Earth's oil gauge on low? (Peak oil on mainstream media again)

[arcos]

Earth's oil gauge on low?

With oil prices hovering near record highs and OPEC saying it's out of their control, the question of whether the planet is nearing the end of its oil supply has again arisen.

<snip>

At current rates of production, there were 40.6 years of consumption covered by proven reserves in 2002, the latest data available, according to the Wall Street Journal.

The newspaper, citing the BP Statistical Review, said that in 1989, there were 44.7 years left of consumption.

" will probably happen in the next 10 to 20 years," Professor David Goodstein, a physicist at the California Institute of Technology, told CNNfn.

<snip>

http://money.cnn.com/2004/05/20/markets/oil_reserves/index.htm?cnn=yes

[hadrons]

1. remember Shell OVERESTIMATED their proven reserves by 20% ....

they can't be the only one to do so

[arcos]

2. no, actually most companies and countries do so...

that's why we have no idea how much oil the Earth actually has left.

[kurtyboy]

11. "Proven Reserves" is not a measure of how much oil remains!

I am undergraduate majoring in Political Science, Philosophy, and Economics. My eyes were opened in an Environmental Economics course this quarter--on the very first day of class.

Some history, for starters. In 1920, The USGS predicted that at (then) current rates of consumption, reserves of petroleum would be exhausted by 1934. In 1939 (when there were still lots of reserves), the Department of the Interior made a needed revision, predicting exhaustion in 1952. By 1951, Interior revised again, to 1964.

By 1970, they pegged 1990--predicted consumption was 550 billion barrels for the 18-year period, and about matched proven reserves at that time. In reality, over that period, the world consumed 600 billion barrels. But by 1990, there were 900 billion barrels in reserve. (Today, 14 years later, the reserves stand at around 1.1 trillion barrels!)

Where does all of this oil come from? Are we discovering more all of the time? Or did we just do a terrible job of estimating reserves? Neither, it turns out. In order to understand the problem, you need to understand the definitions.

TOTAL OIL RESOURCES--All Oil in the ground that we either are aware of at this time--or not.

KNOWN DEPOSITS--Oil in the ground that we are aware of at this time. A subset of TOTAL OIL RESOURCES.

UNKNOWN DEPOSITS--Oil in the ground that we are NOT aware of at this time. Another subset of TOTAL OIL RESOURCES, probably a much greater amount than KNOWN DEPOSITS. (My Econ Prof has actually developed a model to estimate this amount)

Now, the important one....

PROVEN RESERVES--Oil in the ground that can be economically extracted from KNOWN DEPOSITS, given current prices AND current costs of extraction. It is NOT how much oil there is on the planet. It is NOT how much we know about. It is NOT even the amount of recoverable oil--just the amount that can be economically pumped at today's prices using today's methods.

Knowing this definition knocks some HUGE holes in the the Peak Oil predictions. For example, the runup in prices we've seen this spring effectively adds billions of barrels of oil to the reserves because it is now economical to recover even more of the known deposits. A change in technology can have the same effect. If it were suddenly possible to economically extract oil from the Alberta Tar sands, the proven reserves would immediately DOUBLE.

Now, my professor is no conservative--in fact he's pretty damned liberal--but he rails against folks who insist that we'll meet our doom when "oil runs out". For one thing, it won't actually happen (you can never use ALL of the toothpaste from tube, or at least it's never worth the effort), and for another, most non-renewable resources have become less "scarce" over time as opposed to moreso.

I could go on with a Microeconomic definition of scarcity, but I figure I've probably said enough for now.

Kurt

[slaveplanet]

12. Finally , Some sanity

reguarding this issue ....although you still made no mention of the thousands of productive wells they've been busy capping right here in the US for the last 30 years.....CNN coming through with more scare tactics to get the sheeple trained , and keep the freepers in lockstep with the wardrums

[kurtyboy]

17. You're right, I didn't mention those wells.

This illustrates the point perfectly!

Up until the last few months, oil in those capped wells would not have been calculated in the PROVEN RESERVES. Why? Because they are not economically recoverable--OPEC and other sources could underbid the cost of extraction in West Texas or Oklahoma. But now that demand has risen, the caps may come off of the wells (there's money in 'em now), and they will once again be counted in the total PROVEN RESERVES.

I know it's a little counter-intuitive, but RESERVES fluctuate up and down with oil prices and technology changes.

Those capped wells aren't part of some great big conspiricy--but higher prices might be! Who benefits from the prices rising? All those West Texas oilmen who've been sitting on wells that don't earn a dime--now they can make some money. Who's a great big friend of West Texas Oilmen?

You do the math....

Kurt

[amandabeech]

13. I'd be more convinced on the amount of "unknown deposits" if

the prediction had come from your professor of petroleum geology.

[kurtyboy]

16. Yes, I'd also be skeptical of such a claim, but

He actually was working with a team of economists, environmentalists, and geophysicists to create the model.

I should have made that more clear.

[amandabeech]

20. To my knowledge, environmentalists and geophysicists,

however talented in their fields, are not petroleum geologists. As I understand petroleum geology, it is a specialized study of the geology of oil and gas bearing geological formations with an eye toward finding them. I doubt if environmentalists and geophysicists have had that specialized training and any useful field experience in this specialized discipline.

I've studied this Peak Oil issue for 3-4 years now, and I find myself increasingly skeptical of assertions made about oil resources, particularly the unknown variety, made by scientists in other fields, economists, journalists and politicians who are not joined or endorsed by more than one petroleum geologist.

Apparently you see the situation otherwise.

[kurtyboy]

24. I think I was unclear on another issue

My prof does not defend his position by saying that, "There's a ton of oil out there we haven't yet discovered, so everything is rosy." (I'll check to see if Petroleum Geologists were in on the work--it's likely because we live in an area somewhat dependent upon oil refining, three major producers in a fifty-mile radius)

In fact, he is quite certain that there will come a time when it is economically impossible to extract any more at current consumption levels. But he asserts, and I tend to agree, that folks who raise an elevated alarm (Some environmentalists, and others) do more harm than good for their basic causes. They are painted as Chicken Littles and shrill alarmists when their predictions fail to come about--and the important issues (like greenhouse emissions and attendant global warming) are conflated with the other Malthusian positions and discounted, resulting in little or no action on the issues.

Back to the oil. In my Prof's explanation, just the KNOWN DEPOSITS alone might account for enough petroleum to meet our consumption needs and then some--or maybe not. What he does contend is that historically, non-renewable resources have decreased in scarcity over time. This is true of gold, molybdenum, copper, bauxite, etc.---even oil.

A famous example of the decline in scarcity is the wager made between Paul Erlich and Julian Simon in 1980. Simon challenged anyone who wanted to take the bet that if they picked five non-renewable resources and spent a thousand dollars on them, he would pay the difference in cost for the same amounts of them in ten years time (adjusted for inflation). If they fell in price, the other party would pay the difference. This was a sucker bet--for Simon. The most he could possibly win was one thousand dollars--but he theoretically stood to lose an infinite amount if prices spiraled out of control.

Paul Ehrlich, the Malthusian author of "The Population Bomb", took the bet. He bought $200 worth of copper, chrome, nickel, tin and tungsten. Ten years later, he had to mail Simon a check for $576 (he lost even if the dollars had not been adjusted for inflation, by the way). Even though there was less of each of these resources left in the Earth's crust, they were still less scarce.

It comes down to this--Just because there is less of a resource, it is not necessarily less scarce in economic terms. Technology, information, and substitution are all factors that count when the determination is made by the market. If supply decreases, but demand decreases faster, a resource becomes less scarce. This will probably happen with petroleum--but maybe not.


http://www.futurist.com/futuristnews/archive/archive__new_old_economy.htm

http://www.amazon.com/exec/obidos/tg/detail/-/0891908617/103-4847579-1462223?v=glance

[bpilgrim]

25. might account for

"In my Prof's explanation, just the KNOWN DEPOSITS alone might account for enough petroleum to meet our consumption needs and then some"

in the same post...

"In fact, he is quite certain that there will come a time when it is economically impossible to extract any more at current consumption levels."

does this unnamed prof actually have ANY of his numbers published anywhere?

peace

[kurtyboy]

26. I don't know if these numbers are published yet

(didja miss the part at the end of the sentence "---or maybe not" I guess so. It changes the meaning of the first sentence in your post considerably I think.)

I suspect I am the one being unclear here, not Professor Hagen (I'm the undergrad, he's the PhD...)

But nonetheless, he is respected and published in numerous areas.

<snip>

Specialties: Environmental and Resource Economics; International Trade

Education: BA, MA, PhD

Profile: Daniel A. Hagen received his B.A., M.A. and Ph.D. degrees in economics from the University of California, Berkeley. After completing his undergraduate studies, he studied at the University of Oslo in Norway before returning to Berkeley to complete his Ph.D. His teaching and research focuses on environmental and resource economics, and on international trade. Professor Hagen has published articles on a diversity of topics, including environmental valuation, energy pricing, natural resource management, pollution abatement, and international trade. His work on the valuation of environmental amenities has been cited in numerous textbooks. Professor Hagen has received the Dean's Research Award on three occasions, and has served as a consultant to a number of public agencies, nongovernmental organizations, and private firms.

http://www.cbe.wwu.edu/PersonProfile.asp?PersonID=37

endsnip

As to the idea that there's plenty of oil to satisfy our needs going against the idea that at some point we'll not be able to economically extract any more---
These are NOT contradictory. As oil becomes less available (not necessarily less scarce, though), substitution and advanced technology will take up the slack. It's not such a difficuolt concept....

[amandabeech]

27. Petroleum geologists would point out that energy and price

are not always the same. They contend that at some point, all the easy-to-get to oil that is easily refined (uses less energy) into the products that people most want, like gasoline and diesel, will have been gotten. They claim that at some point it will take more energy (usually petroleum derived) to get the remaining oil out of the ground than you could ever get by burning it or running it through a fuel cell. They contend that when that point is reached, it will not be long before pumping ceases, because cost will follow once the businessmen figure why they are not making money anymore.

In fact, there has not been a really gigantic discovery in quite some time, particularly of high-quality oil. Prudhoe Bay may have been the last and it was discovered in the '70s. The recent hullabaloo over the Caspian was premature: there is much, much less oil than originally thought, and it is heavy and loaded with sulfur, which takes a lot of energy to refine.

The only relatively new thing in tertiary recovery technique is the use of carbon dioxide to coax more oil out of a dieing well, but the technique is not suitable for use everywhere and requires that the oil be relatively light, at least 33 degrees API, which covers some middle eastern oil, particularly Iraq and some Saudi light. Nigeria and the U.S. also have some nice light oil that might be used. There also must be a source of carbon dioxide energetically or economically available, which isn't the case right now in many places.

I think that oil for transportation is going to be difficult to replace because it transports and stores very easily, and packs a lot of energy into a small volume.

Hydrogen has all kinds of storage and transportation problems, and that's after you solve the problem of from what substance and with what energy you liberate those hydrogen atoms. It is also not particularly energy dense.

Ethanol is also less energy dense than gasoline or diesel, but it can be transported and stored better than hydrogen. However, it is now derived from agricultural crops which require lots of diesel and natural gas-based fertilizer to grow--yielding little net energy. Same for biodiesel. Non-hydrocarbon-based agriculture is unlikely to produce enough extra crops and biomass to fuel us as well as feed us, and at some point we're going to be forced to take better care of our soil, which means animal manure and anything that can be composted will be out.

Of course, we may end up driving electric cars and riding in high-speed electric trains, if someone can come up with a great way of generating lots of electricity from essentially renewable resources. Wind and solar are great, but they're not enough. Fusion anyone?

You give the example of Erlich and Simon's bet from the '70s on a few metals. Recently, the prices of many commodities have gone up reflecting the frenzied pace of development in China, India and many other places in the world, but we haven't run out, and substitutes have arisen for some of the commodities. Perhaps there are enough of many substances on the earth to last indefinitely, with recycling. I hope that your example of Erlich and Simon will hold for oil, but I won't be resting easy until a few more Saudi Arabias are found or a real substitute is developed.

Global warming is a serious threat and we must do what we can to avoid it. One way to avoid it would be to come up with a viable substitute for oil as a transportation fuel and a renewable way to generate lots and lots of electricity, which will probably a large part of the answer. The two issues are in a way intertwined. You solve one and you will probably solve the other. I prefer to view them as equally important.

[kurtyboy]

28. You have some strong points

But I have to take exception to the idea that energy and price are not the same. Maybe they are not, but price is all that matters---energy will be reflected in price. If it becomes too costly in terms of energy to extract a given resource, it de facto becomes too costly in terms of price--period. In the end, they are the same.

We don't necessarily need really big discoveries of petroleum--we may need really big discoveries in forms of production--OR WE MAY NEED REALLY BIG DISCOVERIES IN SUBSTITUTES. In any event, we end up prospering because the economy keeps expanding. I know that the facts you submit about the substitutes are true at this time, but they may not be true in the future.

More energy may get liberated from hydrogen than we can currently expect, genetic engineering might create agriculture that is twenty times more efficient, and yes, fusion may yet be possible. You don't know and I don't know--but the trends of two hundred years of industrialization point in one direction--I'm willing to bet on them (and beat Ehrlich yet again...)

Finally, it is interesting to note that Ehrlich did NOT choose petroleum to bet upon among his non-renewable resources index in 1980-90 (He could have...). He thought that the metals he chose would almost certainly be MORE scarce in a decade (but oil was not so sure), and he was dead wrong. When Simon offered the same bet for the decade ending in 2000, Ehrlich declined. Perhaps he had gained a new understanding of how technology can overcome scarcity---or maybe not.

[amandabeech]

31. I think that we'll have to agree to disagree, kurtyboy.

Obviously, I have less confidence in economic theory than you. In fact, my confidence is considerably less now than it was back in the '70s. Yes, substitution does occur. But not always. And sometimes new uses arise for commodities thought to be obsolete.
I think that Ehrlich was wrong not because of the reasons you state, but because he may have made the bet centuries too soon; provided, however, that a non-oil transportation system will be set up.

Nevertheless, we can both agree that the time to really press on substitutes for oil, gas and coal is here: for you, it's for global warming, and for me, it's that and depleting hydrocarbons.

[kurtyboy]

29. One more reply--about global warming

You're dead-on on this. It is intertwined with our dependence on petroleum, and it is far more important than that dependence. If we cannot create an industrial solution to lessen our greenhouse gas emissions, we will perish. Forget the oil limitations---

We need to address greenhouse gas emissions---methane and CO2, to be specific. They'll cause civilization's (such as it is...) demise long before we run out of petrol.

[amazona]

15. thanks kurt

I've been trying to calm down some of the panic but without much success. I've been hearing "the sky is falling" for at least 30 years, and I get to a point where I'm just speechless from repeating myself. I'm tempted to print copies of your excellent explanation and pass them out whenever the "peak oil" hysteria cranks up in my circle.

I used to work at an oil company where a geophysicist was famous for retiring early in 1960. Reason he gave for quitting -- All the oil and gas have already been found.

[bpilgrim]

18. which is irrelevant

since as you state in your piece it is IMPOSSIBLE to extract it all...

and your mischaracterization of the problem 'we'll meet our doom when "oil runs out".' leads me to believe that you don't actually 'get' the issue... it's when we get to the HALF-WAY point of PRODUCTION, which we WILL as a matter of FACT, even if the planet was made of oil we would certainly hit PEAK and from then on out it is going to be BAD for OUR WAY OF LIFE and the rest of the world since we are literally HOOKED.

are you aware that prior national energy PEAKS have been predicted and HIT and haven't recovered no matter all the other vars you care to factor into the equation?

well... there should be no denying that we are certainly showing signs of it and plain foolish to pretend like this isn't an issue folks shouldn't be very concerned about, imho.

peace

[Zhade]

30. Um, I think you may be mistaken. Or perhaps your professor is.

For example, the runup in prices we've seen this spring effectively adds billions of barrels of oil to the reserves because it is now economical to recover even more of the known deposits. A change in technology can have the same effect. If it were suddenly possible to economically extract oil from the Alberta Tar sands, the proven reserves would immediately DOUBLE.

It has nothing to do with the economics of what humans refer to as 'money'.

It has EVERYTHING to do with the economics of energy.

The peak of recoverability refers to how much energy - not money in all its arbitrary human-issued forms - it takes to extract the oil before the point of diminishing returns is reached.

As oil deposits dwindle, it becomes more and more costly energy-wise to extract the oil. At a finite point it becomes more labor-intensive, and more expensive in terms of energy expended, to take the oil out of the ground than you will get out of the oil being extracted.

THAT'S what Peak Oil is about. Your post is, I believe, an inaccurate portrayal of the concept. I don't think this is malicious or indeed even intentional on your part - but I do think you're very mistaken.

[rustydad]

33. Good points.....but

There are several other factors that are important. True when oil becomes more expensive (or of more economic value) there are new opportunities to extract previously un-economic oil such as tar sands or shale or deep water. On the other hand one must calculate the energy returned on the energy invested. Middle East oil has a great return, something like 10 to one or more. On the other hand tar sands requires a huge investment in energy just to get it to the refinery, something on the order of one unit of energy invested to get two units for use. Most of the energy used to extract the oil from the sand is natural gas. Natural gas prices are rising as the American continent's production declines. So it's not the dollar value that counts but rather the EROEI.

Second is that peak oil extraction is a non issue. The issue is extraction vs demand. When demand exceeds extraction all economic hell is likely the break loose. Can the USA with it's huge and growing imbalance of payments deficet compete with Asia and it's huge surpluses of dollars? Methinks not. So when the bidding wars start how long before the bullets and bombs wars start? If we go the way of a big war in the ME against the Tigers and India and China we are doomed. Bob

[htuttle]

3. There are a number of misleading statements in that piece

For example:

"At current rates of production, there were 40.6 years of consumption covered by proven reserves in 2002, the latest data available, according to the Wall Street Journal."

First of all, 'At current rates of production': It doesn't mention the rate of CONSUMPTION does it? Oil consumption is rising dramatically. China and India (and the developing world) sort of plan on improving their standard of living over the next few decades. This requires higher oil consumption. That will mean the oil 'runs out' much quicker. This is elementary.

'40.6 years of consumption covered by proven reserves in 2002'
This is a good one. Remember what Shell had to admit this year? Much of their proven reserves were not so proven. By a large factor. I'm not sure anyone can really say what the world's TRUE proven reserves are at this point, given the profit-motivated exaggerations of them by all parties involved.

Finally, and others have repeated this on DU as well, it makes NO real difference when the oil RUNS OUT. What matters is how much they can pump each day, compared to how much people want to burn each day. When the daily demand exceeds daily supply, prices skyrocket. It doesn't matter how long they can continue 'current levels of production' if levels of demand rise. Prices will skyrocket. Finally, as an oil field gets older, it costs more to extract the oil that's left (via water injection, etc...). That means that while there is still oil 'left', it may not be very cost-effective to extract it -- unless prices rise high enough to make it worthwhile.

It serves NO ONE but the short term profits of oil companies to pretend that we don't need to find other solutions. The longer the planet waits to deal with this, the more millions that will die as a result of ignoring it.

[gbwarming]

9. Exactly right - but energy cost of extraction is the end point, not $ cost

There will always be extractable oil left in the ground. At the point it takes more energy to extract a barrel of oil from any particular will than you get by using that barrel there is no point in extracting it no matter what price you can sell it for.

[amandabeech]

21. In a depleting reservoir, the amount that can be pumped each

day declines. Check out the daily production curve from Prudhole Bay. That means that daily oil production over a period of 40 years will not be the same each day and then fall off a cliff. Instead, you will be more each day at the beginning and less each day thereafter until it either takes more energy to get the oil out that you will get when you use it, or the oil is being used for a purpose other than to supply energy, so you don't exactly care how much energy you use in getting it out of the ground. An example of this would be in prescription pharmaceutical production, in which oil really might be the best or only source of a particular hydrocarbon.

At any rate, after 40 years of pumping, you will probably see much less oil each day, but you will still see some coming out of the ground, say 10 years later, but maybe not enough to improve what may then be a very different way of life if we have not then found a way to transport ourselves and products without oil to a degree that makes life bearable and perhaps survivable.

[BlueStateGirl]

4. Check out June's National Geographic. Cover story is

" The End of Cheap Oil."

I looked for the story online but can't find it.

[arcos]

5. here it is...

http://magma.nationalgeographic.com/ngm/0406/feature5/

[NewYorkerfromMass]

6. World daily consumption is 80 million barrels

but that grows thanks to the development of China et al.
The SPR holds 700 million barrels- a mere 90 day supply for the U.S.
The field ballyhooed in this article holds a mere billion barrels- not even a year's worth of oil for just the U.S. alone.
I think we're fucked.

[Petrodollar Warfare]

7. The key is when the gas gauge/curve is *50%* or Peak Oil....

...that is the issue. The world will never run out of oil, but it *is* running out of *cheap oil* - and therein lies the dilemma. Hubbert's curve re Peak Oil is a bell-shaped curve, and it is the 50% mark, or just past the 50% mark in which the laws of physics begin to clash with the laws of economics. Demand increases, but supply decreases in an irreversable manner, with no substitute for hydrocarbons that run 95% of the world's transporation system. It's the glue that holds together the global economy. BTW, I predict physics will prevail...but in the meantime I recommend a study of EROEI vs. ROI...as the former is what most folks don't understand about energy.

[NewYorkerfromMass]

10. Yep. You will pay a lot for it from now on.

starting very soon.

[IronLionZion]

8. We need to step uo research in alternative energy

And George Bush is not the one to do it. bastard

We won't know what's good unless we research it. The records from Carter's research was destroyed by Ray Gun and Clinton didn't see the need. It's up to Kerry to fix this mess.

Kerry is pushing for more ethanol and biodiesel use. And definitely invent new stuff.

from johnkerry.com :

John Kerry has outlined a comprehensive energy plan that will tap America’s initiative and ingenuity to strengthen our national security, grow our economy, and protect our environment. Kerry’s plan will increase and enhance domestic energy sources and provide incentives to help Americans use energy more cleanly and efficiently. When sixty-five percent of the world’s oil reserves lie beneath the Persian Gulf states and only 3 percent lie beneath America, we cannot drill our way to independence. We can, however, develop and deploy clean energy technologies that will make us more efficient and allow us to capitalize on domestic and renewable sources of energy. John Kerry’s plan for a renewable energy trust fund to invest in the development of renewable energy will reduce our oil dependence by more than 2 million barrels of oil a day – about the same amount we import from the Persian Gulf. Kerry’s plan will also create 500,000 new jobs over the next decade and work toward producing 20 percent of US energy from renewable fuels by 2020.

[Dogmudgeon]

14. EROEI

Learn that acronym --

EROEI

Energy Returned On Energy Invested.

It's jargon for "how much we put in compared to how much we get back".

We've only used about 35% of the total terrestrial oil (10% if you factor in super-viscous oils like shale oil and tar sands), but we're getting close to the point where the EROEI starts dropping like a stone.

No matter how efficient our methods of oil extraction get, we'll always be working against the force of gravity -- so once the pressurization behind any oil field is gone, we literally have to use anti-gravity to bring the oil up. Soon enough, the amount of energy needed to overcome gravity will exceed the energy within the oil itself.

Improvements in technology will help, and will buy us a little time, but the investment/return ratio will change asymptotically -- very fast. Within as few as 20 years, recovering oil will be a losing proposition, and it will be done mainly to supply military vehicles; otherwise, most of the petroleum will go into plastics manufacture.

We've known about this since the late 1950s -- M. King Hubbert wasn't some bit-part player in a back office, he was the chief petrologist at Shell Oil for years and years. His warnings were the equivalent of someone like Stephen Hawking telling us that the Sun was going to change its brightness, or that gravity would suddenly jump by 40%.

It won't be the end of the world. I have no doubt we'll survive the social and economic rearrangements that we will face. But after wasting 30 years of lead time, I can't help but think we'll be kicking ourselves very soon.

--bkl

[slaveplanet]

19. translation

//It won't be the end of the world. I have no doubt we'll survive the social and economic rearrangements that we will face. But after wasting 30 years of lead time, I can't help but think we'll be kicking ourselves very soon.//

Not the end of the world ..But peak oil will be the reason for the genocide of approx 75% of the worlds population...leaving a small Master class a large slave class(small by todays standard) governed by an enormous police state, and a permanent elimination of the middle class... this IS their solution to peak oil whether they spell it out for you or not

[Massacure]

22. I don't see genocide coming from it.

As oil prices increase, alternative energies get more competitive, and will replace oil usage, droping the price of oil down again. I don't see oil being depleted fast enough so that alternative energy cannot keep up with it.

Maybe if we are lucky, oil will become scarce enough that Bush and Cheney lose all their oil fortunes and we will be able to lynch em. :evilgrin:

[Geo55]

23. An interesting read

http://www.museletter.com/archive/110.html

[Petrodollar Warfare]

32. wow..."A LETTER FROM THE FUTURE"..powerful stuff

I'm glad you posted that link. I have read Richard Heinberg's book "THe Party's Over," but I had not read this "Letter from the Future." Really important concepts here, and here's a snippet...


"With the exhaustion of fossil fuels, no technology could have maintained the way of life that people had gotten used to. But it took quite a while for many to realize that. Their pathetic faith in technology turned out to be almost religious in character, as though their gadgets were votive objects connecting them with an invisible but omnipotent god capable of overturning the laws of thermodynamics.

Naturally, some of the first effects of the energy shortages showed up as economic recessions, followed by an endless depression. The economists had been operating on the basis of their own religion - an absolute, unshakable faith in the Market-as-God; in supply-and-demand. They figured that if oil started to run out, the price would rise, offering incentives for research into alternatives. But the economists never bothered to think this through. If they had, they would have realized that the revamping of society's entire energy infrastructure would take decades, while the price signal from resource shortages might come only weeks or months before some hypothetical replacement would be needed. Moreover, they should have realized that there was no substitute for basic energy resources.

The economists could think only in terms of money; basic necessities like water and energy only showed up in their calculations in terms of dollar cost, which made them functionally interchangeable with everything else that was priceable - oranges, airliners, diamonds, baseball cards, whatever. But, in the last analysis, basic resources weren't interchangeable with other economic goods at all: you couldn't drink baseball cards, no matter how big or valuable your collection, once the water ran out. Nor could you eat dollars, if nobody had food to sell. And so, after a certain point, people started to lose faith in their money. And as they did so, they realized that faith had been the only thing that made money worth anything in the first place. Currencies just collapsed - first in one country, then in another. There was inflation, deflation, barter, and thievery on every imaginable scale as matters sorted themselves out.