Exploring Hydrocarbon Depletion
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Timo wrote:People are rapidly becoming obsolete for economic function. We're not people, per se. We're consumers. That's our only real purpose - to consume what machines make for us. Oh well. Let's all eat cake!
When we also bear in mind how cheap oil has been in the past, this analysis gets more remarkable still. Even at today’s price of around $100 per barrel, which historically is extremely high, this is really a very cheap form of energy. One only needs to imagine offering someone $100 for 8.6 years of labour to realise that even today’s so-‐called ‘expensive’ oil is still amazingly cheap.
THE ECONOMICS OF PEAK OIL
Although the intricacies of peak oil economics can get very complex quite quickly, the basic dynamics can be easily grasped and conveyed. The first point to note is that there has always been a very close correlation between energy supply and economic growth, which should really come as no surprise. Quite simply, productive activity takes energy, and many studies and events have demonstrated that when energy supply has not met demand, economies suffer, often to the point of recession.
when energy prices increase, expenditures are re-allocated from areas that had previously added to GDP, mainly discretionary consumption, towards simply paying for the more expensive energy. In this way, higher energy prices lead to recessions by diverting money from the economy towards energy only. The data show that recessions occur when petroleum expenditures as a percent of GDP climb above a threshold of roughly 5.5%
If economic growth is indeed dependent on energy prices in this way, then we are truly approaching a momentous turning point in the human history. For two centuries the dominant narrative of human progress has been based on economic growth, but if it turns out that the world cannot significantly decouple growth from energy use, then any stagnation in the supply of energy may very well represent the ‘end of growth.’ This is something that is going to change the world so fundamentally that its foreseeable arrival ought to be taken very seriously indeed. Unfortunately, most people, including the world’s leaders, remain firmly entrenched in a macro-economic paradigm that seeks growth without limit.
The global economy simply cannot withstand the economic impacts of high oil prices – primarily because so much trade is now international and therefore dependent on oil for the transportation of goods. But when oil prices get so high that the economy cannot function – which is what happened in 2008 – the economy struggles to grow, and this reduction in economic activity means a reduction in oil demand, and this reduced demand makes the price of oil crash also. This is what happened after the crash in 2008, and it is what happens whenever the demand for oil is reduced because of economic recession. Low oil prices, however, then aid economic recovery, but as economies recover from recession and begin to grow again, this puts more demand pressure on stagnating oil supplies, and the cycle repeats itself. In short, oil prices increase till economic breaking point, economies crash, which leads to a crash in oil prices; the low oil prices then facilitate economic recovery, which puts more demand pressure on oil, leading prices to rise till economic breaking point, and so and so forth. This increasingly severe cycle of bust-‐recovery-‐bust is what we should expect in coming years and decades, and as oil supplies decline, economic contraction is what we should expect and prepare for. The world is unlikely to escape this unhappy cycle until it transitions beyond a growth-‐based economy and breaks its addiction to oil.
The transition away from consumer lifestyles toward some form of post-‐consumerist lifestyle will be a truly fundamental shift in how the global consumer class lives, involving a significant reduction in material standards of living and a necessary reconceptualisation of what ‘the good life’ entails. Living more simply, in terms of energy and resource consumption, has both an external and an internal dimension.
To sum up: This paper has argued that consumer lifestyles have a time limit and that time is running out. We may even be living in the age of ‘peak consumerism,’ which can be understood as the point at which the energy and resource intensive consumer lifestyles widely celebrated today begin their inexorable and terminal decline. Consumerism is a social experiment that has failed for various reasons, but arguably the most pressing failure is its fatal reliance on a depleting non-renewable resource.
This marks the dawn of a new age, an age in which ‘simpler lives’ of reduced energy and resource consumption will eventually be imposed upon us by force of geological, environmental, economic, and perhaps even geopolitical forces. It would be wise, therefore, to prepare ourselves for this future – psychologically, socially, economically, and politically. The worst way to respond to this looming reality, but which is the dominant response today, is to pretend that our inheritance of oil is never going to deplete despite sustained consumption and increased demand. With consumerism on its deathbed, it is time to dream a new dream – a post-‐consumerist, post-‐petroleum dream – and we should recognise that we are now under considerable time pressure to realise this new, simpler form of life.
To prepare for tomorrow, live it today.
Villagers in a far-off land wanted to capture monkeys. So one ingenious person thought of cutting a hole in a coconut and stuffing peanuts in it. Then he placed the coconut in a tree frequently visited by monkeys.
Within minutes of putting the coconut in the tree, a monkey wandered by, smelled the peanuts, crawled up the tree and put his hand inside the coconut. As villagers approached to nab the monkey, the monkey couldn’t climb down the tree because he was clutching the peanuts inside the coconut and his hand was stuck.
In other words, as energy, food, etc. gets more expensive, it's the people with jobs in the industrialized world - those who manage to make it through the successive rounds of musical chairs - who will get that food because they will be able to outbid those who are poor, regardless of how they got there (voluntarily or involuntarily).
Of course 'ride the ride 'till it stops' is the default argument, because after all, how else is a person to grab the brass ring?
glaucus wrote:All I was trying to get at is that all these ideas about quitting one's job in favor of much lower-paying farmhand jobs with no health benefits just isn't a good strategy - particularly in the short term.
I don't advocate that others follow my example unless they're already inclined to do so. But if so inclined, by all means take the jump. I haven't regretted it for a second.
Involuntary poverty is a different beast than voluntary poverty, far more wrenching.
That is more or less a strawman, glacus. I didn't even remotely suggest people move to the country, like Loki I never do.
A person must feel like it is worth foregoing all the chachkas - either to save the world, or failing that, to learn to live in the next. If you don't think it's worth it because you have no concerns about the world vis a vie the scenarios outlined in the papers I linked in the OP or see any downside to the current two-income, 40-60 hour week, work to retire to die set-up, then obviously me arguing the point isn't going to change your mind.
glaucus wrote:Let me remind you again that I was playing devil's advocate before.
Of course I believe forsaking the 'stuff' mentality is the smart play. Perhaps my aim was off when I posted. I guess an unexamined assumption on my part was to assume that to live under the auspice of voluntary simplicity/poverty one must forsake his/her role in the musical chair game (aka his/her job in the primary economy). Do you believe this to be the case?
Pops wrote:I do print graphics from home, raise beef, do "handyman" type odd jobs for neighbors and I'm trying to build into a small u-pick garden. Obviously I do each part time and each is only a part time income but each could be (and at times has been) ramped up fairly easily to make up for a shortfall in another.
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