre-peak economies like the US. It looks a lot like now.

    Oil will still be extracted, coal dug, PV and wind generate, hydro dams fill. A whole lot of marginal ‘wants’ are going to be abandoned, we will adapt, much will be let go of, and much of that will not be missed by smart people. Those at the bottom of the heap will take the hit disproportionately. ‘Twas ever thus.

    I have no idea why Gail assumes economies won’t change. The US in particular is extremely rich in energy, it’s just that it currently wastes much of it. Facing collapse and starvation or change it is clear which path will be taken. For some that will be like an end, this has happened again and again through history to whole societies and it is already underway now. Fascinating.

    • Watcher says:

      Yes — gentle, gradual, painless mass death.

    • Patrick, I don’t think one can use what happens to one country, Italy, during a deep economic recession as a gauge to what will happen to the rest of the world after the peak of fossil fuel. Italy is one country surrounded by the rest of the world. However the rest of the world is surrounded by nothing.

      What the US waste as a country is not the point, we have never faced peak production and then a decline in energy before. No the peak in world oil production has never happened again and again through history. In fact it has never happened even once.

      • But this is where I can’t join you hard core doomers. Resources are always rationed. Post peak C+C production there will still be C+C production, right? It just will be more expensive, it’s use will be rationed by price, this is already happening. I understand that the world’s economy is ‘addicted’ to cheap energy-dense and available liquid fuels and will have to change substantially in order to deal with this no longer being cheap and always available. But they will still be there for more valuable uses. Like maintaining electricity grids and agriculture and bulk transport. This will be painful and strike places and people unevenly. But this is already underway, and ‘this’ is what it looks like. We are in ‘Peak Oil Dynamic’ now. Like any addict the world will kvetch and moan and say it’s impossible to be different; but it isn’t and we will find ways, but not till we have to.

        There seems to be a desire for an ah-ha moment, some kind of event or signal, a second coming or something. I don’t think we’re going to get something so definitive, I expect oil price spikes like 2008 but them I also expect crashes to follow… I expect demand to keep shifting from liquid fuels all over the place, a transition from these to electricity is already clearly observable, and to LNG where that is available.. This is fitful in places, cruelly set back in Japan. Very difficult in the UK and to a somewhat lesser extent Europe.

        The US will change shape enormously; its going to de-sprawl. Through the mechanism of price. Auto-dependant sprawl-burbs are where the sub-prime crisis hit, where the ‘underwater’ homes are. This will continue. Booms and busts will continue. ND will shrink back after the Shale boom, and railroad companies will have a huge over supply of bulk liquid carriers, these will be adapted for other uses, or syncrude…
        But some places, say like Texas, ironically because oil is being repriced will be able to go on longer looking much like it always did [Even Dallas is building light rail though]. There will be winners and losers, and crises, and migrations, but not billions of deaths. Some places will do the full Detroit, others, because they are more fit for purpose, like Portland say, or because they’re still resource rich like the city of Texas, won’t.

        This is not, in fact a unique moment in human history. We shouldn’t flatter ourselves, we’re not so special. The scale is new, but the challenge is not, we have faced resource depletion again and again through time. Yes the population and complexity makes it look unique and in detail it is, but not the journey. That is the same and that is summed up with one word: change.

        And the US is the scale of Europe, so Italy is like an underperforming part of the US. It is very useful to see what happens there now that it no longer can adjust its currency to destroy relative value; that is a strength and weakness the US shares with Europe, but Europe has a less mobile population because of language and custom barriers. Everything is always relative; the worse off places are always surrounded by better off ones. I’m sure there are many in southern Europe that wish they could go back to their own weak currency and not be saddled with Germany’s. Perhaps the Euro will spilt in two?

        • Watcher says:

          But this is just so extreme a perspective. It completely ignores the most probable scenario. Probability doesn’t care if it’s distasteful.

          “This will be painful and strike places and people unevenly.”

          But how can one say that and ignore the most probable response? Who on the short end of that stick is going to tolerate this? Who is going to say . . . “okay, I’m hurting, I can barely eat, but the US . . . they now have to drive one car instead of two to get to Walmart, so we’re all suffering, so I’ll tolerate it.”

          Who would say that? It is so easy to stop a tanker enroute to Houston and send it to Shanghai instead. No bombs dropped on any cities. You just board and replace the crew. It’s an easy first step. You don’t have to press the red button to deal with some of that uneven pain. You just divert tankers.

          Then the US Navy finds itself escorting third party tankers, and next thing you know some 19 year old on someone’s ship gets excited about guns he sees pointing at him and “defends himself.” This is BY FAR the most probable of the evolutions. And yet folks like to sit back and think some magical array of inventions will appear to push tractors around 50,000 acre farms to harvest crops before they rot — and that these miracles are more probable than an excited 19 year old pulling a trigger.

        • It is not as simple as all that Patrick. The nation, and indeed the world, is based on continuing growth, growth financed by borrowed money. Growth can stop… for awhile. That is what they call a recession. Growth stopping a bit longer is a deep recession, and stopping even longer is called a depression.

          Now if growth permanently stops and the economy actually starts to shrink that means debts cannot be paid. The money supply shrinks, the entire economy goes into a tailspin, then… then…

          Oh never mind.

          • Value, which is artificial, will be destroyed. Currencies are trying to do this now, this is the crisis of devaluation [QE in the US], a race to wipe out value… this is the end of growth. Here and now.

            And Watcher; “Who on the short end of that stick is going to tolerate this?” I have been to the US many times but remember the first time being shocked by the visible presence of the dispossessed on the streets. The US has a social order with many who seem to tolerate ‘the short end of the stick’. But yes, I agree this is an experiment that may not go on too well as this evident inequality magnifies. Riots? Yup; remember London?

            Up until there is a new New Deal all sorts of novelties and horrors will be visited on BAU. And it will take years to work out how to work a post growth world, but we will.

            Dystopias are always seductive, that’s why the culture is full of so many zombie stories right now; we live in a zombie economy, it’s dead but alive. If you’re a fan of dystopias watch The Road [or read the book]. Great art, but not a prediction in my view.

            We’re gonna muddle into the next economic order

            • Here is one small reason to be optimistic. The link below is to an analysis plotting Vehicle Kilometres Travelled and GDP in New Zealand showing a new divergence. VKT is a fair proxy for liquid fuels use, even though in fact the vehicle fleet is also increasing in efficiency as well as being driven less over this period suggesting that if the author plotted fuel consumption to GDP the divergence may be greater.

              http://transportblog.co.nz/2013/04/30/trends-in-vehicle-travel-in-nz/

              I say new divergence because during the oil-age there has been a pretty good match for fuel use and GDP, so much so that fuel use has been used as a predictor for GDP vitality over recent decades. Any signs of economic growth while liquid fuel use is declining is two things: 1. Great, and 2. A discontinuity, a sign of departure and change.

            • Dennis Coyne says:

              The assumption is that a decline in liquid fossil fuels will mean a permanent end to economic growth. I disagree.

              It is likely that a depression will result. The economy will adjust. There will be a steep rise in prices which will direct the limited liquid fuel to it most important uses (growing food, transporting goods by rail and ship, mining coal and ore). The increase in oil and natural gas prices will result in more investment in renewables and nuclear. A lot of oil and natural gas is used for heating homes and water and for transportation, much of this will be provided by electricity when the price of oil and natural gas rises. The economic shift to a new energy paradigm that uses much less oil and natural gas will require investment and labor and this increase in investment will result in economic growth. This investment would preferably be private investment, but if private investors are unwilling to take a risk, the government can invest in infrastructure and energy to get the economy moving. A lot can be done in a depressed economy where there are a lot of idle resources.

              A final thing to consider is that a rise in oil prices to $250/ barrel (in inflation adjusted $) may keep world output on a plateau for longer than many realize. The chart below was created using Paul Pukite’s (aka Webhubbletelescope) Shock model with a World URR of 2500 Gb and the extraction rates shown for the different scenarios. The “data” for 2015 to 2030 are based on BP’s 2013 forecast where NGL was estimated based on the BP NG forecast (the NGL/NG ratio is fairly constant) and the NGL was deducted from the BP liquids forecast to get a C+C forecast from 2015 to 2030. I think if prices rise enough and the economy doesn’t crash as a result, that there is a small possibility (maybe a 10 % probability) that the plateau scenario could play out, though I think the medium scenario is more likely. It is also possible that the rise in prices may increase the URR to 2800 Gb, in which case these scenarios would be a little low (but it would not change things by much).

              Edit: Changed “fossil fuel” to “oil and natural gas”

              • A lot of fossil fuel is used for heating homes and water and for transportation, much of this will be provided by electricity when the price of fossil fuel rises.

                Electricity is fossil fuel use. Wiki says that, in 2007, 86.4% of all electricity was generated by electricity. 6.3% was hydro and 8.5%nuclear. A pittance of 0.9% was wind, solar, geothermal and other. Electricity consumption is, or was then, growing at 2.3% per year, enough to swamp any increase in renewables many times over.

                A final thing to consider is that a rise in oil prices to $250/ barrel (in inflation adjusted $) may keep world output on a plateau for longer than many realize.

                Not a snowballs chance in hell of that happening. I think you are forgetting what happened the last time oil reached $147 a barrel, the all time high. The economy was sent into a tailspin, oil consumption dropped like a rock and the bottom fell out of oil price. If prices ever get that high again, in 2008 dollars, the same thing is very likely to happen.

                There is a ceiling at which oil prices can rise before it starts dramatically affecting the economy. And the higher oil prices rise the less the economy can afford to pay.

                Supply always equals demand with price as the arbitrator. At $250 a barrel there would be a dramatic cutback in oil demand. Demand is just another word for consumption. Such a cutback would wreck the economy.

                Oil is the master resource. Oil is the lifeblood of the economy. A decline in oil production would mean a rise in prices as oil goes to the highest bidder. People would not be able to afford the things they enjoyed in the past. There would be less air travel, less automobile travel, less vacation travel and in general less of everything.

                And, I must add, trying to make oil, or transportation fuel from other sources such as gas or coal, only increases the price of those commodities as it increases the price of oil.

                A decline in oil production means the end of growth.

                • Dennis Coyne says:

                  Very little electricity comes from from liquid fuels, coal, nuclear, and renewables can take care of that just fine. If someone had suggested there would not be a continual worldwide depression when oil had stabilized at over $95/barrel (2008 $) back in 2003, there are many who would have suggested that the economy cannot sustain such a price, just look at what happened in 1980, the economy automatically crashes when oil prices reach more than $95/barrel (also 2008 $). This view has been proven incorrect, the world economy continues to grow with oil prices above 95 dollars/barrel (2008 $) since March 2011 after a tripling in real oil prices since late 2002.

                  Supply and demand must be equal and a rise in prices will mean less demand when all else remains equal, the question is how much does demand decrease when prices increase and does that mean the economy cannot function.

                  What we have seen in the past is that these oil price shocks will tend to cause recessions when prices rise rapidly as they did in 1980 and in 2008, the economy is unable to make adjustments quickly enough. I am not suggesting such a rapid rise in price, if prices rose by 2%/month on average prices would be at $250/barrel (2008 $) by Nov 2016.

                  People will drive less, there will be demand for more and better public transport, more good will be shipped by rail and the oil will be used for the important stuff, growing food, etc.

                  Note also that there is not likely to be a shortage of coal and natural gas any time soon, these are the fossil fuels used for electricity, again the prices of these fuels will rise as the supply becomes more constrained, the higher these prices rise the more attractive renewable and nuclear energy will become.

                  The all time high monthly average oil price was July 2008 at $128/barrel and there was a severe financial crisis which may have been independent of rising oil prices which was the major cause of the recession, the case that the rise in oil prices was the root cause of the recession is unproven, though I agree that it was a contributing factor. But we can disagree on that point.

                • Patrick R says:

                  I agree with Dennis here. Liquid fuels are not synonymous with all FF. It is Oil that the economy is decoupling from, not all FF.

                  We are moving to electricity generated by every means possible, with, IMO, the exception of nuclear. Too expensive to long to come on stream, too complex. It needs cheap oil to be built. Nuclear so share of world energy has been steadily falling and will continue to do so.

                  Renewables are scaling. Gas and Coal are the foundation.

                • Very little electricity comes from from liquid fuels, coal, nuclear, and renewables can take care of that just fine.

                  Very little boiler fuel is oil, except in places like Saudi Arabia and other Middle East countries. However liquid fuel plays a very large part in the mining and delivery of coal. When oil starts to decline the price of electricity will increase.

                  If someone had suggested there would not be a continual worldwide depression when oil had stabilized at over $95/barrel (2008 $) back in 2003, there are many who would have suggested that the economy cannot sustain such a price, just look at what happened in 1980, the economy automatically crashes when oil prices reach more than $95/barrel (also 2008 $).

                  That’s one very strange sentence and I am not sure at all what you are trying to say. But then you continue:

                  This view has been proven incorrect, the world economy continues to grow with oil prices above 95 dollars/barrel (2008 $) since March 2011 after a tripling in real oil prices since late 2002.

                  Who’s view has been proven incorrect? Who said that the world could not grow at $95 a barrel? I don’t recall ever reading anyone making such a claim. I know I did not.

                  Supply and demand must be equal and a rise in prices will mean less demand when all else remains equal, the question is how much does demand decrease when prices increase and does that mean the economy cannot function.

                  Who said the economy would not function? The economy function during the depths of the Great Depression. The economy will likely function well into the coming collapse. Of course it will likely cease to function at some point but half the world’s people could be dead by then.

                  Dennis, we are not talking about the economy ceasing to function, we are talking about the end of growth. Those are two different things entirely.

                  Here is the situation. World oil production peaks then begins to decline… forever. Oil prices start to rise but can rise only so far before people are able to afford it. The economy slows down, people spend less, buy less, travel less. This has a negative feedback as it throws manufacturers out of work and throws people in the travel industry out of work. But it don’t end there, oil production continues to decline. And the above problems get worse. Then oil production declines some more and the above problems get worse. Then….

                  Of course there also wild cards and none of them make the situation any better, they all make it worse. There will be conflict like we are seeing right now in Nigeria, Sudan, Syria, Yemen, Iraq, and other places. It will likely only get worse. Then nations like Russia decide that they need to stop exporting so much oil and keep it for themselves. Some nations are already discussing this strategy. You will hear a lot more about nations hording their own oil when the peak becomes obvious. They will pass laws against the export of crude oil. (One nation has already done that. Guess which one?) They will call it “husbanding their petroleum resources”.

                  Were we a rational society, a virtue of which we have rarely been accused, we would husband our oil and gas resources.
                  – M. King Hubbert

                • Watcher says:

                  “Oil is the master resource. Oil is the lifeblood of the economy. A decline in oil production would mean a rise in prices as oil goes to the highest bidder. People would not be able to afford the things they enjoyed in the past. There would be less air travel, less automobile travel, less vacation travel and in general less of everything.”

                  Much worse than this. You can’t feed 7 billion unless you give farmers diesel to run their John Deeres on 50,000 acre farms. You can’t do that with oxen; planting season expires before the seeds go in. And of course you have to ship the seeds from Monsanto and fertilizer from Potash. They don’t get shipped.

                  Spare parts don’t get shipped. Nuke power plants shut down. So does hydro.

                  The omniscient GOVERNMENT is going to ration all this effectively to be sure food gets to shelves, spare parts get where they have to be, seeds get to farms, tractors get fuel? GOVERNMENT can’t even get a website to work. They only have to screw up a little bit and entire crop fails. And btw, you’re not asking a homeless guy on the street to tolerate the short end of the stick.

                  You’re asking governments with a military filled with senior officers who grew up reading stories of great battles and great victories to tolerate the short end of the stick. They are not a helpless sidewalk sleeper. They have bombs and cannons. It’s just absurd to imagine that a country suffering from scarcity and with a strong military will not act to try to help its citizens. It would essentially be immoral and criminal if they did not act.

                • Dennis Coyne says:

                  Hi Ron,

                  I will rephrase, the economy will cease to function well if there is no economic growth. What you describe is an economy spiraling into a depression, eventually the process you describe stops. Countries with oil are unlikely to stop sell their oil unless they are going to eat sand (in the case of Saudi Arabia). When demand for oil decreases, then oil prices may decrease, if that happens, then by your master resource argument everything should be fine, there will be lower supply to match this lower demand.

                  Lets say Dennis said in 2003 that oil prices will never rise above the 1981 price in 2003 $, because every time prices get that high a severe recession results. The argument that Dennis made in 2003 is similar to the argument that Ron is making in 2014 (oil prices cannot rise above the July 2008 level or a recession will result). Dennis’s 2003 argument has been disproven by oil prices since March 2011, which are above the 1981 level in 2003$. Ron’s current argument that real oil prices can never rise above the peak level reached in 2008 (where the high monthly average was about $129/barrel [2008 $]) will be proven wrong by 2019, average monthly Brent oil prices will be more than $129/barrel (2008 $), without causing a severe recession (defined as a national unemployment rate of more than 10%).

            • Watcher says:

              The Road was absurdly optimistic.

              The book had that guy and his kid walking 50 miles with only a tin of tuna for fuel. Hell, the general populace will be crippled by blisters after 25 miles.

              • Dennis Coyne says:

                Hi Watcher,

                I didn’t propose that the government ration anything, the market does that. The only place the government might want to intervene is to invest when private companies are unwilling to do so, this could be railroads, transmission lines, or whatever needs doing. It would only be used when the economy was in a recession, otherwise there would be massive unemployment and social chaos. So the government would be an employer of last resort when unemployment levels are above 8% and would reduce fiscal stimulus when the economy improved. Diesel fuel will not disappear entirely, it will be less abundant and much more expensive and these high prices will do the rationing. Why are there no spare parts and nothing gets shipped, do we forget how to make stuff? Stuff can get moved with natural gas powered vehicles, electric trains and diesel goes a lot farther when using trains rather than trucks to move goods. Again, no government involvement, unless there is no investment and then (you seem to like the military)we could let military planners decide how best to invest in infrastructure(though that would not be my first choice, possibly tax incentives to get private companies to invest would be best.)

                • Watcher says:

                  The only thing you cannot do with a bayonet is sit on it. — Napoleon Bonaparte

                  And no one ever won a CMH for planning.

                • Tim E. says:

                  Dennis said:

                  I didn’t propose that the government ration anything, the market does that. The only place the government might want to intervene is to invest when private companies are unwilling to do so, this could be railroads, transmission lines, or whatever needs doing. It would only be used when the economy was in a recession, otherwise there would be massive unemployment and social chaos. So the government would be an employer of last resort when unemployment levels are above 8% and would reduce fiscal stimulus when the economy improved.

                  What reality do you live in? I know lots of long term unemployed people – and more are being added every day. In my area, suicides among older unemployed men is a growing problem. One method growing in popularity has been walking in front of a train.

                  Take a look at some REALITY at Daily Job Cuts – and you might get the idea that we are already at the situation you describe above.

                • Dennis Coyne says:

                  Hi Tim,

                  I guess I was unclear. I think the government should do something about unemployment, there are some that disagree strongly with my view and think that any government intervention in the economy is bad.

                  I do however think that government intervention should be minimized, for me that would mean no fiscal stimulus at unemployment levels below 6% and if we are not at zero real interest rates, use monetary policy as much as possible to keep the economy near full employment.

                  So let’s say oil prices rise to some level (maybe $147/barrel in 2008 $) and that there is a high likelihood that a recession follows. I am assuming that this price rise is due to oil supply not rising quickly enough to satisfy oil demand at the previous price level.

                  My point was that I see no need for government intervention in the oil market, higher prices will ration limited oil to its best uses based on consumer preferences. If the recession is mild monetary policy can likely take care of things, if the recession is severe (more than 10% unemployment) it is likely that monetary policy could push real interest rates to zero and then fiscal policy should be used.

                  As you pointed out this is what I wish for, in reality fiscal policy has been taken off the table as a policy option.

  22. aws. says:

    What happens when fossil fuels run out?

    Gary Mason, The Globe and Mail, Published Friday, Jan. 31 2014, 7:17 AM EST

    The foundation of the world economy is built on energy. And if you believe that the economy is structured in such a way that it needs to grow continually in order to survive, then it will take an endless supply of energy to feed it.

    But what happens to that equation when the net amount of energy we extract from the earth is shrinking? How, then, does an economy grow exponentially forever if the one element it needs more than anything to flourish is contracting with time?

    Well, in the mind of Chris Martenson, it creates a moment when it’s vital to challenge existing orthodoxies about the way the economy, debt and capital markets work, and to think about how wealth is accumulated, more generally.

    — snip —

    In decades past, we got 99 barrels out of the ground for every barrel we used in the extraction process. By the 1970s, that ratio was down to about 25 to one. But when you look at the Alberta oil sands and other similar fields, that percentage is closer to three or five to one. “That’s a whole different proposition from what we were getting in prior decades,” Mr. Martenson said in an interview. “Net energy [resources] in the world [are] shrinking. That is a fact.”

    EROI in the Globe! Wonder if Gary is starting to wonder where all the energy to turn tar sands into bitumen comes from?

    • SRSrocco says:

      Ron,

      You asked for our opinions on Gail’s energy production chart and article.

      First… I totally agree with your response to Dennis. There is no way the U.S. or world for that matter, can afford oil prices north of $150, much less $250. Gail also linked an article in a prior post of hers showing that 10 of the past 11 recessions where due to energy price spikes. Anything above $120… kills the economy.

      Second… Everyone has their own opinion and most will not change their mind. However, one of the focuses on my research is in the financial markets. Few realize that the U.S. and world’s banking system is so leveraged that a 2-4% loss, would destroy the whole system… hence the massive QE.

      This is precisely what Gail Tverberg is talking about in her article. When the system starts to unravel as it did in 2008-2009, because the leverage in the system is several times worse today, it kicks of nasty positive feedback loops which destroys capital like never seen before.

      Capital will dry up and blow away. The $195 trillion in interest rate swaps held by the top U.S. Banks is the straw that is holding up the House of Cards. People don’t realize how much economic activity is produced by the Govt & Private Social & retirement Benefits paid annually. This amount will implode say 70-90% when the Great Financial Implosion occurs.

      Third…. Ugo Bardi published an article on Seneca’s Cliff… see image. This is how advanced civilizations collapse. The rise or increases are sluggish growth, but the way to ruin is rapid. Again, positive feedback loops will make it impossible to continue business as usual once we go over the Financial Cliff.

      Lastly… I believe shale oil and gas production will fall rapidly during this time. It is the most expensive energy to produce and it will be the first to go when the system unravels.

      The Marcellus is the only shale gas field really keeping overall U.S. gas production from declining. We need to add 16-17 Bcf each year to keep gas production flat. That means we have to add another BARNETT, WOODFORD, FAYETTEVILLE & HAYNESVILLE at peak production each year (this year next year, so on and so forth) to offset the 23-24% annual decline rate. Ain’t gonna happen……

      I highly doubt the U.S. shale gas industry has that capability.

      steve

      • Dennis Coyne says:

        Steve,

        see my reply below, I clicked in the wrong place.

      • marmico says:

        Capital will dry up and blow away. If that’s the gravitas of your financial research, who gives a shit? Apparently, you don’t know how capital works. A Marcellus producer goes bankrupt. So what? Another producer will purchase the liquidated assets and produce the hydrocarbons. And so it goes in the resource extraction business, generation after generation. Anecdotally, I was a high school student with a summer job working in an abandoned gold mine tearing out the old mill and other equipment for re-sale. Subsequently, it was the first property bought by what is now known as Barrick Gold Corporation.

        You are clueless, but then again, you have a newsletter to sell. FRED graph. You must have run out of ammo in 1980.

        Like you even know the difference between a notional and gross market value derivative position. ROTFLMFAO. Interest rate and foreign exchange contracts are the meat of investment banking.

        Way to go Patterson. Another doomer blog.

        • Capital will dry up and blow away. If that’s the gravitas of your financial research, who gives a shit?

          Really Marmico, that was not the gravitas of his financial research. Steve, along with Gail Tverberg and Nicole Foss, have given in-depth research and analysis of exactly why capital will dry up and blow away. Steve was merely stating an established fact.

        • SRSrocco says:

          marmico,

          Your last sentence of your comment where you state the following, ” Interest rate and foreign exchange contracts are the meat of investment banking”, may indeed be the present financial system, but it is not “Investing.”

          We no longer invest anymore, we TRADE, PRINT & BAILOUT to maintain the status quo financial system. If you don’t realize that Wall Street is now a crime syndicate, then you are making some seriously invalid assumptions.

          There is no real functioning market any longer. It is one giant RIGGED GAME…. courtesy of the Fed.

          Funny, there are still analysts who don’t believe the Gold & Silver market are being manipulated. Of course the top Banks who were found rigging the LIBOR market does not prove that gold and silver are manipulated, but the top German Regulator stating this recently:

          Metals, Currency Rigging Is Worse Than Libor Rigging, Bafin Says

          Germany’s top financial regulator said possible manipulation of currency rates and prices for precious metals is worse than the Libor-rigging scandal, which has already led to fines of about $6 billion.

          http://www.bloomberg.com/news/2014-01-16/metals-currency-rigging-worse-than-libor-bafin-s-koenig-says.html

          When the top banks have 93% of their notional value in Interest Rate Swaps/Forex Contracts & nearly 6% in Credit Derivatives (99% together)… you know we are headed for serious trouble. Gold used to be the major asset on banks balance sheets for settlement of trade contracts.

          There seems to be this delusion that Gold no longer has a role in this high-tech world of finance. While those highly educated in the West believe the pabulum coming from the two major financial network cesspools called CNBC & Fox Business, the Chinese & East are preparing to administer a Financial ENEMA of epic proportions to the West.

          Unofficial estimates are that the Chinese now hold over 10,000 metric tons and more like 15,000 metric tons of gold in reserve. They are only “Officially” admitting to 2,710 mt. The Chinese have a great sense of humor and of course will have the last laugh.

          Lastly, as some here may know the Germans asked for their Gold back in early 2013. They realize the Fiat Monetary System and Derivatives Monster are on its last leg. The Germans are supposed to received 374 metric tons of gold from the United States. Out of the 50 metric ton quota they were supposed to receive in 2013… they got a paltry 5 metric tons.

          This is a quite interesting change of events. When Hugo Chavez asked for Venezuela’s gold back in 2011, he received all of the gold stored in the U.S. within 6 months. However, the U.S. could only part with a 5 lousy metric tons or 10% of their 2013 quota of gold to be sent to Germany.

          Anyone smelling a RAT HERE? Looks like the West is running out of that silly Barbarous Relic — Gold.

          steve

  23. hole in head says:

    Please help me with the following info :
    1.Total all liquids production 2013 along with breakdown i.e how much was C+C,NGL,biofuels etc . In case data is not available for 2013 then 2012 will suffice .
    2. Total net exporters in 2005 and Total net exporters 2013 . How many fell by the wayside in this period ?
    Tks

  24. Dennis Coyne says:

    Correlation is not causation. The rise and fall in oil prices may be in response to economic cycles, do the oil price changes cause the economic cycles or do the economic cycles cause the oil price changes, they definitely correlate, causation only is proven by assertions such as, “oil is the master resource”.

    Also I agree that US natural gas production will diminish, but at a higher price natural gas can be imported, at that point very little natural gas will be used for electricity and it is likely that electricity prices will rise, it will depend on environmental regulations on CO2 as to whether coal or nuclear and renewables will fill this gap, over time renewables will become more and more competitive with coal and natural gas, especially if carbon taxes are ever implemented. On a world wide basis there is still a lot of natural gas.

    There is a lot of leverage in the banking system, a complicated set of IOU’s where for every asset there is a matching liability, when they go poof there is one set of people that are x dollars richer and another set that is x dollars poorer, the net change in wealth is zero. It is definitely disruptive to the economic system. The end of civilization, not so much.

    • SRSrocco says:

      Dennis,

      While I appreciate your comments, I don’t believe you understand the gravity of the financial system. I could spend a lot of time putting down information and data as I see it, but I would bet my bottom SILVER DOLLAR, it would very little to change one’s mind.

      Thus, it is a lousy EROI. So in that vein, I’d rather….. agree to disagree with you.

      That being said, I really enjoy the excellent work you do with your energy graphs.

      steve

      • Dennis Coyne says:

        Thanks Steve,

        The financial system is complex, on that we agree. There is certainly the possibility that it could all come crashing down very quickly, as was demonstrated in 2008.

        My point is that people often string together very nebulous arguments about complicated derivatives and shadow banking which essentially is a set of assets and liabilities held not by the 1 %, but probably 99.9 % is held by 0.1 % or less of the World’s population. What happens if trillions of dollars of derivatives go up in smoke.
        Not much. The set of x people holding the assets are trillions poorer (as a group) and the set of y people holding liabilities are trillions of dollars richer (as a group). It will be disruptive for the millionaires who lose money, but maybe they can party with the millionaires that came out ahead.

  25. Okay, the thread between Dennis and I above is to the point where “reply” does not appear anymore so I am starting it anew down here.

    The argument that Dennis made in 2003 is similar to the argument that Ron is making in 2014 (oil prices cannot rise above the July 2008 level or a recession will result).

    Please Dennis, if you are going to quote me then quote me correctly. What I said was that if prices ever get that high again then the same thing is very likely to happen. Obviously that is not an emphatic statement. I did not say “cannot rise above”. They recession might hit at $163 dollars a barrel, or $175 or $138 a barrel or anywhere in that range. I try to never make emphatic predictions Dennis, and if I do it is always a slip on my part.

    Dennis, I never, never, never, say never. oops I just did didn’t I. ;-) Oh well please understand that the argument is that as the price of oil rises it has an effect on the economy. And the higher the price rises the more effect it has. Then it reaches a point where the price of transportation fuel is so high that it, at first slows, then stops growth altogether, then negative growth if it persist.

    That is happening right now. Some nations already have a negative growth. And growth in the USA is being slowed by high oil prices. And if they get much higher….

    • Dennis Coyne says:

      Hi Ron,

      I was summarizing your position, there were no quotations, here it is:
      “Not a snowballs chance in hell of that happening. I think you are forgetting what happened the last time oil reached $147 a barrel, the all time high. The economy was sent into a tailspin, oil consumption dropped like a rock and the bottom fell out of oil price. If prices ever get that high again, in 2008 dollars, the same thing is very likely to happen.”

      So I guess my summarizing this as “prices cannot rise above” which is pretty similar to “if prices ever get that high again” and “a recession will result” is not that far IMO from “the same thing(economy sent into a tailspin) is very likely to happen”, though perhaps “will” should have been “will very likely”, the second doesn’t sound a lot different to me.

      My point was that a slow rise in real oil prices may not have negative effects, it is the rate of change in real oil prices that is important, in 2007 to 2008 oil prices double in a years time, I am not suggesting $190/ barrel in Jan 2015, if prices rose that fast I think a severe recession would result, but if it happened over 2 years I think a mild recession is a possibility, but maybe 25 % probability.

      The higher oil prices get, the more it will be replaced as the economy adjusts, more hybrids and electric cars, more public transport, more movement of goods by train rather than truck, more efficient buildings and appliances, more renewable and nuclear energy. Natural gas, electric and even coal prices will all rise and the economy will consequently use energy more efficiently.

      I do agree that growth will slow, but I do not think it will stop permanently, although if all nations become developed and population starts to decline then I agree that growth can stop altogether, though per capita growth may still be positive while population slowly declines.

      • You wrote: So I guess my summarizing this as “prices cannot rise above” which is pretty similar to “if prices ever get that high again” and “a recession will result” is not that far IMO from “the same thing(economy sent into a tailspin) is very likely to happen”, though perhaps “will” should have been “will very likely”, the second doesn’t sound a lot different to me.

        Dennis, there is a world of difference between “cannot” (rise above) and (not) “very likely”. The former is definite and the latter is indefinite. I am a little shocked that they don’t sound a lot different to you. But they are quite different whether they sound a lot different to you or not. But Dennis, a “definite” statement is totally different from an “indefinite” statement.

        The higher oil prices get, the more it will be replaced as the economy adjusts, more hybrids and electric cars, more public transport, more movement of goods by train rather than truck, more efficient buildings and appliances, more renewable and nuclear energy. Natural gas, electric and even coal prices will all rise and the economy will consequently use energy more efficiently.

        Oh good Lord! That is the basic cornucopian argument and everything will work out just fine. Sorry Dennis but I am not going to engage in that debate just now. Perhaps later or perhaps someone else will. But not me, not right now anyway.

        • Doug Leighton says:

          Ron,

          To misquote is human, we’ve all done it. To misquote then attempt to rationalize your way out is unprofessional and unethical. An appropriate response might be: “I screwed up, I really screwed up, sorry.”

          You should not have to put up with such pathetic nonsense.

        • Dennis Coyne says:

          I apologize Ron,

          It is very likely that I will quote you in the future as it is likely that I may do a very poor job of communicating to the point of probably being exceedingly offensive to some :)

          • No need to apologize, I thought you were just being Dennis as usual. ;-)

            • Dennis Coyne says:

              I was being a little more Dennis than usual, I guess I should have been apologizing to Mr. Leighton who was very offended on your behalf.

              If I had said “Ron thinks that if oil prices rise above the July 2008 level (in 2008 $), then a recession is very likely to result” rather than “Ron thinks that oil prices cannot rise above the July 2008 level (in 2008 $) or a recession will result”, it would have been more accurate, I was being imprecise.

              I definitely messed up bigtime, oh well my English usage is different from yours as I often use the word “will” interchangeably with “very likely”, I am ashamed and will, er am very likely, not to do it again :)

              Until my next comment.

              I think if something is a high probability event, say a 95% probability (which is what very likely brings to my mind), then it will happen. For events with 100 % probability I use something like it is certain to happen rather than the more nebulous “will”, but you know that’s just Dennis being Dennis.

  26. Old farmer mac says:

    I am so far as I know the only real farm guy who regularly comments on this site and for what that’s worth I have a few things to say about peak oil and food production.

    First off , pay no attention to anybody promising something for nothing on the agricultural front such as jatropha or switchgrass. A farm is not an ecosystem unless it is a subsistence operation that ships little or nothing off the premises.

    It is simply not possible to harvest substantial crops over a long period of time and ship them off premises except under special rare circumstances such as on a river delta that is replenished by annual floods——-unless the nutrients that leave with the crops are replaced by importing fertilizers.

    All crops take up nutrients.Period.

    The so called marginal lands that are supposed to be used for such crops are generally in use already and they are called marginal for good reasons ,usually a combination of the following: very poor soil in respect to nutrients and physical characteristics, lack of water, rough terrain, un satisfactory climate above and beyond water supply.

    Farming such land or a large scale requires substantial inputs of capital.Yields are miserly at best and EROEI is nothing to write home about to put it politely.

    The only practical source of fertilizer and pesticide supply on the necessary scale is by manufacture and mining and long distance shipping at present and this will be the only viable solution for the duration of business as usual.

    Given time enough and warlike effort maybe half to three quarters of the nutrients that go down toilets could be captured and recycled but there won’t be any serious effort made to do this until it is too late the matter at all on the grand scale.

    The various alternative farming models such as permaculture are workable on a small scale but there is essentially zero hope of scaling any of them up to provide food for even twenty percent of the current population. Even a Stalinist government couldn’t force the level of change on a modern society that would be necessary to even get started on the job.

    If there is a fairly sudden and sharp drop in oil supplies rationing can keep the farms running and the delivery trucks on the road probably for decades but if the crisis hits almost without warning………?????

    We can produce enough biofuels after a year or two to plow and plant and harvest and deliver but not to produce new heavy machinery and infrastructure; but what we have can be made to last a decade or maybe even two decades. The boot of necessity constantly and vigorously applied to the posterior of society can bring about a lot of change in twenty years.

    The happy go lucky consumer society is a dead man walking post peak oil.

    We can live on a minor fraction of what we grow by eating it rather than feeding it to cows and hogs and eating them.

    My somewhat informed opinion is that food production will crash to such an extent that hot wars erupt in some places.

    A command economy will arise most places and very few people will starve in currently rich western countries at least for the foreseeable future—barring bad luck.

    But hamburger will be the new caviar!

    If things don’t go downhill too fast my guess is that we here in the US will wind up living under something approaching martial law and a command economy and that by going to wartime footing we will succeed in manufacturing enough synthetic liquid fuels and lubricants and other essential commodities to get by but only by ” the skin of our teeth” in terms of living standards.

    Runaway climate change is the joker. It definitely is already baked in, but when?

    I personally have a gut feeling that peak oil will get us first and that while we are still punch drunk warming will finish off business as usual.

    Now if the oil supply were to diminish slowly and steadily over a decade or two, then we could adapt a lot faster than most people seem to think is possible.

    Any major vehicle manufacturer could for instance be turning out 100 mpg subcompact cars in less than a year if allowed free hand and a govt minister were appointed to clear the bureaucratic train tracks . GM designed and built a new type of truck in well under a year at the start of WWII.

    A few million people annually could opt for a ground source heat pump rather than a new car or fancy vacations.

    A few million more could install a solar domestic hot water system.

    The entire country could go to LED lighting in a couple of years if the manufacture of other types of lights is outlawed and the manufacture of LED’s mandated on national security grounds.

    Thoughts along these lines have brought me to the conclusion that the measure of the troubles associated with peak oil will be strongly correlate with the rate of the decline of the oil industry.

    • John says:

      I think governments response will also dictate what kind of decline we will have. I think if the reality is acknowledged early and strong decisions / legislation is enacted to ensure maximum efficiency and minimal waste then we may be able to hobble along for some time yet.

      This doesn’t change the elephant in the room that the planet is grossly overpopulated, however we can likely dedicate fossil fuels for agriculture for the foreseeable future. It will be interesting whether countries will eventually have to broach population levels and reproductive rates or whether we’ll let nature take over eventually.

      I fail to see how we are going to manage to achieve ‘economic growth’ on the downslope. Net energy per capita is decreasing and I doubt we’ll see efficiency outpace this in the long-term. We still could greatly increase efficiency in some areas however. If I had power I’d reduce speed limits to 70 kmph force all vehicle manufacturers to design cheap ultra-lightweight vehicles with great aerodynamics and very small engines (almost like small velomobiles) and force people to use these for commutes if they insisted on powered transport. Surely steps such as these would greatly cut consumption and buy us time while we restructure society.

      As I said earlier, it will be interesting to see when we drop off this plateau. It will also be interesting to see at what point the general populace starts to understand the challenges we face and their implications (assuming the penny ever drops).

  27. Old farmer mac says:

    Most of the people on this site and others that cover topics such as peak oil seem to believe that it the economy must necessarily contract at best once oil and other fossil fuel production peaks.

    I am of the opinion that peak oil will in fact signal the end of growth but I do not believe that there is any economic or physical law that requires this to be so.

    Consider the obvious fact that economic output per unit of energy consumed can increase. Improvements in energy efficiency are real and commonplace and overall most economies to the best of my knowledge are moving in the direction of greater energy efficiency and at a significant pace-although the pace is not likely to prove to be fast enough to offset the decline in the supply of available energy.

    But let us consider the hypothetical possibility that energy efficiency is improving at say two per cent annually and that energy supplies are declining at only one percent . I can’t see any reason why growth could not continue under these circumstances, every thing else equal.

    Of course in the real world every thing else will not be equal and peak fossil fuel energy will almost for sure mean the end of economic growth and an actual sharp decline in economic output and imo a hard crash to boot.

    But I think we should be wary of saying that peak oil means the end of growth as a theoretical matter and make it clear that we are talking in practical terms when talking to the public.

    • Doug Leighton says:

      Mac,

      While here I’ll respond in case you feel no one is listening.

      I respect that you are attempting to impose a practical view and that it’s not nice hearing so much doom and gloom. I also respect farmers who have to understand a myriad of different fields to be successful. And, I’m a geoscientist (retired) not an economist and therefore I’m disqualified from necessarily having a worthwhile view of some of the things you mention. However, for many years I shared offices with a group of accountants and we had endless discussions, me championing the limits-of-growth opinion. Without exception, I was told over and over that the economy cannot function without growth — without endless growth. Now we both know that’s impossible, for any number of reasons. So, putting the two together, I’m afraid the doom and gloom side wins. The only question is when.

      • Dennis Coyne says:

        Hi Doug,

        I agree that the economy is not likely to function well without economic growth, though if population eventually starts to fall and we looked at it from a per capita output perspective then growth in per capita output is what matters more than the absolute level of output.

        The thing that might counter the doom and gloom is the fact that energy does not equal oil, hopefully we can transition to non-carbon forms of energy over the next 50 years by switching to wind and solar as real prices of all forms of energy rise. The rise in energy prices will increase the incentive to become more energy efficient. This sounds very optimistic because I make it sound very easy, but it will not be a smooth or easy transition, it will be very difficult and maybe not even possible. I do not see this as a business as usual scenario, I think the economic and social system will change dramatically and I hope that it will not become a Mad Max scenario, and I think it likely that it will not. I have no idea what form the changes in the social and economic system will take, perhaps the wasteful consumer culture will wither away and people will become aware that destroying the ecosystem is a bad idea.

        Never mind, it is unlikely to happen. There will be some kind of change hopefully I am wrong about the probability for positive changes resulting from the coming crises.

    • I am of the opinion that peak oil will in fact signal the end of growth but I do not believe that there is any economic or physical law that requires this to be so.

      Ahhh but that’s where you are wrong. There is a physical law that dictates that when the energy that produces a product disappears then that product will disappear also.

      Apparently you are assuming that the decline will reach a lower plateau then stop. No, that is not the case. Once the decline starts it will continue…. forever.

      I keep reading people, on this blog and elsewhere, assume that fossil energy will decline but efficiency will make up for that decline. Perhaps but then what. I mean what happens when energy, or more specifically oil production, declines even further, then further, then further still. Do you suppose that efficiency will continue to improve to the state that when the oil is completely gone that efficiency will produce products from nothing at all?

      We are not talking about a decline to a set level then everything levels off. The decline will last forever. There can be no increase in efficiency that can make up for that decline.

      But let us consider the hypothetical possibility that energy efficiency is improving at say two per cent annually and that energy supplies are declining at only one percent . I can’t see any reason why growth could not continue under these circumstances, every thing else equal.

      But of course, efficiency increases at two percent annually and energy declines at only one percent. Then in a few hundred years we are getting maximum efficiency from nothing. Obviously there is a flaw in that logic. But there are even more flaws. Energy, when it starts to decline will decline at a lot faster than one percent per year. And efficiency has already reached a plateau. For instance agricultural production, per acre, has already plateaued and is barely increasing at all. The Ocean fish catch is dropping dramatically. Efficiency is not helping at all there. Well, let me correct myself, efficiency is destroying the ocean ecosystem. And I could go on and on and write a book about things going to hell in a handbasket. Efficiency be dammed, it is destroying the earth.

      But I think we should be wary of saying that peak oil means the end of growth as a theoretical matter and make it clear that we are talking in practical terms when talking to the public.

      You be wary if you like but I am not wary in the least. And I tried talking to the public and they didn’t believe a damn word I said. Not that it would have made any difference if they had believed every word of what I said.

      • TechGuy says:

        Ron wrote:
        ” I tried talking to the public and they didn’t believe a damn word I said. Not that it would have made any difference if they had believed every word of what I said.”

        I know how that feels. Its like being a modern era Cassandra, Gifted with the power of enlightment and critical thinking, and the curse of never being believed!

        • Cave Bio says:

          Hello all,

          Ultimately we are all oversimplifying the issue. Growth has already stopped or was never allowed to happen for huge swaths of humanity. This is a simple fact of resource limitation.

          I will use the following simple example to try to explain what I mean (I will keep the numbers approximate). The U.S. has 300,000,000 people and we use 20,000,000 barrels of oil a day. That means we have a per capita use of oil of 0.066 barrels/day. In order for the world per capita use to equal that of the U.S., the world would have to produce 466,666,666 barrels/day. I don’t think anyone on this site would argue that production at this magnitude is possible. Thus, billions of people have been forced into poverty due to the fact that they have never had access to the necessary resources–or another way to put is is that “collapse” has been a way of life for billions of people for decades, it is not hypothetical to them.

          I would argue that in a world of declining resources it will be possible for some to continue a BAU lifestyle for some amount of time (how long is probably not possible to know). The answer is to squeeze out more and more people.

          But there are other ways for this to occur–I would argue these processes will work in conjunction with forcing collapse on the poorer and weaker countries. I will point out once more that the most consumptive generation in the history of the world, the baby boomers, is set to power down. Folks born in 1947 are turning 67 this year. This is a group that will, by the nature of getting older and the eventuality of death, be taking themselves out of the growth equation.

          If the fact of resource “shifting” (a euphemism for forcing “collapse” on the poorer, weaker nations) is combined with the aging of much of the population in first world countries, and technological changes, it may be possible for certain pockets of the world to continue the illusion of normalcy for some time to come–I would agree with Ron that we are likely decades not years from collapse. The only caveat I would add is some unknowable stochastic event that completely changes the landscape.

          Eventually, however, without significant technological, economic and social change, the world economy will collapse as there simply will not be enough resources to support what remains of the world’s economy. This could be a catastrophic collapse. I am an ecologist so I will use an ecological example to explain my point. It is possible to remove a species, or multiple species from an ecosystem. This often has the effect of allowing other populations to thrive (removing competition can mean more energy available for other species and so can be seen as a boon to those species). However, remove too many species or certain species that may be “keystone” species, and the entire system collapses–hopefully the analogy to the world’s economy is clear.

          There are simply too many variables, economic, biological, sociological, psychological, etc. to be able to build any model that that could accurately predict what will happen–in the sense of specific events and times. The best we can do is come up with plausible scenarios based on what we know about resource use and economic/population growth and based on analogies.

          For my son’s sake I also hope. I get up every day and I go to work. As a colleague of mine used to say as he passed by my office on the way to his class, “Time to go stamp out ignorance.”

          Best,
          Tom

          • Doug Leighton says:

            “I will point out once more that the most consumptive generation in the history of the world, the baby boomers, is set to power down. Folks born in 1947 are turning 67 this year. This is a group that will, by the nature of getting older and the eventuality of death, be taking themselves out of the growth equation.”

            You may be correct with most of your points but there is another important aspect of baby boomers powering down. Most are using fewer conventional resources, true, but on their way toward death they are putting enormous pressure on health care systems. Many (most) of my peers seem to be, not spending less, but spending it on trips to visit doctors and get their drugs! Not forgetting their globe trotting in between of course. And, for better or worse many of these folks are dragging out the process for a long time, relatively speaking.

            • Cave Bio says:

              Hi Doug,

              You are undoubtedly correct that these folks will shift some (perhaps significant) energy consumption to the health care side. However, if you look at any other metric, for instance miles driven (I have posted a link to that elsewhere and I don’t have time to look it up now) consumption drops dramatically with age. Most baby boomers have saved far too little to do lots of travel and they will increasingly find themselves sequestered in an ever shrinking radius of life.

              But we are discussing a minor point; my thesis is simply that collapse has already occurred for billions of humans. Collapse will continue for many others as resources become increasingly constrained. The fact that baby boomers are about to power down and that technology is changing may help (I argue it will help) mitigate the rate at which collapse will occur across the globe. Collapse may be gradual in a global context until we reach some critical mass or a vital piece of the global economy goes down at which point it will be catastrophic.

              It seems to me our only hope is a “mass conversion” by all humans to the understanding that growth is not the solution, it is the problem and that our lifestyles must change. Technology can be a part of this, but, ultimately, I think we all agree the changes will be much more fundamental.

              Best,
              Tom

              • Dennis Coyne says:

                Hi Tom,

                I would disagree about growth being the problem, I think we need smarter growth and that most of it should occur in the poorer parts of the world where it can do the most good. Also as the poorer parts of the world gain access to a better standard of living there hopefully be a decline in birth rates so that world population can stabilize and then decline. I definitely agree that there need to be huge changes, but smart growth that recognizes the ecological systemic negative effects that can result from that growth, can be positive if it affects population the way I assume. I am not an ecologist, but I play one on TV :)

              • TechGuy says:

                Dennis Wrote:

                “Also as the poorer parts of the world gain access to a better standard of living there hopefully be a decline in birth rates so that world population can stabilize and then decline.”

                But they will consume a lot more energy and resources to maintain their higher living standard. There are now about a billion new middle class people living in India and China. However, there increased standard of living is consuming at lot more resources. Consider than in 1998, China was a net exported for Oil. in just under 15 years, China has become the worlds biggest exporter. The rise of the Asian middle class has dramatically speed up depletion, global pollution. There are still another billion people living in China and India chasing the middle class dream. Unfortunately the world can not provide them the same standard of living. The Planet is suffering long term damage because of the growing number of people joining middle class.

                • Dennis Coyne says:

                  Techguy,

                  I agree completely. If things don’t moderate soon, there may well be very difficult times ahead. The question is how best to mitigate the likely human suffering that is likely to result, would a decline in world output improve things? I think it is unlikely to improve the situation, and is unlikely to be chosen as the way forward.

                  China and India are rapidly industrializing without concern about environmental damage, much like the Western World from 1920 to 1970. Heavy carbon taxes in the US, Australia, South Africa, and Russia would help reduce coal use as China and Mongolia deplete their coal resource. It would also result in the economy to transitioning to lower fossil fuel use more quickly.

                  This is not likely to happen so that climate chaos in the latter half of the 21st century is likely to be our biggest problem. Smart growth would include carbon taxes and import taxes on goods from those countries that have not enacted carbon taxes. Again no growth is unlikely to be a serious policy choice, but it would be better from an ecological prespective than the present not very smart growth path.

      • Old farmer mac says:

        Hi Ron,

        I should have added the caveat that if energy efficiency in increasing faster than available energy then economic growth is possible “at least for some indefinite period until the energy supply falls below a critical threshold.”

        I agree with you that that long continued growth accompanied by long continued declining energy supply is impossible.

        But there is no theoretical reason to believe that we are forever doomed to a continually diminishing energy supply although I do think that is more than likely our fate over the next couple of generations in my opinion.

        But like you , I try to remember to never say never.

        There is simply no theoretical reason why we cannot weather the decline and exhaustion of fossil fuels and successfully transition to renewables -none whatsoever.

        Again there are numerous and compelling practical reasons to believe we won’t manage the transition in the short and medium term, and I personally think we will crash and burn just as you do , for the most part-in the medium term.

        But such questions as these are argued on theoretical grounds in university classrooms all over the world and economics professors and their ilk, meaning cornucopians of all stripes, are apt to seize on such poorly stated arguments as evidence that we are deluded and ignorant of what any right thinking sophomore econ major knows to be a god given truth – that we can always innovate and substitute our way out of any resource issue.

        Unfortunately not very many econ majors ever take a couple of dozen hard science courses such as are prerequisite to getting a degree from a “cow college ” as business majors at my university referred to the college of agriculture back when I was an undergrad.

        I needed a year of business classes and the basic econ course fit the bill and I took it in the same classroom under the same professor at the same hour as the econ majors.

        So I know and you know that the little tin gods of innovation and substitution are only figments of the imagination of economists when we get right down to the nitty gritty of reality.

        But they don’t and they are aren’t looking for evidence they are wrong.

        They will and do however take advantage of any slips on the part of the opposition.

        I don’t think it will play out this way but:

        It is certainly theoretically possible that before the fossil fuel crisis hits in terms of our not having the energy needed to make the transition to renewables that there will be sufficient investment made in research, development, and scaling up renewables so that we can indeed make the transition, helped along of course by huge improvements in energy efficiency and conservation.

        As a matter of fact I now believe that there is a significant possibility that this will actually happen over the longer term.

        But ‘twixt here and THAR as my old maternal grandfather was prone to say in the spring about getting in the crops in the fall, more things can go wrong than you want to think about.

        I’m convinced that we are going to go thru hell over the next century but I also now believe that there may be a nice rainbow at the end of the overshoot storm for the relatively few people who will survive it.

        There is a good possibility that there will be enough of them and in close enough proximity to each other that they will do quite well for themselves even despite runaway warming and severely limited supplies of fossil fuels.

        I once upon a time was a teacher and I am acutely conscious of the lack of depth of understanding of any complicated subject on the part of even the best educated people.

        Once a student hears something from a professor the odds are pretty good he will remember it as holy writ forever-IF, IF,IF he remembers it at all.

        This is why for example pot is still officially a schedule one drug- the generation of people who saw “Reefer Madness ” and believed it is a dangerous drug wrote the prohibition laws and all the evidence to the contrary isn’t going to ever be enough to get them to change their minds.

        The beginning of the end of pot prohibition has had to wait until enough of them died to become a reality.

        Not all of them are dead yet so there will still be jail time associated with pot for another decade or so in some states and maybe at the national level as well.

        Let’s not give the cornucopians any ammo by making categorical statements that they will use to discredit us in classrooms where we have no opportunity to challenge THEIR own categorical claims.

        • There is simply no theoretical reason why we cannot weather the decline and exhaustion of fossil fuels and successfully transition to renewables -none whatsoever.

          Again, from Wiki

          The Energy Information Administration estimates that in 2007 the primary sources of energy consisted of petroleum 36.0%, coal 27.4%, natural gas 23.0%, amounting to an 86.4% share for fossil fuels in primary energy consumption in the world. Non-fossil sources in 2006 included hydroelectric 6.3%, nuclear 8.5%, and others (geothermal, solar, tidal, wind, wood, waste) amounting to 0.9%. World energy consumption was growing about 2.3% per year.

          Hydroelectric is already maxed out, or almost so. Nuclear is not truly renewable as there is a limited amount of uranium. The easily mined uranium is already passed peak. Of course there is an almost unlimited supply in seawater but collecting that happens only in science fiction novels.

          If you are talking about biofuels then you are talking about about three or four more earths to grow the stuff. And that leaves no place to grow food.

          That leaves the above 0.9 %. Expanding that to meet the demand of 7 billion people, soon to be 9 billion. That I would consider an impossibility.

          Mac, I think you are simply mistaken. There are a lot of very good reasons why we cannot transition the support of 7+ billion people on renewables. I think the possibility of that is so unlikely it laughable that some people actually believe it really can be done.

          Really Mac, the population of the world exploded when fossil fuels came into use. They brought on the industrial revolution, the medical revolution and most recently the green revolution. And speaking of the green revolution, without the aid of fossil fuel aided cultivation, fossil fuel fertilizers and pesticides, the food supply would shrink to under 1/3 the present level. Fossil fuels enabled the population to explode from under one billion to now well over 7 billion and is still growing. And you believe that they could all now live with no fossil fuel at all. Incredible!

          But then…

          The curse of man, and the cause of nearly all his woe, is his stupendous capacity for believing the incredible.
          H.L. Mencken

          • Old farmer mac says:

            Backatcha ,Ron

            I said that I agree with you as a practical matter.

            I said that I think there is a good possibility that things might be pretty good a century from now for the relatively few people who are still around ;I didn’t put that into an actual number but I will now.

            To me a “relative few” means a minor fraction of today’s seven billion-any where from a few hundred million to maybe a couple of billion absolute tops would be my guess.

            You apparently define “theoretically” differently than I do- and differently than most other people in my opinion.

            I am not saying it will happen but there is for instance a good possibility that breeder reactors will be perfected to the extent that they can be built by the hundreds.

            There is no reason the design of a breeder reactor can’t be standardized and the safety regs relaxed to the point that they can be built in a fashion similar to the fashion in which Liberty Ships were built in WWII.

            Certainly a few of them will melt down if this comes to pass but compared to the alternative, that won’t be considered a price beyond paying.

            There is a distinct possibility that once the shit hits the fan that draconian one child per couple laws will be passed and enforced.

            Such laws might not even be needed. Birth rate have fallen dramatically in many parts of the world and it may be that women in the rest of the world will follow suit given the right incentives and encouragement.

            Priests of all sorts have sometimes proven themselves adept at leading their flocks to do things that were previously considered heresies once they see the necessity of doing so.

            There is a possibility that the energy plateau will last long enough and the decline of fossil fuels will be slow enough but also obvious enough that an enthusiasm for renewable energy and conservation will take the world by storm from the top floors of Manhattan to my worthless neighbor who brags about how much gas he uses.

            It is even possible theoretically that little green men will land on the White House lawn someday.The odds against this happening are certainly at least a trillion or maybe even a trillion trillion to one but not a flat Zero.

            A very famous economist has been quoted -seriously-in text books – to the effect that if we run out of copper and must have some that we can manufacture it.

            And theoretically he is correct although such manufactured copper given the current state of the art would probably cost a few million bucks a gram because it can only be made in a nuclear reactor used for research purposes.

            All discussions of this sort must be made with some sort of time frame specified in order that the meaning be clear.

            Debates are won and lost at the values and theory levels in large part by controlling the way the issues are framed. At the highest levels of academia pure theory is trumps and practical considerations are not even considered worthy of mention.

    • Dennis Coyne says:

      I agree with OldFarmerMac,

      Ron says:

      I keep reading people, on this blog and elsewhere, assume that fossil energy will decline but efficiency will make up for that decline. Perhaps but then what. I mean what happens when energy, or more specifically oil production, declines even further, then further, then further still. Do you suppose that efficiency will continue to improve to the state that when the oil is completely gone that efficiency will produce products from nothing at all?

      As the amount of oil produced declines, the price will rise and demand will fall so that supply and demand balance. There are other forms of energy which will replace oil, prices of other forms of energy (natural gas, coal, wind, solar, geothermal, hydro, and nuclear) will also increase and it will take some time for the economy to adjust. Oil is not the master resource, or if it is now, it will be replaced by something else. Energy is indeed important, but oil is but one form of energy.

      • Ken Barrows says:

        If the cost to extract the marginal barrel is greater than society can bear without contracting, it will be ugly and there will be no balancing.

  28. aws. says:

    Winter Heat Swamps Alaska

    NASA Earth Observatory, February 4, 2014

  29. KC says:

    Hi all

    First, I believe we are all here attempting to further understand the unfolding reality.

    None of us can know with absolute certainty what the future may hold. Only from our experience and awareness can we have some idea of what may come. Some of us may be more certain than others, and I believe any discussion given may be valid, though hostility tends to breed further hostility and at the nth degree becomes a pointlessly banal pursuit.

    I see no reason for hostility here on this site. Forgive me, Ron, if I take liberty to address this concern. I have seen it elsewhere.

    I believe everyone is here to contribute to a greater understanding, rather than to diminish the idea of peak oil or, worse, our ideas of one another.

    Second, approaching the crunch, I am attempting, perhaps in futility, to make whatever connections I may in regards to the future that we see. I live in the northeast (metro New York) which in itself bodes not well for me. But at the moment, my hands are tied.

    In any case, I hope to make connections, keep up the discussion, and increase my chances on the other side. I prefer to leave the hostility at the door and gather what I may from the better interests of the discussion.

    That be said, I am convinced that Ron and Crash have so far the most reasonable conclusions.

    I come from an accounting background, and I fail to see how the economics of any deal can stand on its feet if the money sees no profit in the deal. Perhaps it is true that, where one enterprise may be a losing gambit, another will rise in its stead, a la Barrick Gold. But that was a different time and circumstances of plenty suggested a profitable future.

    Here we are approaching the downside, whereupon almost all enterprises will begin to see negative returns. Businesses go into and perhaps remain in business to make a profit. Where profit becomes, at best, a flat line suggesting break-even, or, at worst, a bunch of never-ending negative returns, then businesses will close their doors. In that regard I speak from experience, and from a time not-so-long-ago.

    The days that technology might save us are over. Almost certainly we will have continuing technological improvement, though overall we are already experiencing diminishing returns at the extreme. In many cases whatever is presented as technological progress instead turns out to be funny business, be it in financial services/ accounting or in manufacturing, agriculture or any other business that relies on human ingenuity. Ian not convinced that smart phones and more games like Angry Birds is much of an improvement.

    Regards

    • Tim E. says:

      KC stated:

      Here we are approaching the downside, whereupon almost all enterprises will begin to see negative returns. Businesses go into and perhaps remain in business to make a profit. Where profit becomes, at best, a flat line suggesting break-even, or, at worst, a bunch of never-ending negative returns, then businesses will close their doors. In that regard I speak from experience, and from a time not-so-long-ago.

      I agree – however I have uncovered great distortions in the local market. People who are politically connected have been allowed to continue with their businesses even though the property taxes have not been paid for over 3 years. The County is supposed to tax foreclose on properties who have an outstanding balance greater than 3 years old. NOW – those yearly unpaid taxes get passed onto and paid by the property owners in the Community who DO pay their property tax. There is one local business which has not paid it’s property taxes during the last 5 years and has not paid it’s sales taxes – in fact, the owners just change the name that is responsible for paying the sales taxes and continue on as if nothing happened. I have confirmed this by checking with WI. DOR Delinquent Taxpayers.

      Our local City Government has been borrowing relentlessly and rolls debt over. The Politically connected get large contracts for top dollar – that have no return and only add to the debt service. The State of Wisconsin “invested” $5,000,000 to build a roundabout in Downtown Racine – that looks like a Ghosttown customer wise – but tens of millions have been borrowed for fancy sidewalks, special features, art pieces, etc. etc, for which there has been no return.

      Skipper Buds walked away from the County Built Marina because it needed Millions in maintenance and repair. Now taxpayers are stuck with a Marina that only had a 42% occupancy rate in 2013. The restaurant that was in the taxpayer funded facility was not financially viable and went out of business. The County put a connected group in that restaurant and does not charge them any rent – the profits are privatized, the losses socialized – County taxpayers cover the costs.

      I could go on and on – but these are some of the distortions I have uncovered prove to me that when the end comes, it will be at the Seneca Cliff.

      • Watcher says:

        Here is a summation of the gentle, gradual, painless mass death scenario.

        We will transition to other energy. We will get 400 horsepower engines to drive big trucks and, more importantly, tractors using batteries with magical composition that lets the drive all day (rather than reality’s 10 minutes) before they need a charge and have to drive back to the driving station. They also will never weigh more than the 100 gallon tank of diesel.

        Orrr, we will decline so gradually that for these applications will still have diesel to power the tractors and ship seeds while time passes (about 50 years) to create LNG infrastructure across the country (world) and use it to push the tractors and trucks.

        The US consuming about 23% of oil flow with 4% of population will be accepted and embraced by China and India and as that oil flow lessens, they will have some starvation and deaths, but because that reduction is evenly distributed they will tolerate it and not use military force to get more than their present % consumption.

        Russia, the dominant force on the planet in a world where oil is scarce, will never use their power to take food from Europe in return for oil/nat gas. They will never demand that Germany ship “hostesses” to Russia in return for oil/natgas. And under no circumstances will they make any effort to suggest/dictate policy of EU nations who are dependent on their oil/natgas. (If you believe this you might want to look up what Germany did to France after France’s surrender. “Yes, you will pay the cost of our garrison and our military effort overall.” ‘Okay fine, we will pay in francs.’ “No you will not. There are no Francs. We are closing the French central bank. You’ll pay in food and labor and cheap women, and you’ll start yesterday.”) (Don’t feel too morally superior — look up rape of German women by US and British troops after Germany’s surrender, as well as, of course, by the Russians. Deeply suppressed, you’ll have to dig.).

        China and Japan will never go to war over the Senkaku Islands, because they will instead look at charts that show this or that and arrive at some solution that doesn’t involve bombing tankers. BTW Ron, what’s the latest on Chinese domestic production?

        Bottom on all that is soft and gentle, there will be time and during that time miracles will occur.

        • Doug Leighton says:

          And the biggest Miracle of all: the Sahara will bloom while the Fish return to the oceans and the gods provide sparkling water to all the people and Global Warming becomes be a Fairy Tale parents read to children being tucked snugly into their beds.

          • Watcher says:

            Well, if oil production/consumption do collapse along with population, whatever human actions might reduce global warming will have been taken so there would be no point in thinking about it further.

            It will just be the weather.

        • Patrick R says:

          Watcher you seem to have an almost pornographic interest in violence, suffering, and images of mass wipeout. Im pretty sure these are neither interesting or useful to most nor the debate that we come to Ron’s excellent site for.

          So my apologies for any role my thoughts may have had in sending this comment stream in this direction. Especially as really the differences here are speculative. I’m pretty sure we all agree that we will see the outcomes
          of peak oil soon enough. So as one keen reader I would prefer more of Ron’s and DC’s and other’s excellent detailing of the journey with accuracy and data and less fewer fantasies if possible, especially as these always seem to escalate into a bidding war for who can describe the most extreme picture.

          Is that reasonable? Plenty of pity-party doomer sites out there.

          • Doug Leighton says:

            Good point. Opinions are a dine per dozen and worth about that much. Sorry for my part in that.

          • Verwimp says:

            Genuine fear may be the driver for publishing doomer scenario’s on the internet. Preferably on this brilliant site with high profile audience, where the fearing publisher hopes to get genuine and documented feeback that a) gives a reason to calm down; or b) gives a confirmation and a chance of resignation and acceptance. It’s a temporary phase. It’s just stage 3 in the 5 stages of grief. I feel sorry for Watcher, but on the other hand I recognize myself in earlier days.

  30. TechGuy says:

    I am usually don’t get involved with climate change, since I think its a moot point. No Western policies are going to have any change. That said I think this story may be an important one for the US:

    http://www.washingtonpost.com/blogs/govbeat/wp/2014/02/03/californias-drought-is-only-going-to-get-worse-heres-proof-in-one-photo/

    California is drying up, and there is too many people living there to be supported and its not going to be pretty if this persist for years. This event is likely not man made cause since CA and the Western US do suffer long term droughts. Without a break in the drought soon, the economy in CA is going to tank just as if it ran out of oil.

    • clifman says:

      Yes, the western U.S. is subject to long term cycles of drought. But/And the decline of Arctic sea ice, and the more general Arctic amplification of GW leads to much less temp. difference between the tropics and the Arctic, which leads to a much more meandering jet stream. Throw in some ‘blocking high’ and other ancillary players, and you get patterns which are stuck, leading to such things as all of CA’s warm, moist air traipsing on up to AK (see aws’ post above), leaving CA high and dry, and also to the polar vortex taking a winter vacation down over the upper midwest, etc.

      I recommend the work of Dr. Jennifer Francis of Rutgers for the full skinny on this effect.

      So if it ain’t ‘man made’ it is most certainly ‘man aided in a big ol’ way’.

      Pogo had it right.

  31. aws. says:

    Pipeline rupture report raises questions about TransCanada inspections

    2011 report criticized TransCanada’s ‘inadequate’ inspections

    By Amber Hildebrandt, CBC News Posted: Feb 04, 2014 5:00 AM ET

    A CBC News investigation has unearthed a critical report that the federal regulator effectively buried for several years about a rupture on a trouble-prone TransCanada natural gas pipeline.

    On July 20, 2009, the Peace River Mainline in northern Alberta exploded, sending 50-metre-tall flames into the air and razing a two-hectare wooded area.

    Few people ever learned of the rupture — one of the largest in the past decade — other than the Dene Tha’ First Nation, whose traditional territory it happened on.

    In an early 2011 draft report about the incident, the National Energy Board criticized TransCanada, the operator of the line owned by its subsidiary NOVA Gas Transmission, for “inadequate” field inspections and “ineffective” management.

    Final reports are typically published by the investigative bodies, either the NEB or the Transportation Safety Board, but this report wasn’t released until this January when the CBC obtained it through an access-to-information request.

    The NEB said the delay was caused by an “administrative error” when an employee left without transferring the file over.

  32. Eduardo Martinez says:

    The average person in the UK uses 200 kWh per day (David MacKay , Sustainable energy without hot air). In 2012, the UK energy output for wind generation was less than 2 kWh per day per person averaged over the year.

  33. Doug Leighton says:

    Patrick,

    Perhaps you could give us a summary of the New Zealand oil and gas scene? I know there are small gas plays on the West Coast (Taranaka) and that a Texas company recently failed on a deep water oil well test somewhere off New Plymouth. More specifically, there have been rumors of a major Bakken-type shale oil discovery on the opposite coast near Hastings or maybe further north around Wairoa. You could shed light here? Of no consequence, I was in the Hastings area in 1959 which may be the reason this caught my eye. If this really is information and not noise of course.

    Doug

  34. Thought you’d never ask! No seriously, NZ is a profoundly insignificant player by any measure, and a highly vulnerable one with some interesting opportunities that we are largely ignoring because BAU propaganda is being gleefully swallowed and repeated by the government politicians and institutions alike. The US Shale cornucopia meme is particularly destructive to the discourse here. Current gov has an economically disastrous highway building programme based on cost benefit analyses with falling oil price inputs!

    Here is a post I wrote about our oil industry and use 18 months ago because the MSM here was reprinting gov funded PR as news. My apologies for the pie graphs, will never happen again:

    http://transportblog.co.nz/2012/08/28/oil-strike/

    As you can see [also a link there to official data- pretty straight society the data will be accurate]. We have a very small industry that has been extracting steady amounts of oil for a few decades averaging around 2000 kt pa. Consumption has plateaued at around 7000 kt. Still this amounts to a huge forex bill for a small nation of 4.5m souls. Our biggest cost by far. We buy Tapis crude out of Singapore at a considerable margin to even Brent. All of our production is exported because our one refinery is not set up for the local grade; fairly light IIRC. This may be changing.

    This production is centred on the province of Taranaki, which also hosts the Nat Gas industry, and a whole lot of high value dairying [by far our biggest export earner, and only industry that supports an NZ based global scale company; Fonterra]. In the ‘Naki [Taranaki] they boast of their black and white gold: oil and milk. Properous place. No wine there though; too wet.

    We are self sufficient in Nat Gas, but, IMO, waste far too much of it making electricity which is the one energy source we are rich in. In any year the proportion of electricity that is generated by renewables is around 80%. There are no subsidies for these. The backbone of this is 56% Hydro, a state built legacy being stolen [sorry sold] by the current government to fund their programme of tax cuts for the well off [so they can buy shares in power cos- cute huh]. Our wind farms are among the most efficient land based ones on record. Another important feature of the wind resource is that it is a great balance with hydro- allowing water to be conserved when wind is producing. And because NZ is long and thin with a very variable maritime climate there is good geographical spread too, Get the picture: it rains and blows, think Oregon with more sea. And just as liberal population. Geothermal is a significant and growing contributor too.

    We should be doing everything, urgently, to move what we can to electricity and learn to live on a minimum of imported liquid fuels focussed on keeping the vital agriculture sector going. Nat Gas should being used for transportation not generation. Instead we have government that for ideological reasons is doing the reverse. But there this may well change in the elections later this year, we have a strong Green Party in opposition 12-15%, that may get to form a government with the left of centre Labour Party 30-15%. And a form of proportional representation. Here’s hoping; more reality from central government would be good.

    Anyway Anadarko and others have been enticed here with offers of zero to minimal taxes and all the love and kisses the gov can think of as they are just desperate to preside over their own little gusher. Just yesterday Anadarko announced a dry hole, or at least a wet one; nuttin’ but water. Strange because the way the Minister tells it all we had to do was vote in these hard headed anti-greens and they would make oil appear though force of will and strength of climate change denial! [that’s how it’s made, right?]

    I see opportunities on the demand side going begging which would clearly be valuable whether or not there are new sources of viable supply discovered, but there is no official desire to pursue this because that would be to admit a possible problem.

    Main reason for optimism here is that we are a net exporter of food [by orders of magnitude]. It is clear this can go on in a more liquid fuels constrained world [agriculture, fishing, and forestry uses only 6% of current oil]. We can be 100% renewable electricity with some effort at current consumption, and in fact instantly by retiring one ageing aluminium smelter. I do not believe either shipping or flying will stop. Cheap and pointless flying however will.

    Driving the SUV to the cafe to pick up a latte will have to go however. And it is already deslining in the cities despite investment in the wrong movement technologies and spatial orders. Change will come. We are at least funding our friends in the south Pacific to switch from Diesel generators to PV. And I may have posted this before about how we are selling wind power to our dear American friends:
    http://transportblog.co.nz/2013/02/05/magnetic-south-lessons-from-antarctica/

    I advocate on transport and urbane form because basically these are the locus of our vulnerabilities and problems. If nothing else we could be a test lab for new ideas, as it hardly matters if we f**k up; in a global sense. Currently feeling rich selling protein to the Chinese, but have big debt hangover and high vulnerability to you guys catching cold and no longer bothering with our tasty morsels…. still we won’t go hungry, even if we won’t be able to import Italian furniture or Japanese cars.

    • Doug Leighton says:

      Patrick,

      Excellent summary, thanks. So I can presume the Hastings area tight oil play that I heard about is all smoke then?

      I spent two years of my life in NZ and good years they were too. At risk of having you bite me for saying it, if/when the world come crashing down, the Land of the Long White Cloud may remain an oasis in the desert.

      • There has been some exploration in Hawkes Bay and Poverty Bay [yes we really do have a province called that]. Petrobras went sniffing in the very deep water off the East Cape but quickly pulled out. Probably a combination of trouble at home as well as not finding sufficient evidence of a paying play there. Government blamed their departure on the small protest by locals and environmentalists, and changed the law to ban further similar protests, very sad.

        As for NZ as some kind of refuge, yes we are increasingly home to fearful or prudent billionaires of many stripes, a lot from the US, some who spend time here and many who just maintain legal and physical retreat routes…. there was a spike in this in 2008, and it may get out of hand at the next event….? It’s a small liferaft in the context of 7 billion humans so there’s really not much hope in that idea for most people. We do seem to be purchasable, sadly; ‘bring me your rich, your worried…’

        This is one isolated bunch of islands: Auckland to Sydney is the same distance as London to Moscow. Fantasies of these islands holding the only surviving people after some kind of catastrophe have been around since at least the Nuclear age. Just pick, as the Archdruid says, your ‘Apocalypse du jour’. I have no idea what life would be like with no input from the great industrial economies, how long we could maintain hydro turbines, electric rail systems etc, [have to start making our own Oak wine barrels instead of importing American and French ones!] but I do know that knowledge of these systems would not evaporate and there are plenty of resourceful people here. But most of all I do not find this scenario at all likely.

        But hey, we love visitors, and people who to stay, actually.

  35. CTG says:

    Hi,

    This is my first posting here. I have followed the posts on this site and from theoildrum.com for many years. I have also followed Gail’s and other financial blogs like zerohedge.com. I would like to commend Ron for the excellent posts as well as others like Dennis, Techguy, Farmer Mac, et al. for their excellent comments. Insightful..

    I worked in a semiconductor factory in Asia. English is not not first language, excuse me if it is not good. Like Cassandra, nobody will believe you when you deliver bad news or any future prediction. This is very true in Asia.

    The main reason I am doing my first post is that we are missing two big elephants in the room that may be the cause of “mad max scenario” – complexity of human society and long supply chain. These were discuss in Gail’s blog but not in an in-depth manner.

    COMPLEXITY
    40 years ago, anyone with reasonable knowledge can repair a toaster, car or radio. Now, a “check engine” sign may render a car useless and has to be repaired by the manufacturer. A blown capacitor will cause the computer to freeze and shutdown. We never has internet before 20 years ago but now, without internet, many businesses cannot function. Too many electronics parts,lower overall quality and planned obsolescence does not help either (will solar panels, wind turbines, batteries, inverters last 10 years?) The equipment in my semiconductor factory (that makes the semiconductors) needs a lot of parts and attention. They CANNOT function when just a simple valve is broken and it must be replaced. If that machine does not work, then the entire process shutdowns as without that step, the microchip does not function. Every part, every step, big or small, critical or not needs to be working perfectly in order to produce that microchip

    Thus, just a small problem at a “not-so-critical” area will cause havoc at other areas. Just a thought experiment – what if the internet is down or cell phone is not available for 1 week? What we have now (products and services are so complex that we are joined at the hip)

    SUPPLY CHAIN
    This is potentially an extinction level event. 50 years ago, we have shoe and shirt factories down the street. We produce and consume locally. Now, every single part or service is outsourced and globalized. Even skills are outsourced. One of our equipment needs to be repaired by a company that is only based in Canada. They fly people over. Food needs to be transported by trucks which in turn must be maintained by the workshop that needs parts from China/Japan and that part is manufactured in a machine that is bought from UK with parts from India and Australia.

    The financial system is also critical. In 2008, we averted a disaster when Lehman went belly up. Our factory could not get parts and supplies as the vendors do not trust the letter of credit from banks. Central banks come in to the rescue by supporting the banks and printing money. That bullet has been used and it may not work now.

    Just a thought experiment, which can come true

    1. What if the banks are closed for 1 week and credit cards are useless? What will happen to the society? food supplies? jobs, money?

    2. If Japan and China went to war, what will happen to our society? Supply chain will be disrupted and what happens to our food and energy (parts for oil rigs/trucks available?)

    3. If it is announced that next month a killer asteroid will slam into earth, what will happen to the society immediately? Nobody wants to work (truck drivers, pilots and doctors not working), chaos, panic and likely within 2 week, most will die from starvation. That is possibly the reason government does not acknowledge peak oil (or peak energy)

    The following book/article might be interesting to read:

    http://monoskop.org/images/a/ab/Tainter_Joseph_The_Collapse_of_Complex_Societies.pdf
    http://www.feasta.org/wp-content/uploads/2012/06/Trade-Off1.pdf

    regards,

    • Dennis Coyne says:

      Hi CTG,

      Great comment, and I wish I could write that well in English, which is my first language. :)

      Note that the financial collapse of 2008 was very disruptive, but not catastrophic.

      Wars happen a lot and they are terrible, but again unless they are worldwide in most of the world life goes on.

      Do you expect that we will go from 76 million barrels per day to zero overnight? As the decline in World oil output becomes apparent to all, there will be serious changes in energy use, prices will rise to levels that most think are not possible, but there will still be some oil for those that are willing to pay, and there may indeed be a severe recession if oil prices rise so quickly, that the economic adjustments necessary lag behind. A severe crisis will cause society to focus on solving the problem, and possibly teach society that there are indeed limits to growth.

      Mostly I agree with your analysis, but I think the economic system is less brittle than Tainter suggests. There will still be fuel for ships, trains, and airplanes, it will be much more expensive (probably triple present day prices in real terms by 2022).

      • Watcher says:

        “As the decline in World oil output becomes apparent to all, there will be serious changes in energy use, prices will rise to levels that most think are not possible, but there will still be some oil for those that are willing to pay.”

        Suppose you can’t pay?

      • “but there will still be some oil for those that are willing to pay,”

        Of course this is true. There will always be oil for the rich. It it those at the bottom of the ladder who will suffer first and suffer the most. And then as prices continue to rise poverty climbs a little higher up the ladder, then higher and higher as the price rises.

        People never get used to higher prices, they just adapt to doing without… or starve… or freeze… or…

        • Watcher says:

          ya the Philippines folks have zero domestic production and consume 350K bpd at Brent pricing.

          The Phils peso is falling, up to 45ish last I looked. We can make this case for Japan or anywhere else with zero domestic production. What if you can’t pay?

          And if you can . . . at some point the oil pumpers say . . . I got enough paper, send me tanks or fighter aircraft. No, I don’t want new ones. I want the ones you already have.

          Ron you may have missed it above. Is there anything new on Chinese domestic production?

          • Watcher, I have nothing except what I can get from the EIA data. I have China production, through September 2013, posted here:
            Non-OPEC Charts.
            As you can see from the chart their production is below where it was three years ago. But on a year over year average, 2013 is slightly above where it was in 2012. Of course their consumption is increasing much faster than their production.

            • Watcher says:

              Looks like about 4.1 mbpd.

              Remember those satellite pictures of well totals at Ghawar? We are way overdue for some enterprising someone to splash some Chinese oil field pictures in public. That will be amusing.

            • clifman says:

              “As you can see from the chart their production is below where it was three years ago”

              Ron, I don’t see lower production. Just a gradual rise. Am I missing something?

              • clifman says:

                Oops, never mind. I see you were referring to the chart you linked to, not the one you embedded…

        • Dennis Coyne says:

          Those who cannot pay only get what they are given, this has pretty much been true for a long time, unless they resort to theft.

          The point was that a manufacturing facility that needs a part to be shipped, or an expert to come fix their equipment will be willing to pay a high price for the service which will have the high cost of fuel embedded.

          When the price of a single good increases, people often buy a different good, even when it is a master resource. They will drive less, use public transportation where available, car pool if necessary, switch to propane or natural gas, or a heat pump if they heat with oil. They can also buy a more fuel efficient vehicle, move closer to work so they can walk or bike to work.

          The poorest always suffer the most. There are possible solutions such as higher minimum wages and a more progressive tax code, but we would have to wait for Great Depression 2 for any of those ideas to be tenable in the United States. Prices have been rising for a long time as well, they usually rise more quickly when the economy is doing well and for the middle class who usually has significant mortgage debt, inflation helps because they pay back their mortgage with dollars that are worth less.

          I would disagree that people do not get used to higher prices, people are not shocked to see prices at 3.50 per gallon for gasoline, 10 years ago they would have been quite alarmed. Ten years from now $7/gallon for gasoline may seem quite normal. Personally this is what I expect.

          • Dennis, please read KC’s reply to you and I.

            KC’s reply to Dennis and myself.

            Can we consider the above post a reply to KC? Should we tell him just to get used to it?

            People do not get used to having less and they sure as hell don’t get used to having nothing. The economy is a disaster and getting worse. And it is largely because of $100 oil for the last three years.

            • Watcher says:

              “unless they resort to theft.”

              FDR cut off the Japanese from US oil (resulting in Pearl Harbor) in about July/August of 1941, and this was done to try to interfere with the Japanese grab for oil in Manchuria. Note that Japan move to Manchuria’s oil began in 1931, 10 years before Pearl Harbor.

              It’s all about oil. Has been for 100 years. If you can’t pay, you go get it. If you win, your manufactured atrocity becomes historically moral and noble justification. If you lose, you’re a horrible terrorist.

            • KC says:

              THAT was a great response!

              Luckily I have someone that I love, who loves me. I am in a good place, except that — it’s in a not-so ideal place called New York City.

              My life is good, and, though I may be close to bankruptcy, I have no fear.

              These days I keep my eyes focused with clarity on the next twelve months, going into the year 2015. I haven’t much faith in the BAU economy. I believe things will change dramatically, as alluded by Ron and Watcher, and, given our lives of plenty in these United States, we will have a rude awakening very soon.

              Perhaps it is true that some things could still be made, even in a shrinking economy. But, some businesses require critical mass. Airlines and air travel are but one of those businesses. Most airlines rely on the 80/20 rule, where 20% of revenue comes from 80% of passengers, and 80% of revenue comes from 20% of passengers. But, as we all know, though the airline business itself may be a simple model, the airplane building business – and airplane maintenance – is a very complicated business. Airplane building and maintenance require some of the most complicated supply chains we have ever seen in the history of modern technology. When critical parts of this or that critical machine breakdown, it may no longer be possible to get this or that part, because the only business that made it is out of business and the designs and materials, and the materials sourcing, are lost forever.

              My own experience mirrors many, many others. Another of my friends – an engineer for a local water utility – was laid off just two weeks ago. He must be in his mid- to late-50s. Where will he get a job? He cannot rely on Socisl Security until age 62, and I believe his savings too will run out much as are my own, though he has no such fallback as I do. I see many people facing the crisis head-on in similar circumstances.

              For most of us, our experience is deemed by others, by the MSM, as a personal crises, perhaps one which they believe we are due; or it is a financial crises typical to the “business cycle,” as if this situation were perfectly normal and that happy days are just around the corner.

              I don’t believe in the MSM any more, gave up on it years ago, and rarely go there for anything approximating “news”. News to me is what I find in the alternative media, such as here, and which often appears in the MSM three, four and five weeks later.

              • KC says:

                I meant to go further…

                Where airlines themselves rely on critical mass, being the 80/20 rule I described above, what happens when they cannot rely on the 80% of passengers? They go under. American Airlines may be the latest of many examples come before and still many yet to come. In their case, American Airlines grew to such an extent, and banked so many Frequent Flyer Miles, that they could no longer rely upon 80% of passengers being PAYING passengers. “Loyal” patrons, having accrued many hundreds of thousands of miles, often found that frequent flyer seats were either unavailable or that the miles per segment cost was just too high, and they preferred to keep the miles rather than take the trip.

                If I can no longer take the trips I like and I can no longer rely on my frequent flyer miles, then what is the worth of my loyalty to American Airlines? Zero.

                We might instead recognize these “frequent flyer miles” as yet another form of fiat currency, and, as has proven correct, again, all fiat currencies… fail.

                Not to mention the parts and maintenance problems.

                • Or airline travel returns more to what it was in the 1960s; an expensive luxury. So much of the discourse around the impacts of resource scarcity are too binary: Either we must be able to live exactly as we do now or it will be all over and there will be nothing. Cornucopians v Doomers. This is simply a failure of the imagination and a profound misreading of the past. 2035 will be as different from 2005 as 1955 was from 1925.

                  Change is absolutely inevitable. But it will not be synchronous [the same everywhere at the same time] it will not be linear [sometimes sudden mostly incremental] nor just [it will impact more negatively on those who can least afford it].

                  We should stick to what we know: oil will no longer be the master resource. What is most dependant on this resource? Motorised transportation. Clearly this is an area that will be profoundly different over the coming years. How? Will we just move less?, possibly, certainly we won’t be driving so much on our own in heavy ICE vehicles. This is already happening. In terms of habitation, proximity will be increasingly more valued than space [the reverse of the sprawl years]. This is already happening. Inner cities are driving the economic recovery and exurbia is over represented in the sub prime crisis.

                  I could go on. I repeat; look around you: This is what peak oil looks like, we are already in it. I am not saying this is all it will be, quite the reverse, it has only begun, there will be more, same with employment impacts, the squeeze on the middle class… Pressures will build and through a combination of incremental change and crisis, big societal changes will be made. There will be losers and winners. There’s always winners.

                • Oil will peak, natural gas will peak and coal will peak… and they will all decline until fossil fuel of any kind is no longer available on earth.

                  That will all very likely happen within one hundred years from today. And when that day arrives the world’s population will very likely be way less than one billion people. It could very well be less than one hundred million.

                  As we are now in overshoot we will very likely go to undershoot. That is the population that could naturally support it will not be able to support after it has been raped and pillaged.

                  The point is we are going to zero fossil fuel, not some lower level where we have enough coal and/or natural gas to last forever.

                  That’s the point. So everyone should phrase their argument around zero fossil fuel, not some diminished level of fossil fuel that will last forever. When the decline sets in the decline will last forever.

              • clifman says:

                Having run out of ‘levels’, I’m replying to Patrick here:

                Patrick – “There’s always winners.”

                Which dinosaurs won?

                A flippant query, sure. And I suppose one could respond – “the ones with feathers.” But my point is that there aren’t always winners. Some things are predicaments w/out solutions, rather than problems that can be ‘worked around’. So perhaps better:

                Which trilobites won?

                Patrick, if you want to understand some of the more doomerish outlooks here, let me suggest reading William Catton’s ‘Overshoot’. Now over 30 years old, and still a gem. As Ron said in his comment above, we are deep into it, and undershoot, as he terms it, is part of what the piper will demand of us for our profligance, to coin a term.

                • I don’t think there would be human winners from an asteroid collision of scale, no. But we are mistaking the situation if we think the end of the status quo of the last 60 years of western civilisation is comparable to an extra-planet extinction event.

                  Yes overshoot one possible description of the situation, but I think there some assumptions buried in that idea. One of them is that we will all have to go back to living off the land somehow. This assumption has come directly from the hippy movement and is merely an expression of that group’s values, and I just don’t buy it. It is essentially Malthusian and as such is an oversimplification. We know that subsistence farming is poor provider of food and energy and is largely unsustainable. But if you start from the premise that this is the only way forward then yes the world’s population will have shrink.

                  We also know that cities provide the most sustainable spatial order with by far the lowest energy consumption per capita [and carbon emissions] in direct contrast to this assumption. It is the in between world of dispersed suburbia that is, literally, unsustainable. The City and the Country will continue, with many changes.

                  I see the current urbanisation as vital to the powered down world and I also see farming and delivery at scale still going on. And no dinosaurs.

                • clifman says:

                  Patrick –

                  Cities are by definition in excess of their carrying capacity and need to import resources for their existence. Not sustainable. In a world with declining FF, cities of multiple millions of people – VERY not sustainable.

                  As for hippies & subsistence farming wrt overshoot – not sure where you take these as my assumptions. Catton’s book is hard to find, but you’ll be glad you did. Just a tip from one homo collossus to another.

            • Dennis Coyne says:

              No I had not seen KC’s post that you linked to. I feel bad for all the people who are unemployed. What is not clear to me is what you are proposing as an alternative to letting the market work. We have never lived in a utopia where everyone gets what they want.

              If I were calling the shots, there would have been a fiscal stimulus about three times larger than what was tried in 2009. Obama was much too timid and thought if what he asked for initially was not enough he could go back to congress and get a second round of fiscal stimulus.
              Unfortunately everything that economists once knew has been forgotten. A recession is not the time to worry about government deficits. Maybe a plan that combined big tax cuts (to keep the Republicans happy) with big government spending on infrastructure ( to please the Democrats) could have gotten through Congress. The reason the economy has not recovered has much less to do with oil prices and is simply a failure of government.

      • CTG says:

        Dear Dennis,

        Thanks for your comments. I enjoyed your work and comments immensely since the days of TOD. Anyway, in the semiconductor industry, English is a must.

        What I have experienced in my line of work is that we are totally dependent on each other. It used to be, 40 years that most of the things are localized and if an impact on one geographical are, it will not impact the other areas. Internet and emails makes it worse as news will spread instantaneously across the globe.

        If the amount of oil reduces and countries start to grab whatever they have, then our supply chain will be broken and any parts will not be available anymore at any price. So, your renewable energy (turbines, PV, nuclear) will be “without parts” almost immediately. Our factory was nearly crippled when we lack parts that are not available locally.

        The stress in finance, as indicated by debt levels and QE is making matters worse and if the Lehman Brother issue happens again, then there might be a significant drop in oil production when fracking companies do not have access to cheap capital and ME/OPEC do not have the manpower(skills) or parts to bring new oil field online quick enough.

        A lot of parts and skills are now outsourced to China or other developing countries. So, our inter connectivity may one day be the greatest cause of our downfall.

        What do you think if chaos happens in China/Japan and suddenly the supply chain breaks or credit creation disappears ?

        • Dennis Coyne says:

          Hi CTG,

          I know that I am giving the impression that any problem can be overcome, but that is not what I mean. I agree that there can be supply disruptions and that there are a lot of interdependencies. If there was no oil tomorrow, it all just vanished, we would be in some deep stuff, I don’t think the decline will happen so fast. How would there be no spare parts? Do you envision oil production falling so fast that there would be mass chaos and that no parts could be shipped? If production of oil begins to decline and everyone recognizes that fact, don’t you think that manufacturers will no longer rely on JIT (just in time)logistics and have a few spare parts on hand?

          A war between Japan and China would be terrible and a lot of goods will be in short supply and prices of those goods will rise. Not all goods are produced in China and Japan so for their competitors it will be a business opportunity.

          On credit creation, if there is enough chaos it would likely disrupt international trade because the Dollar and/or the Euro could no longer be traded on international currency markets, I don’t think such a problem is very likely, based on what I have read (I tend to agree with the views of Paul Krugman whose area of expertise is international economics).

          Like everyone else here, I could be wrong. I think there are difficult times ahead, and there will be changes needed.

          Maybe the difference between myself and others is that I think social structures have always changed over time particularly in times of crisis. Can I predict what those changes will be? No. But I am not convinced by arguments that the social structure is fixed in stone and that doom is upon us because society has never changed and it never will.

    • Watcher says:

      Well, nobody starves in two weeks. The mechanism is water. The water company guys are out looking for food for their families so they don’t go to work and water stops flowing in the pipes. Thirst kills in 2 days, not 2 weeks.

      As for:
      “2. If Japan and China went to war, what will happen to our society? Supply chain will be disrupted and what happens to our food and energy (parts for oil rigs/trucks available?)”

      Various places are discussing this and the new nature of war. That particular war would be on tankers. You don’t want to kill populace because that reduces consumption. You want to cut off their oil imports via a war on tankers, which would soon stop leaving port. Then, because you didn’t kill any citizens, consumption of storage gets underway. Surrender of one party or the other won’t take long. It’s a good lesson in violence. There never has to be any violence. All you have to do is surrender and there’s no violence.

      BTW, in a contrarian perspective, such a war on tankers headed for Shanghai or Tokyo would soon stop them leaving port — unless they go to Houston. Might make there be more to go around. Lower prices.

  36. Eduardo Martinez says:

    Cuba. Thanks to the US foreign policy towards it, the country has a low energy consumption per capita coupled with a high standard of health care and education. The way we will be living in the near future will resemble Cuba’s.

    Financially, Europe and the US will follow Japan’s lead. That is to say, deflation, ageing population, high government debt, low government bond yields, near zero interest rates as the new normal. Needless to say the Abenomics will prove to be a total failure, in my view.

    Collapse, I don’t think so. We may be incredibly short sighted but we’re also very resilient, as a species.

  37. KC says:

    Good morning all.

    A couple of anecdotal observations this morning, waking up to the developing mess that is the gigantic snow and ice storm in the northeast….

    Regarding global warming, we might surmise that governments will take incremental strategic and tactical steps, to varying degrees according to monies available, to address real-world issues. For example, New York City MTA has begun retrofitting subways with snow shoes to scrape snow clear from elevated train tracks. And, similarly, MTA has curtailed metropolitan and regional rail service at least for today, expecting a third of commuters compared to normal operating weekday service.

    On the other hand, we might also surmise that some of those incremental steps to adept to climate change might instead be viewed as money-saving devices in a time of economic contraction. Again, metropolitan and regional curtailment of rail service seems a good bet there. Perhaps more obvious, however, is the circumstance where now many cities in the northeast and Midwest have run out of monies allotted to storm cleanup and recovery, while we have still more than three months of winter remaining. This is especially true in towns in New York and New Jersey, where I see that highway and sanitation departments are prioritizing the main roads to be cleared, and many secondary and tertiary roads will remain uncleared for the duration of the storm and beyond. And many cities have no more salt or sand for the rest of the season, much less for the latest storm upon us now.

    It is remarkable. Much of this is and was for years completely predictable, yet we still find people exclaiming with much surprise “how could this happen? I never expected….” And yet many of us have been warning of these things for years. We are Cassandras in the forever uncomfortable and unsatisfying “I told you so” position that nobody cares to appreciate.

    • Dennis Coyne says:

      Hi OFM,

      That is behind a paywall for me.

      • Old farmer mac says:

        I found the link on Google news and it worked when I clicked on it this morning.There seems to be a lot of stuff that is ordinarily paywalled that you can read for free that way.

        It’s gone now.

        I set up a folder or whatever the proper term might be in google news for energy and another for Ocare and both of them usually have a bunch of articles and links in them every day.

  38. Hi Ron replying here as it seems I can’t do so above.

    Frankly I think the next five years are going to be interesting enough without having to try to imagine a century ahead. And anyway we have to get through the other 99 first so I see little profit in looking that far, especially as it is just way too unknowable. In fact just trying to see if the Shale boom will make it to the end of this year is the intensely interesting question that keeps me coming back to your excellent site [because this is cornucopia’s last desperate dance and its end will change everything], and when we will see firmer signs of peak production in other sources, especially in the KSA and the FSU.

    Visions 100 hence are a job for novelists and other artists, and their works always always tell us much more about the time they were writing than as accurate descriptions of the future.

    Anyway all we’re hearing about the post FF world is the always useful; we’re done for. Good-oh, now about tomorrow…..

    • Frankly I think the next five years are going to be interesting enough without having to try to imagine a century ahead.

      Patrick, I really think I can do both. That is I can, in some posts, talk about the next few years and in another post speculate on what the rest of the century holds. Or, I can discuss both in the same post for indeed they are connected. That is, what starts in the next five years will continue for… for… forever or until fossil fuels are no longer available, whichever comes first.

      The point is Patrick, people talk about “adapting” to what will happen in the next few years. They believe we will “adjust” to a lower standard of living, to less oil and all the problems a lower oil supply brings. Well if you do adjust, then what are you going to do next year, adjust again? Then will you adjust again the following year? And the next?

      Peak oil and the decline is not something that will happen then stop happening. It is something that will continue until it is all gone. There will be no stopping point, no point that the economy and the public can reach and “adjust” to in five years or so.

      Sorry to be the bearer of bad news.

      • Ron by all means keep thinking about a century hence, but it’ll be as accurate as anyone in 1900 who tried to describe 2000, ie not at all. I’m not saying I can do better, rather that it is unknowable, so therefore just a bunch vague speculation telling us more about your current and previous experience and imaginative powers than anything much at all about life, or not, in 2114.

        So not news, either good bad or indifferent. Now, where’s my jetpack….

        • Calhoun says:

          Patrick, yes, it’s really not possible to predict in detail what the future will be 100 years hence. But given what we do know today, we can make some pretty good predictions as to what won’t happen. Given just two certain megatrends — depletion of oil and other resources AND global climate change — we can rule out anything resembling life as we know it. These things will happen, no question about it. It’s baked in.

          However, I modestly propose that the next 100 years will be easier for us to predict than it would have been for someone in 1900. Why? Because we will be running the movie backwards. Nobody in 1900 could have foreseen the development of our modern society, but I believe it is easier to see how our modern society undevelops. Things that worked will stop working, things that got fixed will remain unfixed, structures that were built will fall into ruins.

          The ride down is more predictable than the ride up, but the details and timing are unknowable. I think Robert Charles Wilson presents a very reasonable vision of the future in “Julian Comstock: A Story of 22nd-Century America”. But that is just one vision derived from the absolute certainty of two megatrends mentioned previously. There are other visions, but they all share a unifying theme — it ain’t gonna be pretty.

        • Patrick, in addition to Calhoun’s excellent post let me add a couple of things. A lot of things about the next 100 years are unknowable but a lot of things are very knowable. An example, if you are headed across a desert road with only a gallon of gas left in your car and you know that the next service station is 100 miles away, you know you are in for a long walk. Of course you could say, “We might make it across before we run out of gas because the future is unknowable.” But you know what that would make you.

          You say it is all just vague speculation, telling us about our previous experience and imaginative powers. Basically you are telling me that I haven’t a clue as to what the hell I am talking about. Well I am 75 years old and I have seen the world population triple in my lifetime. I could list hundreds of other things I have witnessed, like mass extinction, rain forest disappearing, top soil depletion, ocean fisheries disappearing, unbreathable air in Beijing and other Asian cities, rivers running dry, water tables dropping by meters per year, deserts expanding and a hundred other things that tell us the world is swiftly going to hell in a hand basket.

          The world is not just in overshoot, it is in deep overshoot. We are at perhaps ten times the population the world could support without the aid of fossil fuels. If we were not then we would not be raping the earth the way we currently are.

          So Patrick, looking at the condition of the earth while also looking at our finite resources being depleted and saying “this will not end good” is not vague speculation, it is a lead pipe cinch.

          • Doug Leighton says:

            Patrick is a fine fellow and not unintelligent but he lives in a place where it’s difficult to be/accept negativity. Sort of like Hawaii.

            Like you Ron I’m 75 and I’ve worked/traveled in 47 different countries. There are many places on this planet where its impossible not to be negative and the list is growing. And the degree of negativity is growing as well — for good reasons! Call me a doomer if you like Patrick.

      • Calhoun says:

        Exactly the point, Ron. I can adjust to losing 1 leg. With much greater difficulty I could adjust to losing two legs. Adjusting to losing two legs and an arm gets really tough and … well, you see where I am going. The word “adjusting” means, for most people, doing things a little differently, driving a somewhat smaller car, turning down the heat 2 degrees, combining trips to the store. But what about 50 years from now after the economy has been destroyed? When liquid fuels just aren’t available? When the fixed investment of the last 150 or so years becomes worthless? Adjust to that? Sure, we’ll adjust. Our population will decrease, food security will be tenuous as best, lives will be shorter and much more difficult. In those terms, adjusting means simply staying alive.

        A world of declining oil production is a world of continual adjustment, except when the easy adjustments run out, the oil keeps on declining.

        Does this make me a doomer? I’ve tried hard not to be one. I’ve tried to come up with a vision of the future, based in reality, in which we can maintain some semblance of our current standard of living. Nothing I have come up with, nothing I have read from true believers in technology, convinces me that will happen.

        And for those who don’t believe oil is a master resource I really have to wonder if they really understand what oil is, what it does that nothing else can do.

      • Dennis Coyne says:

        Ron,

        You think there are not any alternatives for Fossil fuels? That over the next 50 years (I am talking about oil, natural gas, and coal) as prices of these fuels rise higher and higher due to scarcity that substitutes such as wind, solar, geothermal, tidal, and nuclear energy won’t be ramped up to fill the huge need for energy resources? And there is a huge amount of waste in the system, we could become much more energy efficient and the higher the energy price, the more incentive there is to become more efficient. In addition, people may have to adjust to having less stuff, it all depends on how smart we are about building quality stuff that lasts and abandoning the throwaway consumer culture that pervades modern society.

        Finally the adjustments are continual, the economy is always adjusting to changing circumstances, the less oil, natural gas, and coal is produced the bigger those adjustments will need to be. Sometimes I think that people forget that a transition to wind, solar, and nuclear energy and trains, subways, buses and electric cars for transportation, and retrofitting existing homes with better windows and insulation means jobs for the people that are producing and installing those goods. We could also live in much smaller homes that would require less heating and air conditioning.

        • John says:

          I visited the USA about 3 months ago for the first time ever. I was shocked at how much automobiles dominate your society (granted I probably saw one of the worst examples – LA). The majority of cars I saw were HUGE by a European / world standard. My impression was that there is still so much ‘fat’ that could be trimmed off US oil use which would cause you guys only minimal pain.

        • No Dennis, there will be no “ramping up” of alternatives to fill the void even for oil, not to mention natural gas and coal. Look around you. Almost everything you touch is made from oil, or part of it is made from oil. You cannot produce that from wind or solar. You cannot produce fertilizer or pesticides from wind or solar.

          I think Dennis, that you are living in a dream world. The entire world is sliding into a recession. Even China’s GDP is driven almost entirely with borrowed money. They are building millions of apartments, offices, malls and cities that will never be occupied. That bubble will burst and take half the world down with it when it does.

          And you think it is all about bad government. I think you should wake up and smell the coffee.

          • Ok, I appreciate that we’ve all stated our positions on this so there really is little point in continuing, but cheerfully, respectfully, I feel compelled try again, if only because of Doug’s warm words. Not that I expect to change anyone’s mind, but want to be clear what I’m saying.

            Factually I have to point out that renewables ARE ramping up, now, exponentially, and especially compared to the current ‘master resource’ which despite all the love in the world is clearly dying in a ditch. They are the fastest growing source of energy, not, of course, the biggest contributor, and also not suited to powering the same kind of world that we are currently used to, but when talking of the future it is the trend that matters not the current state. The world they power will not look like this one. That is the difference. I agree; this world is dying. But human civilisation will not die with oil, even though now our affairs are dependent on it.

            You are right, Ron, when you say we live in an oil built world. I, and I’m pretty sure Dennis too, make no attempt to deny it, but where i disagree with you is the idea that no other world is possible for human civilisation. And I know it won’t look like this.

            You will call me a dreamer, and I call you stuck in one paradigm. So it goes…

            There is an image that Māori, the indigenous people of New Zealand, use to describe the human condition. They say that we walk backwards into the future; we see the past too clearly and therefore fail to comprehend what’s coming. So it goes.

            • ” where i disagree with you is the idea that no other world is possible for human civilisation. “

              Oh my goodness, I never said any such thing Patrick. Please do not put words in my mouth that I never uttered. You should read what I wrote and reply to that, not what you think I meant to say.

              There was civilization before the age of oil and there will be civilization after the age of oil. But after the chaos of course. It will not be “civilization as we know it” today but it will be civilization nevertheless. And that civilization will contain a lot less people. And I do mean a lot less people.

          • Dennis Coyne says:

            Hi Ron,

            We will have to disagree.

            Oil does not equal energy.

            Government borrowing is not a problem if it is not overdone.
            Could you fill me in on what you are talking about with China? Are you talking about government borrowing, private borrowing, both?

            You do realize that if I borrow a million dollars from a wealthy friend and then spend it on whatever it does not matter if I default on the loan, in the grand scheme, aside from me being a deadbeat and never being able to borrow a dime in the future. The money has been spent by me rather than my wealthy ex-friend, that is the only difference.

            The borrowed money is only an issue if interest payments cannot be serviced. And the last I checked, you are wrong about the World sliding into a recession, the IMF (International Monetary Fund) predicts economic recovery in 2014 and 2015.

            For the history of World Economic Growth from 1980 to 2013 see chart below based on IMF data found at link: http://www.imf.org/external/pubs/ft/weo/2013/02/weodata/index.aspx

            • “Oil does not equal energy.”

              Was that meant to be a joke? Of course oil equals energy. Of course thousands of products from plastics to tires to asphalt are made from oil but the primary use of oil is for energy. I fail to understand what you mean by that statement or why you made it.

              ” Are you talking about government borrowing, private borrowing, both?”

              I have been following the China story very closely for the last few years. I have just finished reading:
              The China Crisis: How China’s Economic Collapse Will Lead to a Global Depression
              . But you do not need to read a book to get the story, it is all over the net: The Real China Threat: Credit Chaos and Are Chinese Banks Hiding “The Mother of All Debt Bombs”?

              The debt is both public and private. The Chinese people are not allowed to invest outside of China so they invest, primarily in real estate, inside China. That is where all the money is coming from to build all those ghost cities, and they are still building them. Also some of the money comes from banks. That money will never be paid back because those cities, those millions of apartments, those millions of office spaces, the stores in those malls, will never be occupied so the loans cannot be paid back. But apparently you don’t think debt is really a big or bad thing because you wrote:

              “You do realize that if I borrow a million dollars from a wealthy friend and then spend it on whatever it does not matter if I default on the loan, in the grand scheme, aside from me being a deadbeat and never being able to borrow a dime in the future. The money has been spent by me rather than my wealthy ex-friend, that is the only difference.”

              You make it sound so simple. And apparently you really believe it is all that simple. It is not. When the economy is run on borrowed money then that money dries up the economy grinds to a halt. Normally the money you borrowed would be banked and you would buy building materials, hire construction workers and so on. Now that happens but only once in your case. The money you borrowed is never paid back, the construction workers are laid off, the building materials company sells no more building material and everything just goes belly up. If everyone defaults on their loans then the economy crashes, people are laid off, businesses close and go bankrupt. That means they never pay their creditors either. The whole thing has a snowball effect.

              About the IMF, they are eternally optimistic, they have to be. But the real story is quite different: Danger of Global Recession After 30 Years of Neoliberal Counterrevolution.

              If enough European countries fall that could have a domino effect on the world economy. However if just one Chinese economy crashes that could easily do it. And there is a very good possibility that it will.

              • Dennis Coyne says:

                Hi Ron,

                I guess I said it backwards. Do you believe that “energy is equal to oil”? I was thinking in mathematical terms where A=B usually implies that B=A, in English order matters.

                This simple point is that from an energy perspective there are many different types of energy, if one type becomes very expensive people start using other types of energy. The transition can be difficult, but it is not impossible.

                The author of the book you linked to has a web page
                http://jamesrgorrie.com/Home.html

                I am not too confident that this is the “real” story about China.

                You are correct that if most loans are defaulted on, there is a huge disruption to the economy and it usually will lead to a depression for exactly the reasons you state, I am very familiar with economics. At some point the snowball effect that you are talking about has always stopped at some point since 1700 or so, especially for the “developed” World.
                I am assuming by “collapse” you mean something much worse than the Great Depression (though you have not specifically said so). Eventually things get so bad that wealthy individuals, some of whom manage to profit in these times of depression, decide that things can’t get much worse and start to invest their money where they see opportunities, or the government steps in and spends money to get the economy moving (in the case of the Great Depression this mostly took the form of military spending).

                In China there is quite a lot of latitude for the government to intervene in the economy as it sees fit, in some cases bad decisions may be made and resources might be wasted, I am highly skeptical of arguments that the Chinese economy is about to crash, I think it will slow down as all mature economies do, it might even experience a recession, I wouldn’t put a lot of faith in Mr Gorrie’s arguments.

                On Europe I agree that there is more potential for problems. I think eventually things may get so bad in Southern Europe that one of the countries may go back to its own currency and this could potentially lead to a domino effect where all European countries leave the Euro. There would be a huge financial disruption and likely a severe Worldwide recession or depression would result.

                If the governments respond with appropriate economic policy, the recession will be short lived. If the response is similar to the 2009 recession, it will last much longer.
                So we agree that Europe is a potential problem, that oil, then natural gas, and then coal will peak and decline, though the timing and steepness may be quite different, but mostly we see the future very differently.

                • I guess I said it backwards. Do you believe that “energy is equal to oil”?

                  Dennis, No.
                  Pig = Animal? Yes
                  Animal = Pig? No
                  Oil = Energy? Yes
                  Energy = Oil? No

                  Yours is the old “infinite substitution” argument. That has been floated by cornucopians ever since the concept of peak oil was brought up. There have been hundreds of articles and books written on that subject. Richard Heinberg very well in the fourth chapter of his book:
                  Won’t innovation, substitution, and efficiency keep us growing? – Conclusions

                  Have you read Gail’s latest blog?
                  Limits to Growth–At our doorstep, but not recognized?
                  Gail covers the substitution fallacy in depth in this article.

                • Dennis Coyne says:

                  Hi Ron,

                  Heinberg’s piece was mostly a critique of Julian Simon.

                  For example Heinberg says,

                  “How can resources be infinite on a small planet such as ours? Easy, said Simon. Just as there are infinitely many points on a one-inch line segment, so too there are infinitely many lines of division separating copper from non-copper, or oil from non-oil, or coal from non-coal in the Earth. Therefore, we cannot reliably quantify how much copper, oil, coal, or neodymium or gold there really is in the world. If we can’t measure how much we have of these materials, that means the amounts are not finite—thus they are infinite.”

                  If my comments have lead you to believe that my views agree with Simon’s, I have done a very poor job of communicating.

                  Gail’s view that a financial collapse is imminent I disagree with. The current lack of economic growth is a failure of government policy.

                  Gail also consistently assumes that correlation indicates causation and there is an association between oil use and economic activity, but the causation is likely the reverse of what Gail asserts.
                  See chart below from Gail’s blog which is supposed to show us that the lower Oil use in the US, Europe and Japan has caused slow growth rather than the reverse which is more likely in my opinion.

                • “Heinberg’s piece was mostly a critique of Julian Simon.”

                  No it was not. Apparently you only read the introduction on Resilience.org. There are five links on that page from which the entire fourth chapter can be read. Simon was not mentioned even once in that entire fourth chapter. His name only appears in that Resilience.org introduction to the chapter.

                  I fully realize that you don’t agree with Simon on infinite substitution of things like copper. It is only energy, or more particularly oil, where you believe there is no problem with substitution.

                  I think you misunderstand Gail’t graph and comments. It is not just lower oil use but also, perhaps mostly, the high price of oil that is causing the slow growth.

                  ” The current lack of economic growth is a failure of government policy.”

                  Yeah, almost every country in the OECD has a failure of government. Funny that the vast majority of them had such great governments before oil prices went through the roof.

                • Dennis Coyne says:

                  Hi Ron,

                  I guess I was fooled by,

                  “This article is the summary of Chapter 4 of Richard Heinberg’s new book ‘The End of Growth’…”

                  Are the prices of oil lower in the developing countries? There may be a few OPEC countries where this is the case, but I think the answer is mostly no. So it is not the price, it is the use of oil, and the lower use of oil is because the economies have performed poorly.

                  The financial crisis has required good government policy to get the economy out of the recession. Before the financial crisis the governments were still pretty bad, no action was really needed in that case to steer the ship of state.

                  In part 1 of Chapter 4 (from the links) we have,

                  “Economic theory is adamant on the point: as a resource becomes scarce, its price will rise until some other resource that can serve the same need becomes cheaper by comparison. That the replacement will prove superior is not required by theory.

                  Well, there certainly are substitutes for oil, but it’s difficult to see any of them as superior—or even equivalent—from a practical, economic point of view.[1]”

                  He goes on to talk about biofuels, which I agree will not help much, except perhaps for very limited air transport. Then he talks about electric and hybrid cars which do not have as much utility as oil powered (gasoline and diesel)vehicles.

                  No mention of rail, light rail and so forth. I agree that it will be difficult to substitute for oil, it is not clear that it leads to the end of growth, perhaps a slowdown in growth. Again less oil makes things more difficult, over time, say 20 years the economy can adjust

                  Consumers will decide whether battery and hybrid vehicles have enough utility to purchase them, if oil prices are very high, and I think in 10 years time they will indeed be quite high (maybe $175/barrel in 2013$) and those who can purchase a new car will be more likely to choose a hybrid or BEV.

                  I also think that growth must end eventually, I think likely to be at least 50 to 75 years into the future. I am not referring to the ups and downs of business cycles, these will continue of course and the oil decline will result in a severe downturn, I mean a permanent end to economic growth which a some point will be dictated by physics.

                • Dennis, we are going to have to agree to disagree on this one. But just a few parting comments.

                  I don’t think you understand the logistics of converting from liquid fuel to electricity for transportation and farming. It would involve massive investment by the public in vehicles and equipment. Charging stations would have to be built with massive amounts of parking at each station because it would take each car time to charge, one hour perhaps.

                  And the grid would have to produce at least twice as much electricity, likely more. That is a lot of power plants. And eventually they would all have to be powered by solar, wind or nuclear. And there are serious problems with nuclear.

                  And electrical storage is a problem that no one has solved yet. Batteries, not a chance.

                  And there are no electric planes and very likely never will be.

                  Growth will end within one decade. You can bet on it.

  39. Old farmer mac says:

    Some of the following may be redundant but I have had some problems getting comments posted recently due to a poorly functioning internet connection so I’m posting this copy of some rough notes for a long essay I hope to publish in considerable detail someday.

    Wind supplied four percent of our electricity in the states last year and there is no reason wind power cannot continue to grow substantially for years to come.Ditto solar, both technologies are getting cheaper fast.

    People who know all about the way things such as the electrical grid works are among the worst when it comes to understanding how people may react to changes in the future.

    An electrical engineer sees only the difficulties of integrating wind into the existing grid and covering that all important base load.

    But a cold storage operator faced with the fact of ever rising electricity bills can double the insulation in his next new facility and add a meter of crushed stone inside an insulated foundation as a cold sink and run the hell out of his compressors when the wind is blowing and maybe cut his four figure monthly electricity bill in half if he can buy wind power cheap when the wind is blowing. It blows sometime during most weeks most places and that’s enough for him to come out ahead by following this kind of plan.

    Homeowners and other end users such as schools can also pursue such strategies if the decline in fossil fuel supplies comes about gradually enough to allow them to realize what is happening-and for local authorities to tighten up building codes and so forth.

    I would lay a pretty good bet that Elon Musk has a set of plans buried someplace for a subcompact stripped down electric car that would get just about any commuter to and from his mcmansion in the farthest out suburbs at a price that makes it look like a world class bargain compared to giving up the mcmansion and moving into a cramped apartment near his job in the event than gasoline becomes prohibitively expensive-which is sure to happen eventually.

    He might have to farm out most of the actual construction of such a car when the time for it arrives due to a lack of adequate manufacturing capacity of his own but the technology is now off the shelf and well proven and improving noticeably from year to year even as it gets cheaper.

    Nissan could for sure build a fore and aft two seater using Leaf components slightly modified and new sheet metal that would go well over a hundred miles reliably on a single charge and sell it probably for less than twenty thousand bucks if it sells in large numbers.They could have it in showrooms inside a year if the feds were to decide that an economic crash is a bigger danger to the country than than cars that are somewhat more dangerous than an economic crash.

    The feds are apt to make such a common sense decision once the shit hits the fan, and hopefully in they will make it in time for it to do some good.

    One day within the next ten years and probably sooner people are suddenly become more afraid of an empty gas tank than they are of a dead battery.Electric cars are going to sell like ice water in hell when this happens and the assembly lines on which they are built are going to run twenty four seven while the lines set up to build hotrods and 6000 pound 4×4 beer haulers are going to be running a day a week.

    I think the odds are pretty high that peak oil will bring about a bad economic crash and that due to positive feedback loops this means the end of business as usual on a world wide basis.

    But pretty high is not one hundred percent and the crash need not bring down business as usual all over the world unless it brings about wide scale hot war between the larger and more powerful countries- which unfortunately seems to me to be altogether too likely a possibility.

    But the USA and Canada aren’t at risk of invasion for the foreseeable future unless we lose a nuclear exchange and after that, well…. I doubt that there will be any body left to invade in groups larger than can fit on some old tramp steamer that survives the bombs.

    We don’t have as many AK’s as such potential visitors are likely to have but we are nevertheless not exactly sitting ducks and I doubt many of them would last more than a few days.

    The cost of a real future war with a major power is not going to hurt us to even a small fraction of the extent that most people think it will because the munitions we will use to fight it are sunk costs.

    It hardly matters if a thousand aircraft or a hundred navy ships are shot out of the sky or sunk or scrapped because they eventually become obsolete when the chips are all on the table.

    We can worry about replacing them after the fighting is over.

    We can’t whip a full grown and well entrenched guerrilla army because we are too squeamish to just go in and kill ‘em all and let God sort ‘em out-and for that I am grateful, that my society has at least some semblance of a conscience.

    But any strategic war will be fought at long distance with strategic weapons.

    We don’t have to cross either the Atlantic or the Pacific to fight a defensive war but any enemy contemplating doing so would have that near insoluble problem to solve given our robust armed forces and the fact that the needed quantity of ocean going transport barely exists anyway.

    If we do fight a conventional war overseas any time soon against any likely opponent such as another Saddam Hussein his conventional forces are toast in a month of actual combat.

    We aren’t going to challenge the Chinese or the Indians or the Russians on the ground and there isn’t really any body else big enough and potentially powerful enough to worry about in the near or midterm.

    It’s true that the current administration doesn’t seem to have the managerial skills needed to run a carwash but that is probably mostly the consequence of knowingly trying to accomplish a literal revolution on the sly in terms of Ocare.

    If the planning for that had been done out in the open rather than in secret( mostly) in order to get it done in face of the determined opposition of the republicans the many problems would have been obvious and most of them would have been fixed before the rollout even if that meant a long delay.

    (I’m now of the opinion that the top inside leadership of the democratic party has succeeded in pulling of the revolution knowing all along just how bad the Ocare roll out would be and how bad it would hurt the party in the near term but also knowing that in the end they will emerge the big winner.Assuming the republicans don’t succeed in repealing it of course.)

    When -not if-peak oil starts taking obvious large chunks out of our collective backsides then there will be action taken in DC on the grand scale and it will be taken on a bipartisan basis and it will be taken mostly in the open. These actions may not be very welcome to most of us but they will most likely be adequate to prevent the country from descending into outright chaos.

    I could probably list a hundred ways we can save a figurative ton of oil that can be put into effect immediately. For instance the average high school these days has a parking lot with hundreds of student cars in it even though a school bus passes right in front of the houses the students live in.
    There is no tax on commercial aircraft fuel which is patently unfair to the majority of the public because most of us fly only once in a long while.
    Potatoes are very cheaply delivered in comparison to potato chips.

    A pound of chicken has less than half as much embedded fossil fuel as a pound of beef as well as being healthier.

    Painting a stripe along side the the right hand lane on a city street that is wide enough and creating a bike lane costs almost nothing other than the hot air expended in the fight to approve the painting of it.

    Given the fact that most people have smart phones these days, it must be possible for strangers to share rides without undue worry about getting robbed or raped or kidnapped by simply transmitting a picture of the involved cars and parties to an archive designated for that purpose. The insurance issues involved in such an undertaking can and will be solved legislatively when the need for such ridersharing becomes critical.

    And giving everybody, driver or not a fuel ration card, will be enough to convince enough drivers to share their cars since fuel will be rationed by that point in time.

    I’m sure that every member of this forum can come up with a long list of ways to save energy that might be inconvenient and painful but not crippling to the economy.

    We aren’t going to just run out of oil like forgetting to fill up and running out of gas and we aren’t going to run short of coal at all any time soon.

    I am not too sure about natural gas but I don’t think we have even half as much as the cornucopians think we do.

    Coal to liquids is a proven technology and we can and will keep the basic critical parts of the economy running on coal based synthetic liquids once we have no other choice.Not forever but for a few decades any way.

    Biofuels, barring some truly miraculous breakthroughs, aren’t ever going to support business as usual.

    Maybe there is a small chance that some new tech will be perfected whereby biofuels can be manufactured in some sort of industrial plant but the fundamentals of such a process look pitifully bad because the energy must be captured either from the biomass itself or from the sun and just gathering the biomaterials together is a highly energy intensive process.

    Beyond that just about all the available biomaterials have other uses and can probably be used more efficiently in other ways. Wood for instance can just be burned directly near it it’s point of origin to generate electricity and for heat on any scale from single house up to a grid scaled generating plant. Manures including humanure is likely to prove to be more valuable for fertilizer than as a feedstock for biofuels once the fecal matter is well and truly in the fan because the manufacture of fertilizer is in and of itself a very energy intensive process and manures can be applied directly to the land with the only really tough problem associated with this practice being the transportation of the manures to the fields where they can be used.

    It sounds sort of crazy but there is a possibility that pipelines will be built from cities to farms in major farming areas and partially treated sewage trucked to the fields on a grand scale at some not too distant point in time. One of my neighbors bought chicken manure so processed is this fashion by the tractor trailer load this past year and was pleased with his results .

    I used to be able to get a dump truckload directly from local poultry farms for nothing. About five or six years ago they started charging for it and now the entire amount produced is sold by contract to fertilizer manufacturers and I have a hard time getting a even a pickup truck load from somebody whose Daddy did business with my Daddy for forty years.

    If a biofuel manufacturing process depends on sunlight for energy then it seems very likely that it will be more efficient and more economical to just use the sun to generate electricity and use the juice to manufacture free hydrogen or ammonia and burn that in lieu of synthetic gasoline and or diesel.

    We sure as hxxl not ever going to grow crops on farms and produce enough biofuels in that way to provide more than a very minor fraction of the fuel needed to maintain BAU but we could given a war footing effort produce enough to keep the farms running so long as the fertilizers and pesticides arrive in bau fashion.

    None of this is to say that the rest of the world is going to survive the coming hard crash being brought on by overshoot without most of the population there perishing over the next century or so.

    What might come to pass in a century is impossible to say but there is at least a fair chance that Fortress North America will weather peak oil with out experiencing chaos on the ground although long term martial law is a very serious possibility.

    • Doug Leighton says:

      “An electrical engineer sees only the difficulties of integrating wind into the existing grid and covering that all important base load.”

      I don’t really like the implication(s) of this statement. As a retired geologist/geophysist I’ve been told “we” don’t understand the implications of what “we” are doing to the world more times that you could count. I disagree and counter that my associates are among the most environmentally aware and concerned people that exist. I’m a Canadian and I don’t think tar sands should be developed, mainly because of global warming, but if I were working on that project it would be to help get things moving in the safest most efficient way possible. I/we don’t only see this or that. I have helped find/develop resources, true. I also walk my dog in the forest every day, feed wild birds, contribute to conservation projects, even walked to “save whales” once. Please be careful with generalizations.

      • Old farmer mac says:

        Hi Doug,
        I’m afraid I’m guilty of choosing my words poorly and apologize for doing so.

        What I meant to say is that specialists in general are very frequently guilty of tunnel vision brought about due to working within their specialty and therefore all to often unable to see the future in terms of problems associated with their specialty being solved by outsiders just detouring around any given problem.

        For instance the question of how much wind can be integrated into the grid almost always draw responses from utility engineers focused on the limits imposed by current infrastructure and regulations and the supposed inability of the utilities to do things much differently than they are done today.

        This sort of tunnel vision seems to be characteristic of just about every profession and trade. Truckers can’t envision life without trucks.

        Being a farmer I honestly cannot envision our current civilization surviving without fossil fuel based industrial farming although I know that in principle it is possible that we could manage to produce enough food without fossil fuels ; but the size of the challenge is such that imo there is essentially no chance it can be met.

        In the case of the storage of energy generated by wind and solar farms the engineering community seems to be fixated on the idea that unless the utilities can solve the storage problem that wind and solar energy just can’ t be used efficiently.

        But their customers are not thinking inside the same box and can come up -given time – with ways to use intermittent juice efficiently and in a cost effective manner.

        I’m not an engineer but I do have some appreciation of the profession and can imagine being one trying to design a house and the appliances in it to take advantage of as much intermittent juice as possible because my customer expects to buy that juice at a sharp discount whenever it is available in excess of actual immediate demand.

        I’m just guessing at these numbers but I suppose for example I could double the insulation and increase the size of the storage tank of a hot water heater and add an embedded control unit that would allow it to heat up to say 160 instead of 140 when the wind is howling and save the homeowner some money.

        There must be hundreds of ways intermittent electrical energy can be used efficiently but a typical engineer told to solve the storage problem is going to spend much time on just sidestepping the problem in most cases. That’s not what management is paying him for and management is not interested in losing control of the industry the to upstart new competitors.

        My sometimes overly broad remarks are not intended to apply to individuals such as you yourself.

        The very fact that you are participating in this forum is ample proof that you are not professionally blindered like my grandfather’s mule and only able to see what is directly in front of you.

        • Doug Leighton says:

          Mac

          Of course you’re right. And I confess that some of the dumbest people I know have PhD s — beyond their narrow specialty. Sometimes I get worked up about nothing or in this case the wrong things. At least that’s what my wife says.

          Doug

    • Dennis Coyne says:

      OFM,

      Very nice essay.

      One thing that occurs to me is that you think the rest of the world will suffer, but North America will not. For the poorer areas of the world, They are already suffering and may be less dependent on international trade than the developed world (not sure this is in fact the case). For the rest of the developed world do you envision resource wars and such? It seem that countries in Europe are actually in much better shape as far as preparing for less fossil fuel availability. My understanding id that the coal resources in Canada are quite large (though undeveloped) and that if the US is unwilling to sell its coal to Europe, that they can get it if necessary from Australia and Canada when the natural gas runs short.

      Also what is meant by BAU? It seems that when one argues how things might change, people say that is just BAU, the changes that you advocate (all of which I agree with), do you consider those BAU (I don’t)? Sometimes it seems that many people see black (chaos and doom) or white (things the way they are now), all I see are shades of gray.

      • Old farmer mac says:

        I didn’t mention long term martial law for nothing. North America will certainly suffer when peak oil hits and the suffering will be widespread and lasting for sure. But things might not be nearly so bad here as most doomers expect.

        What I actually said was that we might avoid experiencing “chaos on the ground ” while mentioning long term martial law in the very same sentence as a real possibility.Chaos on the ground is in my mind widespread looting and that sort of thing right on up to something approaching warlords controlling cities and stretches of the country side and people dieing of starvation and exposure in large numbers -numbers large enough to put deep dents into local populations.

        think we might be able to keep the grid up and reasonably reliable and keep the water and sewer systems functioning -except maybe in the southwest and to keep people from starving of freezing to death and so forth. If we can manage this much life for most people in the US and Canada might be at least tolerably comfortable and secure.

        But I am not at all sure things will work out this way and am only throwing out these thoughts as a possible middle ground between hard core doomerism and happy go lucky confidence in more of the same meaning another century of life similar to the last half century or so here.

        Speaking in the broadest possible terms I think it is ok to call this scenario “business as usual” in comparing what I expect to come to pass in the parts of the world without much in the line of resources to to trade for food and fuel.Imo hot resource wars are certainties and massive unrest in impoverished countries a certainty. Famine is a certainty in many poor countries.

        Elsewhere in this thread I have said that I think the population of the world will be two billion max a century from now.That implies a short and brutally hard life for billions of people alive today and yet to be born.

        From the perspective of a typical person who pays little or no attention at all to things such as climate change and peak oil and expects life to continue on indefinitely as he knows it, meaning a new car and sending the kids to college and an occasional vacation and lots of little unappreciated little luxuries such as a ribeye steak or unneeded new clothes …..from that perspective, business an usual will soon be a fond memory in my opinion.Hamburger will be the new caviar.

        The new car will be a super subcompact with two seats fore and aft
        and the owner of it will hang onto it for dear life because the sales tax on a new car might exceed one hundred percent.

        • Dennis Coyne says:

          Hi OFM,

          Interesting. I guess I am more of an optimist than you. So you envision, it seems, a situation maybe 2 or 3 times worse than the Great depression within 20 to 30 years (maybe 50 years in your more optimistic moods).

          It seems hard to square this with other comments that you make about scaling up of wind and solar, people buying more fuel efficient and electric cars, storing energy to help with intermittency in the power grid (if wind becomes dominant), and moving sewage from the cities to the farms to deal with a nitrogen (and other ingredients, I am not a farmer) shortage when natural gas and NGL runs short. So I guess you would call yourself a soft doomer, if the chaos on the ground is your expectation(though maybe you are saying we might avoid that, lets say you think there is a 45% chance we will not see the “warlord” scenario.)

          My guess is that if we stay on a plateau in world output for 10 more years and people finally realize that a decline in liquid petroleum fuels (not including biofuels here) will soon be upon us, that social changes could happen quickly.

          Imagine for a moment that in the face of a crisis, rather than the World falling apart into a warlord environment, that societies pull together to solve the problems at hand similar to Great Britain and the United States (and some others such as Canada, Australia, and New Zealand) during World War 2.

          When the decline in liquid fuels begins there will likely be a rapid rise in oil prices and because this will be too fast for the economy to adjust to there will likely be another Great Depression and a huge amount of suffering. Possibly fuel will be rationed, though if this were done a white market for trading rations should be created or a criminal black market would spring up in its place. It is at this point that World War 3 could begin (as Watcher asserts is a virtual certainty), but if the fear of a nuclear war causes us to avert this, there could still be significant governmental and societal action to find solutions.

          It is at this point that much that would seem impossible (such as a huge ramp up in wind, solar, geothermal, HVDC transmission and other needed grid upgrades, more passenger and freight rail lines, light rail, hybrid and electric cars, fuel cells, pipelines for moving sewage to the farm, and no doubt lots of ideas that have not yet been conceived) may become possible.

          Will this be quick or easy? Absolutely not. It will likely be a 30 to 50 year process and will happen unevenly throughout the world. Possible? I think so.

          • “My guess is that if we stay on a plateau in world output for 10 more years and people finally realize that a decline in liquid petroleum fuels (not including biofuels here) will soon be upon us, that social changes could happen quickly.”

            The only thing keeping us on the current plateau is US LTO. And that is unlikely to last for more than two more years at the most.

            “pipelines for moving sewage to the farm,”

            Not very likely. That would take millions of miles of pipeline to millions of farms. And the stuff is mostly water. It would have to be distributed through the irrigation systems. Not sprinkler systems because they would be clogged very easily but flow systems. These don’t exist in most places.

            I think this is rather comical. You are dreaming up all kinds of things that are going to save the world. Nothing can possibly go wrong… go wrong… go wrong… go wrong… :-o

            • Dennis Coyne says:

              Hi Ron,

              So certain are you. Always with you it cannot be done.

              It would be interesting to hear OFM’s take on moving sewage to the farm, it was his suggestion. There are natural substances which can be used as pesticides and a huge amount of food is wasted feeding it to cattle. OFM also pointed out that chicken is a much more efficient way to produce protein.

              Again Ron you seem to think that oil, natural gas, and coal will magically disappear overnight (I know I am overstating the case, you never said that). How quickly do you envision that oil and natural gas will become so scarce that there will be none available to power tractors and produce pesticides and fertilizer?
              As prices of oil and natural gas rise to prohibitive levels, you don’t think that chemists will be able to find alternatives to petroleum as an input? The amount of the total petroleum that goes into pesticides is very small, nitrogen fertilizers can be produced using the energy intensive Haber-Bosch process, if less expensive methods cannot be found. Again as natural gas becomes more expensive much less will be used for electricity production and heating homes and most of it will be used to produce fertilizer, and if there is not enough the importance of food will mean that a solution will be found. For example the sewage could be piped to a manufacturing facility that produces fertilizer in a form appropriate to be used on the farm, when natural gas becomes expensive enough there will be a demand for such facilities and if someone can make money doing it, it will be done.

              Will it be easy no, possible yes. I would love to hear OFM’s thoughts on commercial agriculture, I agree that this must continue, but could battery powered tractors be used? How about natural ingredients to the Agro chemical industry in place of petroleum for pesticides? What about moving compost and sewage to the farm (or a fertilizer plant) from the cities and suburbs?

              Currently about 2 % of the BTU’s of petroleum refinery input in the US is used for machinery on the farm (not including irrigation which I assume can run on electric power), based on 1% of total energy (all forms 8000 Trillion BTU per month from EIA) is used in Agriculture (based on info on direct energy use from Wikipedia) not including indirect energy in fertilizer and pesticides. In fact it is less than this 2 % level because the direct energy use includes energy for pumps, cooling, and drying equipment all of which could be provided by electricity(but I do not know the proportion of these various direct energy inputs so the 2% may be close if the bulk is for tractors, combines, etc that use gasoline and diesel). How long do you think it will be before we get to under 360 kb/d input to US refineries (current input is about 18 million barrels per day)? Rockman often points out that the cliff like decline in oil output that is proposed by some people is unlikely in his view, but he doesn’t usually comment here.

            • Dennis Coyne says:

              Hi Ron,

              You are dreaming up all kinds of things that are going to save the world.

              When the world needs saving, that’s what people do, and lot’s will go wrong, there is no doubt.

              You have very little faith in society’s ability to change and for humans to learn from past mistakes. I do not share that view, but it is great nonetheless to talk about it. I know that population will peak and then decline just as you do, but I hope that we will get to 1 billion or what ever number is necessary to establish the proper balance with the ecosystem, without the catastrophe that you view as almost certain (though you never said that, I think you would give catastrophic chaos a 95 to 99% probability).
              As I said before a spike in oil prices followed by a great depression, will make people peak fossil fuel aware. At that point 6 billion people will be focused on solving the problem (probably less than that, but more than at present). I actually think its too bad that you can only envision catastrophe, it must be depressing. But hey that’s what makes life interesting, if we all agreed on everything life would be pretty boring.

              • Dennis, the only question is when the catastrophic collapse will happen. Will it happen is a lead pipe cinch. The earth, without fossil fuel, can support less than one billion people. Fossil fuel will one day no longer come out of the earth. Will that be 50, 100 or 150 years from now? I don’t know but it will come to pass.

                6 billion people will not be working on the problem. However at least 6 billion people will be rioting in the streets demanding that the government do something.

                But reading your above post you say: ” I hope that we will get to 1 billion or what ever number is necessary to establish the proper balance with the ecosystem, without the catastrophe that you view as almost certain…”

                I am very curious here. Do you really believe that the world could go from well over 7 billion people down to under 1 billion via peaceful means? I mean like family planning or something like that? Do you really believe that? Please answer that one question, that is very important.

                • Dennis Coyne says:

                  Hi Ron,

                  Do you mean do I think there will not be any war in the future? No. However I do not agree that it is certain that there will be catastrophic collapse, though you have not laid out clearly your vision, I think you mean something like 50 % unemployment (which I would call 2 times worse than the Great Depression) or maybe worse.

                  Yes I think that the world population can level off and then decrease, but only if alternatives to fossil fuels are developed and ecological limits are recognized by humans. You think that cannot happen, I disagree. If you are correct then catastrophic collapse will happen, but the conclusion depends on your premise (humans will never adjust their behavior in recognition of ecological limits, and that solar, wind, nuclear, geothermal, hydro, and tidal power along with improved energy efficiency can never replace the energy and other services provided by fossil fuels.)

            • Old farmer mac says:

              You may not see this , nor anybody else at this late date, but I will reply any way.

              I am a bit more pessimistic than Dennis because I personally think that society won’t react as quickly as he does in response to the coming troubles.

              For instance imo we will eventually get moving in a very big way on renewables and conservation but not until a lot of precious capital and lead time have been wasted.

              Never the less a country as rich in resources as this one can do things, once the government finally institutes adequate emergency measures, that seem impossible to people blindered by their knowledge of the status quo way of doing things.

              Germany for instance under Hitler was flat broke, totally busted, when he came into power during the Depression but nobody starved unless he decreed it.

              And within half a decade built the most formidable war machine in history and did so within the confines of a country desperately short of many critical natural resources.

              W hen the US gets deep enough into the fecal matter we will hopefully succeed in pulling of a similar miracle with the focus on renewable energy and conservation rather than bombs and bullets.

              Now as to whether sewage will ever be transported to farms:
              I am not predicting that this will actually happen on the grand scale but it is not such a far fetched idea as it sounds.

              First off sewage actually is mostly water and that fact in and of itself means that the water needed to transport it is a wash in terms of water supply because it is already in the system having been put there by the city water system in the form of potable water used to flush toilets.

              It is easily and routinely pumped every day in every city in the country but the pumps certainly do suck up a lot of juice.

              Cleaning up sewage is a very energy intensive process and it additionally costs quite a bit in capital intensive infrastructure, expendable chemicals, skilled workers and so forth.

              Any sewage diverted to farms will thus save the expense of treating it or at least a substantial portion of than cost ; partial treatment may prove to be necessary.

              Pipelines are expensive sure enough but on the other hand sewage disposal is pretty much a government dominated activity and the government can lay a sewage line along side a highway almost at will and nobody can say otherwise.

              Such lines do not have to go every where any more than existing pipelines and railroads go every where.

              They will extend into farm country within some workable distance of the city where they originate. There is one hxxl of a lot of farm land with in a hundred miles of a lot of cities.

              Raw sewage is nasty smelly stuff but it is a very rich source of the big three nutrients and well worth the cost of hauling it twenty or thirty miles in a specially designed truck that has large flotation tires.

              Such trucks are routinely used on a daily basis to deliver and distribute lime and fertilizers directly in the fields and have been a common sight on country roads for some years now.

              The cost of the pipeline may well be less than the cost of treating the sewage in order to discharge the water in it back into a river and any farmer close to a terminal will be willing to pay for it or at least glad to pay for the hauling of it.

              There are substitutes for oil, at least in part and in principle, and at least to a significant extent.

              There are none for N, P , and K.

              These are the fundamental chemical feedstocks of industrial agriculture and I can no more grow grains or fruits or vegetables on an industrial scale without them than I can call up a demon or an angel.

              Nor can anybody else.

              We will recycle them at some point within the next half century or we will starve.

              Half of us are eventually going to starve anyway on a world wide basis and another quarter will perish in wars or epidemics.

              But with a little luck we Yankees and Canadians can pull thru peak oil because we are still relatively rich in everything that really,really matters and we are still the meanest SOB’s around when the chips are all on the table.

              Nobody is going to cross either the Atlantic or the Pacific to invade us, at least not within the next half century or so.

              • Dennis Coyne says:

                Hi OFM,

                Thanks. So only governments in Canada and US will be able to react to this crisis, European countries, India, Japan, Korea, Brazil, Indonesia, Russia and China will all be unable to take similar actions to whatever magic happens in North America? I assume we will have forgotten how to produce medicine and medical equipment as well as all medical knowledge and that will result in epidemics? I agree war is likely, I am assuming you envision a nuclear war, in which case losing a quarter of world population may be optimistic, I am hopeful that is not the road taken.

                I am not seeing the “half starving”. Don’t you think if natural gas becomes very short in supply, that all of it will be used for fertilizer?

                You give a persuasive case for how some fertilizer needs and eventually perhaps all (though you did not say all)could be done with sewage. What about a industrial plant where sewage is shipped and converted to some kind of fertilizer product that can be shipped to farms, in much the same way that fertilizer products are currently shipped to farms? Is the NPK the main problem?
                As far as fuel for tractors, combines, and other farm equipment, pumps and cooling can be run from electricity and the liquid fuels could come from the limited liquid fuel supply, which when it runs out might be replaced with ethanol, or coal to liquids, but I am guessing that if needed the government would direct any remaining liquids to farms and military only if necessary.

                I don’t think any of these adjustments will be easy or quick, I am envisioning a process that happens over 50 years.

                When you say half of us will starve, do you mean the already impoverished many of whom are undernourished already?

          • clifman says:

            Dennis,

            Two things. First, I must presume that you’re familiar with Tom Murphy and this analysis: https://physics.ucsd.edu/do-the-math/2011/10/the-energy-trap/ But by your comments along these lines it does not appear so. I’m wondering what are your thoughts on Tom’s Energy Trap, which just makes plain ol’ common sense to me.

            Second, wrt a WWII type of response to our energy predicament – from what I have observed of history & human nature, we monkeys seem to require some ‘other’ to blame for our ills, and against whom to become motivated. The Allies did indeed do great & amazing things together during WWII – but all aimed at defeating the Axis. If/when the awakening to our declining energy comes, there will be all sorts of scapegoats offered up for sacrifice. But it just does not appear to be human nature to accept blame ourselves. To point the finger at ourselves and make the sea change required seems to be outside of our DNA.

            Along similar lines, this is why I shake my head every time someone raises the Montreal Protocol as an example of our ability to come together to solve a global environmental problem and offers it as a model for combating AGW. CFC’s played a relatively minor, specific role that could be substituted rather easily. Carbon is in everything we do, deeply & broadly, and we will not make the changes that would be required to reduce emissions and stablizie the climate.

            Put these things – the energy trap, our propensity to blame anyone but ourselves, and the degree to which the energy/climate predicament is embedded within industrial civilization – and collapse seems the only possible outcome. (And I didn’t even mention over population and the decimation of the biosphere…)

            • Dennis Coyne says:

              Hi Clifman,

              I will be brief because you are probably the only person who will see this.

              I am familiar with Dr. Murphy’s blog and the analysis you linked to and I re-read it to make sure I wasn’t missing anything. (I think his blog is great by the way.)

              Towards the end of the analysis, he shows one possible way forward, but dismisses it because society never plans ahead and always goes for the short term fix.

              I am not sure this is true of people in general, my family for example has sacrificed short term enjoyment in order to save for college and retirement, though I realize that not all people do this, a fairly large percentage of people do save some (about 75%) though many may not save enough.

              The basis of Dr. Murphy’s analysis is EROEI. The problem is very clear when framed in this way, but luckily this is not how most people view investment decisions.

              Let’s start with liquid fuels, when production starts to decline prices will rise, they will spike at first, but once people become accustomed to the notion that oil output is decreasing and will continue to do so, they will expect ever higher prices. Nobody will be looking at EROEI, only at how am I going to get from A to B at reasonable cost. There will be demand for more fuel efficient vehicles and the transition will be quicker as oil prices rise to higher levels. Similar things will happen with natural gas when it declines and coal when it starts to decline.

              Also remember that there are many people who thing that fossil fuel output will either never decline or that it will not happen for 50 years or more. When oil output begins to decline (likely between 2015 and 2030), people will begin to realize that the same will happen to natural gas and coal and the thinking about future energy prices in general will see a major shift.

              If someone builds a new home once the oil decline has begun, they may decide on a passive solar house using a ground source heat pump for example when considering future energy costs and the likely steep rise in future natural gas prices.

              For a utility company, decisions are also not made on a EROEI basis but on the NPV (net present value) of any new project considered. High expected future natural gas and coal prices would make investments in new fossil fuel power plants much less attractive than wind or (if solar costs continue to decrease) solar. EROEI does not really play into the decision and based on the conclusions that might be drawn based on Dr. Murphy’s analysis that is probably a good thing.

              I definitely am with you on the climate problem though, that is much more likely to be a problem, I personally am hoping the decline in oil begins ASAP, but I also do not like to overstate the case and claim that it will happen next year because a rise in prices may keep us on a plateau for longer than people realize.
              This is a problem in my opinion because prices may only rise slowly and nobody will see the coming crisis.

              I know I strike everyone as overly optimistic, but regarding climate change I am not optimistic, the only way we might avoid 3 to 4C of climate change is if by 2020 oil declines enough that it is clear to the majority and prices rise significantly (2% per year on average for 5 to 10 years). That would likely lead to a great depression and possibly a transition to something that approaches sustainability.

              My apologies for taking so long to respond I was busy this weekend. I also made a few changes in hopes of helping with bandwidth. I cannot do anything about the comments, I don’t have the skills, but if you do and would like to help let me know.

    • islandboy says:

      Hi Mac, as far as your paragraph “Nissan could for sure build a fore and aft two seater …[snip]. They could have it in showrooms inside a year….” goes, see:

      http://green.autoblog.com/2010/11/01/nissan-reveals-twizy-based-new-mobility-concept/

      The above story is about a vehicle based on a low cost ev, with two tandem seats that, is being manufactured and sold in Europe by Nissan’s sister company, Renault so, I would say you made a pretty safe bet!

      If you really want to keep on top of the cutting edge of green vehicle/ev technology I recommend the following two sites:

      http://insideevs.com/
      http://green.autoblog.com/

      If I had not been made aware of peak oil 7 years ago, this story at autobloggreen.com doesn’t mince words:

      http://green.autoblog.com/2014/02/05/energy-industrys-profits-stumble-easy-petroleum/

      I quote: “What’s behind this trend? While the “peak oil” theory was discredited by many analysts, the truth is that oil companies need to spend more and are still producing less oil lately. “The world’s cheap, easy-to-find reserves are basically gone; the low-hanging fruit was picked decades ago,” Businessweek’s Matthew Phillips wrote. “Not only is the new stuff harder to find, but the older stuff is running out faster and faster.”

  40. aws. says:

    Video: Peace River Tar Sands Community Impacts
    Interview with Carmen Langer

    Resident of Three Creeks, near Peace River Alberta, Carmen Langer talks about how he has lost his cattle and experienced negative health impacts due to emissions from tanks heating bitumen near his home.

    “As the Alberta government was celebrating the State Department analysis into the effects of the KeystoneXL tar sands pipeline, several Peace River residents were at a hearing talking about the tar sands emissions that they’ve been dealing with since 2011.

    Since 2011 residents have watched as their cattle got sick, then as their family members did as well.
    The main source of the problem is believed to be emissions from a Baytex tar sands facility. But Shell, Husky, Murphy Oil, and Tervita operations (some of which are also tar sands facilities) also seem to be contributing to the worrisome situation.

    The emissions have forced many in the region to pick up stakes and leave, simply abandoning their farms and dreams.

    The residents claim the emissions coming off heated bitumen tanks were causing health problems, including headaches, dizziness, and cognitive impairment — symptoms that went away when they moved away.”

    Petro-state?

  41. aws. says:

    From NOAA…

    Wunderground with details.

    • Doug Leighton says:

      AWS,

      This is scary stuff you’re coming up with, very scary stuff. Not sure if you should be getting a gold star sticker on your next report card or be shot-on-sight. Perhaps the latter would be best so we can all sleep better.

      Doug

      • aws. says:

        : )

        What ocean heating reveals about global warming

        The increase in the amount of heat in the oceans amounts to 17 x 1022 Joules over the last 30 years. That is so much energy it is equivalent to exploding a Hiroshima bomb every second in the ocean for thirty years.

        Sure is a lot of energy!

        • Dennis Coyne says:

          Another way to look at it is in W per meter squared.

          The area of the ocean is 361 million square kilometers or 361 trillion square meters (3.61 x 10^14 m^2). A Watt is Joules per second and in 30 years there are
          946,728,000 seconds (using 365.25 days per year as an approximation). So the average number of Watts being put into the ocean over these 30 years is 170,000,000,000,000,000,000,000 J divided by 946,728,000 sec or 179,565,830,000,000 W (1.79566E14W). Over the area of the ocean (area given above) this is 0.497 W per meter squared. This is big part of the ups and downs in the rate of global warming. Since 2005, the data from the Argo floats have enabled more precise tracking of ocean heat content(OHC) and over that period the rate of increase in OHC has gone up to 0.77 W per meter squared.

          Paul Pukite (aka Webhubbletelescope)discusses this at his Context Earth Blog
          (note this is math heavy but mostly algebra except the OHC analysis in a separate blog post, where differential equations are involved)
          http://contextearth.com/2014/01/25/what-missing-heat/
          From Paul’s blog:

          This analysis resolves a couple of issues. First, it explains why the land surface is warming at twice the rate of the ocean surface — in spite of the smaller than anticipated OHC rate of increase. Secondly, it explains how the “missing heat” is a confusion in how the excess thermal energy gets redistributed by latent actions due to the significant evapotranspiration mechanism at the oceans surface as shown below in Figure 2.

          Figure 2 is below.

    • Dennis Coyne says:

      I am pretty sure the data prior to 2002 or so is not very good. The part of that graph from 1960 to 2000 is likely based on data to 700m and then making some assumptions about 700m to 2000m, based on recent data and extrapolating backwards. It is the best we can do, but it seems to me that a better graph would show more clearly that this is the case. Maybe include the data to 700 m and the data for 0-2000 m and a dashed line for the extrapolated part of the 0-2000 m chart.

      Edit: I looked into this a little more and my concern above is unjustified.
      When the 0-2000m chart is compared with the 0-700m chart, they line up around 1990 (shown as the zero level on the chart that aws posted), then it is pretty easy to interprolate between 1990 and 2000 when we start getting the real data for 0-2000m. I’ll post a chart.

  42. Eduardo Martinez says:

    Peak oil world is with us now. People in European cities are driving less miles per year, cycling more. In the UK the average person uses 200 kWh of energy per day. I reckon that we can get that down by three quarters to say 50 kWh per day. We won’t do that voluntarily of course but will be driven by the price of energy. That, and the capital I’ve accumulated during our energy ascent, should see me out for the remaining 30 or 40 years of my life. No children. How can you have children when we are using all their share of oil and resources for ourselves now, leaving them in the s**t ? It’s immoral. By the way, 1kWh is enough energy to power a 40W light bulb for 24 hours.

    • canabuck says:

      Just a tad too pessimistic, I’d say. We can face the challenges of the future with confidence.
      My family will be happy to dig up the oil in Canada and sell it to the world. The jobs are good, and the life is good here. And the future will be good as well.

  43. aws. says:

    U.S. natural gas futures fall; cash rockets to record

    While March futures prices slid on Wednesday, prices for
    Thursday delivery across the country spiked, some to record
    highs, due to the cold.
    In the cash market, trades for Thursday delivery at Henry
    Hub GT-HH-IDX, the benchmark supply point in Louisiana,
    averaged $7.91 per mmBtu, according to the Intercontinental
    Exchange (ICE), the highest average price in 5-1/2 years. Henry
    Hub gas traded as high as $8.40 earlier in the day.
    In the West and Midwest, prices rose by unprecedented
    amounts as threats of production freeze-offs were also expected
    to strain supply. Gas on the Opal pipeline W-OPT-IDX in
    Wyoming reached an all-time high of $29.50, up by $21.44. Its
    previous record high was around $13, according to Reuters data.
    Prices on New York’s Transco Zone 6 pipeline E-TSCO6NY-IDX
    rose $12.74 to $21.87, while Chicago prices MC-CHICIT-IDX rose
    $18.12 to $26.73, ICE data showed.

  44. aws. says:

    EIA : Weekly Natural Gas Storage Report

    for week ending January 31, 2014 | Released: February 6, 2014 at 10:30 a.m.

  45. aws. says:

    Cochin pipeline not shut down

    Aitkin Independent Age (Minnesota), Posted: Thursday, February 6, 2014 5:00 am

    Hoisted from the comments…

    This is reporting? It’s a direct copy of a Kinder-Morgan press release for PR purposes:

    http://www.kindermorgan.com/news/0131CochinStatement.pdf

    — and in the interests of journalistic integrity it should be labeled as such.

    Still, one can extrapolate out the consequences of putting the proposed Keystone XL pipeline — and America — at the mercy of Canadian resources. The risks of striving for “energy independence” by relying on the goodness of our neighbors to the north show that with the Cochin line as well as with the Keystone fiasco, the U.S. is still dependent on another land.

    As was said over 100 years ago by a noted member of the royal empire: “Nations have no friends, only interests”. It is always prudent to look after ourselves first.

  46. aws. says:

    Pipeline operator: Don’t blame us

    By Jan Shepel, Wisconsin State Farmer, Feb. 3, 2014 | MADISON

    A pipeline company, which operates a dedicated conduit for propane from the production fields in Canada, wants the public to understand that their pipeline is open and operational — and that it is not to blame for the current propane situation.

    Kinder Morgan, the company that owns and operates the Cochin pipeline wants the public to know that it is fully operational and is in fact being underutilized.

    After Wisconsin State Farmer published a story on the propane shortage last week, we were contacted by the firm, which operates the shipping conduit for propane and other products.

    A spokeswoman, Melissa Ruiz, said the company didn’t want the story to be that the pipeline is not operational. She said they wanted to set the record straight and contradict the many mentions of the pipeline in the press.

    The Cochin pipeline is a 1,900-mile pipeline (12-inch diameter) between Fort Saskatchewan, Alberta and Windsor, Ontario with five U.S. terminals — in Carrington, ND, Benson and Mankato in MN, New Hampton, IA and Milford, IN.

    Ruiz explained that the pipeline transports propane and other products for third-party shippers-customers. With an estimated capacity of 50,000 barrels per day, it is not being contracted to its fullest capacity, she said.

    The story may have gotten started because the pipeline was down for a short time this fall.

    There was an “outage” of the Cochin pipeline, she said, from Nov. 27-Dec. 17, but it was planned and all the customers who use it were aware it would be happening. The pipeline was back in full operation on Dec. 18, she added.

    I wonder why the KM spokesperson neglected to mention this?

    The Midwest will also need to prepare for the coming reversal [2014] of Kinder Morgan’s Cochin Pipeline, which delivers HGL from Canada to the upper Midwest. Kinder Morgan plans to reverse the flow to deliver light condensate to Canada. This reversal will change supply dynamics in the Midwest.

    • aws. says:

      Reading EIA’s TWIP from a couple of week’s ago I kind of assumed that the maintenance shutdown of the Cochin pipeline had an indirect affect on propane supply into Eastern Canada. I was mistaken, seems it had a direct affect on supply.

      The Cochin pipeline is a 1,900-mile pipeline (12-inch diameter) between Fort Saskatchewan, Alberta and Windsor, Ontario

      The reversal of Cochin this year might have quite the impact on households in Eastern Canada next winter.

      If only people realized that the low EROI Tar Sands are going to suck resources to it, and away from them. The full picture will ultimately show that scraping the barrel to produce low EROI bitumen won’t bring a windfall to Canada’s citizens… more likely it will probably leave them poorer financially when all is said and done.

    • Watcher says:

      Condensate dilutes the tar sands low API oil and raises the API to refinery benign levels. There is also a regulatory benefit of border traverse (hmm, forgot the details).

      Note this also will look like “petroleum product exports”, even though it will re-enter, post dilution.

    • Dennis Coyne says:

      Hi aws,

      Are you interested in doing something along the lines of the old TOD drumbeat, maybe once or twice a week? I think if you click on my name you can get my e-mail

  47. Watcher says:

    Recent presentation from Carrizo — a shale producer.

    http://www.crzo.net/uploads/Analyst%20Day%201-28-2014%20%28MASTER%29_v5.pdf

    Page about 10 is talk of lateral spacing in the Eagleford — 500 ft reducing to 320 ft.

    Involvement in Niobara, Marcellus and Utica, see page 17.

    The seem to plan a 3 rig year in 2014 in the Eagleford and can get 20K bpd with that.

    It’s a presentation to analysts and the hype is thick.

  48. You store energy during peak periods of sun light and consume the electricity from the batteriss as you require
    24 x 7. It must be able to cover the value of your property.
    There are many people who claim to be qualified to deal with electrical abnormalities, but in reality, they would either be novices or else
    they will experiment on you in order to gain experience.

  49. Sastri Gounden says:

    Do you perhaps have the global condensate production for 2013?

  50. I was suggested this blog by my cousin. I am not sure whether
    this pot iss writte by him ass no one else know uch detailed about my difficulty.

    You’re wonderful! Thanks!

  51. I must thank you for the efforts you have put in writing this blog.

    I am hoping to see the same high-grade blog posts by you later on as well.
    In truth, your creative writing abilities has encouraged me to get my
    very own website now ;)

  52. I am extremely impressed along with your writing talents and also with the layout for your blog.
    Is that this a paid subject or did you modify it your self?
    Either way keep up the excellent high quality writing, it’s rare to look a nice blog like this one nowadays..

    Take a look at my homepage; http://ksamaraaylin.soup.io

  53. Everyone loves it when folks come together and share views.
    Great website, keep it up!

    my homepage Tome 1 : L’odyssée de l’esclave pdf

Comments are closed.