Is the Second Great Depression Imminent? 57 comments
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The world is currently facing the most serious financial and economic crisis since the Great Depression of 1929. How have countries responded to the crisis? Well as we know it, by lending huge amounts of money through bailouts and other tax cuts. So while the current crisis was caused by excessive lending, such as the subprimes, the only answer our governments and financial elites found was lending even more and making money out of nothing.
All of these measures will have an impact on economies, no doubt on that. Before the end of 2009 an –artificial- recovery will take place. Good news you may think? Not at all…
In parallel to the recovery, global oil demand will increase next year as mentioned recently by the IEA. This is where the collapse will occur. Global oil production is about to decline, as major oil fields in Mexico and the North Sea have passed their peak… the rate of decline is staggering (check the latest IEA annual report).
Additional energies and non-conventional oils which should have been here do not exist; why? Very simple to understand, with the financial crisis and oil prices back to the low 40s, major energy investments are either cancelled or postponed (they no longer look profitable). In short, when the demand will go up, oil production will be declining; logically prices will explode. Dr. Faith Birol, IEA’s Chief-Economist, well aware of the seriousness of the situation declared on Peak Oil:
What I can tell you is that one day global conventional oil will peak… I think it is going to peak very soon. The main problem here is that the existing fields, many mature fields, are declining.
While you may have found this explanation shaky or over-pessimistic, as early as 2005 the geologist Dr. Colin Campbell (founder of the Association for the Study of Peak Oil-ASPO) declared:
Expansion becomes impossible without abundant cheap energy. So I think that the debt of the world is going bad. That speaks of a financial crisis, unseen, probably equalling the Great Depression of 1930; it’s probable we face the Second Great Depression. It would be a chain reaction, one bank would fail, and another one would fail, industries will close…
What is commonly known as Peak Oil, a decline in global oil production is about to happen: you can ignore it, fight it, but to be sure, you will not escape from it. I will not enter into the details of the Peak Oil debate, an endless one. Nevertheless, here are statements on Peak Oil held by some of the most authoritative groups:
Peak oil is at hand with low availability growth for the next 5 to 10 years. Once worldwide petroleum production peaks, geopolitics and market economics will result in even more significant price increases and security risks. To guess where this is all going to take us is would be too speculative.
The end-of-the-fossil-hydrocarbons scenario is not a doom-and-gloom picture painted by pessimistic end-of-the-world prophets, but a view of scarcity in the coming years and decades that must be taken seriously.
Deutsche Bank (December, 2004)
More recently, a British Industry Taskforce (e.g. Shell (RDS.A), Yahoo (YHOO), Virgin, and Solarcentury) conducted a vast study on oil production. They concluded that, “peak oil is more of an immediate threat to the economy and people’s lives than climate change, grave as that threat is too” and added “the risks to UK society from peak oil are far greater than those that tend to occupy the Government’s risk-thinking, including terrorism” before asking the government to urgently take action.
Here is the “recipe” for the greatest disaster ever. What cheap and abundant oil created, Peak Oil will destroy; our failure to invest in alternatives 10 or 20 years ago is about to fall on us. Michael Meacher, a former British Environment Minister and current Labour MP similarly declared on what is coming:
This is an apocalyptic scenario. In terms of industrial production, in terms of the food supply but above all in the terms of the transportation sector, we cannot continue as we now are.
Like in 1929, this Second Great Depression, caused by hyperinflation (within 3 years) will have dramatic political consequences:
As oil prices rise, it will be millions who suffer, millions of ordinary people who are just trying to get on with their lives, millions of ordinary decent people will be forced into states of anxiety, depression, fear and anger.
Voters take to new ideas, even radically new ideas when the system that they have trusted, worked with, admired and felt comfortable with falls apart.
Peak Oil may well be an important catalyst that helps us to win political power because we are the ones talking about it now.
The British National Party and its leader Nick Griffin are well aware of the seriousness of the coming crisis, yet for them it is seen as a unique opportunity. History is here to remind us that dramatic changes can happen so fast that we don’t even see them until they have happened. Nick Griffin, who is passionate about Peak Oil as one of the BNP permanent staff members told me, is also a racist, holocaust denier. Make no mistake, in a post-Peak Oil world Mr. Griffin and his look-a-likes throughout the world will do all they can to apply their heinous political agenda.
The process has started and once again Europe will face its old demons, fuelled by populism, unemployment and incompetence from mainstream leaders. As mentioned in a recent Newsweek article, un-favourable views on Jews have climbed from 20% in 2004 to 25% today in Germany, in France from 11% to 20% and in Spain from nearly 21% in 2005 to about 50% today. Yet the worst of the crisis is just a few years away and nobody seems to perceive the seriousness of the situation. In fact, the current crisis will soon be seen as no more than a gentle prelude or the “good old days”. Denis MacShane the author of the Newsweek article similarly observed that “the BNP was now the fastest growing political party in Britain”.
Wake up!
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This article has 57 comments:
Independent studies conclude that global crude oil production will now decline from 74 million barrels per day to 60 million barrels per day by 2015. During the same time, demand will increase. Oil supplies will be even tighter for the U.S. As oil producing nations consume more and more oil domestically they will export less and less. Because demand is high in China, India, the Middle East, and other oil producing nations, once global oil production begins to decline, demand will always be higher than supply. And since the U.S. represents one fourth of global oil demand, whatever oil we conserve will be consumed elsewhere. Thus, conservation in the U.S. will not slow oil depletion rates significantly.
Alternatives will not even begin to fill the gap. And most alternatives yield electric power, but we need liquid fuels for tractors/combines, 18 wheel trucks, trains, ships, and mining equipment. The independent scientists of the Energy Watch Group conclude in a 2007 report titled: “Peak Oil Could Trigger Meltdown of Society:”
"By 2020, and even more by 2030, global oil supply will be dramatically lower. This will create a supply gap which can hardly be closed by growing contributions from other fossil, nuclear or alternative energy sources in this time frame."
www.energywatchgroup.o...
With increasing costs for gasoline and diesel, along with declining taxes and declining gasoline tax revenues, states and local governments will eventually have to cut staff and curtail highway maintenance. Eventually, gasoline stations will close, and state and local highway workers won’t be able to get to work. We are facing the collapse of the highways that depend on diesel and gasoline powered trucks for bridge maintenance, culvert cleaning to avoid road washouts, snow plowing, and roadbed and surface repair. When the highways fail, so will the power grid, as highways carry the parts, large transformers, steel for pylons, and high tension cables from great distances. With the highways out, there will be no food coming from far away, and without the power grid virtually nothing modern works, including home heating, pumping of gasoline and diesel, airports, communications, and automated building systems.
This is documented in a free 48 page report that can be downloaded, website posted, distributed, and emailed: www.peakoilassociates....
I used to live in NH-USA, but moved to a sustainable place. Anyone interested in relocating to a nice, pretty, sustainable area with a good climate and good soil? Email: clifford dot wirth at yahoo dot com or give me a phone call which operates here as my old USA-NH number 603-668-4207. survivingpeakoil.blogs.../
These immigrants brought with them a conservative idiology and were never fully integrated in Western Europe. They never fully embraced Western values. Now it is too late and push comes to shove.
We will most assuredly run out of *cheap* oil within the next decade. But several things will happen to alleviate the dire circumstances you portray.
- With the concomitant high price of oil the world will find it profitable to drill in previously uneconomic locations which warehouse a large untapped reserve.
- The high price of oil will also rejuvenate the alternative fuels industry. Electricity, natural gas, hydrogen, et al will find it easy to compete when gasoline is $8+ a gallon.
- Habits and philosophies will change. Gone will be the gas-guzzling trucks, SUVs, and muscle cars. Replacing them will be super-mini bug-like pods which get up to 120 miles a gallon, as people are forced to realize they just can't afford to maintain old lifestyles and habits. These cars will be supplied by auto manufacturers that don't even exist now, as the BIG three and most foreign companies won't be able to change designs, downsize, and retool fast enough. The biggest challenge will be trying to make a profit on such a significantly smaller usage of labor and materials. New companies with new paradigms and business models will be able to do that.
Npne of this will prevent the eventual, inevitable shrinking of the world's oil supply to nothing (nothing that anyone wants to exploit). But it will postpone that occurence until it is no longer relevant.
From what I read and hear, we passed peak in 2005 or 2006 and have been living off drips of this and drabs of that. Listen to Matt Simmons and Robert Hirsch on Jim Publava's Financial Sense Newshour from this last Saturday. Hello, depletion.
I wouldn't be so quick to head to the farm and start plowing the back 40 right away..there are a few more fiscal tricks up the governments sleeve..and a wave of infrastructure projects is among them. Tax revenues for these things are only a nuisance the Fed can easily bypass...The ultimate cost...a debasement of paper currencies around the globe and that $2000+ gold that many think is the province of nutburgers...it isn't.
We Americans, and in fact the world, are in debt beyond any hope of ever repaying it. The banking system is very top heavy with debt. All attempts to avoid recession include more debt and functioning credit markets.
Those attempts are failing. Even if they succeeded, they'd jut be postponing the inevitable. Even after deleveraging, we'd soon be back in over our heads with debt.
Everyone is a credit risk right now. Banks have money but won't lend. People are losing jobs and won't borrow. Our primary means of pushing money through the economy is stalled and shows no signs of turning over. In fact, it shows signs of getting worse...feeding on itself.
The system is under too much strain. It must correct. It must collapse. I fear a depression is coming.
The US is indeed in big trouble due to debt, but you say the whole world has a debt problem.
Are we in debt to the people of Mars?
It was often said in the past when there was a lot of debt in the US that it was not a problem because "we owe it to each other". That was before there was a lot of foreign debt. Debt was primarily internal to the US. Which meant there was no "net" indebtedness for the country.
The problem today is that there is a large net indebtedness between various countries. That means that the US is in a big hole, while countries like China are in a fairly sound position financially.
The other big debt problem is that we have borrowed from the future.
------
But all that is a bit off the subject. As to peak oil, yes it is imminent and yes it will probably lead to a Great Depression. The day of people driving individual automobiles will probably soon be over.
Electric cars may possibly allow us to continue what James Kunstler refers to as the era of "happy motoring". Electric cars will be functionally inferior to internal combustion cars, however. Don't forget about that fact. Electric cars, being far more efficient, will have little or no spare energy for what have in the past been considered necessities like heating, air conditioning, and defrosting.
It’s always good to see you on the screen again. Great article mate. The current situation we are witnessing is grave beyond anything we have previously imagined. Luckily, we are slowly warming up to the reality we’ll be waking up to in a few short years.
Due to cuts in oil industry capital expenditure, the tap is becoming smaller, capping production much like a trailing stop-loss order on a short trade – the ceiling will continue getting lower. This is what I fear more than anything else as the catalyst initiating the critical chain of events transitioning us down the slope into nightmare valley.
Birol now acknowledges the peak oil reality and has even put a number to it. 2020 is in my opinion way to optimistic, as I’m sure many would agree but it’s a start. It seems ITPOES and Screbowski have hit the nail on the head, spitting out a 2013 date, at the latest. That gives us four years folks. We need to double, triple and quadruple our efforts in building momentum on proliferating the peak oil message.
Michael Pinilla
AlienWorld
I agree that the supply of oil will decline in coming years, but hopefully new technology will make up the difference. I am positive everything will be okay.
It seems you guys talking about peak oil are almost talking about "Mad Max" or "Road Warrior" like outcomes in the future that I find very very hard to envision. You may not be describing it as I just did, but you are certainly implying complete anarchy. If you believe what you are saying, I recommend you purchase a fortress somewhere in Alaska stocked with plenty of food, supplies, and weapons, because our gold and silver wont be any good when there are raging starving lunatics running through the streets killing everybody and burning everything down.
For the past 3 months the level of paranoia is increasing amongst the people posting on these comment sections. The same sort of people that believe in Aliens and Bigfoot. You know? You can see them at your local gun shows or flea markets. Paranoid, weak, uneducated cowards.
Recession?
Stagflation?
Call it what it really is: The inevitable economic and political failure of basing America's economy on consumer spending instead of something useful like manufacturing or technology or services. "Dollar Diplomacy" as the hinge pin of US foreign policy has been the sustaining rationale (perpetual excuse) for America's consumer economy for 40 years.
The solution to America's economic meltdown will unfold when we recognize that successful national economies have to be based on making something with intrinsic value, either a good or a service.
Politically, our salvation will come from no longer trying to buy friendship from hostile societies that have nothing to gain from posturing as our buddies, and recognizing that it's OK if everybody doesn't like us or approve of us.
Domestic policy will only become adaptive and functional when we recognize that some contributions are more useful and valuable than others, and that individuals differ in how useful they can be, so we can finally start cultivating and rewarding our brightest and best again and abandon our PC cultural and social relativism.
Societies that are smart and can foresee the trend will invest in light rail, encourage dense development, build renewable energy sources, and work on making agriculture less fossil fuel dependent. Their economies and standard of living will survive.
I'm afraid the US falls into the category of societies that will refuse to acknowledge reality in time. We will one day find ourselves commuting to work from exurbs 30 miles out, paying $25/gal for gasoline, driving 20 mpg cars, and wondering why our economy has been in recession for decades.
Too many people believe whatever they want to believe, or believe rapture will occur within 5 years, there's infinite oil in the Gulf, some technology will save us just in time, etc. The author may be right, when the walls of denial come crashing down, there could be a lot of anger, which as we all know is the next stage of grieving. We in the reality-based community should figure out a plan now.
Another example I can give: last summer (1 August 2008) I interviewed IEA’s former Director (long-term planning, LTO Office) a French geophysicist who used to be Director of Economic Studies at Total (one of the 6 “supermajors”), he currently works as an advisor for the French Government. At the end of the hour long interview I asked him if he was rather pessimistic. He answered me very seriously: “I think we are at the end of mankind; the only ones who will survive will be extremely educated and mobile people”, before telling me how economic growth was dependent on cheap energy. I don’t necessarily agree with that, but when we look at the facts and current developments there are no reasons to be optimistic.
While human ingenuity often surprises us, history is here to remind us that several civilisations did not escape an undesired fall; as mentioned by the historian Dr. Joseph Tainter, throughout history, the first of eleven recurrent reasons in the explanation of societal collapses, is “the depletion or cessation of a vital resource or resources on which the society depends” (The Collapse of Complex Societies, p.42). What we need is a Manhattan Project to develop alternative energies, but time is running out fast.
On Dec 15 02:18 PM Gold Barron wrote:
> So are you guys saying that when peak oil hits there will be mass
> anarchy in the streets and everybody will be poor?
>
> I agree that the supply of oil will decline in coming years, but
> hopefully new technology will make up the difference. I am positive
> everything will be okay.
>
> It seems you guys talking about peak oil are almost talking about
> "Mad Max" or "Road Warrior" like outcomes in the future that I find
> very very hard to envision. You may not be describing it as I just
> did, but you are certainly implying complete anarchy. If you believe
> what you are saying, I recommend you purchase a fortress somewhere
> in Alaska stocked with plenty of food, supplies, and weapons, because
> our gold and silver wont be any good when there are raging starving
> lunatics running through the streets killing everybody and burning
> everything down.
>
> For the past 3 months the level of paranoia is increasing amongst
> the people posting on these comment sections. The same sort of people
> that believe in Aliens and Bigfoot. You know? You can see them at
> your local gun shows or flea markets. Paranoid, weak, uneducated
> cowards.
>
>
I guess the same question applies to gold and the comming decline in the US $.
My oh my, all these opportunities and where to invest.
As far as investing I would see the clip: Colin Campbell predicts credit crunch due to peak oil 2005:
uk.youtube.com/watch?v...
In short, it is no surprise that philosophical clashes are arising again -- when times are good, bad philosophies can prosper by dovetailing and sucking off profits from the truthful, workable ones...but when things turn south, they are exposed as fraudulent!! Buffett's well-known parallel in the investment world is "you only find out who's swimming naked when the tide goes out."
We can expect to see the inherent flaws in Hegelian-Marxism up close and in full scale in the next 4 years...and should not be surprised when that leads to civil issues in the U.S.
On Dec 15 08:59 AM dieuwer wrote:
> Anti-semitism is on the rise in Europe because of the large influx
> of muslim immigrants over the last decade.
The underlying problem is still that real estate prices in London, Hong Kong, Los Angeles, Singapore, Tokyo and Las Vegas are still absurd, and buyers know it. Those markets have another 25%-40% to decline, which will lead to asset deflation, pressure on financial institutions and many unpleasant things. But high oil prices in the next 24 months won't be one of them.
But look at how powerful demand destruction is. We aren't talking about oil being 10%-20% down from the top, either. And, it may well go lower!
America has 400 years supply of oil in shales in Colorado-Utah-Wyoming, which can be retorted into oil for $30 per barrel anytime we want.
Peak oil is totally, completely wrong. There's tons of oil and gas available at the right price, which is probably $75 per barrel or more. At today's oil price the oil companies won't bother opening any new fields because there's no profit in it. Once the price goes back up we will be turning the tap on big time and there will be plenty for everyone...
What concerns me, and should concern others as well IMO, is WILL THIS ADMINISTRATION (OBAMA) seek out these available assets? I think NOT! Why? Because it will cure the "oil" problem, as you suggest, sir. They want only to MAINTAIN the problem in order to MAINTAIN POWER for the Democratic party in government. After this election, it is excruciatingly clear that the uphoria of the Obama supporters was NOT his ability to lead this country, but the HATE for the Bush administration. The people (HUNDREDS) I have talked to about why they voted for Obama replied: "he's tall, he's black, he has a nice smile, hate Bush". Puhleez. When the new administration does nothing, it will be all rigth with the masses. Watch! Too harsh? Not!
Listen to what Matthew Simmons says, he knows the energy market in the US as no one else. Why? His company, Simmons&Company (largest energy investment bank in the world) finances most energy projects in the USA. That’s why he advised Bush on energy in his 2000 electoral campaign. So if there is a problem in the energy market he knows about it.
You say there’s plenty of oil, yes there is but no longer the cheap and easy one. In addition, new projects take about 10 years to be developed (and are often not even profitable). Peak Oil is not the end of oil, but the end of cheap and abundant oil. Tell me how the economy and growth will continue once you take off the cheap energy that created the system? Unlike global warming we won’t have to wait 30 years to see it, only 3 or 5 years; I hope Peak Oil is wrong, but the consequences could be devastating. Denying the problem as you do, will only make things worst.
“When the cabin crew admits to anxiety, it is time to panic. The International Energy Agency has always brushed off claims that oil will soon dry up, adopting the tone of a nonchalant air steward guiding jittery travellers through turbulence. This morning, however, the organisation's chief economist, Fatih Birol, tells the Guardian that he expects global production will stop growing in around 2020. It is a remarkable turnaround for the IEA, which only three years ago was insisting that there was no fundamental reason why oil should not continue to grease the cogs of the global economy.” (www.guardian.co.uk/com...)
LB
On Dec 16 07:58 AM petersterling wrote:
> What a load of rubbish. All we have to do is switch to making flexi-fuel
> cars, able to run on CNG-gasoline and the problem is solved for 200
> years. America has discovered 120 years supply of natural gas in
> shales etc., recently. My company alone could provide 10% of America's
> natural gas needs from offshore North Carolina and the Bering Sea
> Deeps resources.
>
> America has 400 years supply of oil in shales in Colorado-Utah-Wyoming,
> which can be retorted into oil for $30 per barrel anytime we want.
>
>
> Peak oil is totally, completely wrong. There's tons of oil and gas
> available at the right price, which is probably $75 per barrel or
> more. At today's oil price the oil companies won't bother opening
> any new fields because there's no profit in it. Once the price goes
> back up we will be turning the tap on big time and there will be
> plenty for everyone...
On Dec 15 06:31 PM Socialism cannot compete! wrote:
> Anti-islam is on the rise because Islam is not a peaceful religion.
> Plain and simple. Anti-semitic?
Would you say that Christianity is a peaceful religion? If so, could you explain the peaceful history of Christian Europe over the last 1500 years? How many people were tortured and murdered over doctrine? Do Christians ever start wars or commit genocide? I await the inevitable revisionism or finger-pointing. It's always someone else's variety of religion that causes all the problems, isn't it?
Jews have not only embraced the western
> values...they are the *foundation* of them. America is founded on
> Judeo-Christian values, like it or not. And that has been key to
> our concepts of personal freedom (self-government by way of self-imposed
> interior order & virtue), and personal rights, including personal
> property.
For one thing, "Judeo-Christian values" change over the course of history and show differences from person to person, so it is unclear whether this often-used phrase means anything. Burning at the stake? Forced conversion and war? Old Testament rape and genocide? The Holocaust? Royalty (or as it's now known, dictatorship)?
Secondly, the religious right stands opposed to almost every freedom we have today, and always has: the rights of women, the rights of minorities, and every amendment to the bill of rights except the 2nd and 10th (and the 10th only when it suits them) including free speech, freedom from religion, secular government, prohibition against torture, prohibition against illegal search and seizure (wiretapping), etc. Many of the American colonists fled here to escape various oppressive Christianity-based theocracies in Europe.
Freedom has responsibility as its foundation. We have forgotten
> that and seek only entitlements and comforts lately...and the chickens
> have come home to roost. Alternate philosophies do not provide the
> answer -- Islam is not about freedom: women cannot go outside the
> home without a male escort in many Islamic countries, nor attend
> school. The answer is to return to belief in and practice of the
> Judeo-Christian principles that MADE this country. Any atheist who
> doesn't like this...too bad -- the truth is the truth. Atheistic
> humanism leads only to the concept of "the common good is superior
> to the individual's good"...which, in the utmost irony, devalues
> the human person...the very thing they would like to hold up as the
> ultimate. We become cogs in the machine...producers for the great
> utopian society.
In a theocracy (even theocracies where the people are allowed to vote, such as Iran), the good of the individual is not even claimed to be the priority. We become "cogs in the machine" that supports the national government/religion. Dissent, individuality, and individual freedom are crushed - every time. Europe in the era of religion-supported kings was no better than modern Saudi Arabia under their religion-supported king. Religious control of government leads to predictable consequences regardless of the religion. Humanity has been there, done that. Secular democracy creates a better standard of living under greater freedoms every time.
>
> In short, it is no surprise that philosophical clashes are arising
> again -- when times are good, bad philosophies can prosper by dovetailing
> and sucking off profits from the truthful, workable ones...but when
> things turn south, they are exposed as fraudulent!! Buffett's well-known
> parallel in the investment world is "you only find out who's swimming
> naked when the tide goes out."
>
> We can expect to see the inherent flaws in Hegelian-Marxism up close
> and in full scale in the next 4 years...and should not be surprised
> when that leads to civil issues in the U.S.
First, why should there be a link between Marxism and the humanistic moral code that says to put the interests of humans first as opposed to symbols or leaders? Did Mao put the interests of humans first? Of course not. Does democracy allow humans to make the best decisions for themselves in the most fair manner? Yes.
Secondly, I would be far more concerned about violence from religious fundamentalists than I would from a bunch of humanists. Humanists have never bombed federal buildings, strapped on suicide bombs, or gone to war with different factions of themselves. Religious fundamentalists, on the other hand, have. They also control the military and police, have most of society's weapons, surround the country's cities, have billions of dollars at their disposal, and are willing to die for their cause. True to the form of "cogs in the machine" they are still working to crush dissent for the benefit of their leaders and blur the lines between government and religion.
If Exxon thinks oil and gas is so plentiful, why are they a major investor (via Imperial Oil) in Alberta to mine oil sands and go through complicated processing to convert it to synthetic crude ?
far too much driving
far too much jet travel
far too much business travel
far too little use of teleconferencing by business
far too much commuting to and from work
far too little working from home
far too little use of mass transit
far too little use of the railroads
far too many poorly insulated homes
far too many people who are not well enough trained to do basic scientific and engineering research to try to find cheaper energy sources
far too many people
far too much war
and the list goes on
The 1920s were similar to our period in some respects but they are misunderstood. They too were a period of rapid technological expansion which completely changed social relations and working conditions.
However, in the two years, 1920 and 1921 there was a severe recession which some called a depression. It brought a 20% decline in the GDP in two years and a 10% deflation in general prices. Farm products saw a 50% deflation because of better production methods which made their products cheaper.
The "roaring" twenties lasted only from 1922 to 1929 and there were even three years of (very mild) recessions during that time in addition to the very deep two year recession at the beginning of the twenties. The stock market tripled in value. The GDP grew by 2% a year for six years, on average.
When the next deep recession hit in 1930, most people thought it would end in two or three years.
We've had inflation for fifty years in America and we can't imagine anything else. But the world is too complicated to predict the future with very much confidence. History teaches us that if it teaches anything.
Rely on reason but don't trust simple models. They are like valuable maps to help guide us through a city but they are not the city itself.
> RCA, Not so fast. That is, it takes time to drill and establish producing
> wells. Do you think they haven't been looking?
Yes, of course they have been looking. And much has been found.
Many large (if not huge) reserves have been found, but they are in places that are very uneconomic to pursue at today's prices. Some require new drilling technology, but at $200/bbl many of these start to look attractive, new technology will be developed, and drilling will commence.
There will be some latency in getting this bonanza to market, and there will be some latency in getting alternative fuels ramped up. There will be disruptions. But it will happen, and sooner than most people would (or want to) believe, peak oil will not matter anymore.
Pollyanna? No, more akin to Cassandra, who was endowed with the gift of prophecy but fated by Apollo never to be believed.
I am simply a realist who has witnessed many amazing realities that the popular "wisdom" proclaimed couldn't be done. Human ingenuity, when motivated by feasible, realistically obtainable profits and a nay-saying public always wins. The fact that there are skeptics is a tautological necessity.
> jack
Situation we're in now seems pretty analogous to the 1980s. Recession is setting in and we're quickly seeing a glut of oil with concomitant low oil prices. BUT, in the 80s there was a shed load of easy-to-recover oil lying around. Now there ain't. Man, we're burning a load more oil than we were in the 1980s just so we can keep a _world in recession _ going. Trying to make a recovery from this starting point won't work like last time.
I love the folks who reckon we can simply segue into some high-tech, alternative fuelled dreamworld when that oil stuff starts to get inconvenient. What do they think holds up the real world - the grubby, just-getting-by one inhabited billions, which supports the pampered lifestyles of those of us lucky enough to need Financial Sense - marshmallows?
Right now the US, the UK, Iceland, Spain and a load of other economies are broke or going broke. Sure these are big, grown up countries whose credit is normally good but they've borrowed a lot of money against...well, what else...the future energy they need to do work to produce *actual stuff* rather than 'service economy' vapour clouds. Except they can't afford the energy. Even at under $40 a barrel, job losses are mounting, consumption is falling, tax revenues are dropping and exchequers are emptying out. $75 a barrel is too high right now, meaning that new more production will be cancelled next year.
I'm starting to think that oil will only hit $200 or $300 a barrel in a hyper-inflationary or total dollar collapse situation, when there are Zimbabwe levels of money-printing going on. Otherwise, there doesn't seem to be enough firepower left in the OECD economies to push oil past $100 without their being suffocated.
It's not when oil is rare and precious and expensive that you need to worry about civil disorder; it's when it is cheap and relatively plentiful but the people are nevertheless unable to afford it because of the greed and short sightedness of financo-corporatist Governments over the last 25 years.
Is this the start of the long emergency? My gut feeling says there will be another price spike sooner than most people think, as the sheer size of the fiscal stimuli being applied by Governments injects some life into the patient.
On Dec 15 03:02 PM User 224899 wrote:
> Depression?
> Recession?
> Stagflation?
> Call it what it really is: The inevitable economic and political
> failure of basing America's economy on consumer spending instead
> of something useful like manufacturing or technology or services.
> "Dollar Diplomacy" as the hinge pin of US foreign policy has been
> the sustaining rationale (perpetual excuse) for America's consumer
> economy for 40 years.
>
> The solution to America's economic meltdown will unfold when we recognize
> that successful national economies have to be based on making something
> with intrinsic value, either a good or a service.
>
> Politically, our salvation will come from no longer trying to buy
> friendship from hostile societies that have nothing to gain from
> posturing as our buddies, and recognizing that it's OK if everybody
> doesn't like us or approve of us.
>
> Domestic policy will only become adaptive and functional when we
> recognize that some contributions are more useful and valuable than
> others, and that individuals differ in how useful they can be, so
> we can finally start cultivating and rewarding our brightest and
> best again and abandon our PC cultural and social relativism.
>
>
After the cold war was over in place of forming strong alliance with Russia, we chose to form alliances with Georgia, the Ukraine and Poland, and an assortment of other former states of the Soviet Union. How do these so-called alliances benefit the U.S. economically or in any other measurable way? They simply require payment of billions of dollars to prop up their weak economies and or governments. What direct benefit has the U.S. received in exchange for supporting Israel or Georgia. Now contrast any benefit received vs. the problems caused by siding with Israel and/or Georgia against such oil producing nations as Iran or Russia. I think it is high time for the U.S. government to re-evaluate and/or retool its global strategy from a big losing proposition to one where the U.S.A starts garnering the rewards it justly deserves.
We should not continue to subject the U.S. and its citizens to the scorn of the Muslim world because of our cozy and unexplainable relationship with Israel . We should not agitate the peace we have enjoyed with Russia since the end cold war by allying ourselves with Georgia over Russia. Let's hope our new administration will start thinking outside of the box and do so before it is to late. We have been operating under a losing game plan globally for a long time. Let's hope our new administration will start thinking outside of the box and do so before it is to late.
Fuel costs for all development and rebuilding projects were negligible. The opposite is true today.
Do we have a 250-year suppy of NG ? Perhaps. But we DON'T have the extraction, processing and distribution infrastructure.
You don't have to be a professional climatologist to see the storm gathering.
The children now love luxury; they have bad manners, contempt for
authority; they show disrespect for elders and love chatter in place
of exercise. Children are now tyrants, not the servants of their
households. They no longer rise when elders enter the room. They
contradict their parents, chatter before company, gobble up dainties
at the table, cross their legs, and tyrannize their teachers
Socrates 400 BC
We are living in very troubling times, but if we managed to live through tyrants such as Hitler in the not too distant past, I think we'll survive this too. Granted, it may require us to do things many have never learned (our younger generation) and the rest of us have forgotten (those old enough to remember the 60's and 70's), but frankly, a return to values will save us. I do not believe we will be reduced to rioting in the streets and carrying guns and knives for protection.
1) There will be no true "safe place on earth". You live in a smaller, warmer country you face regional dictators who see 'opportunity'.
2) Never underestimate this citizenships way of reinventing itself in America. True, we may return to a Republic called something else besides the USA but it will happen. I do believe it will be very painful but I also believe we are ending an era and entering a new one which shall be much better. The dramatic pain of child birth but a beatuiful, fragile new baby is probably the best analogy.
On Dec 15 08:37 AM Clifford J. Wirth, Ph.D. wrote:
> The global depression begins soon.
>
> Independent studies conclude that global crude oil production will
> now decline from 74 million barrels per day to 60 million barrels
> per day by 2015. During the same time, demand will increase. Oil
> supplies will be even tighter for the U.S. As oil producing nations
> consume more and more oil domestically they will export less and
> less. Because demand is high in China, India, the Middle East, and
> other oil producing nations, once global oil production begins to
> decline, demand will always be higher than supply. And since the
> U.S. represents one fourth of global oil demand, whatever oil we
> conserve will be consumed elsewhere. Thus, conservation in the U.S.
> will not slow oil depletion rates significantly.
>
> Alternatives will not even begin to fill the gap. And most alternatives
> yield electric power, but we need liquid fuels for tractors/combines,
> 18 wheel trucks, trains, ships, and mining equipment. The independent
> scientists of the Energy Watch Group conclude in a 2007 report titled:
> “Peak Oil Could Trigger Meltdown of Society:”
>
> "By 2020, and even more by 2030, global oil supply will be dramatically
> lower. This will create a supply gap which can hardly be closed by
> growing contributions from other fossil, nuclear or alternative energy
> sources in this time frame."
>
> www.energywatchgroup.o...
>
>
> With increasing costs for gasoline and diesel, along with declining
> taxes and declining gasoline tax revenues, states and local governments
> will eventually have to cut staff and curtail highway maintenance.
> Eventually, gasoline stations will close, and state and local highway
> workers won’t be able to get to work. We are facing the collapse
> of the highways that depend on diesel and gasoline powered trucks
> for bridge maintenance, culvert cleaning to avoid road washouts,
> snow plowing, and roadbed and surface repair. When the highways fail,
> so will the power grid, as highways carry the parts, large transformers,
> steel for pylons, and high tension cables from great distances. With
> the highways out, there will be no food coming from far away, and
> without the power grid virtually nothing modern works, including
> home heating, pumping of gasoline and diesel, airports, communications,
> and automated building systems.
>
> This is documented in a free 48 page report that can be downloaded,
> website posted, distributed, and emailed: www.peakoilassociates....
>
>
> I used to live in NH-USA, but moved to a sustainable place. Anyone
> interested in relocating to a nice, pretty, sustainable area with
> a good climate and good soil? Email: clifford dot wirth at yahoo
> dot com or give me a phone call which operates here as my old USA-NH
> number 603-668-4207. survivingpeakoil.blogs.../
Still life is pretty good between these assorted calamities.
You believe things you see in the media? Oh! Public education...
I want to make a slight correction to my post to make it slightly more accurate:
The American economy grew at approximately 2% ABOVE the growth of population of the six years at the end of the 1920s, which is slightly different from what I said.
I think economic growth always be reported as a percentage ABOVE population growth because we expect any economy to grow at least as much as its population growth, but unfortunately economic growth isn't always reported that way.
On Dec 16 10:58 AM Chris B wrote:
Would you say that Christianity is a peaceful religion? If so, could you explain the peaceful history of Christian Europe over the last 1500 years? How many people were tortured and murdered over doctrine? Do Christians ever start wars or commit genocide? I await the inevitable revisionism or finger-pointing. It's always someone else's variety of religion that causes all the problems, isn't it?
We cannot drill our way out of this situation.
I just don't see peak oil causing a great depression. Energy is not as big a factor in the economy as it used to be.
We were in China's position back in 1929 and look what we went through. China is at our mercy; if we quit buying they will have the depression but God knows what we will have with our chaotic economic policies.
--Fred
Take a look at www.generationaldynami... to find some reasearch on the generational issue.
--Fred
On Dec 16 03:36 PM jjc7477 wrote:
> I found this quote and I thought it really hit our issues on the
> head:
>
> The children now love luxury; they have bad manners, contempt for
>
> authority; they show disrespect for elders and love chatter in place
>
> of exercise. Children are now tyrants, not the servants of their
>
> households. They no longer rise when elders enter the room. They
>
> contradict their parents, chatter before company, gobble up dainties
>
> at the table, cross their legs, and tyrannize their teachers
>
> Socrates 400 BC
>
> We are living in very troubling times, but if we managed to live
> through tyrants such as Hitler in the not too distant past, I think
> we'll survive this too. Granted, it may require us to do things many
> have never learned (our younger generation) and the rest of us have
> forgotten (those old enough to remember the 60's and 70's), but frankly,
> a return to values will save us. I do not believe we will be reduced
> to rioting in the streets and carrying guns and knives for protection.
>
On Dec 15 11:38 AM deckx wrote:
> yawwwnnn !!! i work in the upstream O&G sector and believe me
> peak oil is way down the line..... Iove the way people who don't
> even work in the industry have such 'expert' opinions !!
Israel didn't exist as a country until 1948
Germany & Italy were dictatorships until 1945
France was in & out of dictatorships until 1870
Spain was a Fascist state until 1975
Russia is STILL a dictatorship
I also love the term "Judeo-Christian" that was all of a sudden inveneted by these nudnicks when after 200 years of burning crosses and books someone finally reveled to them Jesus was in fact a Jew.
On Dec 16 10:58 AM Chris B wrote:
>
And the last Great depression was actually renamed following the previous ones!!! Depressions are not that rare!
Is there anyone out there with their head not stuck in an inappropriate bodily orifice that can take a look at the real situation and make some sound decisions on what we should do as a country. NOT A CHANCE. The High Priests are now running the show. They aren't making sacrifices of virgins (perhaps there are none to be had) but they are sacrificing a financial system and perhaps a way of life simply on the hope that the gods will smile on us. They haven't a clue.
started blog to think of ways to combat this.
sos-newdeal.blogspot.c...
And I think it gets worse.
At some point, if we dont have massive gov't jobs program (think WPA)
and Federal writers/artists projects, then
who will own the grocery stores? the Federal government!
see ya there!