Unraveling the Unraveling

Within the relatively small community of “Peakists”, they divide roughly into three groups; Cornucopians, Doomers and the largest group, that I will simply call Moderates. I would describe the Moderates as a group of very concerned, but cautiously optimistic, or not so optimistic people. I’m undecided where I fit in, but it is somewhere between the latter two.

Right up front I’ll confess to some hubris in the title, as there are many things which are simply unknowable, but a useful starting point for predicting the future is to examine the past.

Samuel Clemens, a.k.a. Mark Twain said:” History doesn't repeat itself; at best it sometimes rhymes”

There is evidence for this, but when it does rhyme it is because it is a different stanza from the same song. If we are about to rhyme with past events, that would suggest that we will not collapse into a great smoldering heap in a few months or years but a slow decline over several generations to a civilization more akin to how we lived around the end of the 19^th century.

Recent disparate events have made me reconsider some of my beliefs.

How Fast? How Far?

This is like asking the question; “If I fall off a 1000 foot cliff, will I hurt myself?” The short answer is “It depends”, and begs a number of questions. Did you jump, or were you pushed? Did you fall by yourself or with others?

If you jumped, and you are not suicidal, then you likely made some preparation. You either put on a parachute, or placed a large stunt-man style airbag at the bottom. If you thought it through, you carefully selected the time and landing spot AND you knew how to use your device before you jumped. (This is an important point here). If you were pushed, then you were in all likelihood unprepared and you will most likely die.

If you jumped by yourself, then you may at worst suffer a sprained ankle or perhaps even a broken leg. If you fall with others not so prepared, they may land on you and your efforts would have been for naught. The slightly smarter ones may figure out why you are wearing a parachute, and take it away from you before you jump, or try to grab you on the way down, also foiling your plans.

The depth of your fall will also vary, depending on preparation. If you make the trip at terminal velocity you will likely fall more than 1000 feet, as you will end up below ground level. This is referred to as overshoot.

The length of time for decent from Peak Oil will be determined by the depletion curve. If consumption is limited only by geological production factors, then the curve will follow some variant of Hubbert’s Peak. This will result in maximum prices over a minimum time period.

The depletion curve can be stretched out by a reduction in total energy consumption, or by employing alternate energy sources. It seems likely that it will be a combination of both. It’s important to note that the area under the curve will not change, as that area is the total remaining reserves.

Obviously, common foresight and preparation will play an enormous part in answering this question. The slower and more orderly the descent, the less painful it will be.

Historical References

In order to predict what may happen, others have made many references to various empires and civilizations that have gone before us.

One common example is the Mayan civilization. Through soil depletion and possible climate change in the form of drought, combined with an unwillingness to adapt, the massive and sophisticated civilization disappeared over a period of up to two hundred years. This is a relatively comforting thought, however…

Recent Events

• The battles in Georgia seem to be prompted by two issues; Control of the BTC pipeline and an ongoing crusade by Vladimir Putin to restore Russia to its former power and glory. For the sake of brevity, I won’t elaborate but I highly recommend watching the documentary “The Putin System”.

• Both Protracted and sporadic conflicts between the United States and the Middle East continue to remind us of the total dependence on oil and the importance of continued supply. As Vice President Dick Cheney said, “The American way of life is not negotiable.”

• The Olympics in Beijing are the coming out party for China. Because of this event the media has highlighted the enormous growth and industrialization of the country. It also highlights the rapidly blossoming love affair with consumerism and capitalism. The Chinese have chosen a path and show no signs of wavering.

So, as I see it, we have a very contentious situation here. We have three very large industrialized countries; one wants to become a superpower again, one that has every intent on remaining a superpower and one that is pushing hard to become a superpower. The three threads I see running through these countries are hubris, energy and nuclear capability.

Peak Oil Mitigation

As I have said before, (along with many others) our present way of doing things is not sustainable and renewable energy is butting its head up against the laws of physics, particularly the laws of thermodynamics. For this reason, I choose the word mitigation, not replacement.

A Saudi minister said, “The Stone Age didn't end because we ran out of stones; we just found better technology to stones.” True, but it is also apocryphal. While we will be using wind turbines and photovoltaics, we will also be dusting off our metaphorical stones.

In order to maximize our mitigation, a concerted effort is needed, requiring vast amounts of capital and resources. Unfortunately, the free market requires a return on investment, with reasonable confidence that market conditions are stable enough to maintain those returns over the life of the infrastructure.

I say unfortunately, because we are dealing with a tightly coupled supply-demand situation. As an economy grows, consumption grows. Oil demand goes up and oil prices go up. As oil prices rise, the economy then contracts. This is The Devil’s Seesaw, as coined by Peter Pogany of The Energy Bulletin. The seesaw has two effects. It causes bursts of renewed oil consumption and non-viable renewables and secondly, when energy prices and the economy are low, there is less capital available for mitigation. This will send us stumbling and lurching, not gliding down Hubbert’s curve.

So, to go back to history and the Mayan’s decline, the present situation has some disturbing differences and one glaring similarity;

• The Mayan troubles were protracted because the resource decline was protracted. Their soil did not deplete overnight.

• The Mayans were in control of their own corn production.

• To my knowledge, there was not widespread scarcity in the greater region or globally. Feel free to correct me on this.

• The Mayans had the opportunity to go elsewhere, and likely did so. (Richard Branson does not have enough space ships, and they fall back to earth anyway.)

• The Mayans were unwilling or unable to adapt.

As significant as M.King Hubbert’s work was, using it as a basis for planning is a gross oversimplification. It assumes, or at least implies (unintentionally) that future distribution of oil will be uniform based on demand. Factoring supplies being cut or rerouted instantly and perhaps permanently was beyond the scope of the study.

In simpler terms, when the world is producing at 50% of peak oil, it would be folly to infer that each country will receive 50% of what they were receiving at the peak.

Thus, a smooth shift away from fossil fuels will require a global effort involving commitment, cooperation and consistency. That said, history shows me that we do not play well with others when we are threatened. The watered-down shambles that became The Kyoto Protocol is a testament to this.

So, will we rhyme with history? Considering an unstable economy and major geopolitics with self-serving interests, I don’t think we are even singing the same song.

In light of this, I find the idea of a gradual decline over a century or two to be highly optimistic. As has been said, this is a whole new ballgame.

I think I just took a step towards the Doomer camp.