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Ready Or Not… The Unsustainable Status Quo Is Ending

Ready Or Not… The Unsustainable Status Quo Is Ending thumbnail

~ Walking straight in a hall of mirrors

I have to confess, it’s getting more and more difficult to find ways of writing about everything going on in the world.

Not because there’s a shortage of things to write about — wars, propaganda, fraud, Ebola — but because most of the negative news and major world events we see around us are symptoms of the disease, not the disease itself.

There are only so many times you can describe the disease, before it all becomes repetitive for both the writer and the reader. It’s far more interesting to get to the root cause, because then real solutions offering real progress can be explored.

Equally troubling, in a world where the central banks have distorted, if not utterly flattened, the all important relationship between prices, risk, and reality, what good does it do to seek some sort of meaning in the new temporary arrangement of things? 

When the price of money itself is distorted, then all prices are merely derivative works of that primary distortion. Some prices will be too high, some far too low, but none accurately determined by the intersection of true demand and supply.

If risk has been taken from where it belongs and instead shuffled onto central bank balance sheets, or allowed to be hidden by new and accommodating accounting tricks, has it really disappeared? In my world, risk is like energy: it can neither be created nor destroyed, only transformed or transferred.

If reality no longer has a place at the table — such as when policy makers act as if the all-too-temporary shale oil bonanza is now a new permanent constant — then the discussions happening around that table are only accidentally useful, if ever, and always delusional.

Through all of this, the big picture as described in the Crash Course grows ever more obviously clear: we are on an unsustainable course; economically, ecologically, and — most immediately worryingly  — in our use of energy.

So let’s start there, with a simple grounding in the facts.

By The Numbers

Humans now number 7.1 billion on the planet and that number is on track to rise to 8 or 9 billion by 2050. Already ‘energy per capita’ is stagnant across the world and has been for a few decades. If the human population indeed grows by 15-25% over the next three and a half decades, then net energy production will have to grow by the same amount simply to remain constant on a per capita basis.

But can it? Specifically, can the net energy we derive from oil grow by another 15% to 25% from here?

Consider that, according to the EIA, the US shale oil miracle will be thirty years in the rear-view mirror by 2050 (currently projected to peak in 2020). And beyond just shale, all of the currently-operating conventional oil reservoirs will be far past peak and well into their decline. That means that the energy-rich oil from the giant fields of yesteryear will have to be replaced by an even larger volume of new oil from the energetically weaker unconventional plays just to hold things steady.

To advance oil net energy on a per capita basis between now and 2050, we’ll have to fight all of the forces of depletion with one hand, and somehow generate even more energy output from energetically parsimonious unconventional sources such as shale and tar sands with the other hand.

These new finds…they just aren’t the same as the old ones. They are deeper, require more effort per well to get oil out, and return far less per well than those of yesteryear. Those are just the facts as we now know them to be.

In 2013, total worldwide oil discoveries were just 20 billion barrels. That’s against a backdrop of 32 billion barrels of oil production and consumption. Since 1984, consuming more oil than we’re discovering has been a yearly ritual. To use an analogy: it’s as if we’re spending from a trust fund at a faster rate than the interest and dividends are accruing. Eventually, you eat through the principal balance and then it’s game over.

Meanwhile, even as the total net energy we receive from oil slips and our consumption wildly surpasses discoveries, the collective debt of the developed economies has surpassed the $100 trillion mark — which is a colossal bet that the future economy will not only be larger than it is currently, but exponentially larger.

These debts are showing no signs of slowing down. Indeed, the world’s central banks are doing everything in their considerable monetary power to goose them higher, even if this means printing money out of thin air and buying the debt themselves.

Along with this, the demographics of most developed economies will be drawing upon badly-underfunded pension and entitlement accounts — most of which are literally nothing more substantial than empty political promises made many years ago.

These trends in oil, debt and demographics are stark facts all on their own. But when we tie these to the obvious ecological strains of meeting the needs of just the world’s current 7.1 billion, any adherence to the status quo seems worse than merely delusional.

Here’s just one example from the ecological sphere. All over the globe we see regions in which ancient groundwater, in the form of underground aquifers, is being tapped to meet the local demand.

Many of these reservoirs have natural recharge rates that are measured in thousands, or even tens of thousands, of years.

Virtually all of them are being over-pumped. The ground water is being removed at a far faster rate than it naturally replenishes.

This math is simple. Each time an aquifer is over-pumped, the length of time left for that aquifer to serve human needs diminishes. Easy, simple math. Very direct.

And yet, we see cultures all over the globe continuing to build populations and living centers – very expensive investments, both economically and energetically – that are dependent for their food and water on these same over-pumped aquifers.

In most cases, you can calculate with excellent precision when those aquifers will be entirely gone and how many millions of people will be drastically impacted.

And yet, in virtually every case, the local ‘plan’ (if that’s the correct word to use here) is to use the underground water to foster additional economic/population growth today without any clear idea of what to do later on.

The ‘plan’ such as it is, seems to be to let the people of the future deal with the consequences of today’s decisions.

So if human organizations all over the globe seem unable to grasp the urgent significance of drawing down their water supplies to the point that they someday run out, what are the odds we’ll successfully address the more complex and less direct impacts like slowly falling net energy from oil, or steadily rising levels of debt? Pretty low, in my estimation.

Conclusion

Look, it’s really this simple: Anything that can’t go on forever, won’t.  We know, financially speaking, that a great number of nations are utterly insolvent no matter how much the accounting is distorted. Said another way: there’s really no point in worrying about the combined $100 trillion shortfall in Social Security and Medicare, because it simply won’t be paid.

Why? It can’t, so it won’t. The promised entitlements dwarf our ability to fund them many times over. There’s really not much more to say there.

But the biggest predicament we face is that steadily-eroding net energy from oil, which will someday be married to steadily-falling output as well, can’t support billions more people and our steadily growing pile of debt.

Just as there’s no plan at all for what to do when the groundwater runs out besides ‘Let the folks in the future figure that one out,’ there’s no plan at all for reconciling the forced continuation of borrowing at a faster rate than the economy can (or likely will be able to) grow.

The phrase that comes to mind is ‘winging it.’ 

The wonder of it all is that people still turn to the same trusted sources for guidance and as a place to put their trust. For myself, I have absolutely no faith that the mix of DC career politicians and academic wonks in the Fed have any clue at all about such things as energy or ecological realities.  Their lens only concerns itself with money, and the only tradeoff concessions they make are between various forms of economic vs. political power.

If the captains supposed to be guiding this ship are using charts that ignore what lies beneath the waterline, then you can be sure that sooner or later the ship is going to strike something hard and founder.

I’m pretty sure the Fed’s (and ECB’s and BoJ’s and BoE’s) charts resemble those of medieval times, with “Here be dragons” scrawled in the margins next to a series of charts of falling stock prices and unwinding consumer debt.

So there we are. The globe is heading from 7.1 billion to 8 or 9 billion souls, during a period of time when literally every known oil find will be well past its peak. Perhaps additional shale finds will come along on other continents to smooth things out for a bit (which is not looking likely), but it’s well past time to square up to the notion that cheap oil is gone. And with it, our prospects for the robust and widespread prosperity of times past.

Because all of this inevitably leads to some sort of time of reckoning, natural questions emerge: What might happen and when? What would that feel like?  How would I know it’s started? Given the knowns and unknowns, are there any dominant strategies for mitigating the risks that I should undertake?  What are the challenges and what are the opportunities?

Chris Martenson via Peak Prosperity



27 Comments on "Ready Or Not… The Unsustainable Status Quo Is Ending"

  1. Davy on Mon, 29th Sep 2014 6:49 am 

    Chris Martenson is a great asset to the PO and doomer community. He is getting through to the business class among others. His article is nothing new here but it raises great questions for the PO illiterate cornies. His argument are difficult to refute with facts. The cornies are good with superficial non facts, fact distortions, and wildly optimistic projections. His term “winging it” as TPTB policy is spot on. TPTB are aware of the problems and predicaments but they are also aware of the dangers. I am not sure there is a consensus on what the real problems are but there is enough to warrant a plan B overall. I am often troubled with the idea of widespread acceptance of what is coming but also the lies of covering it up. Acceptance will bring BAU down quickly. If MSM hit this topic hard and truthfully explained what it really means the attitude changes would be very dangerous. I am not sure most people are capable of understanding the significance in any case. It is not an easy topic to get a true handle on. Yet, the lack of preparations and or a plan B is very dangerous for all of us. We are talking panic and chaos. A complex system does not run with panic and chaos as its foundation. A complex system freezes up with anything but confidence and liquidity. It is my hope a significant crisis develops that is gentle enough in degree and duration to allow natural lifestyle and attitude changes. These changes would ideally free up resources by diminishing wasteful and nonessential discretionary products and activities. If people become focused on this problem even if they do not know it is BAU ending, we may free up some time for a less severe transition. If we stumble into this paradigm descent at full speed collapse is possible. This situation really must be handled with some coordination and pre-crisis planning unfortunately it is not. Instead TPTB are focusing on maintaining BAU at all costs. A BAU that has little future because it has to grow and at some point growth is not possible. We are near that point.

  2. Dredd on Mon, 29th Sep 2014 7:55 am 

    Martenson said it well.

    The historian Toynbee studied civilizations of the past and concluded that the majority of them committed suicide (Civilization Is Now On Suicide Watch).

  3. paulo1 on Mon, 29th Sep 2014 8:22 am 

    re Davy statement: “The cornies are good with superficial non facts, fact distortions, and wildly optimistic projections.”

    What I am finding is that friends who embrace continued growth etc have either too much crap hurting in their world or they simply find it impossible to imagine the foundation of continued growth is simply not a given. What I hear are arguments that say things like: “Shale gas developments will revolutionize everything and carry NA forward”. Do you think I will disagree with someone who just lost their wife last year to ALS?

    Last week a buddy came up to fish and he mentioned Peak Oil. However, this is the same man who argued the 2008 run up to $147/bbl was simply the fault of ‘the speculators’. Granted, we are 6 years forward on, but I do not argue any points about PO much anymore. I don’t know if they are simply feeling me out, if they are actually accepting the concept of limits to growth, or the possibility that there may be energy constraints in the future? Plus, are they just pulling my chain?, (Because I am the guy who moved from town and is a bit of a…..nut).

    In short, I simply don’t say anything much anymore beyond “There probably cannot be infinite growth on a finite planet” and leave it at that. When I am asked about Peak Oil by someone who just spent $4,000 on a 19 lbs racing kayak I don’t bite and answer. Better to stay friends.

    Paulo

  4. Makati1 on Mon, 29th Sep 2014 8:54 am 

    It is impossible to convince someone against their will. Especially if their self-esteem and/or income depends on their not understanding. It is even more difficult it they have been exposed to brainwashing for all of their life by an incessant stream of ads and propaganda everywhere they turn.

    Few took time to look up the word ‘programing’ when TV became popular. If they had, they might have thrown it into the trash. Consumers are not born that way, they are programmed to want more, more, more, until they don’t even question whether it is good or even possible. How do you break such conditioning except by the most drastic measures?

    Program: a sequence of coded instructions (as genes or behavioral responses) that is part of an organism.

    http://www.merriam-webster.com/dictionary/program

  5. Chris Hill on Mon, 29th Sep 2014 9:46 am 

    I think some are starting to get it. I was talking with an older fellow yesterday. He said he was glad to be as old as he is, didn’t have to worry about near as much.

  6. Northwest Resident on Mon, 29th Sep 2014 10:16 am 

    Davy: “It is my hope a significant crisis develops that is gentle enough in degree and duration to allow natural lifestyle and attitude changes.”

    I guess we all know that nothing is going to change from “the top” unless and/or until something “really big” happens to change people’s attitudes.

    It took Pearl Harbor to shake up Americans to the point where they supported going to war, despite the fact that some really bad guys were rampaging across Europe. It took 911 to motivate (trick) Americans into supporting the so-called war on terror — AKA: Whatever we have to do to secure dwindling oil supplies.

    And it will take another major “hit” of some kind that TPTB can use as a tool to manipulate/motivate public opinion to begin making the sacrifices and extreme life-style changes necessary to manage a “smooth” transition. Because the required changes will be so drastic and so painful, it is going to take a really BIG event to shake people up enough to justify all that pain — much bigger than 911 or Pearl Harbor — something on a scale so enormous that we probably can’t imagine it. Just hope you’re not accidentally or by chance of circumstance standing in the bullseye when that big hammer comes crashing down.

  7. Apneaman on Mon, 29th Sep 2014 10:45 am 

    Makati1
    Good eye …..again.

    I have come to believe that many people are perfectly happy with their programming and do not want it broken. It is safe, reassuring and familiar. Whenever there is anything even remotely negative there is always a quick solution to follow. Usually with X amount of easy payments. Billions are safe and sound in the corporate/government matrix and more want in everyday. Except for a few wide awake malcontents, no on wants to hear it and hate those who speak of reality. As the great unraveling expands and quickens, I expect to see more denial and magical thinking; not less. Humans are special indeed.

  8. Plantagenet on Mon, 29th Sep 2014 10:59 am 

    People respond to their immediate situation. In the US the MSM report that the economy is fine, oil is abundant and energy prices are falling, and US wars in iraqsyriaafghanistanyemensomaliapakistan etc are noble and well intentioned. What me worry should be the US national motto.

  9. J-Gav on Mon, 29th Sep 2014 11:09 am 

    Apnea – “As the great unraveling expands … I expect to see more denial and magical thinking …”

    I agree during the run-up, but once the next big financial/economic crash hits (likely set to dwarf the last one), that’ll become difficult when most people see their 401Ks, bank accounts etc go up in smoke.

  10. CrisisMaven on Mon, 29th Sep 2014 11:23 am 

    Following the discussion on overpopulation, (energy, food etc.) shortages and other looming catastrophes for decades I begin to wonder if we did not start warning too early? The reasoning: when -mostly in the 1970s- resource depletion began to figure large in various reports and the oil crisis struck as well, most people were “believers”. However, as time went on and “nothing” happened, people have become more and more immune and now seem almost deaf to any such warnings. Or they resort to the old whistling in the woods: future technology will keep the ship afloat etc. I wonder if the warnings had come onto the scene only after 2000 if those of all generations not yet demented might not listen more carefully?

  11. Northwest Resident on Mon, 29th Sep 2014 11:29 am 

    J-Gav: I agree that denial and magical thinking will become difficult — but still not impossible — once that inevitable financial crash eventually hits.

    But until then…

    Even my girlfriend who is reasonably intelligent and well-versed in peak oil concepts, having engaged in numerous conversations with me on the subject. She at times fully accepts the reality, then she gets a little depressed or goes into “life sucks” mode. Then later, she will reemerge with opinions that “the government won’t let that happen”, or “the government will do something” or “they’ll find a way to develop better technology”, etc…

    Truth is, it is a VERY hardcore truth that we are dealing with here, and any amount of contemplation on the subject having accepted that truth is bound to result in some very uncomfortable thoughts. Most people are going to have natural inclinations to deny and/or to dismiss any truth that leads to such uncomfortable thoughts. That is just human nature. As the pressure builds, look for a lot of irrational behavior in those around you, and you’re likely to not be disappointed.

  12. JuanP on Mon, 29th Sep 2014 12:06 pm 

    It will be denial until death for most people. Most people will never understand what hit them, even after they are lying dead on the floor. Accepting this is beyond most normal people, IMO.

  13. orbit7er on Mon, 29th Sep 2014 12:32 pm 

    I always return to the big 2 issues to tackle Peak Oil & Climate Change – the endless Wars costing the world $2 Trillion per year. The US War machine is the world’s biggest oil consumer AND greenhouse emitter consuming 5% of US oil usage (40% imported). The next big ticket item is Auto Addiction accounting for 70% of US oil usage and 35% of greenhouse emissions. Transportation is the biggest source of increases in greenhouse emissions over the past 10 years. The US consumes 3x per capita of Europe & Japan which have much better Green Transit alternatives to endless Auto Addiction. This COULD be changed…
    It seemed to be the original vision of Obama when he rode the train with Biden to his 2009 Inaugural and pledged to stop the Wars. But now Obama has totally capitulated with the “all of the above” destroy the planet drilling, the Libyan War, now a Syrian War, with exporting coal not burned in US power plants overseas, with no mention of Green Transit alternatives to the US endless Auto Addiction…
    But redirecting $1 Trillion from Wars and many billions from Auto Addiction to Green Transit and a sustainable Green transition would help a huge amount. Of course the trillions wasted on endless Oil Wars since Bush Seniors first Iraq War could hve built Hi speed Rail all over the US, LightRail in all major US metro areas mostly on existing Rail tracks or at least Rights of Way, and walkable communities powered by solar and wind.

  14. penury on Mon, 29th Sep 2014 12:39 pm 

    In my opinion (questionable assumption) people at least in the U.S. seem to be short term focused, if the descent of the economy is slow people will adjust to a gradual decline with slight changes in behavior and choices. Most people will remain unaware of the changes taking place around them and will presume that life has always been this way. looking back on life, I find that most of the changes have been slow and people adjust rapidly. Children born in the last 10 years will accept current conditions as normal and children born in the next ten will accept that as normal meanwhile us antiques will continue to talk about “the good old days” and will be ignored as we ignored those before us.;

  15. Northwest Resident on Mon, 29th Sep 2014 12:46 pm 

    “But now Obama has totally capitulated…”

    My guess is that a very well-meaning and sincere Obama had a meeting with some guys in black suits and dark sunglasses who explained the realities of life to him. Those guys in black suits of course are representatives of the powers that really run this world, and they have been around a lot longer than any president. It probably didn’t take long for Obama to realize that all the bought-and-paid for Senators and Congressmen, along with plenty of military, CIA and other well-placed head honchos are also on the payroll of those same powers.

  16. Davy on Mon, 29th Sep 2014 1:06 pm 

    Pen, I personally think this crisis is going to be liquid fuel induced food shortages and financial crisis. This will be a triple whammy and hard for the authorities to manage. You will have businesses closing their doors, grocery stores with empty shelves, and the death rattle of retail. I feel it is going to be a bat upside the head complete with the stars and coming to on the ground saying “what the hell happened?” I don’t see how this will be slow and boil us like a frog. I think that is what has been happening on this bumpy plateau. Soon the heat will be turned up but by the time we realize the extent of the crisis we will be well into the crisis. Personally I feel we are well into a masked crisis now. It is just not apparent. Liquid fuels are on life support from central bank money printing. Food security is hugely dependent on a healthy financial system and affordable liquid fuels. The financial system is a mess with bubbles and market stresses. It is like going to the doctor because you think you have appendicitis and he opens you up and you are full of cancer. All the doc can do is stich you up and say “you got a bucket list”? Prep now folks before it is too late. At least invest in some long shelf life food to get you through the start of this.

  17. Northwest Resident on Mon, 29th Sep 2014 1:10 pm 

    The Oil Head-Fake: The Illusion that Lower Oil Prices Are Positive

    For those who think that Econ 101 is all you need to know about oil prices — IF they can understand it.

    ht tp://www.zerohedge.com/news/2014-09-29/oil-head-fake-illusion-lower-oil-prices-are-positive

  18. Chris Hill on Mon, 29th Sep 2014 1:18 pm 

    The era of big projects is probably over in this country. We haven’t been to the moon in over 40 years. It is a shame that this is likely as good as it gets, but I’ve been feeling that way for a while now. Sure, we keep getting new toys and ways to analyze data, but none of it means much if you don’t have the ability to change anything for the better.

  19. JuanP on Mon, 29th Sep 2014 1:31 pm 

    Another excellent article by CM. Don’t skip!
    I highly recommend his Crash Course videos to people who haven’t watched them and want to learn more about the coming energy, economic, and ecologic crises.
    I have learned much from Chris Martenson though the years, and I see things in a way similar to his.

  20. J-Gav on Mon, 29th Sep 2014 1:36 pm 

    Northwest – Same in general in my immediate entourage … People get depressed or call you names if you pile it on so I took it slow and easy over the years and they’re aware enough to have become more active in researching certain ‘hot topics’ they’ve adopted for themselves (oceans, biodiversity and wildlife …).

    My step-son’s gone a lot further than the rest of the predominately female family here, wanting to revolutionize everything tomorrow! Not necessarily the way forward (if there is one) so I have to try and tone him down a bit: “You wanna go head-to-head with THAT, dude? How? Protest marches? I did that for 30 years and look where we are! They’ll squash you like a bug.”

    No, I guess it’ll have to come down under its own putrid weight, massively sliming everything on the way. I still think hose with more awareness should have a better chance of squeaking through.

  21. JuanP on Mon, 29th Sep 2014 1:38 pm 

    Penury “Children born in the last 10 years will accept current conditions as normal and children born in the next ten will accept that as normal meanwhile us antiques will continue to talk about “the good old days” and will be ignored as we ignored those before us.”
    That is called shifting baselines, a fascinating phenomenon. http://en.m.wikipedia.org/wiki/Shifting_baseline

  22. Don on Mon, 29th Sep 2014 2:13 pm 

    Penury is correct. It makes me feel old but you can really see this effect when you listen to children nowadays. Like my cousin asking if calling 911 for police was because of sept. 11th. My cousin arguing that she needs a cell-phone then asking my aunt how old she was when she got her first cellphone. “Thirty.” A look of horror came over my cousin.

    The reality that you grow up with is just what you assume to have always been and always will be, until you find out different.

  23. Harquebus on Mon, 29th Sep 2014 4:30 pm 

    I can not find any reference to Ackerman’s article at the Daily Telegraph.

  24. Apneaman on Mon, 29th Sep 2014 4:49 pm 

    It’s harvest time in California. I’m sure when the numbers come in it is going to hurt. It should not be more than a year or two until Geo-engineering (magical thinking) is being seriously debated. Probably demanded by a desperate public. The rest will turn to the old Gods. Silicone Valley is working on a save humanity app. Haven’t those people and their techno promises been the biggest fucking failure of the 21st century?

    http://www.thebaffler.com/salvos/of-flying-cars-and-the-declining-rate-of-profit

  25. Kenz300 on Mon, 29th Sep 2014 6:25 pm 

    OVER POPULATION — the worlds biggest environmental problem.

    Endless population growth is not sustainable.

    Around the world we can find a food crisis, a water crisis, a declining fish stocks crisis, a Climate Change crisis, an unemployment crisis and an OVER POPULATION crisis.

    Overpopulation facts – the problem no one will discuss: Alexandra Paul at TEDxTopanga – YouTube

    https://www.youtube.com/watch?v=fNxctzyNxC0

    ———————

    Wrap it up……. get it snipped……

    Birth Control Permanent Methods: Learn About Effectiveness

    http://www.emedicinehealth.com/birth_control_permanent_methods/article_em.htm

  26. Repent on Mon, 29th Sep 2014 9:33 pm 

    What I sometimes worry about is when we WILL have new things to talk about and say about this situation- and it won’t be pretty.

  27. Makati1 on Mon, 29th Sep 2014 9:57 pm 

    Apneaman, we share a lot of thoughts, but you have to admit all of those techie toys from Silicon Valley made a few people wealthy while providing the government with a self-paid-for means of tracking every one of us 24/7/365. I’m using one right now, a two year old desktop PC, but that, and an eight year old cell phone, are the only techie toys I own.

    I think the powers that be know what is coming. When the Department of agriculture buys machine guns…

    http://www.zerohedge.com/news/2014-05-15/department-agriculture-launches-proposal-purchase-submachine-guns

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