PowerSwitch

Considering Peak Oil (actual date irrelevant) and the many other Peak resources we seem to be hitting, I have been mulling over the implications for the general global economy and the future. It seems there is no other outcome likely than a reduced standard of living for us westerners and it seems this reduction has probably started. Beria's lovely assesments of world events and likely outcomes must be getting to me!

So, accepting that we are likely to face a downslope over the coming years/decades that may well get nasty, what can be done about it? How do we best mitigate what is coming? I know this is what the forum is all about in a sense, but I think I may just be having a wee panic!

How do you advise your children (albeit mine are now grown up more or less - but they are always your children) how to ride out the coming storm? How should the people I care about including myself ride it out for the next few decades? Where should we go, what work can we do, how do we stay safe, how can we ensure we don't go hungry, etc. etc.

I suppose where I am coming from, is that I think things will go downhill a long way from where we are now. Not just wars, but quite possibly local violence could occur as people are left with no choice but to steal whatever they need in a world which has much less than what we have been used to, including food and shelter!

Sometimes I wonder if it would have been better to take the blue pill....

We look forward to higher taxation, fewer services, increased authoritarianism, more social dissatisfaction, higher unemployment, more resource wars and much more - far more - environmental degradation.

That's me being optimistic.

It could be worse of course but at least (I think) we could deal with the above, each in our own way.

The same advice applies now as did several years ago: get out and stay out of debt, grow some food, reduce your need for money, reduce your dependence upon machinery, get some useful skills for the local community and get to know that community well.

If it's worse than in my first paragraph, then I'll be slightly less optimistic.

It looks like the middle class is hollowed out in a huge game of musical chairs. As soon as you leave the middle class, you dont count to anyone. You become a nobody mixed up with other nobodies in a vast darwinian fermentation broth.

Thus, the short term solution is simple: Try with everything you have to stay in the middle class. Make sure you have a job and an income.

When we get kicked out and dont have an income anymore, God help us!

My guess is that the rich will be victims of blackmailing and kidnapping to an extent that no police can protect them from, until a new stratification has established itself.

I haven't time to write much, we have all been round this loop many times.

Try this for a start,

http://www.energybulletin.net/stories/2 ... diary-once

Things always look worst just before they start to get better.

I like this too, a man who has been talking sense for 40 years.

http://www.energybulletin.net/stories/2 ... trol-world

Although the transcription appears a bit garbled.

MacG wrote: My guess is that the rich will be victims of blackmailing and kidnapping to an extent that no police can protect them from, until a new stratification has established itself.

I read somewhere that about 3000 farmers have been murdered in South Africa since the end of Apartheid. I think South Africa might be a fair model for where we are headed.

Snow, here's a bit of sage advice from some old welsh guy - "...I warn you not to be ordinary. I warn you not to be young. I warn you not to fall ill. I warn you not to get old."

RalphW wrote:I haven't time to write much, we have all been round this loop many times.

Try this for a start,

http://www.energybulletin.net/stories/2 ... diary-once

Things always look worst just before they start to get better.

I like this too, a man who has been talking sense for 40 years.

http://www.energybulletin.net/stories/2 ... trol-world

Although the transcription appears a bit garbled.

The 1st guy gives me a little hope that it may not be as bad as I think it will...not holding my breath mind.

And when the goal is full scale mobilisation towards survival, resources will go where they need to go, not to death-inducing capture by parasites.

Of course, this begs the question of what will trigger this survival mechanism. Do we need to get to the brink, and see thing worsen yet again (possibly a lot more) before we get there? I guess this is where my optimism comes in: I think the natural constraints are going to come for a while in the form of steadily increasing constraints (via prices, for instance) rather than outright shortages, and this will trigger enough action to move us on a different path, even if this is not immediately obvious.

Ludwig wrote:I read somewhere that about 3000 farmers have been murdered in South Africa since the end of Apartheid. I think South Africa might be a fair model for where we are headed.

Heading South, you mean?

RalphW wrote:
Things always look worst just before they start to get better.

But surely you're only talking from the perspective of post-war Western developments. We've had numerous nerve-wracking incidents - e.g. the Cuban Missile Crisis, the 70s oil crisis - whose consequences weren't as bad as many people feared.

I see Peak Oil as a problem of a totally different order.

If you look at history before 1945, you find lots of bad things happening and they were often worse than people expected - perhaps people NOT expecting the worst, and sticking their heads in the sand, is part of humanity's problem.

We've got used to believing in the fairy tale of humanity's path as the perpetual march of progress - believing that there is no upper limit to wellbeing and enlightenment. I have never bought into this idea; the concept of endless progress is absurd. I have often thought that in the arts, science and technology, we have been seeing diminishing returns over the past few decades; the Internet was the last great technological revolution, but that is now a mature technology and we are reaching the point where we've done as much with it as is possible. Where next?

I think there will probably be what you might call a "spiritual revolution", where we are forced to accept the end of technological innovation, and also to accept the fact - long denied - that we are not in absolute control of our fate. Cheap energy has given us, in the West, that illusion for a long time.

This "spiritual revolution", I think, will take a long time coming; there will be a huge amount of suffering before we attain that final enlightenment.

Although projecting the future of the global economy and society is a very hard subject, I have been trying to construct a high probability timeline on the future of what I consider our new post Lehman ‘late-industrialism’ era of industrial civilisation.

If you have analysis the economic, geopolitical and environmental trends the last few decades, it doesn’t take a genius to work out that by the middle of the 00s, conventional global oil production had peaked, the massive monetary expansion of the Federal Reserve was blowing inflationary bubbles which would eventually pop, with hugely damaging affects on the solvency of the globalised banking system, the global economy and the fiscal health of the major economic powers.

However, just because the long term trends are clearly unsustainable, damaging and almost certain to lead to disaster, does not mean in the short term that thing can improve. In other words, a long term secular trend (decline) is subdivided by short-term cyclical recoveries.

Trying to map a reasonably accurate timeline for the coming decades, I would argue the following.

Following the near-collapse of the global economy in late 2008, here’s the good news, we have past the first systemic test (for the moment) and avoided a immediate implosion of industrialised civilisation following the global peak of conventional oil production. We are now entering into a period of cyclical recovery in the global economy, driven mainly by a massive expansion of the monetary base.



It is one of those laws of economics that for a while, the inflationary impact of this gigantic expansion of the money supply will lead to a revival of economic activity through the expansion of asset bubbles – leading to a recovery in real economic activity. For example, the inflation of the housing market led to people withdrawing equity to spend on new kitchens (pumping money into builders etc which went on to spend on bars/pubs – money from the printing presses leaked into the ‘real’ economy).

The Fed among others is trying to do the same thing now, each time they try this inflationary trick, the more printing money is needed to sustain a ever shorter recovery. But, as you are all aware, QE2 is being planned, as we speak, and it will drive, for a short-term, a recovery in the global economy.

On this basis, I project an economic recovery (albeit choppy) going into 2015, combined with higher inflation and a creeping rise in the interest rate. Global oil production (conventional and unconventional) will roughly maintain its plateau until around the middle of the decade, which along with conservation, substitution of cheap LNG production and a potential slowdown of Chinas economy in 2012 (due to bad debts) will lead to reduced demand for China-led commodities which ensure that supply and demand in oil, copper and other key resources will roughly maintain its plateau balance going into 2015/16.

Geopolitically, the world situation will remain stable during this coming five year period of cyclical recovery in the context of a long-term secular trend of civilizational decline, although localised flare-ups are possible, they will be contained and will not have any serious impact of either global fossil-fuel production or the global economy.

The trick-down affect of monetary expansion, fuelling an eventual economic expansion in Main Street will lead to a energy crisis, for a permanent slope in oil production after 2015 impacting surging global demand. This will lead to the second oil shock (and related food spike) in 2016, as projected by Deutsche Bank.

In a nutshell: The oil industry chronically under invests in finding new supplies, exemplified both by Big Oil’s recent love of share buybacks and under-investment by big oil-producing nations. That spells a looming supply crunch.
That will send oil to $175 a barrel by 2016—

http://blogs.wsj.com/environmentalcapit ... bank-says/

The world, still burdened by massive sovereign debt in the developed world, will face a second systemic challenge to the global economy. At this point, either the laws of economics will force a drastic reduction of demand for oil (sending prices down) or the damage to the global economy will be so severe that it will lead to a cascading collapse of the world system. Ludwig is adamant that this oil shock will lead to the collapse of the system; I think that the probability is more of the Deutsche- Bank style rapid transition away from oil led by the United States.

Deutsche Bank notes:
US demand is the key. It is the last market-priced, oil inefficient, major oil consumer. We believe Obama’s environmental agenda, the bankruptcy of the US auto industry, the war in Iraq, and global oil supply challenges have dovetailed to spell the end of the oil era.

The big driver? The coming-of-age of electric and hybrid vehicles, which promise massive fuel-economy gains for short-hop commuting but which so far have not been economic.

Deutsche Bank expects the electric car to become a truly “disruptive technology” which takes off around the world, sending demand for gasoline into an “inexorable and accelerating decline.”

The oil spike of 2016 will herald the end of the post-Lehman cyclical recovery of the global economy and the deflationary impact of both significant demand destruction in the United States and the resurfacing of the sovereign debt crisis will lead to an extremely tough period for the world. There will almost certainly be accelerated QE by the central banks in the developed world (increasingly becoming a major buyer of their government bonds) and to fight the deflationary impact of the short-term collapse in commodity prices.

In some of the weaker states, the shock will be too much, and places like Greece could see a period of social unrest, government takeovers of the banks and accelerated monetisation of their sovereign bonds to avoid a default which would shake the global economy to its knees. The only room for optimism is of the growing commercialization of conservation technologies, including a new generation of renewable, the emergence of the electric car, a whole new range of highly energy efficient products as well as higher yielding food strains which mitigate the declining global production of oil (and oil based products critical to the agricultural system).

The 2016- 2020 period will be a cyclical downward period in which the trends in increasingly de-middle classes of the Western world increases, the sovereign fiscal crisis in the West worsens and the balance of global power shifts ever further to Asia versus the declining West. Geopolitically, this period will be the era when the militaries of the emerging industrial powers start to come into their own and the fiscal crisis in the United States starts to impact on the military strength of the Pentagon. Throughout the world, emerging regional players start to flex their muscles, geopolitical tensions rise but global peace is maintained. Economically, the ever increasing proportion of the Western economy devoted to paying debt (rather than investing in a post-oil future) accelerates (and only a massive expansion of monetisation hides the sheer grimness of the situation) with the impact of a gold price which starts to skyrocket by the end of the decade as faith in government bond mkts starts to dry up.

That's really interesting, but:

Either you've been on a crash course in grammar and spelling;

or: you cut and paste it.

Which is it?

featherstick wrote:That's really interesting, but:

Either you've been on a crash course in grammar and spelling;

or: you cut and paste it.

Which is it?

The world has just reached New Years Day 2020. Let’s review the world situation.

My overall summary is that the world has avoided the doom-and-gloom predictions of the early wave of peak oil activists by the accelerated expansion of unsustainable trends in economics, energy and other areas. These include; using up scarce water supplies, particularly in the Third World, exploiting substitutes like LNG, shale gas and tar sands to expand unconventional production and in the short-term ensure that sufficient flows of energy are sustained, monetisation an ever greater proportion of government debt to avoid sovereign bankruptcy in the Western world and finally exploiting technological fixes which ultimately depend upon a decaying industrialised infrastructure which is being hollowed out.

A few other trends which are about to become visible are the following; the emergence of antibiotic resistance super-viruses by 2020, the acceleration of the decline in oil exports by the major oil producers (the impact of oil mkts was hidden by the late-decade collapse in demand driven by the 2016 spike and the massive conservation/substitution transition) and the little understand but growing importance of a collapsing ERORI as the decline of the all-important conventional, Middle-Eastern based ‘cheap oil’ in both overall production levels and the availability in the global mkts.

Early in the 2020 decade, some form of ‘perfect storm’ combining multiples of the above trends will lead to a third systemic crisis in the world economy. It could be a anti-biotic global pandemic which wreaks global trade flows and the JIT system, or a collapse in the value of the dollar, leading to a hyperinflationary explosion in the United States or some other combination. Either way, whatever cocktail the storm emerges, it will destroy any remaining faith in growth and the future of a viable industrial civilisation.

From now on, the inter-connect feedback mechanisms (as outlined above) will feed on each other and result in a ever greater arc of chaos around the world. The Pentagon outlines how the geopolitics (which will replace the economy as the primary area of interest) of the world could evolve.

2020-2030

Europe

2020: Increasing skirmishes over water and immigration
2022: Skirmish between France and Germany over commercial access to Rhine
2025: EU nears collapse
2030: Nearly 10% of European population moves to a different country

Asia

2020: Persistent conflict in South East Asia; Burma, Laos, Vietnam, India, China
2025: Internal conditions in China deteriorate dramatically leading to civil war and border wars
2030: Tension growing between China and Japan over Russian energy

United States

2020: Oil prices increase as security of supply is threatened by conflicts in Persian Gulf and Caspian
2025: Internal struggle in Saudi Arabia brings Chinese and U.S.
naval forces to Gulf ,i direct confrontation

http://www.mindfully.org/Air/2003/Penta ... 1oct03.htm

This perfect storm(s), as each crisis will erupt, feeding the accelerating implosion of the industrial civilisation will impact the Third world first, being the most vulnerable. As the Pentagon notes;

As famine, disease, and weather-related disasters strike due to the abrupt climate change, many countries’ needs will exceed their carrying capacity. This will create a sense of desperation, which is likely to lead to offensive aggression in order to reclaim balance. Imagine eastern European countries, struggling to feed their populations with a falling supply of food, water, and energy, eyeing Russia, whose population is already in decline, for access to its grain, minerals, and energy supply. Or, picture Japan, suffering from flooding along its coastal cities and contamination of its fresh water supply, eying Russia’s Sakhalin Island oil and gas reserves as an energy source to power desalination plants and energy-intensive agricultural processes. Envision Pakistan, India, and China – all armed with nuclear weapons – skirmishing at their borders over refugees, access to shared rivers, and arable land. Spanish and Portuguese fishermen might fight over fishing rights – leading to conflicts at sea. And, countries including the United States would be likely to better secure their borders. With over 200 river basins touching multiple nations, we can expect conflict over access to water for drinking, irrigation, and transportation. The Danube touches twelve nations, the Nile runs though nine, and the DODGY TAX AVOIDERS runs through seven.

The world is now a series of sinking life-boats; the Titanic (the world economy) has struck an iceberg and is sinking fast. Already, the Third World is becoming engulfed in a die-off, fuelled by increasingly vicious resources wars by emerging powers and the spread of deadly pandemics centred around the nuclear armed South Asia. The Western world is retreating to a series of fortresses, embattled by an ever worsening crisis, the ruling elites impose (with the backing of elements of the remaining middle classes) authoritarian police-state regimes across the developed world. Social unrest deepens, particularly in the immigrant dominant cities of Europe and permanent martial law is imposed by the militaristic regimes of Europe and America.

The world economic system goes into rapid de-globalisation, the major industrial powers scramble to access and control the remaining strategic resources of the world, and the Middle East will certainly become a major battleground (accelerating the decline in oil and gas production). In the die-off regions in the Third World, expect to see growing neo-colonial interventions of militarily powerful Western, Asian and Arab states to secure strategic resources including land rights, mines and water. The world economy will become regionalised, autarkic with state-on-state deals replacing the free market and with the dollar having lost its international status as a reserve currency a de facto Gold Standard has remerged as the accepted reserve currency.

By the end of the decade, the escalating feedback loops will lead to a implosion the flows of resources/energy which sustain the militarised security apparatuses of the industrialised great powers (to keep out the hundreds of millions of Third World migrants, ensure law-and-order among the urban under classes and maintain critical infrastructure/services of a industrial society). With that, either with a bang or a whimper, industrial society will collapse around the point of 2030, as originally predicted by the Limits of Growth crowd back in the seventies.

The world (with maybe a few isolated exceptions) will enter a period of Dark Ages, with a die-off shattering the ex-developed world as millions of Third world migrants flee into western Eurasian continent and globalised pandemics leading to a massive reduction in global population levels.

LOL, cut and paste

My next post, after feedback is what you can do as a individual to adapt to this timeline of collapse, what and when...

Mapping out the Dark Ages, after the collapse of the industrialised world-system around 2030 is critical to long-term post-peak planning. The general theme of a post-industrialised world adjusting to a sustainable carrying capacity (around 2 billion) would be the following;

If carrying capacities everywhere were suddenly lowered drastically… humanity would revert to its norm of constant battles for diminishing resources, which the battles themselves would further reduce even beyond the climatic effects. Once again warfare would define human life.

http://www.mindfully.org/Air/2003/Penta ... 1oct03.htm

The Pentagon argues that America is relatively well positioned…

The two most likely reactions to a sudden drop in carrying capacity due to climate change are defensive and offensive.

The United States and Australia are likely to build defensive fortresses around their countries because they have the resources and reserves to achieve self-sufficiency. With diverse growing climates, wealth, technology, and abundant resources, the United States could likely survive shortened growing cycles and harsh weather conditions without catastrophic losses. Borders will be strengthened around the country to hold back unwanted starving immigrants from the Caribbean islands (an especially severe problem), Mexico, and South America. Energy supply will be shored up through expensive (economically, politically, and morally) alternatives such as nuclear, renewables, hydrogen, and Middle Eastern contracts.

This may be the case, but ironically, although being an advanced power benefits the USA during the late-industrial era, the globalised collapse of industrialised systems would most impact its economy and society. Although a Fortress America is certainly one option, there are other potential futures for the United States. Americas society is increasingly fragmented, with a evangelical Christian minority in the population (dominating the modern Republican Party) an increasingly enraged and disruptive influence of the American body politic. It is difficult to see this trend improving in the future and it is quite conceivable that the political paralysis and in-fighting will deepen over the coming decades, resulting the compete collapse of confidence with the federal system.

As Paul Mason notes from Newsnight;

Public discourse has reached "mad as hell and not going to take it anymore" levels and, watching it all from the outside, I am wondering where it all ends up.

There has been an outbreak of vandalism - bricks through politicians' windows; there have been threats of violence and a lot of violent language. Democrats, in response have begun to accuse mainstream Republican commentators of stoking up the violence, and in turn they have accused the Democrats of trying to provoke a violent reaction.

All this has made me consider in a new light something said by an oil-man who consults for one of the biggest companies in the world. Last summer he told me:

"We run a mainframe computer simulation of the global political and economic situation, modelling various outcomes of the resource crunch that begins in the back half of the 2010s. And no matter which way we tweak it, it always comes out with the same result: civil war in America in 25 years's time."

For obvious reasons, given that the said company is a global player, they were not very interested in publicising the scenario.

In this oil company scenario the driver is not ideology but simply resources. As explained to me, the question becomes whether the world's biggest consumer of petroleum based products can move away from oil dependency fast enough; and in the scenario the answer is no because its political institutions are too consensual. That is, even where you get politicians who are prepared to act decisively, there are so many checks and balances - state-level opt-outs, Supreme Court, Congressional filibuster, corporate-controlled media etc - that they can never implement the most painful decisions. And as a result the political system fragments once the oil gets scarce.

http://www.bbc.co.uk/blogs/newsnight/pa ... ans_s.html

This seems to me a frighteningly plausible scenario. It could be that after a period of civil war, the north Americas could settle down to more sustainable regional power centres on the model of the Russian professor Igor Panarin. (His timing may be way of, but his analysis of the long trends seems plausible).



Regarding Australia, the continent is certainly rich in resources and if its ruling elite can manage a transition could sustain a post-Dark Ages outpost of industrialised civilisation. It has the huge advantage of geographic isolation, it could easily build a Fortress Australia, and keep away the pandemics and migrants in the imploding Eurasian super-continent. On the other hand, the issues of water scarcity and food productivity could lead to widespread shortages of food and culminating in a Mad Max implosion of industrialised society in that region in the world.



I suspect that either Australia or America could survive the globalised die-off, and other geographically isolated areas could sustain some form of order, primarily the candidates the UK (think of Children of Men), New Zealand (geothermal energy, isolated), Russia (abundant resources, low population and ruthless ruling elite), Japan (shrinking population and a history of self-sufficiency) and finally maybe a areas of Africa, Madagascar and the resource-rich South Africa region. Latin America could be a wild card, resource rich, reasonably well-governed and with a regional superpower Brazil capable of fending of aggressive powers during the late-industrialism era could sustain some from of civilisation post 2030.