Monday, September 16, 2013

Post Peak Reflections

"At US$25 per barrel — the historic average — 90 million barrels would be US$2.25 billion every day on oil expenditure. At US$105 per barrel, that amounts to US$9.45 billion per day. This is a difference of US$7.2 billion every day, an extra cost to the global economy which is primarily a result of crude oil having peaked … or US$2.6 trillion every year. — Dr. Samuel Alexander, Univ of Melbourne, September 11, 2013"

We did not feel the Korowicz Crunch circa 2005 (named after Dublin economist David Korowicz), when conventional oil peaked, nor did we go over the Seneca Cliff  (after Lucius Anneaus Seneca who wrote around 50 CE, “It would be some consolation for the feebleness of our selves and our works if all things should perish as slowly as they come into being; but as it is, increases are of sluggish growth, but the way to ruin is rapid.") We instead found new, unconventional sources to fill the gap — sources that were both more expensive and more damaging to the climate and the environment. The economic damage keeps the lid on growth in demand, albeit sustains a wicked production level that may kill us all in the end.

We, and our fellow prognosticators of the mid-2000ies, for the most part did not see this present state of affairs coming, and we all admit that. Colin Campbell predicted the mad scramble and undulating plateau phase pre-1995, but even he did not realize how much ready substitution the unconventionals held, and how close they were to being exploited, once the financial capital began pouring down those holes. Since most of that giddy capital flow is fictional debt (or real debt with fictional repayment, if you will), it is theoretically unlimited, as is the damage it can do.

Well, it’s not quite as unlimited as that. Korowicz warned:
 “Firstly, we have reached the limit in the credit backing of our financial, monetary and banking system. We are at the same time hitting profoundly destabilizing ecological limits. Preeminent at this time is that we are almost certainly at the peak of global oil and food production. Put another way, we are at the limits of the system of trust and solvency that underpins the trade upon which we depend. We are at the limits of the least substitutable energy source that, by the laws of physics, is necessary for economic maintenance and growth. We are at the limits of our most fundamental human sustenance. They are the three most critical structural pillars of the globalized economy. Like a three-legged stool, the whole system can become destabilized by the buckling of just one.”

Our own Post-Petroleum Survival Guide (2006) gave recipes for downsizing and weatherproofing your home, changing your job, storing water and growing food, but it completely left readers unprepared for the slowly stagflating situation we face now. As Dr. Alexander puts it:
When oil gets expensive, everything dependent on oil gets more expensive: transport, mechanised labour, industrial food production, plastics, etc. This pricing dynamic sucks discretionary expenditure and investment away from the rest of the economy, causing debt defaults, economic stagnation, recessions, or even longer-term depressions.
Rather than a crunch or a cliff, what we are seeing play out now is gradual erosion rather than steep decline. Economic decline is not pacing the decline curve of petroleum production, it is leading it. There are large islands of unreality — academics, economists, popular media, governments, city planners, industrialists — who are still constructing a post-recession vision of the future and putting all their finest resources there, but their projections bear no relationship to the stagnant, jobless, eroding zeitgeist. As James Howard Kunstler  puts it:
The stock market is a proxy for the economy and a handful of giant banks are proxies for the American public, and all they’ve really got going is a hideous high-frequency churn of trades in conjectural debentures that pretend to represent something hidden in the caboose of a choo-choo train of wished-for value — and hardly anyone in the nation, including those with multiple graduate degrees in abstruse crypto-sciences, can even pretend to understand it all.
We really should be learning to grow food and do all the things we spoke of in that 2006 book, but we are not being compelled by either the current economy or our mainstream cultural narrative to do that.
The IEA World Energy Outlook reports get more accurate every year – by 2030 it’ll be spot on. —Craig MacIntosh (2008)
What the current reality, and not the cultural narrative, is saying is, “keep spending,” and so we go deeper in debt, waste time and our youthful energy, and set ourselves up for a bigger fall, or perhaps just more of a long slide down into reduced opportunities. We observe the prices paid by courageous self-sacrificers — the pioneers who go off grid and focus on sustainable homesteading — you know, isolation, giving up creature comforts, having to struggle to learn and adapt to the change. Spending more to put up homegrown preserves than to buy cheap canned goods. The transition cost is daunting, and not entirely in economic terms. Pioneers need to give up a lot of comforts before the rest of us have to, and that is a real deterrent for others contemplating taking the leap. Denial and procrastination is so much easier.

Renewables pioneer and author Dan Chiras says that if you are spending tens of thousands of dollars to put solar electricity on your home or business what you are really doing is buying a quarter century of electricity and paying for it in advance. And you are secure in the knowledge that as long as the sun shines your electricity will keep being delivered every day. Your neighbors who pay by the month cannot say the same. You cannot say the same of the benefits supposed to come from your Social Security check, or of the money you have in a certificate of deposit, IRA or savings account. Viewed in this way, a solar system for your roof might even be worth borrowing money to install.

David Korowicz said, “Collapse now, avoid the rush.” Richard Heinberg put it another way, proposing that the sooner you begin living more independently, the easier it will be for you and your family as the future descent curve unfolds. Still, few are listening, and that makes being out in a front of the herd a lonely undertaking.

The map illustrates the global distribution of the climate stability/ecoregional intactness relationship. Regions with both high climate stability and vegetation intactness are dark grey; those with high climate stability but low levels of vegetation intactness are dark orange. Regions with low climate stability but high vegetation intactness are dark green, while those with both low climate stability and low levels of vegetation intactness are pale cream.



Anonymous said...

'Renewables pioneer and author Dan Chiras says that if you are spending tens of thousands of dollars to put solar electricity on your home or business what you are really doing is buying a quarter century of electricity and paying for it in advance.'

Yes, but who are we buying that future security from? Energetically expensive solar panels are really purchased through unfair trade off of the backs of poor Chinese peasants, yes? Just because it is their environment we are damaging, and their peasants who get the short end of the stick, rather than our own, is that OK in terms of costs to the environment and social equity?

Anonymous said...

I thought it was Greer at the 2012 Age of Limits conference, who coined the “Collapse now, avoid the rush” phrase.

Albert Bates said...

Korowicz was using the “Collapse now, avoid the rush” phrase as early as 2010, although I believe Richard Heinberg may have used it even earlier.




The Great Change is published whenever the spirit moves me. Writings on this site are purely the opinion of Albert Bates and are subject to a Creative Commons Attribution Non-Commercial Share-Alike 3.0 "unported" copyright. People are free to share (i.e, to copy, distribute and transmit this work) and to build upon and adapt this work – under the following conditions of attribution, n on-commercial use, and share alike: Attribution (BY): You must attribute the work in the manner specified by the author or licensor (but not in any way that suggests that they endorse you or your use of the work). Non-Commercial (NC): You may not use this work for commercial purposes. Share Alike (SA): If you alter, transform, or build upon this work, you may distribute the resulting work only under the same or similar license to this one. Nothing in this license is intended to reduce, limit, or restrict any rights arising from fair use or other limitations on the exclusive rights of the copyright owner under copyright law or other applicable laws. Therefore, the content of
this publication may be quoted or cited as per fair use rights. Any of the conditions of this license can be waived if you get permission from the copyright holder (i.e., the Author). Where the work or any of its elements is in the public domain under applicable law, that status is in no way affected by the license. For the complete Creative Commons legal code affecting this publication, see here. Writings on this site do not constitute legal or financial advice, and do not reflect the views of any other firm, employer, or organization. Information on this site is not classified and is not otherwise subject to confidentiality or non-disclosure.