Governments Pork-Barrel Roading Policy
...and NFI Award Winner of the Week

It’s election season right, let’s roll out the pork-barrel. Such can be the only conceivable reason this Government on election hogmanay, as the sun sets on the era of cheap oil, decides to invest millions in an infrastructure that has absolutely no future.

Oil hovers around US$60.00 per barrel and is predicted by many analysts to exceed US$80 as a northern hemisphere winter descends with all the demand surge that will bring. The “price of oil” has all but hijacked the G8 summit in Edinburgh as the issue of the day. And why, because world leaders are slowly beginning to realise that without it [oil] there is no economy. Tropical storms Cindy and Dennis will surely see oil push out beyond $65 within the week.

Yet our Government still of the belief that oil will return any day now to US$25 per barrel continue to wish and hope that the good old happy motoring days of unending economic growth and suburban utopia will carry on regardless. Meanwhile we stupidly encourage more and more people to migrate to xurbia, the far-flung extensions of the suburban dream and drive for an hour and a half everyday to work in the 70’s platform shoe equivalent of the motor vehicle, the SUV. Driven by showpony wankers, as necessary and relevant as the millenium dome, these vehicles (and the desire to own such global-warmers) need to be eliminated.

The unsympathetic truth is that the more roads we build the greater our problem will be in the long run – it’s money that could have been spent preparing ourselves for an era of extended austerity. Cheap abundant oil is all but over. The price of oil is moving in one direction, upwards. From now onwards oil will increase in price at a rate far in excess of inflation. Much to the chagrin of the demi-gods of capitalism – economists, there are no alternatives.

Roads will not become gridlocked with solar and hydrogen powered vehicles as the National party suggest,

we would be happy to receive any material (from you or from
anybody else) suggesting that the forms of alternative energy that are already
developed will somehow reduce the need for proper roading

Bryan Sinclair, Special Advisor to Don Brash, in email correspondance April 2005)

(NFI Award Winner this week)
Just as blissfully ignorant, Peter Dunne of United (No) Future for thinking that building the multibillion dollar white elephant (the Transmission Gully road) is an idea even worthy of rational debate.

This project would barely be finished as oil prices begin causing serious economic and social impacts across the industrialised world. The days of sitting in a car for three hours a day to and from work will be long gone before Transmission Gully is completed let alone paid for. A fact that will be reflected in this years election results, United Future (along with ACT) are an increasingly irrelevant party that haven’t moved out of the 20th Century, operating on assumptions that most of us let go of a decade or more ago.

Steve McKinlay for
Powerless NZ
07 July 2005
PowerLess NZ is a growing group of scientists, energy analysts and concerned citizens whose principle objectives are to alert both Government and the general public to New Zealand’s looming energy crisis. Our aim is to support development of renewable energy resources at both a private and public level, as well as encourage a firm move away from dependence upon fossil fuels.
More information about global peak oil and resource depletion can be found at http://www.oilcrash.com and http://ontic.blogspot.com

The Kiwi Dream and the End of Economic Growth

Freezing cold across most of New Zealand this week and Auckland electricity spikes upwards of 94% odd utilisation. Move demand beyond the available supply and who knows what happens - perhaps substations trip and then how do you bring them back on line. Maybe you get brown-outs? I'm not sure, no one has really talked about that.

You'd think this kind of usage information would be a wake-up call but instead we get the usual suspects ranting and raving turning the situation into a political wank-fest. Everyone wants their drive-in recreational shopping lifestyles to continue but no one wants 90 metre pylons or wind turbines obscuring their view of gorse covered hills. The rampant desire for continued economic growth is pushing infrastructure and resources to the limit - something will break sooner rather than later.

We are a country living beyond it's means. As people cash up the fake wealth in their properties in the form of revolving credit deals, personal loans and credit cards to rush off to Noel Leeming to get the latest LCD flat screen TV's we end up posting the largest annual trade deficit since the mid 1970's - and we all know what followed that period.

Our greed for more consumer products the democritisation of shopping is reinforced with National's poll surge. John Key (national) (multimillionaire) promises to let the good times roll - massive tax cuts - so we'll all have an extra 5 pints worth of coinage in the pocket ultimately at the expense of services, health and education. Consumption is good. Buy more stuff, throw more stuff away, just spend, consume and waste more - it's what keeps us all in jobs, and it keeps the country growing. A few more hundred thousand immigrants will also ensure that the Capital Valuation on your home will continue to increase - thus, you can up the limit on your gold card to get that new 3G mobile blackberry or that winter trip to Fiji you wanted.

The oil price continues to creep endlessly upwards, beyond $60 per barrel this week, meanwhile the Government assures us it will at some point settle back at around 20-30 a barrel. Of course the high price in oil has seen the emergence of all manner of viable alternatives just as the economists assured us. (yeah right)
I guess in the absense of food in supermarkets cannabilism will emerge as an economic substitute proving that the market truely does work.

The election this year I suppose will at least provide some cynical entertainment. Both sides desparate to peddle a business as usual picture. Go get a bucket of hot and spicy, you have everything to be fat and happy about. The good times are expected to roll for at least another 12 months, by which time oil could be out towards $100 a barrel, United (NO) Future and ACT will both be political and historical curiosities, and as it stands there is a good chance that Labour and the Greens will be in opposition.

Meanwhile the love-hate relationship between National and NZ First will be busily building an infrastructure that looked good in the 1990's. Roads, more roads and a few more roads, with increasingly dimishing numbers of people able to use them.

You can't expect our politicians to be aware or prepared for the troubles ahead. They are seduced and blinded by the dogma that economic growth is the solution to everything. Whereas, any voice of reason will indicate that their solution is precisely the problem.

Economic growth will halt once oil reaches some magic figure. ($120.00 barrel??). At that certain point those living in xurbia, the far flung reaches of our suburban dream, will no longer be able to afford to travel to work. At this point or very near to, general societal structure will collapse. Xurbian property prices will plummet taking with it large sectors of the real estate market and mums and dads geared to the limit on their revolving credit accounts. Inner city shoebox property will skyrocket causing something of a hyperinflationary effect, the resulting lahar will plough through the mortgage industry. Stock market melt-down will cascade into retirement funds, managed portfolios and hedge accounts - watch the fallen brokers fly from multistory building windows as they did in 87.

All this plunging NZ into an economic recession from which we will never emerge.

Enjoy your day.

Steve McKinlay

Net Energy Gain and Photo Voltaics

In the early days of PV cells NEG (Net energy gained) of their production was actually below 1. Today it is above 1 but no-one knows by how much as the effective productive life of a PV cell is not known. The most modern estimate is that after 2 years service a PV cell has equalled the energy required to manufacture and install it.

This summation (2 years of service of PV use equals amount of energy used to manufacture it) of course doesn't take into consideration the historical evolution in research and infrastructure required and related to development of PV technology, mineral refinement and extraction, technological and economic viability of associated supply industries and plant required to manufacture PV. Let alone the massive costs associated with educating, transporting and supporting the humans that are needed to make PV.

We have PV cells because we have a fossil-fuel economy. Without oil, we never would have discovered PV, because the social economic culture that has enabled industry, research and levels of education to soar to the point where we could develop PV technology would never have existed in the first place.

The formulation below assumes a factory to build PV is in place and a truckload of refined silica is sitting in drums waiting to be turned into PV cells by someone with a priori knowledge about how to build them. All this with no prior consideration of how all that stuff got to be there in the first place.

And this assumption, totally devoid of any holistic knowledge about the nature of why our society exists in it's present form is this precisely the problem.

Steve.

On Being Quiet!

One might wonder, why the silence? I can tell you. In two weeks I'm off on a junket tour of Sweden, Scotland and England. Specifically, Vasteras, near Stockholm, Sweden for the E-CAP (European Conference on Computing and Philosophy). I am presenting a paper entitled "Can Knowledge be an Immutable Data Type? The limits of the model theoretic approach". More than happy to provide more detail for those interested. But, I'm getting ready to expose my credentials to a bunch of professors of philosophy. This is the real world!

In the mean time here is something for those hanging out for a peak oil rant.

This was the result (my result) of an exchange with someone who was interested in my provision of a solution for Peak Oil. Actually, that's not entirely fair. This was my ranting and raving. Simple as that. I place no blame on any individual that asks me any question - I am the one with the problem.

Society is fine. Continue consuming at your leisure!
The reality of all those people (consumers) is called real-politik. The change required goes right to the heart of democracy. You have to do away with democracy if you want things to change, because inherent in democracy is individual freedom and property rights. These rights will have to be foregone in a new world.

The minute you or I or some politician tells someone else what they can do and what they cannot do with their own property, whether that is land, resources, labour whatever you have lost some of that freedom that democracy holds so dear, that what is yours is yours to sell or do as you wish with.

All this is about is people trying to make money. It's just that now we have an entire global system supporting that aim. As long as this system is in place resources will be exploited at ever increasing rates. Try telling a mother in Bangladesh that she cannot feed her children because it's immoral to fell forests so she can graze her animals. So what do you do about that - ship in grain by container from the first world. That's not a solution, that's the problem.

What is it that you can possibly do - bring in laws to stop the importation of all that stuff we buy from Bond and Bond, the Warehouse, Noel Leeming... Do we prevent people buying cars and living in suburbs? Where to you house people if you are not going to let them live in suburbs? City Ghettos? The average wage in NZ is less than 35,000 - most people on this kind of money live from week to week. All they are concerned about is paying the bills and feeding their kids. It's a treat to them to afford to buy a Playstation for Christmas for the kids, it's a treat to them to have MacDonalds and hire a video in the weekend. What do you do, take this away from them? Tell them they have to go back to cross stitch and macrame - for gods sake most of these people can't read anyway, they don't go the library for entertainment they turn on the TV - the TV tells them to buy stuff, and if they don't they are losers.

Changes only happen in the face of extreme adversity. At the moment there is nothing like this. NZ is experiencing the highest level of employment and economic growth since before the last oil crisis in the 70s. Nothing will change until 450,000 people are displaced, unemployed. Nothing will change until it costs more to fill your car each week than it does to pay your mortgage. Nothing will change.

Jo if I can't convince scientists that there are severe problems ahead what hope do we have of convincing people living on the breadline in Naenae, or middle class familys with 2 BMW's in the garage mortagaged to the hilt, their kids at Queen Margaret and Scots college living in Khandallah. They don't care. To them it's all bullshit, all they want is a better life. Energy - that is someone elses problem, they pay their taxes, they expect water to come out of the tap when they turn it on, they expect the light to go on when they hit the switch.

I'm mostly disinterested in trying to change the world - you drive yourself mental trying to do that. I'm interested in peak oil from a sociological/anthropological point of view. If I provoke one or two people to think about it, then that's great. The solution to peak oil is well beyond my comprehension, I can't even be bothered thinking about solutions. The only solution I see actually panning out is for the worst to happen, because only when this happens will the entire perversity that we call civilisation that has taken 4 generations to build be destroyed. At that point we can begin to look at how we might live, post industry.

Maybe this is a proposed solution.

Increase petrol tax by 300% incrementally over the next 3 years
Use the money to double rail infrastructure across NZ
Increase road tax (rego) on all vehicles larger than 1200cc - quadruple it at least.
Make vehicles less than a 1000cc and motor bikes etc exempt.
Ban all imported vehicles immediately over 1200cc
Reduce speed limit on open road to 60k
Stop all new suburban development
Stop all immigration immediately
Impose massive tariffs on all imported goods - basically take out all the mega-shopping chains and encourage localised production again.
Implement compulsory NZ wide permaculture and market gardening regimes/education
Force suburbs to become to some extent self sufficient in food production, energy generation, water supply
Stop all new road projects
All international trade deals are off.
Implement emergency food rationing (because at this point you will have made a lot of people unemployed)
Implement full scale command economy. Unemployed people have to move to argricultural areas and begin that kind of work or get harshly reduced benefits. Government control where resources get spent etc.
Stop all tax dollars going into arts/cultural/sport... DOC programmes, limit all research funding to appropriate areas.
Can both TV1 and Maori TV (a massive waste of resources) - use radio as a news/information medium.
Impose voluntary repatronisation for new immigrants - back dated to say 1990.
(NZ will have to reduce it's population)
Introduce 1 child policy
Increase student fees to cover all costs for non-essential education. (That is English Lit and Athenian Coinage courses will no longer be funded by the taxpayer - this money will be needed to build new infrastructure/rickshaws and grow food.

Now that we have implemented a soviet like state, we'll need to encourage and coerce people to participate in this new utopia.
Introduce government implemented education schemes, praising the virtues of the new system.
Teachings will include discouraging class distinctions, a leveling of society where doctors and farmers are held in the same esteem.
In this uptopia we will also have to have a strong military/police presence because there will be descenters.
However, the good news is that most of the highflyers - those people with big fat houses in Roseneath and Remuera will move to Australia or somewhere else.

Within 5 years if well planned (but lets face it this is logistical nightmare) we'll be using a similar amount of fossil fuel to what we were using before the second world war. Society will resemble that time too. It will take generations for the resentment to fade tho. Violence will most certainly increase. The transition will be extremely harsh. BUT - when the US, the UK, Australia and Europe are all in full scale collapse, NZers will be whinging but living somewhat sustainably.

Steve McKinlay
PowerLess NZ.

Peak Oil and Mirage Realism
PowerLess NZ Press Release. 13 April, 2005

Realism is the philosophical notion that what our scientific theories tell us about the world are more or less, or approximately true. Scientific theories are generally considered to be the pinnacle of human knowledge. Although ultimately fallible and always up for revision the scientific method for discovering knowledge has, certainly in the West been shown to be instrumentally reliable. If the “realist” gets ill, the “realist” is more likely to visit a medical doctor than a soothsayer or faith healer.

Normatively then we might argue at least that being a realist is a position one might hold if one believes that the knowledge forwarded by our best theories is approximately true. This claim presupposes that we look toward science for answers to questions we might have about the natural world. To some extent being a realist is a matter of pragmatics. Panglosian arguments held by politicians and economists may serve to comfort us but such reassurances rarely stand up to logical scrutiny, natural laws or scientific evidence.

Optimists amongst us are plentiful, and their reassurances are familiar however, merely wishing or hoping something to be true, particularly in the face of evidence to the contrary, doesn’t make it true. We might call this position “mirage realism”. We explain and present two examples but first some background.

Oil production worldwide is close to peaking. That is, we are close to the point where the all time maximum amount of oil can be pumped from the ground. After this point it is expected that oil production will decline at a rate between 3% and 7% per annum (suggested by the empirical evidence provided from existing oil fields that are already in decline). The evidence for “peak oil” as it is called is indisputable. Oil production in a variety of regions and states that are now in decline can be predictably graphed as a bell shaped curve. The first significant example was when the United States peaked in 1971. More recently the North Sea, with Norway close at its heels have peaked and are in permanent decline. Collectively the world will follow soon.

A prominent mirage realist to emerge in recent weeks is Larry Baldock, transport spokesperson for the United Future NZ party. Mr Baldock proudly announced his plans to lay asphalt in the form of a big wide double laned freeway from Kaitaia to Invercargill. Either Larry Baldock is ignorant to the issue of peak oil, an issue that the prestigious Deutsche Bank argued last December ought to be of primary concern to forward looking politicians and company chiefs, or he is wishing it will simply go away. His ignorance does not excuse his culpability but to the mirage realist bullshit is bitumen – sadly under the spectre of peak oil a single cent spent on such a project is an investment in an infrastructure that has no future. We suggest a name change for Baldock’s party. United No Future.

Yet another mirage realist to stick his neck out this week was National’s Bryan Sinclair, Special Advisor to Don Brash leader of the opposition. We think Don Brash ought to consider seriously any future advice from Mr Sinclair given this comment in an email exchange on the subject of peak oil.

…we would be happy to receive any material (from you or from anybody else) suggesting that the forms of alternative energy that are developed (and there are obviously a number of these, already in development, including solar powered road vehicles and hydrogen powered road vehicles, but two examples) will somehow reduce the need for proper roading.

(Bryan Sinclair, April 2005)

We can only assume Mr Sinclair has decided not to participate in our knowledge society (at least certainly not the knowledge society that is predicated by any received rendering of logic).

Consider the following. Given that spaghetti junction is already gridlocked (every rush hour) with internal combustion engine vehicles, and Mr Sinclair seems to be arguing that either a demand or supply reduction in oil would not reduce the requirement for building more roads it follows that if we do not build more roads, spaghetti junction will become gridlocked with hydrogen and/or solar powered vehicles. Mr Sinclair’s mirage realism seems to extend to the ridiculous myth that the endless expansion of global economies is physically possible. Sinclair seems confident that human ingenuity combined with market forces will meet any forthcoming energy crunch or environmental emergency.

The futuristic scenario from mirage realist Bryan Sinclair will never occur because the energy equation for both hydrogen and photovoltaic solar cells results in marginal if not negative net energy returns. It takes more oil equivalent energy to make a solar cell than the cell ever returns in its lifetime. Hydrogen requires large amounts of natural gas, which we are currently running out of.

The demand for roads is directly connected to oil and the internal combustion engine. Less oil will result in less demand for roads. As oil becomes expensive and scarce and as we experience shortages, much to the National Party’s dismay cars will disappear from roads.

The godfather of mirage realism has to be the International Energy Agency (IEA) whom in the face of recent prices near US$60 a barrel oil, claims by OPEC that they are pumping at capacity, evidence that the mighty Saudi Arabian fields are peaking still hope and wish that oil will peak in 2037.

However just in case, the IEA are preparing a special report due to be released in a week or two that aims to prepare member nations (which includes NZ) about the need for urgent and extreme energy conservation measures if the worlds oil supply is disrupted or reduced by one to two million barrels per day (we currently consume 84 million barrels per day). Such bizarre measures suggested by the IEA include bans on privately owned motor vehicles, reduction of the working week and imposition of lower speed limits.

New Zealand’s energy minister, the Hon Trevor Mallard, currently frantically keen to comply with the IEA’s strategic 90 reserve day requirement by building dozens more oil storage silos will want to seriously consider the IEA’s latest report since he will be the one breaking the news to New Zealanders that “Carless Days” is not a Mexican folk singer.

Steve McKinlay
for PowerLess NZ

NFI Award of the Week
...and the winner is Larry Baldcock - United (no) Future

United Future transport policy announced
Friday, 1 April 2005, 3:50 pm
Press Release: United Future NZ Party Media statement
United Future transport policy announced

Greater transparency in road funding, the ultimate four-laning of State Highway 1 from Kaitaia to Invercargill, the possible splitting-out of traffic functions from the police force, and driver education in schools are all significant features of United Future’s transport policies for the next election.

Transport spokesman, Larry Baldock, announced the policy at today’s annual meeting of the Automobile Association in Napier today.

Mr Baldock said the party was also committed to the continued construction of the strategic roading networks in Auckland, Tauranga and Wellington (including the Transmission Gully project.)

Ends

Another gem from Jim Kunstlers Clusterfuck Nation Chronicle

The Hooverisation of George W. Bush
After the convulsion of Word War Two, we went back to confidently marshalling our resources with a vengence. We took all that oil, all the mineral wealth, the raw land, the timber, and other riches and directed it into the dubious-but-profitable project of building a suburban utopia.

We're now in the final act of the industrial pageant, a few minutes to curtain. The Long Emergency that we're about to enter as the world passes the all-time oil production peak will be about the depletion and scarcity of things we used to have in plentitude: energy, electricity, food, water, minerals, with a new crisis of money and credit like a cherry on top. ...

The Endless Supply of Oil and Other Fairy Tales

The rigour of science requires that we distinguish well the undraped figure of nature itself from the gay-coloured vesture with which we clothe it at our pleasure.
Heinrich Hertz, 1895

Common bloviated pigeon-chesting by those that believe our drive-by fantasyland will continue ad-infinitum include the following claims;

• Ho hum, heard it all in the 70’s
• Peak oil = chickenlittlism
• The stone age didn’t end because we ran out of stone
• OPEC could simply pump more oil if they wished
• The world is awash in oil
• The market will provide

Obvious logical fallacies aside the final statement has some credibility; we suspect the market will provide with rickshaws and bicycles being high on the demand list.

The point is that the mutterers of such slaver never seem able to offer any coherent argument as to how it is that the price of oil is 400% higher than it was in 1999. Nor can anyone point to the seemingly endless reserves [1] that are said to exist to meet ballooning demand. Certainly in regard to supply and demand within the oil market the empirical facts speak for themselves. None of the hubristic rants inclusive of any of the above bullet points or not, have yet been able to cool the market back to US$11bbl.

Further, all new production due to come online over the next year or two is likely to be offset by existing depletion running close to 2Mbpd per year (ExxonMobil confirm their fields are depleting at 4-6% per year) combined with existing strong demand growth [2].

Although the peak oil model is instrumentally reliable, it has been verified in all oil field production data most visibly in fields that are now in decline since it’s inception in the US in 1971, the actual peak oil date to some extent is largely irrelevant once available supply is surpassed by demand. The debate whether the peak oil model is “true” or “real” or not is orthogonal to the present demand/supply issue. You can happily ignore peak oil at the moment, but you can’t ignore the probability that demand is outstripping supply.

Nevertheless it is a simple observable fact that the peak oil model is descriptively accurate in regard to the oil production cycle. Normative appeals to market principles or human ingenuity do not change geological facts. Furthermore advances in technology serve only to exploit oil reserves at a quicker rate but surely depleting resources at a quicker rate does not solve the depletion problem. The market may well provide, we can be sure it won’t be providing cheap oil, even the flat-earthers are beginning to reluctantly concede this point.

The recent “Hirsh Report”[3] to US Department of Energy describes the economic, social and political costs of peak oil as unprecedented. Hirsh in fact questions the ability of the market to provide adequate solutions. The report looks at the Peak Oil problem from a risk management perspective, Hirsh contending that dealing with Peak Oil will cost trillions of dollars and require years of intense effort. Transitioning to a more fuel-efficient national automobile fleet for example is expected to take more than a decade.

Yet in respect of Peak Oil, from our Government we hear a divine silence. We go about building more roads and infrastructure, we make predictions about how well the economy will do next year, and the year after. The Government has ignored peak oil’s warning signals; many other political parties are equally ignorant.

According to recent analysis on Aljazeera’s web site (Oil Prices Confound Experts, Adam Porter) industry analysts and other “experts” are befuddled by the fact that the price hasn’t fallen. "OPEC isn't running fast enough to meet this train of demand that's growing without any sign of a slowdown," said Gal Luft, executive director of the Institute for the Analysis of Global Security in Washington.

The International Energy Agency (IEA), bastion of positivism, beholder of distended technological hubris are showing signs of worry. This warning was issued by the IEA last Friday, “The reality is that oil consumption has caught up with installed crude and refining capacity," the Paris-based agency said. "If supply continues to struggle to keep up, more policy attention may come to be directed at oil demand intensity in our economies and alternatives”[4]. This revelation comes on the back of upward demand growth and downward discovery adjustments made by the IEA earlier this year.

The typically ultra-optimistic IEA, panderer to neo-classic economic dogma while powerless to do anything about oil price volatility, seem to be suggesting that a crisis is almost upon us. If as Hirsh suggests changeovers will cost (at least in New Zealand terms) many billions of dollars and take a decade or so implement we are likely to see the emergence of serious oil induced problems quite soon. Hirsh cites higher oil prices and oil price volatility as advance signs of peak. The final warning signals are now imminent.

Yet the cavalry is not appearing on the horizon. Evidence is emerging that Saudi Arabia are simply unable to increase production. There have been marked declines in monthly production figures from the peninsula since the end of 2004. If this turns out to be the case and Saudi has peaked then according to Matt Simmons [5] the world has peaked.

A similar scenario faces the FSU. Production figure declines have persisted for several months running. It is progressively evident that production increases both within OPEC and non-OPEC states will prove increasingly difficult to maintain. The limits are being reached.

No, the Stone Age didn’t end because we ran out of stone; we found something better, we replaced stone with iron but this transition took centuries. This time according to Dr Hirsh we have about a decade if we are lucky and a replacement for oil is yet to be identified.

Those disbelievers who feel the need to ridicule the peak oil story ought consider this. If by hallucination or some stretch of the imagination we turn out to be wrong then we merely look silly. However if the detractors are wrong, if the fountain of eternal energy, whatever that might be, is not found soon then the western civilisation we all know and love, contingently reliant upon oil to feed, clothe, house and medicate itself is about to end.

[1]. In 2004 the total world discovery of oil was 7Gb (a total of 3 months or so supply on the world market). 2Gb were in deep-water finds and the cost of exploration alone (not including development and production) exceeded the current net present value of the oil discovered. The world consumed 30Billion+ barrels of oil in 2004. Economies of scale are disappearing as the oil found is spread across greater numbers of increasingly smaller fields. Source – Association for the Study of Peak Oil and Natural Gas, Newsletter #50, February 2005.

[2] IEA report demand growth running at 2.2%, other reports suggest 3%+ is a more realistic figure.

[3]. The Hirsh Report Executive Summary (and link to the full report) is available at www.energybulletin.net/4638.html

[4]Financial Times, Mar 11, 2005. news.ft.com/cms/s/f20cfb8a-920d-11d9-bca5-00000e2511c8.html

[5] Matt Simmons, Founder and Chairman of the worlds largest energy investment bank, Simmons and Co. International. Advisor to the 2001 Bush-Cheney Energy Task Force.

Steve McKinlay
PowerLess NZ

Letter to Wellington City Councillors re V8 SuperCar Race Planned for Wellington

Alick Shaw; Andy Foster; Bryan Pepperell; celia.wade-brown@wcc.govt.nz; Hayley Wain; Helene Ritchie; Jack Ruben; Kerry.Prendergast@wcc.govt.nz; Rob Goulden; Robert Armstrong; Stephanie Cook

Dear Councillors,

Last week the price of oil again moved beyond US$55 per barrel. This is a 400% increase in the price since 1998 (when it hovered around US$11).This represents a clear trend. Several sources ranging from Venezuela'sPresident Chavez, OPEC's Secretary General (who predicts US$80 perbarrel oil within a year or two) to increasing numbers of geologists,industry analysts and scientists are all singing the same song. Cheap oil is finished and Peak oil is just around the corner. At the time of peak oil production, global demand will surpass the available supply.

Please note. We are NOT running out of oil overnight. We are simply reaching the point where increased production will not be possible. Oil is not an endless resource - there are limits. OPEC's president Purnomo Yusgiantoro is on record as saying last year "there is no more supply."

Dr Robert Hirsh (Consultant to the US DoE) warned last week, "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."

Dr Colin Campbell of the Association for the Study of Peak Oil and Natural Gas warns "The actual decline of oil will be gradual at less than three percent a year: such that the production of all liquid hydrocarbons in 2020 will have fallen to approximately what it was in 1990. In those terms, it does not appear to be a particularly serious situation. But in reality, it is a devastating development because it implies that the oil-based economy is in permanent terminal decline,removing the confidence in perpetual growth on which the Financial System depends." Dr Campbell predicts peak in conventional oil in 2006 (next year) http://www.peakoil.net

With the US "spring driving season" approaching my bet would be we'll see oil move beyond US$60 a barrel within a few weeks.

Apart from at least one notable exception (that I know of) WellingtonCity Councillors, amongst many others, seem to be unable to distinguish reality from illusion. This is unsurprising behaviour from those in power who it seems would uphold a wilful blind illusion of "business as usual", such that continued extraction of support from traditional constituencies occurs rather than facing the harder reality - the economic, social and political fall out that will occur as oil supply is increasingly unable to meet global demand. I suggest people would prefer the truth.

Moving forward with plans for a V8 Street car race without giving this particular issue serious consideration smacks of pitiable ignorance and sheer lack of accountability. Once you verify that the above information is credible, reliable and valid - to continue with your plans for a V8 supercar race is morally culpable.

Politicians both local and national who continue to ignore this issue will eventually be held accountable.

Steve.

NFI Award of the Week

New Zealand Customs Minister Rick Barker quoted on the recent petrol tax hike;

petrol prices have fallen and oil prices stabilised, making April 1 a suitable date to bring in the extra charge

I wonder if Rick Barker could pass Level 1 of NCEA Maths? The price of oil is more volatile since the 1970s and the price has risen almost 400% since 1998. This comment is indicative of the level of competancy our Government brings to this issue. (Not Yet Competent!)

Rick Barker you are an idiot!

(in 1998 oil traded at US$11 - today the price settled around US$55, a percentage difference of around 400%).

Petrol Tax: The real reason for the hike.

"Some people have wacky ideas,” the new Republican campaign ad alleges. “Like taxing gasoline more so people drive less."

Although I tend to shy away from this sort of speculation - I'd like to propose a conspiracy theory.

Our Government is well aware of Peak Oil, the fact that sometime within the next few short years global maximum peak oil production will occur after which demand will exceed the available supply sending prices skyrocketing well beyond US$100bbl, oil production will begin an inevitable and permanent decline, with depletion figures in excess of 2-3% per year, resulting in mass global oil shortages, more resource conflict, social chaos, economic calamity, probable closure of the Warehouse meaning you'll have to do without your plastic toilet seats, fishing rods and cheap wetsuits from China.

Thus the 5% Petrol Tax is an underhanded market signal. A signal that alternatives need to be developed to our energy hungry, drive in utopia, suburban McMansion, recreational shopping lifestyles. The petrol tax is a dissuasion to you purchasing that obese black V8 SUV you had your eye on. It is a signal to the market to use alternatives such as rail transport, rickshaws and Goggomobils.

The revenue gathered from the new petrol tax will NOT infact be spent on thousands of kilometres of roading, a complete and utter waste of resources, a piteous investment in an infrastructure that has absolutely no future. In actual fact the Government gives a toss about whinging Aucklander's and their boring traffic congestion problems as much as the rest of us - Change the record Aucklander's. The rest of NZ is not interested - we are sick of your complaining, you choose to live there - suck it up.

You're worried about economic growth - in a few years, once surplus oil supply is well and truely history there will be no more economic growth. Economic growth depends on growing energy supplies. That growth is all but over. Make no mistake, as energy declines so will the economy.

So, instead of the petrol tax being spend on roads, the surplus will be spent on developing sustainable cities with energy efficient transit solutions, importing rickshaws from China obviously, reconditioning scooters and Cub Commuters.

Motorists, SUV lovers and the AA, be prepared for more motoring related rude awakenings. This is a warning especially directed at those perverted obese egotistical consumers living in recreational shoppers fantasyland. Global warming, gas guzzling V8 SUVs drivers are in for a fright as their registration fees quadruple, this will be an incentive to get over your egos, lose some weight and get on your bike. This contrary to what the Government and the media will tell you is NOT so that spagetti junction can be sorted, but so that more rickshaws can be imported, the railway system can be improved and some kind of meaningful more efficient transport system can be developed that doesn't involve overweight mothers (that according to Helen Clarke should be at work anyway) driving their chubby kids 400 metres down the road to school in V8 4WDs.

Cast your mind back to the chaos and mayhem, not to mention downright violence and aggression at the petrol pump back in the heady "carless days" era. SUV drivers had better sign up to martial arts class. There is gonna be some nasty irritation at you lot.

The funniest thing of all is that the Government blindly following the IEA's assurances, consumers blissfully living in lala land whilst driving their Jeep Cherokee's to the Warehouse on Saturday morning all the time munching on Double Whoppers with cheese are all unaware of the events unfolding before our very eyes.

Oil has increased 300% since 1999 - and it's headed higher. Why, there is no more supply for demand growth. Without cheap oil, the only safe option is to start dismantling our complex economies

A couple of years then it's Game Over!

Petrol Tax - it's just a warmup - get used to it.

NZ Politicians Inflicted with Acute Stupidity

It may be lost on some people that a rise in the price of oil of almost 300% since 1999 is a trend. It's a trend that won't go away.

New Zealand politicians of almost all persuasions (with the possible exclusion of the Green Party) continue to bang on about how the current high price of oil is an abbertation. That prices this year some time will return to normal levels.

In fact the NZ Government with it's swollen luddite head firmly placed deep in the sand still believes that oil will return to around US$20 per barrel, that economic growth and increased oil supply will continue forever and that the best thing at present for the NZ economy is to spend a few billion dollars on more roads.

This from the last Energy Supply and Demand Projections - Ministry of Economic Development.
"Oil prices rising from US$20/bbl in 2004 to US$25/bbl by 2020 and constant thereafter; "

The current price of oil at the time of this posting was US$51

Meanwhile our politicians are arguing and bickering with one another like a rabble of retarded galah's as to how we ought to spend billions on more roads to solve our congestion problems. The solution to all our woes so it seems is to continue to invest in infrastructure that has absolutely no future.

Matt Simmons informs us that world demand for oil is currently about 82 Million barrels per day. It is exceedingly unlikely that any of the key oil producers, Venezuela, Norway, Saudi Arabia, Iraq, Iran, Russia the US or the UK can increase production. In fact many are already beyond peak production.

The SIMPLE FACT lost on our idiotic politicians is that oil demand is very close if not at total maximum global supply. Lack of capacity exists right across the supply chain, from the well-head to refinery.

If oil demand grows at the same rate this year as it did last - we have perhaps a year or two left of happy go lucky drive-in utopia.

Meanwhile our fuckwit politicians are screwing our future down the drain assuming that happy-clappy economic growth will continue forever and ever - they are wasting billions of our dollars flushing them down the toilet by building white elephants highways to nowhere.

When will these dickheads wake up?

Jim Kunstler's Eyesore of the Month
From Jim Kunstlers Clusterfuck Archives

NZ Ecomagazine

A new magazine that is about the be released - this week or next I think, watch out for it.
Anyway, they have invited me to write an article. I thought I'd publish the first couple of paragraphs, I like them. It's supposed to be about Peak Oil but I got carried away with myself. Comments welcome - if anyone reads this godforsaken blog.

edited 18th Feb
The End of The Age of Reason
The fundamental promise at the dawn of the 20th century was the democratisation of modernity. The ideology of modernity prescribes rational thought as the ultimate liberator informing us to the truth about the world and ourselves. The road to progress therefore would be one built upon true knowledge, knowledge informed by science and logic, free from superstition, dogma and ignorance. And lets face it science delivered, not only did it put men on the moon but it laid the foundation for our modern all-mod-cons way of life. The last century upon the foundations of science and logic was one characterised by great technological advancement. We have become accustomed to the belief consequently, that there are technological solutions to all our problems, we like to call this human ingenuity.

However the 21st century dawns under the spectre of an ever-increasing pluralism. Science and rationalism is in decline in favour of baneful individualism. The sciences popularly perceived as irrelevant by students and laymen are retreating into their respective labs and philosophy departments, in favour of a kind of pop-cultural post-modern relativism. In the wake of this retreat we are left with all manner of popular worldviews that by and large freely evolve within the democratized slurry of our suburban malls, determined by our SUV driven, recreational shopping lifestyles, mostly devoid of any rationality, selected for consumption by a corporatist media intent and dependant upon perpetuating a myth.

The myth itself is one of the most fundamental views to transpire within modern consumerist society. Supported by the mantras of neo-classic and supply-side economic theory and in conjunction with our newfound technological hubris emerges the unquestionable assumptions of perpetual growth and “endless substitution”. Essentially the myth embodies the faith that the “market” will always provide. New products and resources are always superseded by something cheaper, more efficient and much better than the previous. To economists natural resources are no exception to the rule. The market of course dictates, as productivity increases, prices drop, production increases, more exchange occurs and living standards rise for all involved. And on and on and on it goes, forever.

Neo-classic economic theory is the supposed perpetual motion machine of the globalised mass consumer fantasy, predicated by endless economic growth compounding at 3% or so a year, creating wealth via fractional reserve banking and fiat currency. Tomorrow’s expansion is the put-up collateral for today’s debt. According to modern economics there are no limits to this growth. Forget the sciences, unquestionable faith in technological progress will allow us to use fewer and fewer resources for greater and greater returns. The reductio ad absurdum of this bizarre form of reasoning is that technology will eventually enable us to use zero resources for infinite returns.

Both science and reason inform us otherwise. We only need consult the laws of thermodynamics in order to inform ourselves that any kind of perpetual motion machine is impossible. Energy is the capacity to do work. No energy equals no work. Thus our entire global economy much to the chagrin of voodoo economists is 100% dependant upon energy. In order to grow economically we must also grow our energy consumption too.

It may be offensive to futurists, technologists and economists but the laws of thermodynamics inculcate that neither capital, labour nor technology can create energy. We cannot convert our supposed intelligence, our ability to find novel technological solutions into energy. Instead available energy must be expended in order to transform matter (e.g., oil, natural gas etc.) or to divert an existing energy flow (e.g., water, wind etc.) into more available energy. Furthermore energy resources must produce more energy than they consume. It would never be economic to expend more than one barrel of oil to extract one barrel of oil.

on PEANZ - Petroleum Exploration Association of NZ

The converstation with Mike Patrick of PEANZ continued. I shan't bore anyone with the detail, but interestingly Mike said some of these things.

I re-state my case – yes, one day the world’s petroleum reserves will physically run out, despite that fact that it is a “renewable” resource

Mike thinks oil is a renewable resource!?

NZ probably will never be self-sufficient in petroleum resources, but we shouldn’t stop trying eh?

Oh, Mike thinks is ok to throw trillions of dollars into drilling dry holes on the endless quest of "trying" to be self-sufficient, presumably this follows from the first quote.

I'll leave you to draw your own conclusions from this. Mike did remind me he IS a scientist, so we should all just bow down at the alter of authority and believe him.

Steve.

An interesting exchange with the Petroleum Exploration Association of New Zealand.

The press release Booming Oil & Gas Ind. Seeks Level Playing Field on the 2nd February 2005 in Scoop prompted me to ask further questions of Petroleum Exploration Association of New Zealand.

PEANZ claimed that New Zealand could become self-sufficient in regard to it's production of oil. I asked the question what kind of investment would required to ensure this. What follows is Mike Patricks reponse for Donald Morgan, Chairman. And my subsequent response to Mike.

Steve
In order for NZ to become self-sufficient in oil supplies, you’re looking at approximately 5M tonnes per year – and we currently produce 1M locally. Can NZ have the reserves to meet this level of indigenous production? Yes, the industry and its scientific backup believe so. The costs to obtain this level of production is impossible to predict because it depends entirely upon whether the new reserves are onshore or offshore, if the latter how far offshore, how close to infrastructure, etc etc. Certainly large though.

Should not this money be preparing for the future oil supply shortfall? Hmm, will there be one in our lifetimes? Or our children’s? The world is not running out of oil, it’s running out of cheap oil – as price rises, technology gains and economics means that a lot of oil in the ground currently uneconomic to extract (and not booked in formal reserves figures) becomes economic to extract.

This is how, strange as it seems, that some fields can increase reserves after many years of pumping – the economic factor! Yes, the industry believes that one day world demand will exceed physical supply, but it also believes that economics will play the larger role in the shift to other forms of fuel before that time, with marine and aviation being the last ‘kids off the block” – to quote Sheik Yermani, former OPEC head, “the stone age didn’t end because we ran out of stones, and the oil era will not end because we run out of oil” – ie other technologies and fuels will become more economic and hence oil demand will drop to about 30% or so of its current levels (that’s the level required for the plastics in your computer and a lot of the pharmaceuticals you and others take, for fibres and other oil-derived chemicals)

To which I replied...
Mike,

Firstly thank you for the response but what I really wanted to know however was what kind of investment was required for NZ to become self-sufficient.

Interestingly if the "costs to obtain this level of production are impossible to predict" as you say this indicates to me that it is possible (if not probable) that the costs could in fact exceed the returns in terms of the current NPV of oil. Of course this would be a ridiculous scenario. Not quite as ridiculous as it sounds. I am sure you are aware that the total world discovery of oil in 2004 was about 7Gb, 2Gb located in deep water finds. Less than half of this discovery was fields with reserves greater than 100mb. Interestingly however the cost of the exploration alone (let alone development) exceeded the net present value of the discoveries in absolute terms.

Obviously this bodes well for those speculating on oil futures markets. Just today the IEA warned that "greater-than-expected demand and disappointing world production growth could strain world supplies". (Reuters). The IEA have revised their demand growth figures upwards and their discovery figures downward - how long can these adjustments continue before demand supplants supply?

Actually you are wrong, the world is running out of oil, it began running out the day the first barrel was extracted. What is at issue is the timing. What is more important however is that we are approaching (if not already at) the end of the first half of global oil production. The second half will of course be characterised by a gradual decline as we try harder and harder to squeeze out the remnants. Most Saudi oil already is cut with about 30% artifact seawater. This is no secret.

I've never really been able to fathom the claim "the stone age didn't end because we ran out of stone..." Remind yourself that the transition from tools such as axes and arrowheads made of stone to more effective weapons made from iron and bronze occurred over several centuries - the transition was about moving to something more effective than stone. Yet we are looking to transition a planet of 8 billion people, the agricultural systems that feed us - a global economy based on cheap oil technologies to one that is dependant on some other yet to be developed technology. All this must occur within a few short decades. Your argument that the "oil age won't end because we run out of oil" presumes by the analogy that some other more efficient alternative will be found such that endless economic growth can continue.

I'm not sure how you come up with the argument that oil demand will drop to about 30% of it's current level??? What will take it's place? Rather than dropping in demand oil demand per capita in NZ has grown steadily since the 70s. At what price per barrel do you expect oil demand to begin dropping, where and what is the infrastructure to replace the 70% - will this just magically appear overnight, or the day structural supply deficits become self-evident? If you want to replace oil with somethink like say biodesiel what energy are you going to use to cultivate, harvest and process the biomass. If you want to replace it with hydrogen where will that come from? We can barely keep Auckland running on electricity without everyone plugging their hybrids in for a recharge every night. You have to follow the energy equation from the beginning to the end. Technology or capital doesn't create energy Mike.

Anyway NZ will become 100% self-sufficient in regards to oil supply so we won't need the alternatives right?

I wish you luck in your venture Mike - excuse my brashness but I think your dreaming. Remind yourself of Thomas Khuns observation - "but there are always some men who cling to one or other of the older views, and they are simply read out of the profession, which thereafter ignores their work."

Cheers
Steve.

The Dawn of the Second Half of the Age of Oil

by Colin Campbell
from the ASPO Feb Newsletter, Feb 9, 2005

This Newsletter has now been running for four years and has covered almost 500 items of interest. It is accordingly perhaps timely to look back and try to summarise what might be learnt from the exercise. The Newsletter started in a modest way with no particular mission, concentrating at first on the more technical aspects of the matter. Later, it came to cover various related geopolitical issues, some of a sensitive nature. Gradually a picture began to fall into place, which may be summarised as follows:

The Industrial Revolution opened in the mid 18th Century with the exploitation of coal, initially in Britain, providing a new fuel for industry, transport and trade, which grew rapidly. The Oil Age dawned 100 years later, initially to provide lamp-oil for illumination, but later to fuel transport, following the development of the Internal Combustion Engine. Electricity generation expanded widely, fuelled first by coal, but later mainly from oil, gas and nuclear energy. This epoch has been widely seen as one of amazing technological progress, which has conditioned many people to think that there must always be a technological solution.

The Industrial Revolution was accompanied by an equally important, but less visible, Financial Revolution. In short, commercial banks lent money in excess of what they had on deposit, effectively creating money out of thin air, but the system worked because tomorrow’s expansion provided collateral for to-day’s debt. It was effectively a system of confidence, an intrinsic element of all debt. So, it might be better termed the Financial-Industrial Revolution.
The Stock Markets evolved from being simply an exchange of dividend-yielding instruments to become largely speculative institutions, being in turn stimulated by the tax regime that gave preferential treatment to speculative gains. In addition, World trading currencies, previously the pound sterling and now the US dollar, delivered massive hidden returns to the issuing countries, becoming in effect the prime benefit of Empire.

The World’s population expanded six-fold exactly in parallel with oil, which provided much of the fuel with which to plough the field, and bring food and manufactured goods to market, thus indirectly supporting the Financial System. The international of transport of food reduced the risk of local famines when harvests failed for climatic and other reasons.
The Second Half of the Oil Age now dawns and will be characterised by the decline of oil, followed by gas, and all that depends upon these prime energy sources. The actual decline of oil will be gradual at less than three percent a year: such that the production of all liquid hydrocarbons in 2020 will have fallen to approximately what it was in 1990. In those terms, it does not appear to be a particularly serious situation. But in reality, it is a devastating development because it implies that the oil-based economy is in permanent terminal decline, removing the confidence in perpetual growth on which the Financial System depends. Without the assumption of ever-onward growth, borrowing and lending dry up: there being little viable left to invest in. It follows that there will be a need to remove vast amounts of so-called Capital, which in fact was not Capital in the sense of being the saved proceeds of labour, but merely an expression of speculative confidence in ever onward economic growth. This in turn leads to the conclusion that the World faces another Great Depression, triggered more by the perception of long term decline of the general economy rather than the actual decline of oil supply itself which is gradual not cataclysmic. The World is definitely not about to run out of oil, but it does face the onset of decline having consumed about half of what is readily available on the Planet.

This is not welcome news, and those with mindsets conditioned on past experience find it very difficult to accept, some becoming vituperative in their reaction. In terms of pragmatic politics, it is virtually impossible for Governments to plan and prepare with logical strategies to face the new world that opens. Accordingly, the transition will likely be a time of international tension and resource wars of which the first salvoes have already been fired. But some of the more philosophically inclined wonder if in fact the post-oil world might not turn out to be a more harmonious one for the survivors. There are indeed hopes, Deus volens, that they may number somewhat more than the Planet was able to support prior to what by then will be seen to have been the brief Age of Oil, during which the World consumed its inheritance of fossil sunshine.

Peak Oil and The Sociology of Knowledge
Original Article posted on Scoop 2 February, 2005
A Peak Oil Primer
This article also now appears on Energy Bulletin

Anyone who wants to drag in the irrational where the lucidity and acuity of reason still must rule by right merely shows that he is afraid to face the mystery at its legitimate place. Karl Mannheim (1952).

The significance in differences in argument between what Colin Campbell terms the “flat-earth fraternity” and Peak Oil theorists is profound.

Flat-earthers typically dismiss arguments that global oil production will peak (very soon) and subsequently decline in favour of arguments claiming that vast reserves of oil exist (somewhere) and can be exploited well into the future thus securing economic growth for decades to come. Other variations from the flat-earthers include such arguments from the smooth transition to a “hydrogen economy” to the bizarre claims in the absence of any knowledge of the laws of thermodynamics, that modern supply-side economic theory combined with technology will somehow magically produce oil or some cheaper more efficient alternative to the dictates of market demand.

Peak oil’s empirically based claims can countenance no such sociological or economically arational challenges. It seems today for all purposes that there is little or no spare oil production capacity world wide, we currently produce about 83 Million barrels per day. Yet in today’s “deficits don’t matter” world everything but everything is blamed for oil supply concern except geological limitations.

Continued economic growth predicated by cheap and abundant oil viewed through the perspective of such an inherently flawed argument seems to ignore all prejudiced, obscurantist and irrational baggage. Upbeat claims regarding abundant oil by Oil companies, OPEC, Governments, the International Energy Agency, and Automobile Associations amongst others obtain a legitimacy, which obviates the need to look at the social milieu for an explanation as to what is actually going on.

History however clearly instructs us that rationality (or in this case the lack thereof), choice and belief inevitably depend upon the existence of certain social structures and norms. Beliefs across groups of people can emerge under specific intellectual conditions informed by empirical problems and guided by respected research traditions. Such a methodology unfortunately rarely speaks to the social classes chock-full of pregnant confusion, largely ignorant to dynamics of energy supply, consumption and its relationship with societal well being. In other words, the masses will suck up mainstream media propaganda that we need to rid the world of terrorists and that oil will return to US$25 per barrel very soon. Continue your recreational shopping at your pleasure.

In many ways it is perhaps an historical curiosity that science was touted as having enormous practical and utilitarian value in informing and inevitably improving the physical conditions of life. This approach however in the face of mass consumption, aspirations and expectations of certain standards of living seems to carry no weight anymore. Instead many of us look to economists, politicians and other soothsayers to assure us that the science in regard to Peak Oil is wrong, if you want to know what’s happening to oil supply you’re better off reading your local Financial Times than consulting an oil geologist. The fact that oil reserves equivalent to five or so Saudi Arabias will be discovered and developed within a decade or so and that the oil price per barrel will return sometime soon to US$25 dollars per barrel are a given.

PowerLess NZ urge New Zealanders and politicians unafraid of ditching their dogmas to rationally question current assumptions. Consider our economic system, predicated on debt, fractional-reserve banking and fiat currency. Much of what we consider “value” in New Zealand is not determined by anything at all measurable or tangible it is merely a perception of an expectation of future use or gain.

This system is necessarily dependant upon limitless infinite growth to survive. Rational thought ought to inform all of us that this scenario is an impossibility theorem. Growth is not possible without energy and there is nothing on the market that can currently replace oil and natural gas. Without oil and natural gas our financial system is doomed. Several respected independent scientific sources predict Peak Oil, the time at which the demand for oil exceeds the available supply, to occur between 2005 and 2007. Richard Heinberg argues the answer to this dilemma is the one no one wants to hear. So we sit, and wait, and assume, and deny.

Steve McKinlay (c)
http://www.oilcrash.com/

Two Thumb Tarn

Two Thumb Tarn
Originally uploaded by ontic steve.

I was here three weeks ago. The Two Thumb Range, between Lake Tekapo and the Rangitata River, Canterbury, NZ.

Suburbia's looming fire-sale

On the forthcoming energy crunch Jim Kunstler argues,

”Many of the beliefs and accepted dogmas of the late 20th century will fall
away as a new and very different reality asserts itself.”

One of the reasons a great many people, policy makers and leaders find it impossible to face the issue of peak oil is because it challenges the very beliefs that we argue are a priori truths about industrialised western societies, without requirement for justification, our fundamental birth-rights.

These beliefs, that the society our children will inherit will somehow be richer, more open and peaceful and economically more prosperous. That technology and coming generations will solve the collective global problems we face. We truly believe in the fallacy of endless substitution. That we will discover and liberate energy sources cheaper and more productive as existing ones run out. In New Zealand many of us favour leaving such issue’s to the “market” to sort out. After all, the stone-age didn’t end because we ran out of stone.

An acute understanding of the fundamentals of energy and its intrinsic relationship with society instructs us differently however. The post-globalist, post-cheap-oil age will seriously challenge our deeply seated assumptions. We don’t have to run out of oil for life to be up-ended. We merely need to experience a supply squeeze and a reasonable price spike for all the mechanisms that support our modern life to be seriously destabilised. This situation is quickly approaching. The world is currently experiencing growth in oil use that is stretching available supply to the absolute limit. This is occurring when the global production of oil is about to move over it’s all time peak, after which it will be in permanent and increasing decline.

The public of New Zealand are about to get the shock of their lives. Currently there is no national leadership in regard to this issue. It is entirely likely that an aggrieved angry public will lash out as the instant erosion of lifestyle is paralleled by increasing fuel prices and shortages.

The resultant disorder will require an urgent downscaling of virtually all the activities in New Zealand. The suburban lifestyles many of us have invested our life’s earnings in, represent arguably the largest misallocation of resources since the Second World War. We will be forced to live closer to work, within walking or cycling distance.

As national and international supply chains are affected by disrupted oil markets the days of driving your 4WD to the Warehouse for some recreational shopping will quickly come to an end. The emergence of such massive discounters and franchisers was seen as a huge boon to mass consumerism however many of us failed to notice the losses incurred to society as the demise of localised retail systems followed. Such centralised national chains are ultimately dependant upon an infrastructure both local and international, that require heavily oil reliant distribution channels to be operationally seamless.

We will need to re-establish interdependent localised communities based on moving merchandise including food and produce shorter distances. Rail systems will have to be developed to replace defunct long-haul trucking systems.

Our agricultural systems face similar restructuring. Many of our food products are mass produced hundreds of kilometres away from cities and trucked to New World’s and Pack & Save stores country-wide. The re-emergence of market-gardens and localised agri-business will be necessary. Interdependent multi-mode distribution and transportation channels will have to be re-established if we are to feed ourselves. Farming will be performed on a much smaller scale. Access to fossil-fuel based fertilisers and pesticides will be tenuous and rather than a trendy luxury, small scale organic farming will become a necessity.

The changes we face, the end of globalisation bought about by the emerging dysfunction and peak in world oil production will not be pleasant. We will be forced to change our living arrangements in ways that we never envisioned in the golden years of the 1990s.

Suburban life has no future!

In fact many people will find that their lifelong financial investment in this car-dependent living arrangement becomes worthless almost overnight. Kunstler argues that we could well see a mad scramble to “get-out” (of suburbia). Unfortunately history reminds us that we are likely to cling to the tragic delusion that somehow “things will get back to normal”. The defence of the suburban way of life will become a bizarre yet futile exercise. It is very likely to precipitate appalling political situations. As it becomes increasingly evident that it is impossible to maintain our suburban utopia communities will likely turn to fanatical politicians preaching a “business as usual” message.

Whether we like it or not we are on the road to an extended harsh period of austerity and consequent re-adjustment. The sooner as a nation we face up to this dilemma the less the shock will be.

www.oilcrash.com
http://www.energybulletin.net/

Steve.
PowerLess NZ