Today, 6.5 billion humans depend entirely on oil for food, energy, plastics & chemicals. Population growth is on a collision course with the inevitable decline in oil production.
~ The Oil Factor: Behind the War on Terror, Free Will Production ~
“...worldwide overpopulation is the greatest risk to public health that we have ever encountered. The single obstacle to solving this problem is not money or the lack of acceptable family planning choices, but the opposition by a small group of extreme reactionaries now in control of the Roman Catholic Church. Uncounted numbers of people are denied access to contraception and abortion by the political machinations of a pope who is, by the dogma of his religion, unable to change his mind.”
~ Stephen Mumford, Ph.D; The Center for Research on Population & Security ~
Note: On 18 July 2007; the compiler of the 18 July 2006 :: PeakOil_RSA :: Briefing Paper, was Arrested, on five alleged charges of Crimen Injuria; for demanding a response from the ANC SA Goverment; c/o Hon. Patricia de Lille, ID; to issues raised in the report and related: Mag. Crt: 14-1198-08: State v. Johnstone.
Update: The 151 page copy of 18 July 2006 :: PeakOil_RSA :: Briefing Paper (PDF:2754K), was submitted into the Court Record, on 08 July 2009: State v. Johnstone: “Offer of Proof” Court Proceedings: 08 & 09 July 2009: Mag. Capetown: # 14/1198/08
Overview of Documentation:
06-07-18: 18 July 2006 :: Peak Oil_RSA :: Briefing Paper: Is gross mismanagement of the nation's energy policy an impeachable offense? [Word(P131):3,864KB]
Submitted directly to Plaintiff: 18 July 2006 PeakOil_RSA Briefing Paper Data CD; and Denial Stops Here DVD documentary, were submitted directly to the Plaintiff; c/o & via: Secretary General for the Independent Democrats: Mr. Avril Harding (Who in South African Government, Media, NGO's, Corporations Knew What and When About Peak Oil?); mailed to the Secretary General on 14 August 2006.
- Introduction: Limits to Growth
- I. WHAT IS PEAK OIL?
- II. WHO KNOWS WHAT ABOUT PEAK OIL?
» International: Geologists, Energy Advisors, Scientists, Investment Bankers, etc.
» South African Expert Opinions on Peak Oil
- III. HOW SERIOUS IS THE THREAT OF PEAK OIL?
» Peak Oil: Food Production & Population Issues
» Peak Oil: Medicine, Water and National Defense
» Peak Oil: Financial / Banking System
» Conclusions: "What Does All of This Mean?"
Briefly: My efforts to inform the South African people / government / media related to the conundrun called Peak Oil, and it’s related contextual issues, started in March 2002, and have resulted in me being (a) banned from entering Capetown Parliament Buildings, due to a false allegation by individuals in the Ministry of Intelligence that I made a bomb threat (for which I was never charged), (b) being charged with a bomb-threat in George, (c) being arrested without warrant, and refused access to a court, and transported directly to Lentegeur Hospital, for alleged ‘observation’, (d) the Director of Public Prosecutions doing their damn best to have me certified as insane in a mental institution indefinitely (they failed, the Magistrate ruled there was no evidence whatsoever of any illusions or otherwise), (e) spent 14 months in George Womens’ Prison, after I finally informed the court of the truth of my opinions, the whole truth and nothing but the truth.
This is my last effort. As Michael Ruppert says in Globalcorp: The Militarisation of Oil:
There is much in this Briefing Paper, that could have been said more eloquently, and that could have been edited a few more times, with plenty more information which I simply just could not get in, with the time I have at hand. Hopefully, however the information that is here, will be enough to provide a big picture view, for anyone intellectually fair, tolerant and honest about their own prejudices.
We must all do what we must do and do it now. My conscience is clear that I have done all that is possible to warn. When a tsunami is coming there is a point at which one must stop trying to warn the indifferent and just get out of the way and help others who are also trying to get out of the way. …In order to do that, other bridges must be abandoned.
It is my opinion, based on the evidence for the imminence of Peak Oil (in my opinion already arrived, but let’s for argument’s sake say within 10 years), that South Africa’s executive and legislative bodies are grossly mismanaging South Africa’s energy policy and that they should be impeached therefore.
The problem being that it does not appear as if any other political party has done any serious enquiry into the issue of Peak Oil, and it’s financial, agricultural, population etc. ramifications and who are willing to confront reality and speak up about what needs to be done, and thereafter put their money where their mouths are and do what needs to be done.
And in this state of affairs, while our country heads directly towards the iceberg, the captain and crew are debating the niceties about whether our esteemed former Vice President’s sexually predatorial patriarchal behaviour was ‘rape’ or not. The majority of the passenger citizens are blind drunk in the Titanic’s bars, consuming themselves to debt-driven oblivion – thanks to none other than “Proudly South African” advice to SHOP TILL UNEMPLOYMENT DROPS – and will undoubtedly not have the faintest clue when they finally get not slapped in the face with the reality of Peak Oil, but more to the point, hit between the legs by a baseball bat, with the reality.
Since my return from America in March 2002, I have come to the conclusion that the majority of ‘Proudly South African’ ‘Mandela is my Hero’ Worship and similar is quite simply allot of hot air and rhetoric. It is not sincere. It is arsenic casuistry, and so fake at times I am revolted as if I have just walked into an Agent Orange haze in the Vietnam Jungle.
Steve Biko’s words as to the commitment of the ‘white liberals’ is as true as it ever was when he said it, and these days can be applied to the ‘black bourgeous liberals’ too, if not more so. It seriously does not appear – besides for Mandela – that any of the the many other ‘struggle brothers’ were fighting for justice and issues of integrity, equality and inner growth and understanding, but more so for $$$$$$$, -- or as Cheney would call it ‘The American Way of Life’ -- and as McMansion High flying as possible, don’t matter who has to be stepped upon, lied to or deceived along the way.
I don’t mind being proved wrong. I would be more than happy to be proven wrong, and to find that somewhere in our government or opposition political parties, and in the South African people, there truly are citizens whose intellectual, emotional and psychological focus is not simply never ending consumption as a goal for ‘equality’ or some other obscure automatonic Orwellian ideal, but that there are those who have learnt from Mandela’s story, from his vision to see the future, to see what needed to be done, to work and organise to get it done, to make a personal sacrifice so that it gets done.
Are there any South Africans with the capability to envision the future of Peak Oil, to see what South Africans need to be doing, to work and organise to get it done, and to make personal sacrifices so that it gets done?
If so, I imagine, we could do so, in a symbolic gesture, of informing the ‘father of our nation’ that his young children have learnt his incredible lesson of love, sacrifice, vision and commitment. That we know – not intellectually – but from an experience of learning we are able to put ourselves through – for our own good – that there is more to life, than a McMansion, fast car, fancy holidays, techno toys and abusive alienated sexually predatorial relationships.
We can put our money where our mouths are, when we say we admire the man, or that we are ‘Proudly South African’.
But without actions to match our emptry rhetoric, our words mean absolutely nothing. We are oxygen thieves, and deserve the fate we have instore for ourselves.
Please be so kind as to prove me wrong.
PeakOil_RSA Listserv Moderator
Excerpt: PeakOil_RSA Briefing Paper [Word(P131):3,864KB]
INTRODUCTION: LIMITS TO GROWTH:
18 July 2006
At the beginning of the chapter Who Knows What About Peak Oil, you will find:
Confronting the reality that ‘civilisation is coming to an end soon’ may sound at first like the end of your world, to you. But it needn’t be. It may be the end of a world your consciousness currently defines as the only possible world you may wish to live in, but with a little consciousness revolution, you may find at the end of the revolution in your thinking, that, saying goodbye to your experience of The American Way of Life may not be nearly as problematic as you thought it would be. In fact for every door you may find closing to such a way of life, others are opening to a new revolutionary way of living, being, relating and evolving.
Civilization – the modern, petroleum based civilization that Dick Cheney refers to as “The American Way of Life” -- is coming to an end soon. This is not the wacky proclamation of a doomsday cult, apocalypse bible prophecy sect, or conspiracy theory society. This is the scientific conclusion of some of the best-paid, most widely respected geologists, energy advisors and oil experts, scientists & scientific bodies, and investment bankers and banks, in the world. These rational, professional, conservative individuals are making and recommending serious preparations for the global phenomenon known as global Peak Oil.
In Facing the Limits to Growth, Meadows ends with:
I sincerely hope that any reader with a serious interest in the concept of sustainability will be willing to set aside your beliefs, and in the spirit of Socratic enquiry, will affirm your beliefs as true, by verifying whether the foundation upon which they rest is in fact on solid rock or not.
The Next Revolution: Sustainability
It is as impossible now for anyone to describe the world that could evolve from a sustainability revolution as it would have been for the farmers of 6000 BC to foresee the corn and soybean fields of modern Iowa, or for an English coal miner of AD 1800 to imagine an automated Toyota assembly line. Like the other great revolutions, the coming sustainability revolution will also change the face of the land and the foundations of human identities, institutions, and cultures… Of course no one knows how to bring about such a revolution. There is not a checklist: "To accomplish a global paradigm shift, follow these 20 steps."
Like the great revolutions that came before, this one can't be planned or dictated. It won't follow a list of fiats from government or a proclamation from computer modellers. The sustainability revolution will be organic. It will arise from the visions, insights, experiments, and actions of billions of people. The burden of making it happen is not on the shoulders of any one person or group. No one will get the credit, but everyone can contribute. Our systems training and our own work in the world have affirmed for us two properties of complex systems germane to the sort of profound revolution we are discussing here.
First, information is the key to transformation. That does not necessarily mean more information, better statistics, bigger databases, or the World Wide Web, though all of these may play a part. It means relevant, compelling, powerful, timely, accurate information flowing in new ways to new recipients, carrying new content, suggesting new rules and goals (rules and goals that are themselves information). When its information flows are changed, any system will behave differently. ..
Second, systems strongly resist changes in their information flows, especially in their rules and goals. It is not surprising that those who benefit from the current system actively oppose such revision. Entrenched political, economic, and religious cliques can constrain almost entirely the attempts of an individual or small group to operate by different rules or to attain goals different from those sanctioned by the system. Innovators can be ignored, marginalized, ridiculed, denied promotions or resources or public voices. They can be literally or figuratively snuffed out. Only innovators, however -- by perceiving the need for new information, rules, and goals, communicating about them, and trying them out -- can make the changes that transform systems. This important point is expressed clearly in a quote that is widely attributed to Margaret Mead, "Never deny the power of a small group of committed individuals to change the world. Indeed that is the only thing that ever has." We have learned the hard way that it is difficult to live a life of material moderation within a system that expects, exhorts, and rewards consumption. But one can move a long way in the direction of moderation. It is not easy to use energy efficiently in an economy that produces energy inefficient products. But one can search out, or if necessary invent, more efficient ways of doing things, and in the process make those ways more accessible to others.
Above all, it is difficult to put forth new information in a system that is structured to hear only old information. Just try, sometime, to question in public the value of more growth, or even to make a distinction between growth and development, and you will see what we mean. It takes courage and clarity to challenge an established system. But it can be done.
Are you willing to ask yourself questions such as:
- Is a fundamental premise our ‘Civilisation’ relies upon for it’s existence: ‘Cheap Energy’?
- Are there any ideas related to the foundations upon which our ‘Cheap Energy’ civilisation exists, which we consider true not based upon our enquiry into their essence, but purely due to the fact that millions of others consensually validate our beliefs?
- If some of the concepts you believe in related to our Cheap Energy Civilisation are in fact based on error, would the fact that millions of people share the same error in thinking make the error true?
- Were there many who erroneously thought the earth was flat?
- How many of you (black and white) thought (and some still do) that white people were superior to blacks?
- Were you correct?
- If not, did it require you to do some self-examination, and critically examine the foundational assumptions upon which the ‘superiority’ theory existed, both in the social system, and within you, in your own subconscious thinking and behaviour, as to how your moment to moment unconscious thinking, and behaviour affirmed a system based on erroneous thinking?
- Was the journey of self-discovery, of one-by-one breaking down the pillars of erroneous ‘superiority’ conscious and subconscious thinking and behaviour, worth the effort?
Those brave enough to stand their ground, look themselves in the mirror, admit their fear, will find a sense of connection with the world, with nature, with the noticing of your momentary actions. You will experience at a deeper level the concept of ‘cause and effect’ and know that they are symbiotic twins.
You will know that it is impossible to attempt to live within a system which greedily and voraciously without conscience annihilates the planet’s finite resources, and not think that there are going to be any consequences (effects) for such behaviour.
You will realise that you have two options:
One: You can continue to remain in denial, for as long as possible, knowing there a few billion who share your illusion that all is well on the ‘economic growth is good for us’ / ‘infinite growth is possible on a finite planet’ front. Give this Briefing Paper, to your child, they may be more openminded, and watch out for that round that’s marked ‘TO WHOM IT MAY CONCERN’. As they used to say in Vietnam :
Two: You can trade your ‘economic growth’ illusion in for a ‘personal growth’ reality journey of self-awareness and self-discovery. You can find out that who you are is not who or what you own physically, materially, psychologically, emotionally or any otherwise. Who you are is your inner courage inside of you to be true to yourself. To venture into the biggest mystery there is: yourself, and your perception of your relationship to the universe.
It’s not the round with your name on it you gotta watch out for, it’s the one that’s addressed ‘TO WHOM IT MAY CONCERN’ that was the phrase that contained the two ways of looking at life and death in Vietnam.
Welcome to the psycho-emotion adventure of Peak Oil. Enjoy the ride on this rollercoaster through your subconscious thinking of what is ‘real’ and ‘true’ and who you thought you were, and find with glee you are no longer. No longer a slave to the system. You are free from the system which is too carefully ordered, too strictly organized, too expertly managed, thoroughly programmed and carefully planned, in which too few control too many.
Be your own authority, lead yourself. Learn the ways and means of the Ancient yogi masters, Pied Piper, cloud walkers, and medicine men. Get in harmony with nature. Listen to the loony rhythms of your blood. Look for beauty and poetry in everything in life. Let there be no moon that does not know you, no spring that does not lick you with its tongues. Refuse to play it safe, for it is from the wavering edge of risk that the sweetest honey of freedom drips. Live dangerously, live lovingly. Believe in magic. Nourish your imagination. Use your head, even if it means going out of your mind. Learn, like the lemon and the tomato learned, the laws of the sun. Become aware, like the jungle became aware, of your own perfume.
Welcome to the Journey
PeakOil_RSA Listserv Moderator
Excerpt: PeakOil_RSA Briefing Paper [Word(P131):3,864KB]
I. WHAT IS PEAK OIL? (ANSWER: THE END OF ‘CHEAP OIL’)
Colin Campbell: "The term Peak Oil refers the maximum rate of the production of oil in any area under consideration, recognising that it is a finite natural resource, subject to depletion." [A]
Peak Oil is also called "Hubbert's Peak," named for the Shell geologist Dr. Marion King Hubbert. In 1956, Hubbert accurately predicted that US domestic oil production would peak in 1970. He also predicted global production would peak in 1995, which it would have had the politically created oil shocks of the 1970s not delayed the peak for about 10-15 years. [A]
Oil will not just "run out" because all oil production follows a bell curve. This is true whether we're talking about an individual field, a country, or on the planet as a whole. Oil is increasingly plentiful on the upslope of the bell curve, increasingly scarce and expensive on the down slope. The peak of the curve coincides with the point at which the endowment of oil has been 50 percent depleted. Once the peak is passed, oil production begins to go down while cost begins to go up. [A]
In practical and considerably oversimplified terms, this means that if 2000 was the year of global Peak Oil, worldwide oil production in the year 2020 will be the same as it was in 1980. However, the world’s population in 2020 will be both much larger (approximately twice) and much more industrialized (oil-dependent) than it was in 1980. Consequently, worldwide demand for oil will outpace worldwide production of oil by a significant margin. As a result, the price will skyrocket, oil-dependant economies will crumble, and resource wars will explode[A].
The issue is not one of running out of oil, it is the running out of cheap oil, which is about not having enough to keep the world’s economies running. The ramifications of Peak Oil for western capitalist civilisation are similar to the ramifications of dehydration for the human body. [A]
The world’s oil-based growth economy, doesn’t need to deplete its entire reserve of oil before it begins to collapse. A shortfall between demand and supply as little as 10-15 percent is enough to wholly shatter the worlds oil dependent economies and reduce their citizenry to poverty.
The effects of even a small drop in production can be devastating. For instance, during the 1970s oil shocks, shortfalls in production as small as 5% caused the price of oil to nearly quadruple. The same thing happened in California a few years ago with natural gas: a production drop of less than 5% caused prices to skyrocket by 400%.[A]
Colin Campbell noted another example of the effects of even a small drop in production in his report to South African Businesses: Peak Oil: An Outlook on Crude Oil Depletion, on Mbendi:
It is worth briefly recalling what occurred in Europe in late 2000, as a foretaste of what happens when oil supply becomes short and expensive. The French fishermen blockaded the Channel Ports because their fuel costs had doubled, even though their fuel was already tax-free. The dispute spread rapidly to England and other countries. Schools were closed. Hospitals had red alerts because staff and patients could not reach them. Supermarkets started rationing bread. Trade and industry was seriously interrupted: the cost was huge. People lost confidence in their governments, whose popular support fell sharply. If an interruption in supply lasting only a few days could cause such havoc, it surely demonstrates how utterly dependent on oil we have become.Fortunately, those price shocks were only temporary. The coming oil shocks won't be so short-lived. They represent the onset of a new, permanent condition. Once the decline gets under way, production will drop (conservatively) by 3% per year, every year. [A]
That estimate comes from numerous sources, not the least of which is Vice President Dick Cheney himself. Unfortunately, many experts are nowhere near as optimistic as Mr. Cheney was in 1999. Andrew Gould, CEO of the giant oil services firm, Schlumberger, recently stated that “An accurate average decline rate is hard to estimate, but an overall figure of 8% is not an unreasonable assumption.” An 8% yearly decline would cut global oil production by a whopping 50% in less than nine years. If a 5% cut in production caused prices to triple in the 1970s, what do you think a 50% cut is going to do? [A]
Other experts are predicting decline rates as high as 10%-to-13%. Some geologists expect 2005 to be the last year of the cheap-oil bonanza, while many estimates coming out of the oil industry indicate "a seemingly unbridgeable supply-demand gap opening up after 2007," which will lead to major fuel shortages and increasingly severe blackouts beginning around 2008-2012. As we slide down the downslope of the global oil production curve, we may find ourselves slipping into what some scientists are calling the "post-industrial stone age." [A]
Excerpt: PeakOil_RSA Briefing Paper [Word(P131):3,864KB]
II. WHO KNOWS WHAT ABOUT PEAK OIL?
- International Opinions of Geologists, Energy Advisors, Scientists, Investment Bankers, etc. on Peak Oil
- South African Expert Opinions on Peak Oil
A. International Opinions of Geologists, Energy Advisors, Scientists, Investment Bankers, etc. on Peak Oil:
Civilization – the modern, petroleum based civilization that Dick Cheney refers to as “The American Way of Life” -- is coming to an end soon. This is not the wacky proclamation of a doomsday cult, apocalypse bible prophecy sect, or conspiracy theory society. This is the scientific conclusion of some of the best-paid, most widely respected geologists, energy advisors and oil experts, scientists & scientific bodies, and investment bankers and banks, in the world. These rational, professional, conservative individuals are making and recommending serious preparations for the global phenomenon known as global Peak Oil. [A]
Furthermore others who have studied or know about Peak Oil and publicly commented on it or its effects include the G8, International Energy Agency, US Army Corps of Engineers, the Pentagon, the Central Intelligence Agency (CIA), the Swedish Government, the Senate Foreign Relations Committee, the US House of Representatives, US and UK politicians, an Australian politician, the Secretary of State, Ms. Condoleeza Rice, former Federal Reserve Bank Chairman, Alan Greenspan, Vice President Dick Cheney, and by no means least of all, two United States Presidents.
US Labour Against the War (USLAW):
J. Cooper, Congressman from Tennessee, in July 2005:
Everybody with common sense knows that George Bush invaded Iraq for its oil! NOW do you know that: » at the current production rate, North America and Western Europe will run out of oil in 2010? » One million U.S. military personnel are deployed overseas near oil fields and oil routes? » U.S. military deployment in Afghanistan and Central Asia blocks China and Russia from accessing oil and natural gas they desperately need for their economies?
Former President Bill Clinton, July 11, 2006:
“America is still in denial about the energy problem and few politicians are prepared to accept painful solutions”
Dozens of International media publications appear to be taking them seriously. Finally, various US states and cities have passed Peak Oil Resolutions, and various Universities have Peak Oil Curricula .
“To the best of my knowledge I never had a security briefing which said what some of these very serious but conservative petroleum geologists say, which is they think that either now or before the decade is out that we'll reach peak oil production globally and with the rise of China and India and others coming along unless we can dramatically reduce our oil usage we will run out of recoverable oil within 35 to 50 years.
“And that would mean in addition to climate change we have a very short time in the life of the planet to turn this around. So I think that we all need to start ... thinking about that. As we propose practical solutions to climate change, we all need to keep this in the back of our minds.
“There's a good chance that these people who made a living all these years studying petroleum deposits know what they're talking about, and we may not have as much oil as we think. So we need to get in gear.”
B. South African Expert Opinions on Peak Oil
Comparatively, the scientific conclusion of one University Professor in South Africa is that civilisation founded on cheap oil is coming to an end soon, as a result of the imminent inevitability of Peak Oil.
According to three other University Professors & Lecturers, one oil consultant, one bank, and one corporation in South Africa: Peak Oil (the end of cheap oil) is a reality, some consider it more imminent than others, but all consider it a reality, which we need to take reasonably seriously (but their sense of urgency is not nearly that ‘civilisation as we know it is coming to an end soon’.) The University staff are however speaking out and raising awareness as to the concept of Peak Oil and that preparations need to be taken by the South African government to prepare for Peak Oil.
As for the Dept. of Environment, the Western Cape, and the city of Johannesburg’s positions are rather ambiguous: they do not dispute the reality of Peak Oil as a future threat, which needs to be planned for, although they do not indicate any sense of urgent implementation requirements, and furthermore the paradigm within which they intend planning to deal with it, seems to indicate that they do not have anywhere near a comprehensive understanding of what Peak Oil’s causes are (the paradigm of economic growth and it’s inherent flaws), and how Peak Oil needs to be mitigated (reduce consumption, reduce population, reduce energy use, discard ‘economic growth’ paradigm’s including ‘sustainable growth’ which is an oxymoron!). Although the city of Capetown – to be fair – comes the closest to hinting that there may be a problem with their paradigm of endless growth/consumption.
As of 18 July 2006, the South African Government, especially Energy, Finance, the Central Energy Fund, PetroSA, including the Reserve Bank Governor (Mboweni) are deathly silent about Peak Oil, or the real reasons for the rise in the petrol prices and interest rates. The South African Communist Party considers Peak Oil a possibility that should be seriously considered for; and the DA’s spokesperson on Defence has submitted a proposal to the Government to consider a $100-a-barrel task team. A minor few non-profit organisations also appear aware as to the possibility of Peak Oil.
The South African English speaking media, including Business Day, Carte Blanche, The Financial Mail, Noseweek, Cape Times, Biophile, EngineeringNews, UCT’s Energy Management News, The Mercury and The Mail & Guardian have reported on Peak Oil, with headlines such as » The End of Cheap Oil: It’s Time We Talked » End of the Oil Age » End of Oil » Oil: Are We Running Out? » Is there a future without Oil? Did their content seriously explore their essense behind the sensationalist heading?
For the most part they seem to grudgingly accept Peak Oil as a possible reality, from my interpretation not a virtual certainty for which urgent preparations need to be made (just in case), definitely not firm believers, except possibly for the Mail & Guardian. The Financial Times doesn’t even consider it a possibility, Noseweek considers it a plausible conspiracy theory, too frighteningly realistic to take seriously.
Noteworthy quotes being from Business Days, End of the Oil Age, by Lindsay Williams, 21 April 2005; with guest Petroleum Review editor, Chris Skebowski where Skebowski ends with:
Mail & Guardian’s Is this the legacy we want to leave our children? by Glenn Ashton, 06 Dec 2004
“We’re assuming that we can - in an unrestrained way - let people have as much oil (fuel) as they want, providing they’ve got the cash to pay for it. That, I don’t think, is particularly sustainable. When we say our whole way of life may have to change - this reflects the fact that oil is pervasive in almost everything we do. First of all, about 70% of oil actually goes into the transportation sector - sea, air or land. Our whole economy is predicated on having that. It’s very difficult to envisage a modern developed society - without large volumes of relatively low cost oil. Some of the other uses - like lubricants, like petro-chemicals - are even more restrictive because there just aren’t obvious alternatives to them! So if the whole supply is going to shall we say, “go flat” with no growth - then we’ve got to work out how we can conduct normal economic activities with less oil!
Finally, Sasol’s lack of concern, plausibly can be described as the Mail & Guardian’s ‘futile blindness’ and probably exemplifies the general South African blindness, as stated by Sasol’s Andre de Ruyter (Strategic Operation Manager) in Carte Blanche (John Webb’s) End of Oil, interview of Richard Heinberg, 08 May 2005, with comment from Mr. De Ruyter/Sasol:
“Time for change: Yet this state of affairs need not continue. We have, by most accounts, reached peak oil production. We will never have cheap oil again. There is talk of a shift to low-grade coal and even worse options, but the idiocy and futility of this route is clear to all but the blind. We need to move toward a way of life so radically different it is hard to consider possible today, but we also should not believe such change is impossible. Radical change is essential for the future of all of life on earth. How do we embrace this change, which threatens the very core of our culture, our current way of life? More to the point, can we continue to rely on a system that is inevitably moving toward atrophy? Yet, precedents for radical change do in fact exist.”
Perhaps The Financial Mail’s The Global Oil Industry at a Crossroads, by Stafford Thomas, 09 September 2005 may cause Sasol/Mr. De Ruyter to re-enquire into the issue of Peak Oil’s consequences on South Africa:
“"We calculate that we have some 300 years' worth of coal left for local use, including exports, so to be alarmist about the state of our coal reserves at this stage, I think is not necessary." André says we can keep our faith in cars because fossil fuel will remain profitable for decades.”
“Welcome to the age of the perpetual oil shock. This is the message coming through loud and clear from the world's major oil producers as they warn that the era of cheap oil is over.”
Excerpt: PeakOil_RSA Briefing Paper [Word(P131):3,864KB]
III. HOW SERIOUS IS THE THREAT OF PEAK OIL?
- Peak Oil: Food Production & Population Issues
- Peak Oil: Medicine, Water and National Defense
- Peak Oil: Financial / Banking System
- Are the Banks Aware of this Situation?
- Conclusion: “What Does All of This Mean?
Addressing this question requires some speculation: the peaking of global oil production is an event that has never occurred before. However, we need not speculate baselessly; for guidance we have a U.S. government-funded study that could hardly be more relevant — “The Peaking of World Oil Production: Impacts, Mitigation and Risk Management,” prepared by Science Applications International (SAIC) for the U.S. Department of Energy, released in February 2005. The project leader for the study was Robert L. Hirsch, who has had a distinguished career in formulating energy policy. The report on the study will hereinafter be referred to as “The Hirsch Report.”[C]
The first paragraph of the Hirsch Report’s Executive Summary states:[C]
The peaking of world oil production presents the U.S. and the world with an unprecedented risk management problem. As peaking is approached, liquid fuel prices and price volatility will increase dramatically, and, without timely mitigation, the economic, social, and political costs will be unprecedented. Viable mitigation options exist on both the supply and demand sides, but to have substantial impact, they must be initiated more than a decade in advance of peaking.18As the Hirsch Report explains in detail, due to our systemic dependence on oil for transportation, agriculture, and the production of plastics and chemicals, every sector of society will be impacted.[C]
The Hirsch Report effectively undermines the standard free-market argument that oil depletion poses no serious problem, now or later, because as oil becomes scarcer the price will rise until demand is reduced commensurate with supply; meanwhile, higher prices will stimulate more exploration, the development of alternative fuels, and the more efficient use of remaining quantities. While it is true that rising prices will do all of these things, we have no assurance that the effects will be sufficient to avert severe, protracted economic, social, and political disruptions.[C]
First, price increases may or may not stimulate more exploration, or do so sufficiently or productively. During the early 20th century, more exploration resulted in more oil being discovered. However, in recent decades, expanded exploration efforts have turned up fewer and fewer finds. It is difficult to avoid the obvious conclusion that there simply isn’t much oil left to discover.[C]
Higher prices for oil will also no doubt spur new investment in alternative fuels. But the time required to produce substantial quantities of alternative fuels will be considerable, given the volume of our national transportation fuel consumption. Moreover the amount of investment required will be immense. And it would be unrealistic to expect most alternatives to fully or even substantially replace oil at any level of investment, and even with decades of effort, given practical, physical constraints to their development.[C]
Higher prices will also no doubt spur efficiency measures, but the most productive of these will likewise require time and investment. For example, raising the fuel efficiency of the U.S. auto fleet would require years for industry retooling and more years for consumers to trade in their current vehicles for more-efficient replacements.[C]
James Schlesinger, who served as CIA director in the Nixon administration, Defense secretary in the Nixon and Ford administrations, and energy secretary in the Carter administration, in November, 2005 testimony before the Senate Foreign Relations Committee urged lawmakers to begin preparing for declining oil supplies and increasing prices in the coming decades. “We are faced with the possibility of a major economic shock and the political unrest that would ensue,” he said. [C]
Schlesinger was far from overstating the threat. In fact, it would be no exaggeration to view Peak Oil as potentially representing the economic, social, and political impact of a hundred Katrinas. And that impact will not subside in a few days’ or years’ time: once global oil production has peaked, the energy shortfalls for transportation and agriculture will be ongoing, relentless, and cumulative.[C]
A. Peak Oil: Food Production & Population Issues
In Threats of Peak Oil to the Global Food Supply, Richard Heinberg begins with:--
Food is energy. And it takes energy to get food. These two facts, taken together, have always established the biological limits to the human population and always will.
The same is true for every other species: food must yield more energy to the eater than is needed in order to acquire the food. Woe to the fox who expends more energy chasing rabbits than he can get from eating the rabbits he catches. If this energy balance remains negative for too long, death results; for an entire species, the outcome is a die-off event, perhaps leading even to extinction.
…. Over all - including energy costs for farm machinery, transportation, and processing, and oil and natural gas used as feedstocks for agricultural chemicals - the modern food system consumes roughly ten calories of fossil fuel energy for every calorie of food energy produced.4
But the single most telling gauge of our dependency is the size of the global population. Without fossil fuels, the stupendous growth in human numbers that has occurred over the past century would have been impossible. Can we continue to support so many people as the availability of cheap oil declines?
In a Harpers Magazine Feature, The Oil We Eat, on July 23, 2004, Richard Manning provides the following ‘food production based on oil’ related to population issues ‘food for thought’:
In the US, agriculture is directly responsible for well over 10 percent of all national energy consumption. Over 400 gallons of oil equivalent are expended to feed each American each year. About a third of that amount goes toward fertilizer production, 20 percent to operate machinery, 16 percent for transportation, 13 percent for irrigation, 8 percent for livestock raising, (not including the feed), and 5 percent for pesticide production. This does not include energy costs for packaging, refrigeration, transportation to retailers, or cooking.
Trucks move most of the world's food, even though trucking is ten times more energy-intensive than moving food by train or barge. Refrigerated jets move a small but growing proportion of food, almost entirely to wealthy industrial nations, at 60 times the energy cost of sea transport.
Processed foods make up three-quarters of global food sales by price (though not by quantity). This adds dramatically to energy costs: for example, a one-pound box of breakfast cereal may require over 7,000 kilocalories of energy for processing, while the cereal itself provides only 1,100 kilocalories of food energy.
So, from that you’ll realise that petrochemicals are key components to much more than just the petrol in your car. Jay Tomczak points out in Implications of Fossil Fuel Dependence for the Food System,
The journalist’s rule says: follow the money. This rule, however, is not really axiomatic but derivative, in that money, as even our vice president will tell you, is really a way of tracking energy. We’ll follow the energy.
We learn as children that there is no free lunch, that you don’t get something from nothing, that what goes up must come down, and so on. The scientific version of these verities is only slightly more complex. As James Prescott Joule discovered in the nineteenth century, there is only so much energy. You can change it from motion to heat, from heat to light, but there will never be more of it and there will never be less of it. The conservation of energy is not an option, it is a fact. This is the first law of thermodynamics.
Special as we humans are, we get no exemptions from the rules. All animals eat plants or eat animals that eat plants. This is the food chain, and pulling it is the unique ability of plants to turn sunlight into stored energy in the form of carbohydrates, the basic fuel of all animals. Solar-powered photosynthesis is the only way to make this fuel. There is no alternative to plant energy, just as there is no alternative to oxygen. The results of taking away our plant energy may not be as sudden as cutting off oxygen, but they are as sure.
Energy cannot be created or canceled, but it can be concentrated. This is the larger and profoundly explanatory context of a national-security memo George Kennan wrote in 1948 as the head of a State Department planning committee, ostensibly about Asian policy but really about how the United States was to deal with its newfound role as the dominant force on Earth. “We have about 50 percent of the world’s wealth but only 6.3 percent of its population,” Kennan wrote. “In this situation, we cannot fail to be the object of envy and resentment. Our real task in the coming period is to devise a pattern of relationships which will permit us to maintain this position of disparity without positive detriment to our national security. To do so, we will have to dispense with all sentimentality and day-dreaming; and our attention will have to be concentrated everywhere on our immediate national objectives. We need not deceive ourselves that we can afford today the luxury of altruism and world-benefaction.”“The day is not far off,” Kennan concluded, “when we are going to have to deal in straight power concepts.”
… On average, it takes 5.5 gallons of fossil energy to restore a year’s worth of lost fertility to an acre of eroded land—in 1997 we burned through more than 400 years’ worth of ancient fossilized productivity, most of it from someplace else. Even as the earth beneath Iowa shrinks, it is being globalized.
...The experience in population control in the developing world is by now clear: It is not that people make more people so much as it is that they make more poor people. In the forty-year period beginning about 1960, the world’s population doubled, adding virtually the entire increase of 3 billion to the world’s poorest classes, the most fecund classes. The way in which the green revolution raised that grain contributed hugely to the population boom, and it is the weight of the population that leaves humanity in its present untenable position.
Discussion of these, the most poor, however, is largely irrelevant to the American situation. We say we have poor people here, but almost no one in this country lives on less than one dollar a day, the global benchmark for poverty. It marks off a class of about 1.3 billion people, the hard core of the larger group of 2 billion chronically malnourished people—that is, one third of humanity. We may forget about them, as most Americans do.
The common assumption these days is that we muster our weapons to secure oil, not food. There’s a little joke in this. Ever since we ran out of arable land, food is oil. Every single calorie we eat is backed by at least a calorie of oil, more like ten. In 1940 the average farm in the United States produced 2.3 calories of food energy for every calorie of fossil energy it used. By 1974 (the last year in which anyone looked closely at this issue), that ratio was 1:1. And this understates the problem, because at the same time that there is more oil in our food there is less oil in our oil. A couple of generations ago we spent a lot less energy drilling, pumping, and distributing than we do now. In the 1940s we got about 100 barrels of oil back for every barrel of oil we spent getting it. Today each barrel invested in the process returns only ten, a calculation that no doubt fails to include the fuel burned by the Hummers and Blackhawks we use to maintain access to the oil in Iraq.
...There is another energy matter to consider here, though. The grinding, milling, wetting, drying, and baking of a breakfast cereal requires about four calories of energy for every calorie of food energy it produces. A two-pound bag of breakfast cereal burns the energy of a half-gallon of gasoline in its making. All together the food-processing industry in the United States uses about ten calories of fossil-fuel energy for every calorie of food energy it produces. That number does not include the fuel used in transporting the food from the factory to a store near you, or the fuel used by millions of people driving to thousands of super discount stores on the edge of town, where the land is cheap.
...Green eaters, especially vegetarians, advocate eating low on the food chain, a simple matter of energy flow. Eating a carrot gives the diner all that carrot’s energy, but feeding carrots to a chicken, then eating the chicken, reduces the energy by a factor of ten. The chicken wastes some energy, stores some as feathers, bones, and other inedibles, and uses most of it just to live long enough to be eaten. As a rough rule of thumb, that factor of ten applies to each level up the food chain, which is why some fish, such as tuna, can be a horror in all of this. Tuna is a secondary predator, meaning it not only doesn’t eat plants but eats other fish that themselves eat other fish, adding a zero to the multiplier each notch up, easily a hundred times, more like a thousand times less efficient than eating a plant.
Animal rights aside, vegetarians can lose the edge in the energy argument by eating processed food, with its ten calories of fossil energy for every calorie of food energy produced. The question, then, is: Does eating processed food such as soy burger or soy milk cancel the energy benefits of vegetarianism, which is to say, can I eat my lamb chops in peace? Maybe. If I’ve done my due diligence, I will have found out that the particular lamb I am eating was both local and grass-fed, two factors that of course greatly reduce the embedded energy in a meal. I know of ranches here in Montana, for instance, where sheep eat native grass under closely controlled circumstances—no farming, no plows, no corn, no nitrogen. Assets have not been stripped. I can’t eat the grass directly. This can go on. There are little niches like this in the system. Each person’s individual charge is to find such niches.
...Eighty percent of the grain the United States produces goes to livestock. Seventy-eight percent of all of our beef comes from feed lots, where the cattle eat grain, mostly corn and wheat. So do most of our hogs and chickens. The cattle spend their adult lives packed shoulder to shoulder in a space not much bigger than their bodies, up to their knees in shit, being stuffed with grain and a constant stream of antibiotics to prevent the disease this sort of confinement invariably engenders. The manure is rich in nitrogen and once provided a farm’s fertilizer. The feedlots, however, are now far removed from farm fields, so it is simply not “efficient” to haul it to cornfields. It is waste. It exhales methane, a global-warming gas. It pollutes streams. It takes thirty-five calories of fossil fuel to make a calorie of beef this way; sixty-eight to make one calorie of pork.
Still, these livestock do something we can’t. They convert grain’s carbohydrates to high-quality protein. All well and good, except that per capita protein production in the United States is about double what an average adult needs per day. Excess cannot be stored as protein in the human body but is simply converted to fat. This is the end result of a factory-farm system that appears as a living, continental-scale monument to Rube Goldberg, a black-mass remake of the loaves-and-fishes miracle. Prairie’s productivity is lost for grain, grain’s productivity is lost in livestock, livestock’s protein is lost to human fat—all federally subsidized for about $15 billion a year, two thirds of which goes directly to only two crops, corn and wheat.
This explains why the energy expert David Pimentel is so worried that the rest of the world will adopt America’s methods. He should be, because the rest of the world is. Mexico now feeds 45 percent of its grain to livestock, up from 5 percent in 1960. Egypt went from 3 percent to 31 percent in the same period, and China, with a sixth of the world’s population, has gone from 8 percent to 26 percent. All of these places have poor people who could use the grain, but they can’t afford it.
The city of Brighton’s Direct Action Collective reports :
The current food system is dependent on non-renewable fossil fuel resources, which will soon become increasingly scarce and expensive. This dependence is a threat to food security and future food supply.
The availability of decades of cheap fossil fuel energy has allowed the food system to become dependent on finite resources that are rapidly being depleted. Due to the constraints of the first and second laws of thermodynamics this system cannot be maintained in its current form. Essential components of the current system such as synthetic nitrogen fertilizers, which require natural gas as a feedstock and oil dependent distribution, exemplify the fragile nature of the food system. A wide scale conversion to low energy, ecologically sustainable agriculture must be implemented to avoid food system collapse and future food supply shortages.
…… If action to change these aspects of the food system is not taken, convening resource depletion and degradation will cause the food system to collapse.
Geologist Dale Allen Pfeiffer points out in his article entitled, "Eating Fossil Fuels," that approximately 10 calories of fossil fuels are required to produce every 1calorie of food eaten in the US.[A] The size of this ratio stems from the fact that every step of modern food production is fossil fuel and petrochemical powered:
The implications [of Peak Oil] in terms of food are pretty terrifying. Since the 1960s it has been true to say that food equals oil. In 1944 the average US farm produced 2.3 thousand calories of food for every calorie of fossil fuel inputs. In 1974 the ratio became 1:1…. As Heinberg says, “in terms of energy return on energy invested, industrial agriculture is the least efficient food distribution system the world has ever known.”
- Pesticides are made from oil;[A]
- Commercial fertilizers are made from ammonia, which is made from natural gas, which will peak about 10 years after oil peaks; [A]
- With the exception of a few experimental prototypes, all farming implements such as tractors and trailers are constructed and powered using oil.[A]
- Food storage systems such as refrigerators are manufactured in oil-powered plants, distributed across oil-powered transportation networks and usually run on electricity, which most often comes from natural gas or coal;[A]
- In today’s globalized economy the average piece of food is transported hundreds to thousands of miles from where it is produced to where it is consumed (US almost 1,500 miles, in Canada 5,000 miles). In short, people gobble oil like two-legged SUVs. [A]
- The motives of most of the wars in recorded history were the need to expand agricultural production, as an essential portion of the energy base.[B]
- With every increase in food production, the human population grew apace.[B]
- Modern agriculture is highly energy intensive: egs, to produce one kilogram of nitrogen for fertilizer requires the energy equivalent of 1.4 to 1.8 litres of diesel fuel (excluding the natural gas feedstock).[B]
- We are literally eating fossil fuels, but due to the laws of thermodynamics, between energy input and agricultural output, along the way there is a marked energy loss. Removing fossil fuels from the equation, the current US daily diet would require nearly three weeks of labour per capita to produce.[B]
This necessary fossil fuel input is going to crash headlong into declining fossil fuel production![B]
Giampietro & Pimental concluded that a sustainable food system would be possible under the following four conditions:[B]
- Environmentally sound agricultural technologies must be implemented.
- Renewable energy technologies must be put into place.
- Major increases in energy efficiency must reduce exosomatic energy consumption per capita.
- Population size and consumption must be compatible with maintaining the stability of environmental processes.
NOTE: None of their aforementioned research, including it’s conclusions and population reduction recommendations, to attain a sustainable economy and avert disaster, considered the impact of declining fossil fuel production (Peak Oil)![B]
In other words, the current peaking of global oil production is not only a crisis in and of itself but shall conceivably precipitate the aforementioned agricultural crisis sooner than expected, due to decreased production of the required fossil fuels for intensive agriculture to simply maintain crop production constant.[B]
- …a population reduction of one-third will not be effective for sustainability.
- ….the necessary reduction might be in excess of one-half
- … In light of Peak Oil/declining fossil fuel production’s input into agriculture, and the additional impending agricultural crisis: For global sustainability to be achieved, global population will have to be reduced by 2/3rds to 2 billion (a reduction of 68%).[B]
In the Energy Bulletin article, Facing the Limits to Growth, Meadows explains catastrophic overshoot:
“Does our present lifestyle mean so much to us that we would subject ourselves and our children to this fast approaching tragedy simply for a few more years of conspicuous consumption?”
Richard Heinberg does have some suggestions at the end of Threats of Peak Oil to the Global Food Supply:
Occasionally, however, there arises the potential for catastrophic overshoot. Growth in the globe's population and material economy confronts humanity with this possibility. It is the focus of Limits to Growth. The potential consequences of this overshoot are profoundly dangerous. The situation is unique; it confronts humanity with a variety of issues never before experienced by our species on a global scale. We lack the perspectives, the cultural norms, the habits, and the institutions required to cope. And the damage will, in many cases, take centuries or millennia to correct. But the consequences need not be catastrophic. Overshoot can lead to two different outcomes. One is a crash of some kind. Another is a deliberate turnaround, a correction, a careful easing down. We explore these two possibilities as they apply to human society and the planet that supports it. We believe that a correction is possible and that it could lead to a desirable, sustainable, sufficient future for all the world's peoples. We also believe that if a profound correction is not made soon, a crash of some sort is certain….
Any population-economy-environment system that has feedback delays and slow physical responses; that has thresholds and erosive mechanisms; and that grows rapidly is literally unmanageable. No matter how fabulous its technologies, no matter how efficient its economy, no matter how wise its leaders, it can't steer itself away from hazards. If it constantly tries to accelerate, it will overshoot.
By definition, overshoot is a condition in which the delayed signals from the environment are not yet strong enough to force an end to growth. How, then, can society tell if it is in overshoot? Falling resource stocks and rising pollution levels are the first clues. Here are some other symptoms:
- Capital, resources, and labor diverted to activities compensating for the loss of services that were formerly provided without cost by nature (for example, sewage treatment, air purification, water purification, flood control, pest control, restoration of soil nutrients, pollination, or the preservation of species).
- Capital, resources, and labor diverted from final goods production to exploitation of scarcer, more distant, deeper, or more dilute resources.
- Technologies invented to make use of lower-quality, smaller, more dispersed, less valuable resources, because the higher-value ones are gone.
- Failing natural pollution cleanup mechanisms; rising levels of pollution.
- Capital depreciation exceeding investment, and maintenance deferred, so there is deterioration in capital stocks, especially long-lived infrastructure.
- Growing demands for capital, resources, and labor used by the World: The Dynamics of Growth in a Finite World military or industry to gain access to, secure, and defend resources that are increasingly concentrated in fewer, more remote, or increasingly hostile regions.
- Investment in human resources (education, health care, shelter) postponed in order to meet immediate consumption, investment, or security needs, or to pay debts.
- Debts a rising percentage of annual real output.
- Eroding goals for health and environment.
- Increasing conflicts, especially conflicts over sources or sinks.
- Shifting consumption patterns as the population can no longer pay the price of what it really wants and, instead, purchases what it can afford.
- Declining respect for the instruments of collective government as they are used increasingly by the elites to preserve or increase their share of a declining resource base.
- Growing chaos in natural systems, with "natural" disasters more frequent and more severe because of less resilience in the environmental system.
Do you observe any of these symptoms in your "real world"? If you do, you should suspect that your society is in advanced stages of overshoot.
The transition to a non-fossil-fuel food system will take time. And it must be emphasized that we are discussing a systemic transformation - we cannot just remove oil in the forms of agrochemicals from the current food system and assume that it will go on more or less as it is. Every aspect of the process by which we feed ourselves must be redesigned. And, given the likelihood that global oil peak will occur soon, this transition must occur at a rapid pace, backed by the full resources of national governments.
Without cheap transportation fuels we will have to reduce the amount of food transportation that occurs, and make necessary transportation more efficient. This implies increased local food self-sufficiency. It also implies problems for large cities that have been built in arid regions capable of supporting only small populations on their regional resource base. One has only to contemplate the local productivity of a place like Nevada, to appreciate the enormous challenge of continuing to feed people in such a city such as Las Vegas without easy transportation.
We will need to grow more food in and around cities. Currently, Oakland California is debating a food policy initiative that would mandate by 2015 the growing within a fifty-mile radius of city center of 40 percent of the vegetables consumed in the city.11 If the example of Cuba were followed, rooftop gardens would result, as well as rooftop raising of food animals like chickens, rabbits and guinea pigs.
Localization of the food process means moving producers and consumers of food closer together, but it also means relying on the local manufacture and regeneration of all of the elements of the production process - from seeds to tools and machinery. This would appear to rule out agricultural bioengineering, which favors the centralized production of patented seed varieties, and discourages the free saving of seeds from year to year by farmers.
Clearly, we must minimize chemical inputs to agriculture (direct and indirect - such as those introduced in packaging and processing).
We will need to re-introduce draft animals in agricultural production. Oxen may be preferable to horses in many instances, because the former can eat straw and stubble, while the latter would compete with humans for grains.
Governments must also provide incentives for people to return to an agricultural life. It would be a mistake simply to think of this simply in terms of the need for a larger agricultural work force. Successful traditional agriculture requires social networks, and intergenerational sharing of skills and knowledge. We need not just more agricultural workers, but a rural culture that makes agricultural work rewarding.
Farming requires knowledge and experience, and so we will need education for a new generation of farmers; but only some of this education can be generic - much of it must of necessity be locally appropriate.
It will be necessary as well to break up the corporate mega-farms that produce so much of today's cheap grain. Industrial agriculture implies an economy of scale that will be utterly inappropriate and unworkable for post-industrial food systems. Thus land reform will be required in order to enable smallholders and farming co-ops to work their own plots.
In order for all of this to happen, governments must end subsidies to industrial agriculture and begin subsidizing post-industrial agricultural efforts. There are many ways in which this could be done. The present regime of subsidies is so harmful that merely stopping it in its tracks might in itself be advantageous; but, given the fact that a rapid transition is essential, offering subsidies for education, no-interest loans for land purchase, and technical support during the transition from chemical to organic production would be essential.
Finally, given carrying-capacity limits, food policy must include population policy. We must encourage smaller families by means of economic incentives and improve the economic and educational status of women in poorer countries.
All of this constitutes a gargantuan task, but the alternatives - doing nothing or attempting to solve our food-production problems simply by applying more technological intensification - will almost certainly result in dire consequences. In that case, existing farmers would fail because of fuel and chemical prices. All of the worrisome existing trends mentioned earlier would intensify to the point that the human carrying capacity of Earth would be degraded significantly, and perhaps to a large degree permanently.
In sum, the transition to a fossil-fuel-free food system does not constitute a utopian proposal. It is an immense challenge and will call for unprecedented levels of creativity at all levels of society. But in the end it is the only rational option for averting human calamity on a scale never before seen.
B. Peak Oil: Medicine, Water and National Defense
It's not just agriculture and transportation’s petrol/diesel prices that are entirely dependent on abundant, cheap oil. Consider the and agriculture that are entirely dependent on abundant, cheap oil. Modern medicine, water distribution, and national defense are each entirely powered by oil and petroleum derived chemicals.
In addition to transportation, food, water, and modern medicine, mass quantities of oil are required for all plastics, all computers and all high-tech devices. [A]
Some specific examples may help illustrate the degree to which our technological base is dependent on fossil fuels:
The construction of an average car consumes the energy equivalent of approximately 20 barrels of oil, which equates to 840 gallons, of oil. Ultimately, the construction of a car will consume an amount of fossil fuels equivalent to twice the car’s final weight. [A]
The production of one gram of microchips consumes 630 grams of fossil fuels. According to the American Chemical Society, the construction of single 32 megabyte DRAM chip requires 3.5 pounds of fossil fuels in addition to 70.5 pounds of water. [A]
The construction of the average desktop computer consumes ten times its weight in fossil fuels.
The Environmental Literacy Council tells us that due to the "purity and sophistication of materials (needed for) a microchip, . . . the energy used in producing nine or ten computers is enough to produce an automobile." [A]
When considering the role of oil in the production of modern technology, remember that most alternative systems of energy — including solar panels/solar-nanotechnology, windmills, hydrogen fuel cells, biodiesel production facilities, nuclear power plants, etc. — rely on sophisticated technology. [A]
In fact, all electrical devices make use of silver, copper, and/or platinum, each of which is discovered, extracted, transported, and fashioned using oil-powered machinery. For instance, in his book, The Lean Years: Politics of Scarcity, author Richard J. Barnet writes: [A]
Most of the feedstock (soybeans, corn) for biofuels such as biodiesel and ethanol are grown using the high-tech, oil-powered industrial methods of agriculture described above. [A]
To produce a ton of copper requires 112 million BTU's or the equivalent of 17.8 barrels of oil. The energy cost component of aluminum is twenty times higher.
Nuclear energy requires uranium, which is also discovered, extracted, and transported using oil-powered machinery.
In short, the so-called "alternatives" to oil are actually "derivatives" of oil. Without an abundant and reliable supply of oil, we have no way of scaling these alternatives to the degree necessary to power the modern world. [A]
C. Peak Oil: Financial / Banking System
The global financial system is entirely dependent on a constantly increasing supply of oil and natural gas. The relationship between the supply of oil and natural gas and the workings of the global financial system is arguably the key issue to understanding and dealing with Peak Oil, far more important than alternative sources of energy, energy conservation, or the development of new technologies. [A]
Dr. Colin Campbell presents an understandable model of this complex (and often difficult to explain) relationship: [A]
It is becoming evident that the financial and investment community begins to accept the reality of Peak Oil, which ends the first half of the age of oil. They accept that banks created capital during this epoch by lending more than they had on deposit, being confident that tomorrow’s expansion, fuelled by cheap oil-based energy, was adequate collateral for today’s debt. The decline of oil, the principal driver of economic growth, undermines the validity of that collateral which in turn erodes the valuation of most entities quoted on Stock Exchanges. The investment community however faces a dilemma. It desires to protect its own fortunes and those of its privileged clients while at the same time is reluctant to take action that might itself trigger the meltdown. It is a closely-knit community so that it is hard for one to move without the others becoming aware of his actions.
The scene is set for the Second Great Depression, but the conservatism and outdated mindset of institutional investors, together with the momentum of the massive flows of institutional money they are required to place, may help to diminish the sense of panic that a vision of reality might impose. On the other hand, the very momentum of the flow may cause a greater deluge when the foundations of the dam finally crumble. It is a situation without precedent.
Commentator Robert Wise explains the connection between energy and money as follows:
It's not physics, but it's true: money equals energy. Real, liquid wealth represents usable energy. It can be exchanged for fuel, for work, or for something built by the work of humans or fuel-powered machines. Real cost reflects the energy cost of doing something; real value reflects the energy expended to build something.
Nearly all the work done in the world economy -- all the manufacturing, construction, and transportation -- is done with energy derived from fuel. The actual work done by human muscle power is miniscule by comparison. And, the lion's share of that fuel comes from oil and natural gas, the primary sources of the world's wealth.
In October 2005, the normally conservative London Times acknowledged that the world's wealth might soon evaporate as we enter a technological and economic "Dark Age." In an article entitled "Waiting for the Lights to Go Out" Times reporter Bryan Appleyard wrote the following: [A]
We've taken the past 200 years of prosperity for granted. Humanity's progress is stalling, we are facing a new era of decay, and nobody is clever enough to fix it. Is the future really that black? The greatest getting-and-spending spree in the history of the world is about to end. The 200-year boom that gave citizens of the industrial world levels of wealth, health and longevity beyond anything previously known to humanity is threatened on every side. Oil is running out; the climate is changing at a potentially catastrophic rate; wars over scarce resources are brewing; finally, most shocking of all, we don't seem to be having enough ideas about how to fix any of these things.
Almost daily, new evidence is emerging that progress can no longer be taken for granted, that a new Dark Age is lying in wait for ourselves and our children.
. . . growth may be coming to an end. Since our entire financial order — interest rates, pension funds, insurance, stock markets — is predicated on growth, the social and economic consequences may be cataclysmic.
If you want to understand just how cataclysmic these consequences might be, consider the current crisis in the UK as a "preview of coming attractions." On October 23, 2005 the London Telegraph reported: [A]
The Government has admitted that companies across Britain might be forced to close this winter because of fuel shortages. "The balance between supply and demand for energy is uncomfortably tight. I think if we have a colder -than-usual winter given the supply shortages, certain industries could suffer real difficulties." The admission was made after this newspaper revealed that Britain could be paralysed by energy shortages if the winter is colder than average.
The Met Office says there is a 67 per cent likelihood of prolonged cold this year after almost a decade of mild winters. That, coupled with high fuel prices, raises the fear that industry will not be able to cope.
The severe consequences of these relatively small shortfalls between supply and demand (less than 5%) have prompted the UK government to look into draconian energy conservation measures that would be enforced via house-to-house searches by a force of "energy-police." [A]
Parts of the US are facing similarly dire possibilities. In December 2005, US News and World Report published a six-page article documenting some potentially nightmarish scenarios about to descend on the US. According to the normally conservative publication, people in the northeastern US could be facing massive layoffs, rotating blackouts, permanent industrial shutdowns, and catastrophic breakdowns in public services this winter as a result of shortages of heating oil and natural gas. [A]
This is happening despite the fact we are probably at least a few years away from seeing the peak in either oil or natural gas production. You have to ask yourself, "what's going to happen when the 'real problems' start showing up?" [A]
1. Are the Banks Aware of this Situation?
The central ones certainly are. On June 28, 2005, Gary Duncan, the economics editor for the UK based Sunday Times, reported that the Bank of International Settlements (BIS), "the central banker's central bank", had issued the following warnings regarding the economic fallout of further rises in the price of oil: [A]
Duncan goes on to summarize the bank's report as follows: [A]
Oil prices may well remain high for a prolonged period of time . . . Further rises — if they materialize — may have more severe consequences than currently anticipated. .
Everyone needs to commit to some unpleasant compromises now, in order to avoid even more unpleasant alternatives in the future . . .
A bank as crucially important to the world economy and as influential to the markets as the BIS doesn’t just casually toss out terms like "unpleasant compromises", "severe consequences", "even more unpleasant alternatives", "turmoil," and "disorderly decline" in relation to the oil markets and the dollar (which is the reserve currency for all oil transactions in the world) unless something very nasty is brewing in the background. [A]
The US current account deficit meant that a further slide in the dollar was "almost inevitable", while the BIS sounded a warning that the deficit could yet lead to "a disorderly decline of the dollar, associated turmoil in other financial markets, and even recession."
On a similar note, Warren Buffet, the world's second richest man, recently warned of "mega-catastrophic risks" and "investment time bombs" currently threatening the global economy. Add those to a mix of sky-high energy prices; destabilizing resource wars, a possible currency collapse, more "petrodollar warfare", and well, the picture begins to look pretty grim, pretty quick. [A]
D. Conclusions: "What Does All of This Mean?"
What all of this means, in short, is that the aftermath of Peak Oil will extend far beyond, how much you will pay for gas. If you are focusing solely on the price at the pump, more fuel-efficient forms of transportation, or alternative sources of energy, you aren’t seeing the bigger picture. [A] Oilman ends with:
When you finally realize how pervasive it (oil) is in our everyday lives, you will begin to understand exactly how much the human race must change in order to do without it.
Hopefully, you have now removed your head from the sand and begun to think for yourself about the real magnitude of the crisis our children are facing.
Excerpt: PeakOil_RSA Briefing Paper [Word(P131):3,864KB]
18 July 2006 :: PeakOil_RSA :: Briefing Paper