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Page added on March 11, 2014

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Heinberg: The Oil ‘Revolution’ Story Is Dead Wrong

With all the grandiosity of the media headlines touting our destiny as the new “Saudi America”, many pundits have been quick to pronounce Peak Oil dead.
Here at PeakProsperity.com, one of the most frequent questions we’ve received over the past two years is: will the increased production from new “tight” oil sources indeed solve our liquid fuels emergency?
Not at all, say Chris and this week’s podcast guest, Richard Heinberg. Both are fellows at the Post Carbon Institute, and you are about to hear one of the most important and most lucid deconstructions of the false promise of American energy independence.

TRANSCRIPT

Chris Martenson: Welcome to this Peak Prosperity podcast. I am your host, Chris Martenson, and today, I am really excited to introduce a man who needs no introduction, Richard Heinberg, author, educator, speaker, writer now of eleven books including Party’s Over, the one that got me started on the peak oil story, The End of Growth, and Snake Oil: How Fracking’s False Promise of Plenty Imperils Our Future.
Richard Heinberg: Try say that fast five times.
Chris Martenson: [Laugh] I did, and that is the best I could do [laughter]. Welcome, Richard.
Richard Heinberg: Good to be with you, Chris.
Chris Martenson: So I want to start here. The Party’s Over, the book that did get me started on peak oil, written in 2003. And very clearly articulated, oil is a finite substance, and we built this whole giant growing economic model around it and that is a problem, it is a predicament. Here we are, eleven years later in 2014, and the party is still continuing. What is going on?
Richard Heinberg: Well, you know, I recently went back and reread the first edition of The Party’s Overbecause it was the tenth year anniversary. And I was actually a little surprised to see what it really says. My forecasts in The Party’s Over were really based on the work of two veteran petroleum geologists—Colin Campbell and Jean Laherrère. So they were saying back before 2003, because it published in 2003, so it was actually written in 2001 and 2002. So they were saying back in 2000 and 2001 that we would see a peak in conventional oil around 2005—check—that that would cause oil prices to bump higher—check—which would cause a slowdown in economic growth—check. But it would also incentivize production of unconventional oil in various forms—check—which would then peak around 2015, which is basically almost where we are right now and all the signs are suggesting that that is going to be a check-off, too. So amazing enough, these two guys got it perfectly correct fifteen years ago.
Chris Martenson: Well, it is an amazing part of the story is that at a price, there is always more oil, right? If it was a trillion dollars a drop, I assume we would find ways to actually flip North Dakota over and scrape the source rock out. And so the price and availability and supply of oil is always a big deal. I see that a lot when people are talking about the resources of natural gas that exist but fail to tell me at what price those exist, right? To get the resource is always possible but the price is important.
And yet, we look at the economic sphere and we discover that the economy also has a price for oil but it’s what it can afford to pay.
Richard Heinberg: That is exactly right.
Chris Martenson: And as I look across the last three years, we have roughly been averaging $100 a barrel on the international landscape. And what do we see? We see Ukraine suddenly dissolving, we see Southern Europe with 50% unemployment rates—all things that I think were predicted by almost anybody who was really looking at the peak oil story a long time ago. It is all really coming true and yet the story today is not really connecting those two pieces together, except for people like you and myself and a number of others, but really a handful.
Richard Heinberg: Right. Yeah, the big news right now is that the industry needs prices higher than the economy will allow, as you just outlined. So we are seeing the major oil companies cutting back on capital expenditure in upstream projects, which will undoubtedly have an impact a year or two down the line in terms of lower oil production. That is why I think that Campbell and Laherrère were right on in saying 2015, 2016 maybe, we will also start to see the rapid increase of production from the Bakken and the Eagle Ford here in the US start to flatten out. And probably within a year or two after that, we will see a commencement of a rapid decline.
So you know, on a net basis, taking all those things into account, I think we are probably pretty likely to see global oil production start to head south in the next year or two.
But this change in capital expenditure by the majors, that is a new story. You know, just a couple of years ago, they needed oil prices around $100 a barrel in order to justify upstream investments. That is no longer true. Now they need something like $120 a barrel but the economy cannot stand prices that high. So you know, if the price starts to go up a little bit, then demand just falls back. People start driving less. And so the economy is unable to deliver oil prices to the industry that the industry needs. This is—I think Gail Tverberg is saying this is the beginning of the end. I think she is right.
Chris Martenson: Well, this part about the oil majors, I really want to harp on this because to me, this is a smoking gun. The oil majors are not in the business of supplying us oil. They are in the business of making money and they have been extraordinarily good at it. And they are businesses. Very intelligent people—I know a lot of people who work at Shell and Exxon. They are really hardworking. And they have scoured the globe. They have looked at all their possible opportunities and they have come to the conclusion that the extent to which they spend money on capex is the extent to which they are going to hurt cash flows and the potential for shareholder value and dividend payments.
So they have decided to cut back on capex—capital expenditures—meaning exploring for new finds, in-fill drilling in existing places, all the places, that upstream word you mentioned, that is creating more supply. They all have now, I think we are on the fifth year of declining output from the seven oil majors. These are the big ones—Total, Exxon, Shell, BP, etc.—and they have been spending, I think they have doubled their capex in the last five years and their collective output is down at least 10% or 12%. So they are spending more, getting less, and they have just thrown in the towel this year and said, “Until and unless oil prices are higher than they currently are, we cannot invest in this game anymore.” How is that not front-page news with Congressional committees being formed immediately in urgent haste?
Richard Heinberg: Yeah, I totally agree with you. I mean, this is extraordinarily important news and we are just not hearing it really. I mean, you know, the occasional article in the Wall Street Journal. But this is going to impact our entire way of life.
Another way of looking at this is declining energy return on energy investment. We have been talking about declining financial returns on investment in the oil industry and as you say, that is huge news. But just as big of news is declining energy returns. You know, high energy returns on energy investment is what made the Industrial Revolution happen. It is what made the middle class, it is what made urbanization and all the rest.
But you know, the industry is having to invest not just more money but also, more energy in producing unconventional oil and gas. So this means that more labor and more real investment of materials, as well as money, has to go into the energy production business all the time.
Now, if we go all the way back to the average energy profits of agrarian times, which were maybe three or four, five to one, something like that. You know, basically, virtually three-quarters of the population would have to be involved in producing energy in order to produce enough surplus for the other 25% to live in towns and specialize in being bankers or mayors or [laugh] whatever else, you know, stamp collectors, who knows. But that is the path we are on.
I read an article the other day talking about solar energy and how it produces more jobs than the oil industry and the coal industry combined. But what the article did not say is that yes, and solar provides only a tiny proportion of the energy to society as coal and oil combined. So yeah, we want more jobs. That is a good thing. But look at where this is headed. If this trend continues, then at some point basically, there is not going to be enough surplus to fund all the things that we are used to, like education, healthcare, [laugh]…
Chris Martenson: Retirement?
Richard Heinberg: Yeah, right, on and on.
Chris Martenson: Well, speaking on solar for a second, whenever I give a talk, inevitably the hand goes up and says, “But what about this alternative future?” You know, Amory Lovins, we are all going to have carbon fiber cars and going to have this solar future. And for a while there, I had a hard time getting the energy return on energy-invested data out of what solar really was. I sort of have this twenty to thirty to one thing waving around on a graph. But that was industry-supplied data. And so the only real data I have seen so far is Charlie Hall and another gentleman whose name I do not…
Richard Heinberg: Pedro Prieto.
Chris Martenson: Yes, they took a look at the Spanish return. So Spain has enough experience and they have built both an aggregated solar tower collector with all the mirrors pointing at a central device, plus they have lots of install base. And they came up with some interesting results, didn’t they? When they looked at the energy return.
Richard Heinberg: Yeah, they came up with, I think, a five to one or less. And just so folks understand, you know, a five to one return on investment would be great in the financial world. But in the energy world, everything we do requires energy whether—again—it is healthcare or education or manufacturing. All those things use energy but they do not produce any energy. So the little bit of energy that we invest in getting more energy has to be extraordinarily productive. Historically, it was in the range of a hundred to one with oil and coal and the early Industrial Revolution. Now in the US, it is down to about ten to one.
So it is questionable whether we can continue to operate a complex industrial society on energy profit ratios of less than ten to one. So if solar really is five to one, that is problematic.
Now, my friend, Chris Nelder, would probably be sitting here arguing with us that, in fact, solar is much better than that. And I am not an engineer myself, I have not done the calculations so I do not know. But I think there is good reason to assume that renewable energy sources, intermittent energy sources like solar and wind can give us better energy returns than were common during the agrarian era. But they are not going to be able to power the way of life we have gotten used to with cheap, portable, on-demand energy from oil and fossil fuels.
Chris Martenson: Well, my perception—and perhaps this is wrong—but when I look back and when people were in agrarian societies, I see those as times when people’s work life was rather expansive. The farming life is not easy. Anybody listening who is a farmer knows that and I have hung out with lots of farmers. It is a pretty full-time commitment. When the growing season is up, you are working hard. And what I see today is that even on minimum wage, which I think is paltry, but even on minimum wage, your need to work—the number of hours you have to work in order to buy the number of calories you need to live for the day—is really still very modest by any agrarian standard whatsoever.
And so that is what I think we are talking about here is that we have got these very expansive lifestyles that have sort of pushed out into all these really creative ways of existing. And those, just by necessity, retract as the amount of surplus energy we have shrinks.
Richard Heinberg: Yeah, and we are seeing that. Americans—even though the GDP is going up—for most Americans, their actual experience is that they are losing ground. Yeah, there are more jobs being created each month, we hear the statistics from the government. But they do not pay as much as the jobs that disappeared over the last few years. And so on average, people are finding that they are losing ground. And this is exactly what we would predict based on what we have been talking about with regard to the larger energy picture.
Chris Martenson: Oh, absolutely. So, I want to finish out on the energy story before we move on to really, the implications and I think socially, culturally, and psychologically of all this. Because you have got some fascinating things to say there. I have a quote I want you to build out on.
But first, let’s really talk—so the shale miracle has really been pumped and hyped. And from my perspective, it is a lot of propaganda at this point in time because what I see are pieces in the New York Times even, which look like PR collateral shipped out by Range Resources and copy and pasted into the article.
Richard Heinberg: [Laugh] That is exactly what they are probably. [laughter]
Chris Martenson: Range Resources being one of the premiere North American operators in the shale play, not to pick on them personally. But something is really interesting going on there when we look at the Red Queen Syndrome, which says you have to run really fast. And I think people are familiar with this now because the shale wells deplete so rapidly that when you are in a semi-mature play like the Barnett, soon to be the Bakken, you have to then put in a thousand, fifteen hundred, maybe two thousand wells per year just to maintain production. Because behind you, your existing wells are falling off these cliffs. So you are running in place just putting in these new high-producing but rapidly depleting wells.
And in that story, somehow we are supposed to believe that this is our new energy future. But you said something really interesting earlier, which is that the Bakken is probably going to top out at some point in the not too distant future a couple, three years away. When did we first start drilling seriously in that? 2007?
Richard Heinberg: Well, the Bakken has been producing for a long time with conventional wells. But in terms of horizontal, hydrofactured wells, yeah, just in the last few years. I think 2007 is probably a good number.
Chris Martenson: So we are talking about supposedly one of the most productive, most amazing fields, and it is going to go from basically inception to peak in ten years. That is a completely different profile from the Ghawar, which is still, what, first tapped in the thirties, I think, and really producing in the fifties maybe?
Richard Heinberg: Late forties probably.
Chris Martenson: Yeah. And it did not hit a peak of production for decades, many decades. And we will have a long gentle down slope of many, many decades.
Richard Heinberg: Right, right. That is the difference between a conventional oil well where you have caprock and highly porous rock holding the fuel and what we are seeing here in the US in these unconventional plays, which is—you used the term earlier, “source rock.” This is rock that has very low permeability. Much of the oil is already migrated out of it into conventional reservoirs or just migrated to the surface and volatized probably millennia ago. And getting that oil out is technically possible but it is really difficult. It does not want to move through the rock, it wants to say right where it is. That is why they horizontally drill and hydrofracture it.
But these are the last, worst plays—onshore plays—in North America. And geologists have known about them for decades and thought, you know, “We will never be going after source rocks,” but here we are. That is where we are. This is the bottom of the barrel.
Chris Martenson: Arthur Berman put it beautifully in a presentation I saw where he said, “It is not a shale revolution, it is a retirement party.” And I held a piece of this so-called “source rock” in my hand and I would not be disappointed to have this stuff as kitchen counter surface. It is not this open, wonderful, porous material that you could put your lips up to and suck something through. It is literally solid rock, by my human interpretation of feeling it. A little greasy, but it is basically just really, really impenetrable stuff, and that is what we are going after.
So between the oil majors saying, “We cannot make money at $100 a barrel. We are slowing down or stopping or even reversing capex,” and then the idea that we are drilling into things that take this extraordinary effort that are going to peak within maybe ten to fifteen years of their initial rapid, almost frantic production. And yet, somehow through this story, most people I talk to have no concern whatsoever because that is what they have been told. “Our energy concerns are in the rearview mirror, we have a hundred years of natural gas.” We have all sorts of things that are just contextually and patently false. Like, provably false.
Richard Heinberg: Amazing public relations machine that the industry has trotted out. But you know, they need that public relations in order to maintain the value of their assets. And those assets are basically millions of acres of drilling leases. And especially in the dry gas area, you know, they need those drilling leases to be valuable so they could sell them at a profit. And that is what many of these companies are subsisting on. Companies like Chesapeake that has not turned a profit on actual production of dry gas in any one of the last ten years, but still remains a profitable company. How? By selling off drilling leases. So how do you maintain the value of those drilling leases? Through the fiction that there are a hundred years’ worth of gas there; that you can drill anywhere and hit a bonanza.
And that is what we decided to test with our Drill Baby Drill report that David Hughes authored at Post Carbon Institute. We looked specifically at the assumptions that they are making that the different plays are uniform among themselves and also, within plays. That in fact, you can drill almost anywhere successfully. And we looked at almost sixty-five thousand wells, we looked at the location of each well, the initial production rate, the rate at which they decline over time. And we found that those assumptions are not confirmed. That there are only small core areas within each of the plays that are initially significantly productive and that production declines rapidly over time in almost all wells within the plays.
So take all those things into account and you get a very, very different picture not just from what the industry is telling us but also, from what the government is telling us. President Obama in his State of the Union address in January was touting shale gas and tight oil as the energy saviors of America. And when you have it coming from the President himself, I mean, what more credibility could you possibly want? And yet, it is all down to public relations. The assumptions are disconfirmed by the actual drilling data.
Chris Martenson: And when you say government, I also think the state governments have really fallen down on the job. I think Texas does the best possible job of managing the situation. They have got really high quality people who know how to regulate the environment. I think they do a pretty good job with—you know, given the number of holes they punch in the ground, the number of accidents that you have with casing failures or water table disruptions statistically are low. Still very damaging to those that actually get impacted by them. And yet despite that, all that great sort of oversight and with Texas taking the highest severance tax, which is a direct tax on actual production, out of any of the like—you know, Pennsylvania is not even getting remotely what Texas takes.
Even with that, the Department of Transportation in Texas did this analysis and said, “Fracking is doing about four billion dollars of damage to our road surfaces and bridges on a yearly basis. These eighty-thousand-pound trucks, of which it might take as many as almost twelve hundred to complete a single well—six hundred if you want to re-frack it—and those twelve hundred trucks weighting eighty thousand pounds filled with sand and water and fracking fluid and who knows what and giant diesels and…
Richard Heinberg: Drilling rigs, yeah.
Chris Martenson: “…drilling rigs and stuff. They are only collecting about a billion dollars in severance tax back to repair the road damage and doing four billion in damage.” Who is going to pay that?
Richard Heinberg: Right, yeah. Well, you know, this story is slowly starting to leak out to state and local officials. I say slowly because there is still a lot of public officials who are victims of the snow job of the industry saying, you know, “This is going to be a bonanza for states in terms of not only tax revenues, severance taxes, but also, in terms of jobs and therefore, state income tax revenues and so on.”
But more and more analysis is showing that the jobs are fewer. They often go to out-of-state workers who are flown in to do the fracking jobs and well completions. That the costs to state and local governments are often greater than revenues. And as this news comes in, you know, more and more places are turning against fracking. It has really gotten its toehold here in the US largely because of the subsurface mineral rights ownership regime in the US, which is different from almost everywhere else in the world where property owners also own subsurface mineral rights. So they benefit directly financially from fracking operations.
But it is still dividing neighbor against neighbor and it is still resulting in this boomtown frenzy that turns communities upside down. And more and more places are enacting laws or restrictions against fracking. Now this is in the United States. Elsewhere in the world where people do not own subsurface mineral rights and have no direct financial stake in oil or gas production, you can bet that the public outcry against this technology is going to be ten times greater than in the US. So when people talk about “Oh, we are just getting started and what we are going to do in the UK and Australia and China and so on,” well, wait a minute. It is probably not going to go so well both because of the things I was just talking about and also, because the geology is different.
Chris Martenson: Right. And the regulatory environment, certainly in Europe—I will not speak as much about China, obviously, in this regard, but what—a lot of people are concerned about fracking fluid in the water table, but I think they are missing a big part of the story, for me. So, I was a former toxicologist. You know, fracking fluid—five hundred nasty chemicals in random combinations—toluene, benzene, xylene, you pick it, right?
Richard Heinberg: Known cancer-causing chemicals.
Chris Martenson: Awesome stuff, right? The fracking operation, you pump all these millions of gallons of water plus however many gallons of this fracking fluid down. You pop it and then it flows back and it goes into this big holding pit. And this is where I do not think Europe is going to lie down on this. When it goes into the holding pit, anything that wants to aerosolize or volatilize or otherwise drift away from that holding pit is free to do so. And lots of people downstream from these operations during the fracking operation report nausea, headaches, nosebleeds, all kinds of things that are very consistent with polyaromatic hydrocarbon toxicity. It is clear as day. And the reason that the oil companies can do this is because of the so-called Halliburton Amendment. They are exempt from any clean air act, clean water act regulations around these chemicals.
So what it is interesting is you could have literally hundreds of gallons of these things aerosolizing out of the fracking pit and going downstream. And right next door, you could have a dry cleaner that accidentally spills a liter of the same substance and boy, they would get in trouble—a huge amount of trouble because the EPA would regulate the bejesus out of that particular incident. There would be hazmat teams and oil scrubbies. And it is just this dichotomy between what we allow in the name of oil production versus other ways we would regulate ourselves. The gap is just enormous in the US. I do not think that gap exists in Europe.
Richard Heinberg: Yeah, I think you are right about that. It is going to be much, much more difficult for this. And you already see the public reaction in places like Romania and the UK—some pretty gutsy citizen efforts to stand in the way of trucks and just prevent this from happening.
Chris Martenson: Well, I guess that is encouraging. Now from my perspective, I think fracking happened because it happened so fast and under the radar in the US. In fact, I started tracking what I thought was a very obvious PR campaign back in 2011. There were a number of articles—one in Reuter’s, one in the New York Times, one in the Washington Post that all had very similar language that basically boiled down to, “If the government and the environmentalists get out of the way, this is an awesome story,” right? And there were flavors of that in each one of these pieces. I said, “Wow, somebody has got a PR message that says, ‘If we can just get the environmentalists out of our way and if we can get the government regulators out of our way, shale oil and gas is going to be this awesome thing.’” It was a very, very brilliant campaign. [claps] Golf claps, right? It was nice.
But people bought it. They ran with it and it took years for citizens with nosebleeds and nausea and dizziness and destroyed aquifers to say “time out” on this. And so it took a while for this story to really begin to develop, and it is developing.
But I want to get to this quote because I think this is the crux of the whole thing. It is a recent article from your newsletter found at your website, RichardHeinberg.com. And the quote is, “Today, it is especially difficult for most people to understand our perilous global energy situation precisely because it has never been more important to do so.” What do you mean?
Richard Heinberg: [Laugh] Yeah. Well, that is from an essay where I sort of take apart the politics of energy. You know, energy has never been more important—it has always been incredibly important because it is the basis of life, it is the basis of the economy. But it is even more important right now because we are faced with a requirement for an energy transition both because of climate change and because of the depletion of the energy sources we have been relying on, all the things we have just been talking about.
So we know we have to get off of fossil fuels and this is going to be a huge job. It is going to require trillions of investment and decades of work and so on. But nothing is happening. Why? Because it is totally politicized. Climate change is completely politicized. On one hand, you have Democrats who say, “Oh, look at the science. You know, it is clear this is an important thing. We have got to do something about. We do not know what but we have got to do something about it.” And then the other political party says, “No, it is not happening. No, no, it is all just a conspiracy theory. There is no climate change.” [Laugh] “And if the weather is changing a little bit, it is not because of fossil fuels. You know, that cow farts or I do not know, we do not know.” [Laugh]
So as a result, nothing happens, you know, nothing happens with climate—depletion is not acknowledged. All of the things we have been talking about with the problems of the oil majors and capex, none of that is talked about by politicians because it would actually require them to do something.
So it has never been more important for the average person to understand energy issues than it is right now. But I doubt if there has ever been a time when energy issues have been so deliberately confused by the people who should be explaining it to us.
Chris Martenson: Well, I have certainly seen that. You know, one piece that I have to fight constantly is this idea of energy independence, where they lump all the BTUs from coal, natural gas, oil, hydro, wind into one spot as if they are the same thing and then say, “Oh, look, we are almost independent on this basis.” It is a really bizarre way to do it and it is very deliberately obfuscatory and confusing, and unnecessarily so.
I am wondering in this quote, though, if there is not a sense that it is difficult for people to talk about this precisely because it is just too large.
Richard Heinberg: Yeah. Well, I think that is true, too. You know, if you go very far into this and you really start following the evidence closely, it gets kind of overwhelming. Not just in terms of the detail and the requirement for some math and engineering knowledge and so on, but just in sort of human toll, understanding that our entire way of life is really on shaky legs right now. And that we cannot count on a future looking anything like what we have today and that our children’s future is likely to be very, very different and far poorer than our lives.
This is, psychologically, it is very difficult for a lot of people. I call this “toxic knowledge.” And my books are full of this toxic knowledge and I always have kind of mixed feelings about conveying this stuff because I know I am going to depress people. I am going to cause them to go through probably some trying times personally, coming to terms with this information. And yet, is it better to know or not to know? Is it better to live in denial or to be aware of troubling truths? And when I think it through, I always come down on the latter side—it is better to know.
Chris Martenson: Well, I agree. And not doing anything is still doing something in this story, right?
Richard Heinberg: That is true.
Chris Martenson: There is no avoiding this. I understand the human desire to avoid unpleasant information. You know, if you have got that angry, irregular mole on the back of your leg, you can choose to ignore it or not. You know, that is really where we are at in this story. It is like, maybe we do not want to have to face this but here we are.
And so I really think of this as just a monumental, colossal failure of leadership, if not imagination. I totally understand if you are an unimaginative politician, you look at this story, and you say, “I cannot talk to people about self-imposed hardship and austerity. They are going to hate that.” And they would.
Richard Heinberg: Yeah, absolutely right.
Chris Martenson: But the failure of imagination is, “Oh, by the way, we have done some really hard things in the past if we had the appropriate vision.” And that is what we are lacking—that vision that says here is where we are going to go and here is how we are going to get there. “Hey, we have to fight some Nazis so here are all the things you are going to have to do without as we go through this process.” If conveyed properly, I think people will move mountains. Conveyed improperly, which is just, “Oh, by the way, we just want your energy to become more expensive until you start using less of it and all your jobs sort of fall away,” I agree, bad story.
Richard Heinberg: [Laughter] Yeah.
Chris Martenson: But what is really troubling for me in this story is when I talk to younger people, there is this extraordinary divide between my generation, the Boomers, and younger people, say the Millennials, and the poor Xers stuck in between. But the Millennials have looked into this larger narrative and said, “I do not get it. You know, how does preserving the status quo help me at all? Crumbling infrastructure, maybe an inappropriate infrastructure for the future I see coming, massive amounts of debt. I am going to have to pay for your retirements with no guarantee that I will get one out of this story,” and that is not really a compelling vision in their—where is that vision going to come from?
Richard Heinberg: Yeah. Well, frankly, for all the reasons I outlined in that essay that you quoted from, I think it is unlikely that it is going to come from the top anytime soon, absent some kind of major government restructuring, whether it comes in the form of a coup or revolution or what have you. Where I think it has got to come from is the bottom up. And of course, that is terribly problematic because there are lots of things you cannot do from the bottom up. You cannot institute a carbon tax from the bottom up, you cannot reform agriculture as we know it nearly as quickly and efficiently from the bottom up as you could with just a few rule changes at the USDA.
But nevertheless, that is what we have got. And it is happening. I mean, I mentioned the USDA. The USDA points out in its recent literature that the segment of agriculture in the US that is growing fastest is local food. The local food movement trumps everything else in current agriculture.
So people are getting it at certain levels. Things are happening. It is just it is kind of below the radar and it is not going to be fast enough. It is not going to be enough of a change to avert the kinds of climate impacts that we are all concerned about and so on. But it is the leverage point we have. Operating locally, whether it is through the local grange or transition towns or just in your own backyard with your own neighborhood, that is where we can make a difference and a lot of people are already doing it.
Chris Martenson: In the absence of a compelling national narrative, people are arriving at their own. And by the way, it is very common. I go all kinds of places. I see the same sets of responses and reactions in Louisville as I do in Sacramento as I do in Austin. Still on a fairly small percentage basis but really growing…
Richard Heinberg: Yeah, when I tell people I am from California, they all go, “Oh, well, in California you have blah, blah, blah, blah. That must be so easy there.” But you know, when I travel around, I see basically the same thing happening everywhere. You know, whether it is Michigan or New York State or British Columbia, you know. The local food movement is happening, farmers markets are happening, people are concerned about where energy is coming from and they are doing what they can to put solar panels on their own houses and do what they can in their communities.
Chris Martenson: Well, with that, a gentleman I was talking to yesterday, I think, outlined it very well. He said—he has done all those things. He said, “I have got my solar panels, I have got my garden, I support local food.” Very necessary, completely insufficient steps.
Richard Heinberg: Absolutely.
Chris Martenson: There is this gap [laughter], you know?
Richard Heinberg: Yeah.
Chris Martenson: And he feels uncomfortable with it but a.) you have to be the change you want to see, so what else can you do besides be that change? And at the same time, in the sense that the things that we cannot control are still very large and potentially overwhelming, they might swamp our efforts.
Richard Heinberg: That is true.
Chris Martenson: And how do we begin to close that up? What can we possibly do?
Richard Heinberg: Well, I think knitting together all of those local movements is really important. I think what you are doing with Peak Prosperity, what we try to do with Resilience.org, is helping people understand that they are not alone in this. That there are people everywhere who are fighting the same fight. Help them connect up first with the people in their local communities, but also with people maybe on the other side of the planet who face the same challenge and figure out a really good strategy for dealing with it. Beyond that, I wish I could say, “Well, let’s start a new political party,” you know, or something like that. But frankly, right now, maybe it is just the mood I am in but I do not have much hope for that.
Chris Martenson: Yes, I applaud people who are trying to work from what I will call the top down, you know.
Richard Heinberg: Yeah, if somebody is working with a big organization like 350.org or Sierra Club or trying to infiltrate the Democratic Party and change its policies with regard to fracking, you know, more power to you. If you can make some change at the top end, you have my total support. And I do not want to be discouraging with that.
Chris Martenson: I am in the same camp. I do think that this has to be local from the ground up. And here is part of it, I mean, if you just sort of—let’s take two steps back and we will look at the big picture again and we will say, let’s imagine for the moment that all of a sudden, world governments get religion around climate change and they really look at this. And obviously, the big sources of carbon happen to all be from coal, oil, and natural gas. That is most of it. So we get religion. We suddenly say, “Within twenty years we have to be burning 75% less of these things.” The implications of that are extraordinary. You know, literally, it means my lights might not come on when I flick the switches. It means that I will not be able to transport myself by putting fuel into my tank. It means everything suddenly changes. If there was an Apollo Project and a Manhattan Project, it would be both of those times some other large number, like 100, in terms of the change we would have to go through to restructure ourselves in pretty much every way I can imagine. Plus pour all of this investment into these alternative energies so that we have something we can do.
If that happens, everything changes. But if we do not do that…
Richard Heinberg: Everything changes.
Chris Martenson: Everything changes [laughter].
Richard Heinberg: Yeah, and if we do not do that, then everything changes as a result of the economy coming apart, the debt bubble bursts, you know, agriculture declines because of the expense of oil and because of depletion of topsoil and because you cannot trust the weather anymore. And we have a very dystopian future if we do not do anything.
Whereas if we do what you were describing earlier, you know, if we were to take all of these challenges seriously and put trillions of dollars into the energy transition and relocalize food systems and all the rest, it would be the biggest thing we have ever done as a species. And it would be really hard and all the things you are saying—yeah, we would probably find a lot of economic casualties along the way. But I think the end result would be a lot better.
Chris Martenson: It might also be exciting and fulfilling for people who are engaged in that.
Richard Heinberg: We would have a huge project to devote ourselves to, and for young people, I think it makes all the difference in the world. If you see the world around you basically going the wrong direction and coming apart, that is one thing. But if you see a big challenge ahead that you can devote your life to, even if it is a challenge on a scale of World War II, you know. It gave a lot of people—it gave their lives meaning.
Chris Martenson: Well I agree. I am going to float an idea. Because we talked about this gap between the Millennials, the young people on the one hand, and Boomers on the other hand. Roughly speaking, Millennials without a whole lot of assets because they are at that stage of their life; Boomers with a lot of assets. Now let’s connect that, “I have assets” to this idea that we are kind of darned if we do, darned if we do not, big change is coming.
And so the challenge I would like to promote is this idea that Boomers, to the extent that they have assets and a sense of legacy potentially looming in front of them, really ought to be non-status quo, putting those assets to work while they still have utility. While you can still get traction. You know, the big brown truck of happiness will still roll up your driveway after you click “Buy” on Amazon, right? And give you awesome things, right?
Richard Heinberg: [Laugh] Why not adopt a farmer?
Chris Martenson: But why not that? You know, “I am too old to farm, I do not want to own one.” I hear that a lot. And yet, these are people who, some of them are sitting on quite sizable, still recognizable assets in the financial system. The challenge is: why not put those in a place, in a direction, that feels good and makes sense today?
Richard Heinberg: Yeah. And for the young farmers—and there are whole organizations of young farmers now—one of them that I follow closely is the Greenhorns. And they are doing great work. And these are young people who are totally dedicated to farming and ecological—a truly sustainable way. And almost universally, the one thing they lack is access to land. And if they get access to land, it is usually on the basis of land rental.
So okay, supposing you are a wealthy Baby Boomer and you want to adopt a farmer, under what conditions is that actually a fair relationship? I do not know that there is anybody who has totally worked out the answer to that question but it is a question that needs to be addressed. Because if this turns out to be just a new form of serfdom where, yeah, there are a lot of young Millennials around who are capable of working hard and you know, “we can teach them how to farm, okay, let’s put them to work for us” [laugh], you know? There is something wrong with that picture, you know. At the end of the day, the people who do the work need to end up owning the land. Again, I do not know how that looks, legally, but these young people need a sense of an end game in this.
Chris Martenson: Well, sweat equity is real equity and this idea that paper money is the be-all-end-all, that is sort of our cultural narrative, right? And if you have that form of capital, you have it all. And we have not traditionally awarded sweat equity. In fact, the trends in labor are not good over the past decade and a half so we are even devaluing the human inputs more. And “oh, robotics, we will just do this—it will all be about capital.”
So you are right. We have to find a way to make this equitable and here is that gap between the younger and the older generations: The older generations have everything to lose if the status quo is not maintained, right?
Richard Heinberg: Right.
Chris Martenson: And to be fair, they have paid into the system, they have worked hard, played by the rules, and had this expectation of retirement, all within the parameters of the system, but now we get to this new part of the story where we say, “Oh, we have over-crossed,” right? And we know this, right? The entitlement programs, a hundred trillion underfunded and basic pensions everywhere underfunded and unlikely that that is ever going to, sort of, recover. And so there has to the sense of releasing of expectations, releasing of what we thought we were promised on one end of the generational scale and finding a way to make it fair for the people on the other end. Because this is ultimately turning into a story that is not fair. And by nobody’s fault. Can I say “not fair” without blaming?
Richard Heinberg: Yeah.
Chris Martenson: And so there is a fairness gap there. And I talk to young people and they look square at it and they go, “Yeah, I am not participating in that. That does not look right at all.” And so here is an example of that: I know a guy in his thirties who lives in my county. I happen to live in one of the poorer counties in Massachusetts on a per-capita income basis. Very intelligent, working three jobs really intelligently. Still has to make use of food stamps, right? This is who he is. He has pieced this life together out of what is available as hardworking and as diligently as anybody I can imagine—probably better than I was doing at that age for sure. But I grew up in a different time, right?
And so I look at that and I say, “That is really fundamentally not fair,” particularly when you have people on the other end who are sitting on relatively large-ish-sized asset bases at this point but they are desperately afraid of losing it. This guy on this end has nothing, these people are desperately afraid of losing it. We have got to close that gap.
Richard Heinberg: That is right. Yeah, one way or another, we have to address the problem of wealthy inequality in this country. Otherwise, it is already tearing us apart but it is going to do so much more savagely as time goes on.
This is what creates revolutions [laugh], I mean, look back historically, if the wealth disparity gets just too extreme. And we are backing gilded age levels of wealth disparity right now.
So how do you address that? Well, through different banking rules, through all different possibilities. In my book, The End of Growth, I suggested the possibility of haircuts for everyone. You know, just chop a zero off the end [laugh] of all debts and assets. I do not know how likely that is but we are going to have to do something like that.
Chris Martenson: Well, it is encouraging that we see this at the local level. I agree that I do not see much yet at the national level to give me hope. Let me be honest. I think we are further away from what I would call a rational discussion in DC, not closer, over the ten years I have sort of engaged in this project of awareness. And so that…
Richard Heinberg: That is a sad commentary.
Chris Martenson: It is a sad commentary. I have a little personal fault and I am like, “Really? I must have failed at what I have done.” I have a little of that lurking in there and yet it also confirms for me this idea that we have to prepare for a very different future because there are no preparations being undertaken that I am aware of. If they are doing it, it is a Skunk Works project.
Richard Heinberg: Well, the only preparations we see are, frankly, the militarization of police forces around the country and the ubiquitous surveillance. So that is not very confidence-building in terms of our future [laugh].
Chris Martenson: It is a set of responses that does make sense and I could actually, if I step into that role, I could understand why people would make those decisions.
Richard Heinberg: Yeah, well, they see that more social unrest is likely as a result of the current trends, so they are preparing for social unrest rather than addressing the trends.
Chris Martenson: Right. So with that, I see we are out of time on this wonderful interview. Thank you so much for your time today.
Richard Heinberg: I am sorry we had to end on kind of a down note.
Chris Martenson: Well, then let’s not…
Richard Heinberg: I think—no, there was a lot of content in there that I think folks can draw encouragement from so I am willing to let it go at that, right? [laughter] But it has been a pleasure talking with you, Chris.
Chris Martenson: Well, thanks, and the pleasure has been mine. And people can find out more at your website, RichardHeinberg.com. And, any events coming up or anything people should know about?
Richard Heinberg: Oh, gosh. You know, my calendar is on the website and I do not look at it often enough. I do not even know what I am doing half the time.
Chris Martenson: I understand that model.
Richard Heinberg: More than a week ahead.
Chris Martenson: Well, fantastic. Because I totally understand how that works. So glad to hear you are busy and going to be out there helping to share this message. Because the summary I have is: It is not about preparing for the apocalypse; it is simply understanding and becoming emotionally accepting of the fact that these changes are coming. And if you choose to, the warning signs are all there.
Richard Heinberg: And there are lots of things that we can do ourselves and with our friends and neighbors and relatives. And the more we do, the better we feel.
Chris Martenson: So really, I see this as an invitation to get busy.
Richard Heinberg: Yup.
Chris Martenson: And the invitation is now printed in forty-eight point Helvetica font [laughter] and being hand delivered.
Richard Heinberg: Scrolling across the screen.
Chris Martenson: And there it is in the news every day and it is for anybody to see. So again, thanks for your time.
Richard Heinberg: Thanks, Chris.

Peak Prosperity



62 Comments on "Heinberg: The Oil ‘Revolution’ Story Is Dead Wrong"

  1. Northwest Resident on Tue, 11th Mar 2014 2:47 pm 

    “I think that Campbell and Laherrère were right on in saying 2015, 2016 maybe, we will also start to see the rapid increase of production from the Bakken and the Eagle Ford here in the US start to flatten out. And probably within a year or two after that, we will see a commencement of a rapid decline.”

    I wonder if this is where the Military strategic planners in the 2010 JOE got the year 2015 from when they predicted likely oil shortfalls, which would lead to significant international and national security challenges? I’ve seen or heard the year 2015 offered by other individuals who I consider to be authoritative when contemplating exactly when energy shortfalls will begin to hit the world.

    Great discussion in this transcript.

    Peak Oil is here. It is real. And the consequences are going to playing at a theatre near you, probably sooner than you’d like. Better get ready.

    “Operating locally, whether it is through the local grange or transition towns or just in your own backyard with your own neighborhood, that is where we can make a difference and a lot of people are already doing it.”

    That’s me — the plan is to maximize food production in my back yard. We’ll see how that works out.

  2. bobinget on Tue, 11th Mar 2014 3:53 pm 

    Of all the ‘solutions’ offered, solar’s importance was diminished by offering that a five to one energy invested— simply too high. I say tunnel vision.
    These guys, as are most here, totally absorbed in their specialty, like medical surgeons, struggling to understand complexities of a single most important energy aspect, oil and gas.

    Rather then offer criticisms of this excellent interview
    i’ll simply say solar, in all it’s configurations is the only
    available technology ready and willing to get human kind, in this stormy sea, to the next port.

  3. Arthur75 on Tue, 11th Mar 2014 3:53 pm 

    I am always surprised that in the “peak oil community or circles”, a key person in the “oil history” isn’t more talked about : James Akins
    For an intro see for instance :
    http://www.washingtonpost.com/wp-dyn/content/article/2010/07/26/AR2010072605298.html
    And especially his key article “the oil crisis, this time the wolf is here” from April 73 (before the first oil shock).
    http://www-personal.umich.edu/~twod/oil/NEW_SCHOOL_COURSE2005/articles/for_aff_aikins_oil_crisis_apr1973.pdf
    Why ? Before this article is full of insight into the future : he even talks about tar sands and shale (but in the kerogen sense in that case).
    But more importantly because, this also corresponds to most “peak oilers”, more or less also being stuck in the completely wrong “common image” :
    “first oil shock = Yom Kippur/Arab embargo= geopolitical story= nothing to do with geologic constraints”
    When the real story was :

    – end 1970 : US production peak, the energy crisis starts from there, with some heating fuel shortages for instance (some articles can be found on NYT archive on that)
    – Nixon name James Akins to go check what is going on.
    – Akins goes around all US producers, saying this won’t be communicated to the media, but needs to be known, national security question
    – The results are bad : no additional capacity at all, production will only go down, the results are also presentede to the OECD
    – The reserves of Alaska, North Sea, Gulf of Mexico, are known at that time, but to be developed the barrel price needs to be higher
    – In parallel this is also the period of “rebalance” between oil majors and countries on each barrel revenus (Ghadaffi being the first to push 55/50 for instance), and creation of national oil companies.
    – dropping of B Woods in 71 (move to petro $) and associated $ devaluation also put pressure on raising the barrel price for producing countries.
    – So to be able to start Alaska, GOM, North Sea, and have some “outside OPEC” market share, the barrel price needs to go up (always good for oil majors anyway) and this is also US diplomacy strategy
    – For instance Akins, then US ambassador in Saudi Arabia, is the one talking about $4 or $5 a barrel in an OAPEC meeting in Algiers in 1972 (when it still was around $1)
    – Yom Kippur starts during an OPEC meeting in Vienna, which was about barrel revenus percentages, and barrel price rise.
    – The declaration of the embargo pushes the barrel up on the spots markets (that just have been set up)
    – But the embargo remains quite limited (not from Iran, not from Iraq, only towards a few countries)
    – It remains fictive from Saudi Arabia towards the US : tankers kept on going from KSA, through Barhain to make it more discrete, towards the US Army in Vietnam in particular.
    – Akins is very clear about that in below documentary interviews (which unfortunately only exists in French and German to my knowledge, and interviews are voiced over) :
    http://www.youtube.com/watch?feature=player_embedded&v=fQJ-0jAr3LQ
    For instance after 24:10, where he says that two senators were starting having rather “strong voices” about “doing something”, he asked the permission to tell them what was going on, got it, told them, they shat up and there was never any leak. The first oil schock “episode” starts at 18:00
    (the “embargo story” was in fact very “pratical”, both for the US to “cover up” US peak towards US public opinion or western one in general by putting the blame “on the Arabs”, but also for major Arab producers to show “the arab street” that they were doing something for the Palestinians).

    And then the second oil shock (79) result of Iranian revolution, and leading to the “Carter doctrine”, with then the Reagan corollary and creation of CENTCOM.
    http://upload.wikimedia.org/wikipedia/commons/thumb/3/35/Seal_of_United_States_Central_Command.png/768px-Seal_of_United_States_Central_Command.png

    Followed by the counter oil shock (for a big part the result of Reagan administration pushing the Saudis to produce more in order to bring the USSR down), about this for instance :
    http://www.youtube.com/watch?v=02F-3l1EKsA

    The global ignorance about all this allows to keep the messages around “old time geopolitics, this is about values, pushing democracy, bad and good guys, etc”, and allows the current grotesque propaganda around “US shale boom”.
    How many Americans knows that US peak was in 1970 ? 5% ? 1% ? less ?
    By the way, Akins report to Nixon in 1971 should be a key document, but it is still classified to my knowledge, anybody knows whether it could now be declassified ?

  4. Dave Ranning on Tue, 11th Mar 2014 4:11 pm 

    i’ll simply say solar, in all it’s configurations is the only
    available technology ready and willing to get human kind, in this stormy sea, to the next port.

    A 2 to 5 year return on energy invested at point of production.

    When all externalities are added in, one may never even break even.

    But, what better thing to do with oil right now?

    I say lets proceed.

  5. GregT on Tue, 11th Mar 2014 4:55 pm 

    “I say lets proceed.”

    So did I, but we didn’t, and we still aren’t. That doesn’t mean, however, that we as individuals shouldn’t take advantage of AltE sources. It only means that society as a whole is in for a very unpleasant future.

    If we’d started 3 or 4 decades ago, we would be in much better shape today. If we make a concerted effort right now, it looks like we will run out of time, energy, and resources in the near term. Too little too late.

    Even if we had of listened when we should have, AltE is nothing more than a bridge to a much reduced energy reality.

    The storm is on the horizon, it is gaining in both speed and intensity, and the amount of lifeboats available are minuscule in comparison to our populations. This does not end well, for the vast majority of us that are reliant upon modern industrial society. Build your own lifeboats soon, no one else is going to do it for you.

  6. shortonoil on Tue, 11th Mar 2014 5:28 pm 

    “Right. Yeah, the big news right now is that the industry needs prices higher than the economy will allow, as you just outlined. So we are seeing the major oil companies cutting back on capital expenditure in upstream projects, which will undoubtedly have an impact a year or two down the line in terms of lower oil production. That is why I think that Campbell and Laherrère were right on in saying 2015, 2016 maybe – ”

    The ETP model predicts that the maximum dollar value generated from petroleum for the end consumer will occur in 2017 at $10.53 trillion per year. It makes sense that when petroleum can no longer increase its monetary return to the consumer, that the consumer will stop buying additional products. Campbell, Laherrère’s dates of 2015, 2016 appear to be in close agreement with our determination, and they are within our margin of error.

    Whether or not the Bakken, or shale in general will be the straw that breaks the camel’s back is difficult to determine, but with the information we presently have it certainly can’t be dismissed out of hand.

    http://www.thehillsgroup.org

  7. Arthur on Tue, 11th Mar 2014 5:31 pm 

    NRW says That’s me — the plan is to maximize food production in my back yard. We’ll see how that works out.

    Same here. Just returned from the garden center and bought seeds of stuff you can store: potatoes, onions, beets, cabbage, carrots. It’s only a matter of time before the first recipes will appear on this site 😉

    Solar panels will follow later this year. Investment in a greenhouse and heat pump are in the pipeline.

  8. Northwest Resident on Tue, 11th Mar 2014 6:15 pm 

    Way to go, Arthur. I have so many seeds that I’ll never get them planted — I have a vast excess of seed. I figured they might end up being a good trade item someday. With raised planter beds, proper soil maintenance, composting with religious fervor and other techniques including winter crops and lattices for upwards-growing veggies, it appears that a decent sized backyard is good enough for feeding a small family of three (and maybe a straggler or two) year-round. I’m busy constructing my own greenhouse(s) and chicken coups right now, along with other projects on the list that will get me to the “see how it turns out” stage by end of summer this year. Wish me luck! (I’ll need it)

  9. Paulo on Tue, 11th Mar 2014 7:22 pm 

    @NW Res

    re: “That’s me — the plan is to maximize food production in my back yard. We’ll see how that works out.”

    Bare minimum, probably for all of us and my wife and I are also working really hard to do grow and/or catch most of our food.

    One more thing, and I hate to sound like such a dink about this, but I am looking forward to hearing a few of the following, “this is what Paul was talking about”, “now I see why they”….etc.

    I forward the occasional ‘must read’ article to friends and family, but do so knowing they probably won’t be read anymore. This forwarded news is about as welcome as a JoHo on your front porch every Sat. morning trying to hand you an Awake. I am pretty much giving up spreading the word and concentrate instead on our plans, family, friends, and building community. I am not in the same position of Richard H and others to be taken seriously on message. Instead, we get “they just aren’t the same since they moved to”…..; the speakers not understanding that the change began before the move and not after. Oh well, all we can do is our best. Have a great growing season!! Almost here.

    regards….Paulo

  10. J-Gav on Tue, 11th Mar 2014 8:02 pm 

    Good interview. Covered many of the more salient points re: our predicament.

    Shorton: You guys at Hills seem to be pretty much aligned with what I’ve been saying for some years, though the initial 2016 I pegged as a sure-fire energy wake-up date I’ve moved back to more towards 2020 since fracking came on line. What with fairly regular NG discoveries these days, there does seem to be an awful lot of the stuff out there (Eastern Mediterranean etc). The question as usual will be getting it out and into places where it’s needed, when it’s needed at an affordable price … And much of it is “naturally” in geopolitically sensitive regions (Khazakstan, Turkmenistan,Iran etc).

    So, while admitting I was overly pessimistic in my 2008 prediction, this ‘good news’ doesn’t exactly fill me with joy either, since it means we’ll be spewing that much more GHGs into the atmosphere in the meantime. Damned if you do, damned if you don’t. Bravo, Arthur, by the way, for your preparedness efforts.

  11. Northwest Resident on Tue, 11th Mar 2014 8:12 pm 

    “One more thing, and I hate to sound like such a dink about this, but I am looking forward to hearing a few of the following, “this is what Paul was talking about”, “now I see why they”….etc.”

    Watch out, Paulo. That may be the last thing those people say before they transform into zombie raiders. They are less likely to be feeling regret that they didn’t take your advice, and more likely to be thinking “I know where my next meal is coming from.”

    I’ve always been a very friendly and sociable guy, looking to meet neighbors, strike up new friendships, etc… But honestly, since I became aware of what is lying in store for us not too far down the road, I have withdrawn and I don’t talk to anybody about peak oil, collapse or related subjects except with those I know understand the situation the same as I do. Advertising that you are preparing could end up being the worst mistake you ever made. My brother is in that boat — great house in a great location out in the hills, but far too many friends joking with him, saying “hey, if it ever happens, we’ll just come to your place.” Now my brother’s plan is to bail out with his arsenal and his food supply rather than have to turn away his friends. Like my brother says, today’s best friend might easily become tomorrow’s blood sucking zombie.

  12. PapaSmurf on Tue, 11th Mar 2014 8:58 pm 

    GregT wrote about solar:
    “So did I, but we didn’t, and we still aren’t. ”
    ============================

    Only if you are ignoring everything in the news about solar would you have that opinion. The growth rate is impressive.

  13. PapaSmurf on Tue, 11th Mar 2014 9:07 pm 

    Heinberg is an idiot.

    http://peakoildebunked.blogspot.com/search?q=Heinberg

    Read up on the nut before you hold him out as any sort of expert on anything.

  14. PapaSmurf on Tue, 11th Mar 2014 9:14 pm 

    Heinberg is a disgusting human being who probably should be in ostracized for some of the policies he has been advocating. Read up on this sick crap he was publishing in 2006-2007 related to population.

    http://www.resilience.org/stories/2006-04-30/population-resources-and-human-idealism

    He is basically hopping in bed with full blown genocidal fascists like William Stanton.

  15. shortonoil on Tue, 11th Mar 2014 9:28 pm 

    “Shorton: You guys at Hills seem to be pretty much aligned with what I’ve been saying for some years, though the initial 2016 I pegged as a sure-fire energy wake-up date ”

    Lol!! We are saying the same thing that a lot of people have been saying for quite awhile. The difference, and why it’s important, is that we are using a methodology that is completely new to depletion modeling. All previous reservoir modeling has relied on the methodology traditionally employed by reservoir engineers. Modern reservoir engineering is an incredibly advanced application of science and technology, but all evaluations have depended on the same equations, and the same variables. The possible variance in those variables has left room for differing interpretations.

    Our approach employs a totally different area of physics. Whereas reservoir engineering is an application of First Law statements, our approach is an application of First and Second Law statements. We use entirely different equations, and entirely different variables. Even though our approach is miles (if not light years) away from previous evaluations, we have come up with the same determinations as Campbell, Laharerre, Robelius, and many others. It also has brought out some new information about the petroleum depletion event that the reservoir engineering approach has missed.

    When you can apply widely different laws of physics to the same problem, and come up with the same answer, most likely – you have the answer.

    We’ll be posting more on the site as time goes on.

    http://www.thehillsgroup.org/

  16. Northwest Resident on Tue, 11th Mar 2014 9:53 pm 

    PapaSmurf — I’ve read your posts for quite a while and there is absolutely no doubt about who the real idiot is here, and it isn’t Heinberg.

    In Dr. Doom’s article which you linked, I actually think he did an okay job of critiquing Heinberg, but he puts too much faith in nuclear energy which all smart people know is as close to a solution for peak oil as fusion energy and natural gas is.

    In the resilience dot org article, he is not advocating extreme population decline, he is simply making the straight forward and obvious case that extreme population decline is what will happen as a result of peak oil.

    PapaSmurf, you have totally, completely misinterpreted what you read in even the two links you presented, putting even more solid evidence on the table as to who the actual idiot is here.

    From your second link, Heinberg writes:

    “An ethic of human rights, of sharing, and of equity without a practically expressed awareness of ecological limits is a setup for disaster. But demographic competition by way of fascism, as a response to population-resource crises, is an admission of failure; and it is less an expression of human nature than of the ugly habits formed through the past few thousand civilized years of extreme inequality, hierarchy, and authoritarianism.

    The longer we wait, the fewer our options. Social liberals and progressives who fail to talk about population and resource issues and propose workable solutions are merely helping to create their own worst nightmare.”

    How you arrive at “Heinberg is a disgusting human being …” or “an idiot” from reading that article is beyond rational explanation. Maybe you yourself are an idiot and a disgusting human being and you’re merely projecting — just guessing.

  17. J-Gav on Tue, 11th Mar 2014 9:53 pm 

    Shorton – Thanks for the details, as far as they go without getting into the physics … 1st and 2nd laws no problem though.

    NW – I understand your reticence about advertising preparations but you gotta stay sociable anyway, no matter what happens. No man is an island.

  18. Northwest Resident on Tue, 11th Mar 2014 9:56 pm 

    shortonoil — I find your posts and the information you present fascinating, and I appreciate what you’re doing. Hopefully you’ve figured out a way to get paid for it!!

  19. GregT on Tue, 11th Mar 2014 10:07 pm 

    Papasmurf,

    “The growth rate is impressive.”

    The growth rate may be impressive, but solar power in Canada accounted for less than .04% of total power generation in 2012, and .34% in the US. These numbers are insignificant in the big scheme of things, and even if they were increasing at rates in the 100s of percent per year, it would take many decades to build out infrastructure required to only replace current fossil fuel base electric power generation. Decades that we don’t have.

    Like I said above, we should have started 3 or 4 decades ago. At this point in time, too little too late.

    That shouldn’t stop YOU from installing your own system, however, like many here have already done. You too can have electricity for a few more decades, even if the grid goes down when the global economic system comes to a grinding halt.

  20. GregT on Tue, 11th Mar 2014 10:10 pm 

    Shortonoil,

    I also appreciate your contributions, Thank-you, and please keep up the good work!

  21. PapaSmurf on Tue, 11th Mar 2014 10:12 pm 

    NWR,
    You are a sick puppy if you agree with any of those genocidal nuts.

    RICHARD “POL POT” HEINBERG

    http://peakoildebunked.blogspot.com/2007/12/318-richard-pol-pot-heinberg.html

  22. GregT on Tue, 11th Mar 2014 10:16 pm 

    Papasmurf,

    Why do you constantly feel the need to call everyone that you don’t agree with, rude names.

    Don’t you find such behaviour a little ‘childish’?

  23. Arthur on Tue, 11th Mar 2014 10:24 pm 

    Dave Ranning says: A 2 to 5 year return on energy invested at point of production. When all externalities are added in, one may never even break even.

    That’s way too pessimistic:

    http://deepresource.wordpress.com/2013/12/26/solar-panels-energy-payback-time/

    The Fraunhofer Institute produced some interesting graphs showing that the EPBT for solar panels is remarkable low, even less than a year for southern European locations. Encouraging is that the EPBT has come down considerably over the past years. Currently solar panels exist with a EPBT of 6 months. For an economic lifetime of 30 years, this implies an EROEI of 60, which is spectacular.

  24. Paulo on Tue, 11th Mar 2014 10:31 pm 

    Smurfman,

    You discredit yourself with every post. I believe that Heinberg works from a place of compassion, and is not any kind of a genocidal nut as you state. He is trying to get the message out because he cares about humanity and hopes others will be better able to face the inevitable changes that are coming. It would be much easier to hide in the weeds and go along with the status quo. He could have become a GS banker trying to maximize profits. Save your slings for the Trumps of the world, for those that push the popular meme of ‘grow our way out’ of everything, and ‘yes we can’.

    Come on….7+ billion in a world of shifting climate and a pyramid of debt to work with cannot be a good thing, can it?

    Paulo

  25. GregT on Tue, 11th Mar 2014 10:31 pm 

    Arthur,

    You must still be implying grid tied systems? Not an option here, and with our current hydro electric rates, a battery backed system in my house would take 27 years to pay for itself. For most people here this is simply not a viable option. It may be in the future however, as our rates are climbing dramatically. Our hydro company just announced a rate increase of 28% over the next 3 years, and I doubt it will get cheaper in the future.

  26. PapaSmurf on Tue, 11th Mar 2014 10:35 pm 

    Gregt,
    Truthfully, I am embarrassed to even be wasting my time chatting with you guys. I feel sort of dirty even being on a website that is full of these types of people.

    In the past PeakOil.com was often a haven for 9/11 conspiracies and discussions on population extermination strategies in a “humane” manner. For some reason, this topic attracts some really crazy types.

  27. PapaSmurf on Tue, 11th Mar 2014 10:38 pm 

    GregT,
    Why would a grid tied solar system not be an option? Are you assuming total crash and not grid? That seems more like wishful thinking than anything based in reality.

  28. GregT on Tue, 11th Mar 2014 10:42 pm 

    Papasmurf,

    In the article ‘RICHARD “POL POT” HEINBERG’ that you posted above, I see nothing wrong in Heinberg’s writings. He is trying to find viable options for as many people as possible to get through the bottleneck that is coming to every last one of us.

    You can go down kicking and screaming all that you like, but it isn’t going to do you any good in the long run. The more people that try to find viable solutions to our collective predicament the better. People such as yourself are going to be in a great deal of trouble. We can all be part of the problem, or part of the solution.

    You are a very big part of our collective problem, and you are not solving anything.

  29. PapaSmurf on Tue, 11th Mar 2014 10:43 pm 

    Paulo,
    Heinberg is compassionate in his plans for mass extermination? He wasn’t exactly distancing himself from William Stanton. He was more in the tone of playing Good Cop / Bad Cop on their extermination plans. “Better listen to me, or we will have to do this Stanton’s way !!!”

    He is flat out nuts and would be laughed off the stage with any serious audience. Only in the minds of the fringe is a guy like Richard Heinberg taken seriously.

  30. Stilgar Wilcox on Tue, 11th Mar 2014 10:46 pm 

    I’m going to segue somewhat off topic to medical, because something just happened to me this AM that will blow your minds! I was scheduled for hernia surgery – got there at 5:30 AM and they handed me a bill for $54,717 dollars and that did not include the hernia surgeon. On the left side was the max. out of pocket of 6350. Ok, I can pay that if that’s all there is but I started to get a weird feeling about it because every time I tried to pin down that the absolute max. was 6350 with my ins. she went into this sort of poetic version of math which was unintelligible. So I sat down in the waiting room and read the disclaimers, got real nervous and told her I couldn’t rely on the 6350 number and was cancelling.

    So I get home and make some calls and there is this thing called ‘network’. If the dr. or hospital are on network it is 6350 max., but it turns out both the surgeon and the hospital are NOT on network so I would have been liable for 1/2 of the $71,000+ and later they throw in a pathologist and follow up appointments, so the total could have easily gone to 100K with my half being 50K.

    So I made a call to their billing dept. and she said she’s talked to Admin. numerous times about the need to let people know if they are on network or not, and they always ignore her. So I almost got sucker punched to the gut for a fortune for an out patient procedure when they knew darn well they were out of network for my insurance. Scumbags!

    I credit my critical thinking to find out about AGW and peak oil as the backbone for having caught this before getting snagged. Thanks guys for keeping me on my toes.

  31. GregT on Tue, 11th Mar 2014 10:51 pm 

    Papasmurf,

    Heinberg regularly speaks at Universities and think tanks all over the world. He doesn’t get laughed off of the stage, because most people do not consider any of this to be a laughing matter.

    Where did you ever get the idea that Heinberg was promoting ‘mass extermination’? If anything he is trying to find solutions to stop people from dying en masse.

    Do you have a learning disability?

  32. GregT on Tue, 11th Mar 2014 11:04 pm 

    Stilgar,

    That is completely insane! Not trying to make you feel worse, but in Canada, a hernia operation is free. WTF?

  33. PapaSmurf on Tue, 11th Mar 2014 11:08 pm 

    (quotes from some other skeptics)

    Apparently, Heinberg argues in his latest offering that shale gas- which has gone from zero to supplying 40% of US gas in the past 10 years -is just hype, a bubble that will burst soon, leaving society worse off (because of increasing dependence on fossil fuels and consequent climate change) than if we had never exploited it in the first place.

    Let’s see what he said about fracking in his earlier books:

    Nothing. Not a word. There is no mention in either about the potential of shale gas. Heinberg, who is now predicting the imminent demise of shale gas, completely missed the biggest shake up in the energy world since nuclear power, even as it emerged at the very same time he was writing his predictions of the collapse of industrial society due to peak oil (shale gas started to become economic in the US in 2003, the same year The Party’s Over was published).

  34. PapaSmurf on Tue, 11th Mar 2014 11:10 pm 

    Here is another view of Heinberg and his silly predictions…

    http://skepteco.wordpress.com/2013/08/20/heinbergs-snake-oil-predictions/

  35. GregT on Tue, 11th Mar 2014 11:17 pm 

    Here is another view of Heinberg and his silly predictions…

    Perhaps it would do you more good if you read the comments on that article, instead of listening to the idiot that wrote it.

  36. PapaSmurf on Tue, 11th Mar 2014 11:17 pm 

    GregT wrote:
    “Why do you constantly feel the need to call everyone that you don’t agree with, rude names.”
    =======================

    Because most of you are 100% certifiable wack jobs. I feel foolish for even wasting my time getting drawn into a back and forth here. It happens to me every few years. I come back and do this with the newest PO groupies who think they have it all figured out.

    Seriously, you will burn out also and find something else to grab onto. It is really tough to keep up the doomer diet when nothing really happens. You guys are amateurs compared to the 2007-2008 crowd.

  37. Stilgar Wilcox on Tue, 11th Mar 2014 11:25 pm 

    To add insult to injury, our family moved from England to Toronto and then moved to CA. I still have UK citizenship, so guess we could move to Canada, maybe BC? Would be a nice option if the trajectory keeps going this way. It’s getting to be land of the ripped off and home of the scam artists.

    I tell you, the interaction with that women and me would have made a great you-tube video. She was a snake oil salesperson. She knew most people get confused about numbers and did all this math out loud that went no where as she waved her hands around. Pushed though she finally said, “Well, it could be more or could be less.” For F sakes! That one line told me all I needed to know. Exit stage left.

  38. GregT on Tue, 11th Mar 2014 11:27 pm 

    “Truthfully, I am embarrassed to even be wasting my time chatting with you guys.”

    “I feel sort of dirty even being on a website that is full of these types of people.”

    “I feel foolish for even wasting my time getting drawn into a back and forth here.”

    Certifiably nuts. BYE BYE nutbar.

  39. shortonoil on Tue, 11th Mar 2014 11:34 pm 

    “Apparently, Heinberg argues in his latest offering that shale gas- which has gone from zero to supplying 40% of US gas in the past 10 years -is just hype, a bubble that will burst soon, leaving society worse off (because of increasing dependence on fossil fuels and consequent climate change) than if we had never exploited it in the first place. ”

    Heinberg is quoting Laharerre, who called it “a Ponzi scheme”. How Lagarerre came to that conclusion he doesn’t expand upon, but our analysis of shale is the same; just probably not for the same reason. The entropy production in these wells is horrendous. At the very best they will be very short lived, which seems to be case. The average first year depletion rate of shale gas wells is about 65%. But the real question is will society get back the investment that has been placed into shale development? With the shale industry now spending $1.50 in drilling costs for every $1 of product produced – it seems doubtful.

    “Hopefully you’ve figured out a way to get paid for it!!”

    We are almost selling enough studies to pay for the ones that we give away. lol
    It coming.

  40. PapaSmurf on Tue, 11th Mar 2014 11:42 pm 

    GregT,

    You have the same group of 10-15 guys in an echo chamber here enjoying the agreeing with each other with this mental masturbation.

    You guys have it all figured out and the masses are all clueless…..

    You guys are hilarious. I am writing all of your user names down on a text file. I will check to see if any of you are active in 2015. My guess is that you will burn out like all of the other PO groupies have.

  41. shortonoil on Tue, 11th Mar 2014 11:59 pm 

    Off the subject, but I thought you guys might find this interesting. In February we had about 10,000 hits to the site. Most of them were from the US and UK. But we got quit a few from China, and (South Africa)​​??? Almost 20% of the hits came from Intelligence Services all around the world; the best we can figure!

    There is a lot more people watching oil than you think!!!!!!

  42. Yeti on Wed, 12th Mar 2014 12:13 am 

    PS and his BS have me wondering if Heinberg maybe hit a nerve with the fracking crowd?

  43. Yeti on Wed, 12th Mar 2014 12:31 am 

    Short, that would make sense regarding the intelligence types.

    If they’re aware of the reality of the situation being “dicey”, then they’d want to gauge how much time they had till Joe Public would have their viewpoint affected.

    Back in the day, it was the “fringe” sites where people would compare notes on how insane the housing market was.

  44. MSN fanboy on Wed, 12th Mar 2014 12:35 am 

    Papa

  45. MSN fanboy on Wed, 12th Mar 2014 12:40 am 

    Papa Smurf is correct when he writes of the peak oil crowd and their false predictions. How disaster awaits…. in five years, always around the corner.
    The same fallacy that you doomers ridicule Fusion for….. always in the next 20 years.
    Also you have to admit, lol mental masturbation 😛 its a good description of the fanbase of this site.
    Aside from the insults he makes a fair point.

  46. GregT on Wed, 12th Mar 2014 12:44 am 

    Yeti,

    “Back in the day, it was the “fringe” sites where people would compare notes on how insane the housing market was.”

    The housing market here in BC still is insane. 1.3 million for an average 1800 sq ft house built in the 50s, and people don’t think we’re in a bubble. The general population is living in La La land. Just like with peak oil, the economic recovery, and exponential growth. The vast majority of people are totally clueless about reality. I guess that’s why all of those reality shows on the idiot box are so popular, and advertising works. Never could figure that one out.

  47. GregT on Wed, 12th Mar 2014 12:50 am 

    Life sure would be dull without all of the idiots to keep us entertained.

    I kinda figured Papasmurf, MSN, MSN (revised) fanboy, MSN fanboy, and TomS was the same ‘person’. I wonder what the next iteration will be?

  48. Northwest Resident on Wed, 12th Mar 2014 1:34 am 

    PapaSmurf, we’re just a bunch of guys who are hanging out, enjoying the discussion about peak oil and all of its implications. If you feel so dirty being here — and you should for good reason — then why not just go somewhere else. Why waste your time here? Do you interrupt other people in discussions just because you don’t agree with them. What is it with you and your compulsive need to make a world class ass out of yourself here?

    To anybody who cares — I bet that if we simply stopped responding to the smurf’s provocative posts, he would lose interest and go find somebody else to harass. He is the personality type that feeds off of the irritation and annoyance that he causes other people. For my part, I’m going to completely stop posting in response to anything the smurf writes. See you later, smurf. The one consolation I have as I say goodbye is that there is one undeniable fact, and that is, your are retarded and ignorant beyond comparison, and are a thoroughly miserable human being — easy to ascertain that. You’ve proved it many times over. Good luck in your attempts to irritate and annoy.

  49. Makati1 on Wed, 12th Mar 2014 1:41 am 

    Ah, reality is illusive to some of the uneducated, over medicated, narrow minded sheeple.

    Name calling is the last resort of the above sheeple when their extreme ideas are not accepted. Nuff said.

  50. Davy, Hermann, MO on Wed, 12th Mar 2014 1:55 am 

    I would have to say I hold Heinberg in the highest regards. I have read all his books and they are still in my library. I don’t keep books in my library unless they are good. He is a very good speaker and is advancing the ideas we hold dear here. He speaks in a non-confrontational way that gets people to listen. We need more Heinbergs getting the word out! PapaSmurf criticism is way off the mark in my opinion. I like balance in discussions but Papa Smurf is not on the scale to start with.

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