Doing the Numbers: What You Need to Know About Oil Depletion

Sharon November 1st, 2008

Some people take drink or eat chocolate when bad news strikes. I go out to the barn and milk the goats (ok, I eat chocolate too sometimes ;-)).  You see goats, (whose motto is “We’re people too, and would you mind if we came inside with you and stood on your dining room table for a bit.”) do best if you keep their routines intact (think of them as toddlers with hooves) - so no matter what is on your mind, how busy you are with other things or what kind of mood you are in, you have to go out to them.  They have to be brushed, fed, enticed to their spots, you have to lean your body against their warm one, and you must immerse yourself in the rhythym of milking.  And it is almost impossible, by the end, to be in the same place in your head that you were when you started.  They are too real, too concrete - the abstractions tend to settle down.

What on earth does this have to do with oil depletion?  Well, not much, actually - except that the last couple of days, what I’ve taken out to the barn to my two little fuzzy therapists has been the new IEA depletion rate.  And the problem I keep taking out there is this - how can I or anyone else make something as resolutely unsexy, as deeply, eye-glazingly dull-seeming as oil depletion rates, appear engaging enough to actually get people to understand how much this matters.  I thought I could do worse than starting with the cute goats ;-). 

Earlier this week, the Financial Times leaked the International Energy Agency’s figures that show the rate of decline in production of the 400 largest oilfields in the world - and they concluded that without large scale, above normal investment, the annual decline will be 9.1%.

It is hard to understand how important that number is, particularly given the situation we are in right now.  In an excellent essay on the subject, Richard Heinberg observes,

“Considering regular crude oil only, this means that 6.825 million barrels a day of new production capacity must come on line each year just to keep up with the aggregate natural decline rate in existing oilfields. That’s a new Saudi Arabia every 18 months.”

This is huge news, and it got very little media attention.  If you did read it online or in your morning newspaper, your eyes probably did glaze over a bit, unless the implications were teased out in the article. 

In order to fully understand these implications, you have to have some background about what we’ve known or suspected about oil for a while.  The first thing most articles don’t tell you is that we’re not discovering anything like enough oil to keep up with that figure.  Now I’m something of an energy geek, so I keep track of this stuff, but most of us, if we read the papers, hear about big discoveries in Brazil or the Gulf of Mexico, about offshore drilling and ANWR and think we’re pretty well set on discoveries.  In fact, that’s not true.  We’re not replacing the oil we’re extracting with new discoveries, mostly becauses we pretty well know where the oil is.  Oh, we find new barrels - but only one for every six we consume.

And the other thing you would have to know is that we’re shifting from what we might call “easy” oil - the kind that comes pumping out of the ground without too much effort, to oil that is pretty tough to extract. In some cases, our new discoveries, like the Bakken oil shale are places we knew there was energy that could theoretically be extracted, but it was so expensive, and so difficult, and so energy and water intensive that it wasn’t worth bothering.  We can talk about new discoveries, or new technologies, but it is really important to realize that when we compare a newly discovered barrel of oil with a played out field in Saudi Arabia, we aren’t necessarily comparing equivalents.  First of all, it may take a lot more energy and money to get at that oil in the first place - and that money may not be available when we want it.  When oil prices shot up to $125 barrel, some of this new oil started to look pretty good - but falling back under $70, its not so easy.  We’re already seeing new energy projects being put into mothballs due to the financial crisis.

Second, a lot of what we’ll be getting isn’t the easiest oil to use - there are multiple kinds of oil out there.  The most desirable sort is light, sweet crude.  That needs refining, but not nearly as much as heavy, dirty oils - and now we’re getting a lot more heavy, dirty oils that cost more energy to clean up, and are expensive to produce, and not that efficient.  The two kinds of oil aren’t really equivalent - think of it as though someone took your beer and replaced it with an equal volume of Tab - they are both somewhat carbonated liquids, but they don’t really produce the same results.

Now I’m unashamedly a peak oil activist.  The media is presently declaring peak oil to be a hoax, something that they were willing to consider when oil prices were high, but now that they are low, something to be dismissed.  That’s because they’ve never understood what peak oil was - no one has ever claimed we were running out of oil.  What has been claimed is that we were running out of cheap oil - the days of stable low prices and easy supplies are over.  Peak oil was never about price - yes, if we’ve passed the halfway point of extraction, prices will probably go up.  But the key word is not “expensive” but “volatile” - that is, of course if rising energy prices help tank the economy, the cost of energy that people can’t afford to buy will go down.  And they’ll probably go up again, too, just at the moment most of us find it hard to pay.  That’s pretty much common sense.  The idea that it is only peak oil if the price goes up every time is just wrong.

Now here’s what you most need to know about these numbers - I can’t speak for any other peak oil activist, but they are much higher than I expected.  And that’s really bad news.  There has been a lot of speculation over the years about what the decline rate really is, and there are a lot of smart people out there who have good and useful cases on this subject.  Matt Simmons, for example, author of _Twilight in the Desert_ and Jeffrey Brown, the creator of the Export Land Model have both been telling as many people as they can that the decline rates, for a host of reasons, are going to be higher than most people expected.  Maybe they anticipated this.  But I sure didn’t.  And I don’t think most people did. 

We’re not going to find the equivalent of a new Saudi Arabia every 18 months - most of the new discoveries you’ve heard about in the media are a long way from development.  And the biggest thing needed to keep up oil production is a lot of investment money - precisely the sort of thing that is disappearing in the credit crisis.  Peak oil folks get accused of having too bleak an outlook - but right now, I don’t think it would be inaccurate to say that most of us have actually had too rosy an outlook - we’ve been expecting a depletion rate considerably lower than that.

What about renewable energies?   Can they take up some of the slack?  Well, they could if we were building them rapidly enough - we aren’t.  And they are facing the same failures of investment capital that new oil extraction techniques are.  They need money. Not only that, they need a lot of fossil fueled energy.  That last part may sound kind of crazy - solar and wind need a lot of fossil fueled energy?  Absolutely - there’s not a plant out there making solar panels that doesn’t depend on a stable supply of oil, and certainly most of the US ones depend heavily on coal-fired electricity as well.  Getting those wind turbines set up means a whole lot of trucks using diesel fuel.  In itself, that isn’t a problem - but let’s imagine you have to replace 9% of our oil production every year with those renewables - that is, that not only is our oil production likely to see a decline, not only are we already struggling to match demand from other places, but now a large percentage of our incoming fossil fuels have to be allocated to a build out of renewable energy.  Could that be done?  Sure - it would be a lot like living in World War II, where everyone was serving a greater project, but it could be.  But it hasn’t been, and I have my doubts that it will.

Now everyone in the peak oil community has their project, and their particular niche.  Some folks chase down the data, deal with media or start up this project or that - and there’s so much to do that I personally can’t help but be grateful to everyone.  Here’s what I’ve been doing - in the simplest possible terms, I looked at the scale of the problem, and I looked at our response (not much so far), and I came, broadly, to this conclusion.  We might screw it up.  Oh, it is possible that I’m underestimating human ingenuity, and that we’ll do everything right.  On the other hand, it seemed like having some kind of contingency plan for a scenario in which we did not replace all our energy infrastructure rapidly, where we did face tight supplies, volatile prices and perhaps an economic depression, in part created by our situation was a good idea.

So that’s what I’ve been doing all along - at the same time that I nightly pray that we’ll get our act together, my own relationship to this (since the other best cure for worry, besides goats, is action) is to get as many people, and communities, neighborhoods and other groups ready to deal with less energy, less wealth, less security as possible.  And I have to say, learning that the decline rate is 9.1% makes me feel that my strategy has mostly been the right one. Because that’s a huge and shocking number - we’re already running as fast as we can to keep in place.  We can reduce our demand some (in fact, it seems that the economic situation will probably do that), and we can increase our investment as much as possible, given the constraints of our debt and resources.  But in the end, we’re probably going to have to make our transition to new energy supplies more gradually than most of us like or are prepared for.  We’re probably going to have to make do with a lot less.

The good news is that that’s not such a bad thing.  There is hope here - yes, the cheap energy is going away (whether in the form of rising prices or our simple inability to pay the bills) - but that’s not the end of the world.  Merely a vast challenge - and challenges can be met - maybe we won’t have all the energy we want, but we have the courage to live differently.  But before we can meet that challenge, we have to know what we’re facing.

Sharon

36 Responses to “Doing the Numbers: What You Need to Know About Oil Depletion”

  1. Anna Bananaon 01 Nov 2008 at 9:34 am

    Sharon, I found that Chris Martenson put together a pretty brilliant, easy to follow, fascinating summary of not only peak oil, but of the whole trifecta that we are facing now: economy, energy, environment. It’s called “The Crash Course”, and you can find it here: http://www.chrismartenson.com/crash-course Chapter 17(a, b, and c) are the ones where he explains peak oil, including information about the difference between easy oil and the more difficult oil we’re getting now, and why it’s not going to get any easier.

  2. Stephen B.on 01 Nov 2008 at 9:52 am

    I too found the 9.1% decline rate shocking. I had already seen a bunch of other numbers that Simmons and various theoildrum.com articles had mentioned, in the area of 5 to 6%, but 9.something? ….Uh oh! Now as I understand it, this IEA number is figured without any new oil coming on line, and there will be *some* of that, but I agree, we won’t begin to replace what we’re losing.

    To show how bad the worst case would be (worst being zero bbls of the existing 400 largest field output being replaced), dropping world oil production by 9.1% annually for only 5 years (.909^5) gets us to 62.1% of today’s output…..in 5 years!! Double yikes. Now, as I say, we probably will replace some declining oil, but we probably won’t come close to replacing even half, but even replacing half (giving us an approx 4.5% decline rate), we still are down to 79.2% of present capacity in 5 years. It’s still Yikes!

    Any way you cut it, when that decline starts (this year, next…or even the year after) 5 years of compounding these kinds of declines spells real oil pain and fast.

    Give the goats a hug for me……I could use some goat therapy right about now too!

    Stephen Beltramini
    Suburban MA

  3. graceon 01 Nov 2008 at 9:53 am

    “The good news is that’s not such a bad thing”.
    Yes.
    Maybe more of us can lean in and find comfort
    and pleasure being nuzzeled by a goat.
    Blessings upon Us,
    grace New Mexico

  4. karenon 01 Nov 2008 at 11:45 am

    Yup it is ugly. I *got* the high decline rates a while ago. There was a wonderful interview with Matt Simmons on EV world in Feb where he said he looked up the new papers (since the book) from the Petroleum Institute and said that when he wrote Twilight in the Desert, he *thought* they were doing these super extraction measures which create huge decline rates when he wrote the book… then he said,”now I KNOW that that is what they are doing”. This could all unravel really really fast. People have no idea what is coming.
    Karen

  5. Gracieon 01 Nov 2008 at 11:49 am

    If I remember right (and I might not) the decline rate for Cantarell was figured at about 9 percent, so I kind of had that number in mind for the rest of them, when they truly started declining. But it still hit me like a blow to the gut when I actually read it. You know, we prepare and prepare and yet when that moment comes when we see the actual figures, and then realize how many people right now think they are bogus, as a result of gas prices falling, it is truly scary. I wonder when we, as a nation and as a people truly stopped thinking. Because it has to require a nation of non-thinkers, not to see what’s going on. Scary.

    Great article, Sharon, thank you.

    Gracie

  6. WNC Observeron 01 Nov 2008 at 11:53 am

    Sharon:

    Thanks for bring up this topic. It has made for a particularly depressing week for me.

    Let me suggest this way of looking at it to really put it in perspective:

    If we were investing some money at 9.1%, using the “rule of 72″ it would take 7.9 years for your money to double. Let’s use a round number of 8 years since we are talking about estimates and predictions here.

    The same rule works the other way, too. Thus, a depletion rate of 9.1% means that ALL the oil that we are pumping today - ALL OF IT - will be cut in HALF in just EIGHT YEARS! And then, in another eight years, what is left will be cut in half again. And then again in half in another eight years, and so forth.

    Global production for conventional oil and “other liquids” is now in the range of 85-86 million barrels per day. That means that as things stand right now, if we don’t discover and develop another drop of oil, then as soon as 2016 we would be down to maybe 43 mbpd. By 2024 we would be down to maybe 22 mbpd.

    Yes, there is probably a little more oil out there to be discovered. Yes, there are some advanced technologies that can be brought to bear. Yes, there are things like oil sands and biodiesel and coal-to-liquids that can be developed.

    But can we bring 43 mbpd worth online in just EIGHT years? Can we bring 65 mbpd worth online in just SIXTEEN years? Does anyone have any idea how difficult, and especially HOW EXPENSIVE that would have to be?

    And that last question - How expensive? - is the real rub. Need I remind people that the economy and the capital markets aren’t doing particularly well right now. Given such an economy and financial markets, where is all that money going to come from?

    And here is the final kicker: Does anyone realize how long it takes for all these massive megaprojects to be planned, and to get the financing and permitting (including changing laws in some cases, like ANWR) in place, and to line up all the equipment and expertise (which is in short supply), and to actually do the work, and to build the infrastructure (which doesn’t always exist, or is rusting away and needs to be replaced) to actually get the oil to market? Well, here is a partial answer: if we were going to have any hope at all of coming anywhere close to replacing as much production that we are already set to lose due to depletion, THEN WE SHOULD HAVE ALREADY STARTED MANY OF THESE MEGAPROJECTS. There are a few megaprojects that are “in the pipeline”, but by no means is there anything even remotely close to being enough to make more than a small dent in the gap that needs to be filled.

    Bottom line: It is true, the world’s supply of oil (and “other liquids”) will be declining, and fast - far faster than even many of us who were “peak oil aware” were hoping.

    Add to this Jeffrry Brown’s thesis that exporting nations won’t maintain their export levels as they deplete, but rather will give priority to their own domestic consumption first, and it is clear that we in the US will be forced to live with NO oil imports (except for maybe just a trickle from Canada) far sooner than anyone has possibly imagined - maybe even bfore 2020 has come and gone! The politicans have been promising us “energy independence” for years, with no plan to make it happen. Well, guess what? We are going to get our “energy independence”, and it is going to happen far sooner than anyone could have imagined. It is going to be a far different “energy independence” than anyone had in mind, though, because what it is going to mean is that the US is going to be forced to live on nothing but its own energy resources. We cannot operate our economy at existing levels with those. Yes, a crash program to develop renewable energy resources would help a little, and investments in things like electrified rail transport within and between cities would also help quite a bit. Once again, however, that difficult question comes up: This will all cost a huge amount of money, how will we come up with all of it?

    Thus, I am forced to a very clear, if painful conclusion: The US is going to become a MUCH poorer country than it is now, and this is going to happen over the course of just a couple of decades. It has already started, really. Real per-capita GDP has actually been falling for years, if the bogus government propaganda statistics are adjusted to reality. I need not mention the present economic happenings. The message I hope that people take from this, though, is to forget any hopeful talk about this current downturn being short-lived. There is no recovery “just around the corner”. We’ve just taken a step down a staircase; there are more steps to follow, for it is a long way down, and no way to turn around and head back up.

    Will we, as a society, stumble and fall to the bottom? Maybe - there is a real possibility of that, but I’m not sure what any of us can do individually to prevent that. Nor do I know what one would do to “survive” such a disaster; I suspect that survival would be more a matter of luck than anything. I do know that even in such dire circumstances, total collapse is not an absolute certainty. The future is “contingent” - it is contingent upon the many different actions of many different people. Doing the right things to cope with this new reality - the types of things that Sharon has been talking about here - just might make a difference. It is worth a try.

  7. sacon 01 Nov 2008 at 12:03 pm

    I want to officially crawl back into bed and wake up in the time before I understand what peak oil (or anything for that matter) and decline actually meant. I am hustling to finish school, get moved, get a place and hunker down for the coming crisis. Yep, friends think I am nuts for buying seeds and composting and planning for economic disaster and energy crisis and I start to feel a little strange. Then a report like the IEA’s comes out and I just want to cry because there does not seem to be enough time or momentum for large scale change and I just have to keep putting one foot in front of the other.

    I need a goat.

  8. […] Casaubon’s Book » Blog Archive » Doing the Numbers: What You Need to Know About Oil Depletion Some people take drink or eat chocolate when bad news strikes. I go out to the barn and milk the goats (ok, I eat chocolate too sometimes ;-)). You see goats, (whose motto is “We’re people too, and would you mind if we came inside with you and stood on your dining room table for a bit.”) do best if you keep their routines intact (think of them as toddlers with hooves) - so no matter what is on your mind, how busy you are with other things or what kind of mood you are in, you have to go out to them. They have to be brushed, fed, enticed to their spots, you have to lean your body against their warm one, and you must immerse yourself in the rhythym of milking. And it is almost impossible, by the end, to be in the same place in your head that you were when you started. They are too real, too concrete - the abstractions tend to settle down. […]

  9. AnnaMarieon 01 Nov 2008 at 1:17 pm

    It is difficult sometimes to explain to people why you don’t drive your car except once a week. Gas has come down in price so folks ask why we don’t get out more. My knitting guild meets this winter 30 miles from home rather than 12. I have declined to attend, even with car pooling, because I have found that there is a knitting group/crafts group that meets weekly 3 blocks from my house and I will transfer my energies and go there. It’s not that my friends aren’t happy to drive me the 30 miles and back, it is that I object to traveling for two hours and 60 miles for something that I can find in my village.

    We really have to stop going so far afield for things that we might be able to cultivate in our immediate surroundings. Only by getting very local can we cut out all the consumption.

    It’s just not easy trying to explain those ideas, folks don’t want to understand. Sigh….

  10. nikaon 01 Nov 2008 at 1:26 pm

    I saw this report in my daily Peak Oil PDF from ASPO and wrote about it on my blog “Whistling past the graveyard” link - http://tinyurl.com/5osdk3 but I have to tell you, I think I have reached oversaturation with the anxiety.

    When I saw these numbers I didnt feel panic, not really (should I? Not sure yet). I felt more like “sighs - the sh*t train continues”.

    I have been burying myself in political statistics at Daily Kos and FiveThirtyEight http://tinyurl.com/5kegts and have not been stressing hugely on how overwhelming it is to grow our food - our garden turned out rather meek this year (due to my having to work full time and could not focus on the tending).

    Its important to recognize that we are at an inflection point (and that can be scary) but due to the complexity of it, we PO aware types are pretty much the only ones who are getting/preparing for the collapse (instead of living-by-the-dow)

    For me, on this chilly fall day in New England, its all about cleaning up the garden, hanging up herbs and peppers to dry. We are getting a shed ready for winter goat and llama housing and spring kidding season (and then milking 8 goats!) - these things definitely ease the spirit. Sometimes I stand in my garden or watching the goats and I try to imagine how it might feel once things have collapse well and good, will standing in the garden feel the same?

    I will leave you with links to these charming youtube videos from Hungary, Poland, Slovenia and other places where farmers STILL farm the olden ways. Look through the many video thumbnails and find videos on making cheese the old way, hand milking sheep and goats, farming, festivals, all in languages I cant understand but its all about what their hands do.

    http://www.youtube.com/user/sonidus

    Am loving this stuff.

    Oh, if I might, here is a link to my garden video this summer (not best quality) - you will see our garden, my kids, our chickens, our goats, our llama - we do not live on a farm either kids.

    http://www.humblegarden.com/2008/10/26/2008-video/

  11. Ron Bengtsonon 01 Nov 2008 at 2:56 pm

    If the USA acts soon and aggressively – with public works projects similar in size and effort as thee civilian World War II work force, we can create a bridge to the future, a transition energy source that would prevent the catastrophic economic disruption predicted by peak oil theory.

    See details of the U.S. Public Works Initiative:
    http://www.AmericanEnergyIndependence.com/publicworks.aspx

  12. toddon 01 Nov 2008 at 5:42 pm

    I would be somewhat hopeful if:

    1. people recognized and accepted that business-as-usual (BAU) is not the continued trajectory of society.
    2. people had appropriate skill sets
    3. people had appropriate equipment and tools
    4. people were adapting psychologically to a different future

    In reality, few of these things are occurring to any extent in society. Therefore, I am not hopeful and remain a doomer.

    Todd

  13. CrimsonCoconuton 01 Nov 2008 at 6:26 pm

    Hey Sharon, good post! (Frequent reader, first time commenter). However, I think its worth pointing out that while a 9.1%/year decline sounds very scary, it might not be as bad as a lot of us think.

    For one thing, this figure may not even be correct, and the IEA has said that it is not (they would know!). Now it may be close to this, but there are a few things worth noting.

    According to the report, the world will need to invest $360 billion dollars a year to slow the decline to around 6.4 percent. Even in a bad economy, that money will be found somewhere, because this is too important of a thing for the world to neglect, and the official IEA report will be out later this month for everyone to see. So, most likely, the world will somehow scrape together the money.

    Also, whatever new projects are still coming on will lessen the impact a bit more. Probably not a whole lot- let’s say 2 percent for the sake of argument, I don’t think that seems unreasonable. That gets us down to only a 4.4% depletion rate. Still nasty, but not near enough to make civilization implode.

    In addition, the rate of depletion is naturally connected to the rate of extraction, so lets say that oil producers cut their production, as the Saudis are doing now. That could shave off another point or two, so we could end up with only a 2 or 3% depletion rate.

    And finally, it’s important for us to remember that industrial society isn’t as fragile as many people like to think. In the event of an emergency, fuel will be rationed, as will goods and services, and in the US at least, we use so much energy that in crunch time we could remove oil from certain systems to others. Which would you rather have, the WalMart shut down, or the local grocery store shut down? We could cut our energy use by half or more without damaging our standard of living! And on one third of the energy we use in the US, we could still get by pretty well. That’s how much the Europeans use, after all.

    Now, I’m no expert at any of this and these are just geusses, but I think I’m at least partially right at the worst. We’re still in for hard times of course, but not the ‘end’ times.

  14. […] That IEA report with the scary annual 9.1% depletion rate has a lot of people a bit freaked out, so I thing it’s worth looking at some more. Here is Sharon Astyk’s take on it. […]

  15. Shiraon 01 Nov 2008 at 9:51 pm

    You go, Crimson. There are many, many places to cut. We are back to pre-1970’s oil spike levels of building efficiency. That’s 40% of energy wasted in commercial buildings on doing dumb stuff, like not servicing the HVAC system or leaving the lights on.

    We still have way too much embodied energy in what we eat, from out of season foods airlifted from the other side of the world to eating over processed cereal instead of oatmeal and cream of wheat.

    We have whole regional economies to rebuild. We are still zipping stuff all over the continent when we could produce it regionally.

    Shira in Bellingham, WA

  16. young snowbirdon 01 Nov 2008 at 10:16 pm

    For any of you movie buffs, recall the scene in The Graduate where Dustin Hoffman’s character is newly graduated from college and sitting by his parent’s swimming pool. An older man takes him aside and says to him the one word of wisdom that would guarantee his future career success: PLASTICS.

    Peak Oil is a boondogle for more than just transportation and shipping. We as a society don’t realize just how much of our lives contain and run on plastic and petroleum ingredients that have nothing to do with the transportation industry. Here’s a quick list of what I can think of for what is made with plastic:

    Waxes and softeners in shampoos, soaps, lotions, cleaners. Containers for just about every liquid and dry product we buy and use, machine parts, molds and dye tools for injection molds for making stuff made out of plastic like tvs, computers, small appliances, car interiors, toys.
    Baby furniture, coatings on diapers, feminine products, tools. Organizing stuff of all kinds (clothes hangers, storage boxes, paper clip holders and some paper clips!) food containers and wraps, casings and covers for medical equipment and throw away things like IV bags and tubes, blood bags, plunger parts of needles, sanitary control stuff like bedpans, and water pitchers. Water bottles large and small. Garbage cans and patio furniture. The list goes on and on and on. Can we begin to live without plastic? We will need to but WOW what a mountain THAT is!

    Without plastic, Walmart will be the first casualty.

  17. Rosaon 02 Nov 2008 at 12:00 am

    There aren’t solar plants running on solar yet because oil is still so cheap. But there will be, soon - you can build concentrated-solar partly out of turbines from an existing coal plant. And iceland needs hard currency - they have a lot of geothermal. If the demand for wind turbines got high enough, they’d be on it (and the freighters can get more than half their power from wind).

    But I’m a pollyanna about peak oil because I’m so worried about global warming- if we were really running out of all fossil fuels, I’d be pretty happy (instead, there’s still a lot of coal sitting around).

  18. Amanda Kovattanaon 02 Nov 2008 at 12:52 am

    I have been asking myself the exact same question as you pose about how to explain how important peak oil is to people and how it will change life as we know it. I gave the same explanation as you do about light crude vs tar sands, etc, etc and have been at it since ‘05. I had better luck explaining global warming pre-Al Gore.

    What I’m realizing now is that the reason people don’t get the significance of peak oil is because they don’t really understand economics. Heck even economists don’t understand economics especially the young ones who were star struck by free market ideology and the rest are so overspecialized they don’t dare venture an opinion on the whole enchilada.

    Since peak oil is the hinge pin between environmental limitations and the economy we might have to start by explaining to people how the economy works and that it is an imperfect system that can collapse. They seem to think it is something like physics and has rules that can’t be violated. None of the clients I’ve worked with this month seem to realize how bad this is and they are not going to listen to me because I’m not a designated financial expert and I dare not offer any comment at all. Which is why I’m going to start watching that 3 hour Chris Martenson presentation soon.

    We (especially in California) are so smart about human psychology; we are well versed in every nuance of relationship dynamics, identity politics, non-violent communication et al and even how societal systems work and what happens to rats when they are overcrowded as a model for what humans will do. I wish people were so well versed in different economic systems just so they could see that there was one and understand how things will change dramatically when peak oil is thrown into the equation.

    I tried to explain this to my mother (a retired therapist) who has huge assumptions about how safe her money is in the market and thinks she is better off taking out a loan because she can write off the interest than taking her money out of the market at a loss. This is downright scary and I am at a loss to explain to her that the financial system can no longer be trusted to work as it used to. I don’t even know where to start.

  19. Sharonon 02 Nov 2008 at 6:50 am

    Anna, I agree with you - the problem of explaining economics is one that I don’t think I would turn my hand to - gack.

    CrimsonCoconut, I agree that we’re not going to hit the full force of 9.1 most likely - but that number doesn’t even begin to include the Export Land Model - which means that to your 4 % we’ve got to add 2 or 3% of oil being held back.

    I’m not a believer in end times (wrong religion, first of all) of any sort - what I’m concerned about is ordinary human poverty. That’s what I call the reality of being poor - poor like much of the world is poor. I think the apocalyptic visions are in many ways, an excuse to avoid the reality of thinking about what real, deep poverty is like - or how it might be a reality to people who have been comparatively insulated.

    I agree there is a lot of fat to cut - but there has been in the US, no concerted attempt to cut that fat - instead, right now, we’re still using our “allocate by wealth” strategy - and I see no real sign that that will change (although I like to dream - perhaps if we’re lucky on Tuesday - but not holding my breath - Obama was worried about moral hazard if we bailed out homeowners - I’m not convinced he’s going to prove to be our next FDR, little as I like the alternative). That way goeth many bad things. And turning around the ship is a slow process.

    That said, I’d be delighted to be proved wrong.

    Rosa, I’ll believe when I see it. On this subject, I think we disagree - show me five solar panels or wind turbines made cradle to grave without fossil fuels and we’ll talk - for me the operative issue is that we didn’t do that even when we were rich and had the resources to begin absorbing the cost of our build out. I think that’s actually a rather significant fact.

    Sharon

  20. Rebeccaon 02 Nov 2008 at 8:03 am

    I’ve said for some time that my children will not know much of the fossil-fueled world and my grandchildren will know nothing of it.

    I had a conversation about energy yesterday afternoon with three highly intelligent, progressive men. These were their opinions about peak oil: a) new technology will save us, b) we are about to go to space anyway and evovle so it doesn’t matter and oh yeah, technology will save us, and c) PO is a conspiracy cooked up to keep us from “our” oil.

    I think there is another, very deep reason people can’t seem to get PO and the fact that Business As Usual is over. Modern free markets and the idea of unlimited growth has very much become our modern religion in America. People don’t like it when you tell them their gods are dead. It’s very hard to absorb and even harder to believe.

  21. H Dean Priceon 02 Nov 2008 at 10:03 am

    Sharon,

    After reading all the replies, it is somewhat disheartening to see the dismal outlook that that most everyone has. Certainly change is in the air, but with change there is opportunity. To me, I welcome this dramatic change that is about to take hold in this country, wheather we want it or not.

    We need change! Radical change. We need a vision. I believe there is a way out of this mess. We live in the most abundant furtile land on the planet. The reason our ancestors came here and thrivied initially was because of the land. We now need to turn back to the land. Instead of getting our oil from below the ground we need to get it from above the ground.

    We need to think how we can accomplish this on a local basis. I have been in the truckstop business for 14 years and a farmer before that. Right after Hurricane Katrina, we ran out of diesel at the truckstop. At that point, I was determined to make my truck stop Energy Independent. And by golly, we did it. Very simply, We built a biodioesel plant next to the truckstop and contracted with local farmers to grow oilseed crops,ie….canola, soybeans. We created the first “closed loop” delivery system of biofuels in the entre country. What I mean by that is, We Grow it, We Make it, We Sell it all in one location. Locally.

    This can be replicated all over the country. We can do this! But we have to think differently. Small is beautiful. Please check out our website… http://www.redbirchenergy.com Let me know what you think.

  22. Gailon 02 Nov 2008 at 10:32 am

    The gods are dead…… that’s good. All the assumptions about everything might be up for review. The world is changing. What I find astonishing, and this is relation to the financial stuff, is the belief in cycles and balance. The old world is gone and it isn’t coming back. Too much carbon is floating out there, too much debt, too many people, too much consumption. None of the old models are going to account for what happens next. No “expert” spinning stuff through a computer is going to even come close. If we could relax in the face of possible, unpredictable, massive change……. All I see ahead are tipping points.

  23. Gracieon 02 Nov 2008 at 1:06 pm

    The problem with biodiesel is that it takes farm land that will be needed in the not too distant future to feed the population that is living on the earth at this point. Not only that, but much of the farm land of today is useless without petroleum based inputs to make it fertile land. Without petroleum based inputs, a great majority of farm land in the US will go back to dust, simply worn out, sterile, having had too many chemicals dumped on it over the years, and thanks to monsanto, too many chemical inputs designed to make the land sterile.

    I cannot see that biodiesel will ever be an answer. It’s just prolonging the inevitable. It’s a ‘business as usual’ solution.

    I would love to be proven wrong on this, but I don’t think I will be.

  24. sacon 02 Nov 2008 at 5:18 pm

    One question about farmland. I believe through composting measures ground can be made fertile again. Is this incorrect?

  25. Gracieon 02 Nov 2008 at 6:41 pm

    Yes, but do you have any idea how much compost it would take to reestablish the bacteria levels in about 3/4 of the state of Kansas, Nebraska, Oklahoma and Texas, not to mention Iowa, Illinois, Ohio, Virginia, etc…etc….it would be impossible to do so.

  26. Gracieon 02 Nov 2008 at 6:43 pm

    Wanted to add, individual farmers (some, but I don’t think enough of them) are starting to work at restoring the land. And it is going to help us going forward. But until Monsanto cannot sell any GM manufactured seeds, those farmers are fighting an uphill battle.

  27. Alanon 02 Nov 2008 at 8:51 pm

    “three highly intelligent, progressive men. These were their opinions about peak oil: a) new technology will save us, b) we are about to go to space anyway and evovle so it doesn’t matter and oh yeah, technology will save us, and c) PO is a conspiracy cooked up to keep us from “our” oil.”

    Rebecca, these weren’t “highly intelligent” men. If they were, they would realize the fallacies in the viewpoints they are espousing.

    And they are definitely not “progressive” men, because progressive men definitely know that the oil under the middle-eastern sands and the African jungles is not “our” oil.

    And “progressive” men would never believe that sending a few dozens or hundreds of people out to colonize “space” is an even remotely acceptable alternative to organizing humanity to preserve our biosphere and survive on Earth.

    Whatever those guys were, they certainly weren’t progressive and weren’t very intelligent, either.

  28. CrimsonCoconuton 03 Nov 2008 at 2:29 am

    Sharon, I understand your concern but I think when it comes down to it, we’ll do what we have to as a nation to survive. What president wouldn’t jump at the chance to become a national hero? Seeing as how the attempt to secure oil via military power has failed miserably, we’ll start finding other ways to do things. Still, things will probably get worse before they get better, so it couldn’t hurt to take some precautions!

  29. Sharonon 03 Nov 2008 at 7:12 am

    There’s an interesting German study that suggests that one season of intensive compost cropping and inoculation of soil with mycorhyzzae (I know I just spelled that wrong) can prevent a major drop in yield in a shift to organic agriculture. My own experimentations with plots suggest that might actually work, particularly if we can get charcoal into some of the soils. But bringing the soils back to life is going to be a major national project - Cuba is quite an interesting model - they had limited topsoil to begin with and used proportionally even more chemicals than we did, but they managed to make the transition fairly well - except that the really large farm level. The big state farms never succeeded - which suggests to me that we’re going to have to break up agriculture into smaller units.

    Sharon

  30. Rebeccaon 03 Nov 2008 at 8:08 am

    Alan,
    Yes, they were and that is what is disturbing. All three our engineers; the space guy is an expert in renewable energy systems and works on everything from solar power to biodiesel. The oil guy is a mechanical engineer and was not referring just to foreign oil, but domestic oil; he thinks they stopped producing so much here to suck all the oil out of foreign countires. The other one -the technology one -is a film engineer and has helped make many movies. I know these men and they are all very progressive in their view of the world.
    This is why we have such a problem: so many highly intelligent people still buy into the infinite growth paradigm. We are taught from birth to believe in it. And like I said, I think it is a religion and the dominant one today. Religions don’t need to be logical. The Archdruid Report has a good post up this week on this subject with many good comments.
    -Rebecca

  31. jonathan v porcellion 03 Nov 2008 at 8:24 am

    HI Sharon,

    I too am an ardent believer in Peak OIl, but one element I believe many of us overlook is that many of our comparisons about future energy needs also use predictions based on todays consumption. I think we will see that the U.S. is slowly weening itself from it high energy diet…mainly through a collapsing economy. But what replaces it will be a less consumptive, maybe more energy efficient economy. We will find our percentage of world energy consumption slowly declining, and allowing renewables to become a large percentage of our energy use. Thats is my hope at least. If its not there to burn then its not there to burn.
    thanks
    jvp

  32. H Dean Priceon 03 Nov 2008 at 8:52 am

    There are several things that make biodiesel made from canola very different and attrctive.

    First, canola is a winter crop therefore it doesnt compete with other food crops, ie….corn, soybeans.

    Second, the meal from canola after the oil has been extruded is a very high protein feed for dairy cows, chickens, turkeys. BTW, NC and VA are meal deficit states, most of the meal is brought in from the midwest.

    Third, canola oil is the healthiest oil for human consumption. Our eventual goal is to take the oil, get it to a food grade, sell/lease it to local restaurants then get it back and turn it into biodiesel. Allowing us to double dip. It’s not a question of food or fuel. It’s a question of food and fuel.

    Also, we had several farmers that planted their canola with an airplane. They treated it as a cover crop. They planted on top of soybeans (which are a legume) before they were harvested. This greatly reduced the impact on the soil (no nitrogen added), as well as, the amount of energy used to get the crop in the ground. I feel this could change the complexion of how we look at energy crops.

  33. Gracieon 03 Nov 2008 at 11:09 am

    H. Dean Price,

    I truly don’t know much about Canola, but am glad you posted again with this information. Hopefully someone with much more experience and knowledge in this area will post also. Thanks for the additional information.

    Sharon,

    I’ll try to find this German study. Do you have any additional information on it?

    Thanks to all,

    Gracie

  34. Lisa Zon 03 Nov 2008 at 7:55 pm

    There are many who would disagree that canola oil is the healthiest oil for humans. Here’s one link: http://www.westonaprice.org/knowyourfats/conola.html

    Sally Fallon at Weston Price.org of course! I’ve stopped using canola oil, however, because of the research they’ve done (and b/c my holistic nutritionist friend says it’s bad!)

  35. Lisa Zon 03 Nov 2008 at 7:59 pm

    CrimsonCoconut, every president we’ve had has tried to be a national hero! But most have fallen terribly short of the mark. Our next president or two may try very hard, but unless they have the right ideas and the support of the people they too will fail.

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