Peak Oil News and Message Boards

Cloud9 wrote:Once again, I am going to relate this short story. During the run up to Y2K, I bought fifty pounds of rice, one hundred pounds of corn, a generator and a drum of gasoline. As we all know, the world did not end. My extended family ate the rice. I fed the corn to the compost bin, burned the gasoline and left the generator in the plastic wrap.

When the 04 hurricanes came over the top of my house, I was the only person in the neighborhood that had a generator.

Bottom line: preparations are not disaster specific. The can goods you have may do nothing more than feed you through a bout of unemployment or add to the bounty of the food bank in your area. Not to prepare puts your fate in the hands of others.

I just bought a set of wood gas plans from Mother Earth News. Am I going to build a gas generator? Not this week, but when the time comes, I don’t want to have to reinvent the wheel.

Pops wrote:This was discussed at TOD earlier this year, I just got around to reading the full paper:
Tipping Points: Near-Term Systemic Implications of a Peak in Global Oil Production

This is the Overnight Armageddon Scenario updated with lessons from the Great Recession.

The credit crisis exemplifies society's difficulties in the timely management of risks outside our experience or immediate concerns, even when such risks are well signposted. We have passed or are close to passing the peak of global oil production. Our civilisation is structurally unstable to an energy withdrawal. There is a high probability that our integrated and globalised civilisation is on the cusp of a fast and near-term collapse.

Basically the paper outlines the case for a "fast-crash" scenario centered around a collapse in monetary confidence due to peak oil:
The world economy functions on credit, which requires growth to sustain. Once it becomes generally accepted that energy growth and so economic growth have ceased, banks, bondholders, shareholders, etc will realize they will not be repaid their principle (let alone their profits) and world trade will collapse as the "haves" attempt to change their imaginary (soon to be nonexistent) assets into tangibles.

Which brings in the second major topic; the de-localized and globally interdependent economy. Simply put, there is no local economy without global trade since few local businesses today produce anything which isn't, in whole or part, sold into or sourced from the global economy. Once faith in world credit markets evaporate, so will "local" business large and small.

Leading to the final element (in my summary anyway) which is the dependance of the critical on the trivial. We talk here a lot about wasteful consumerism supporting lots of real jobs and this is the same idea applied to the greater infrastructure, i.e.: trivial Facebook (and PO.com) use enables the economy of scale that allows banks, business - infrastructures of all kinds, to function over the internet. Just one other example, cheap chip manufacture for games and refrigerators and cellphones enables cheap, readily available parts for all manner of critical infrastructure; electrical grid, military hardware, etc. The loss of the trivial greatly impacts on the critical.

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The idea of our self-organized, infinitely interconnected, energy/growth/credit dependent global economy tripping over it's own complexity is my personal default doom scenario. I work hard to keep my optimism up by encouraging self-reliance, localizing and "de-growth" and a variety of fixes - which, unfortunately, are the main targets of the paper:

They [cornucopians and optimists like me] have made suggestions including changing the debt based money system; pricing environmental externalities; reducing the working day; consuming less, controling population, increasing the lifetime of goods. In the context of the current financial crisis they often include some control on financial speculation.

There are way too many authors who spend time arguing their predictions for the future. The best part of this paper in my opinion is the author spends most of his effort outlining possible connections instead of justifying conclusions or selling his version of mitigation.


So anyway at least take a look at the summary, and read the entire paper (50pgs) if you have time and tell us what you think. I'll try to bump this thread now and then so take your time.

Of course, feel free to pull your usual opinion out of your butt without expending any effort but be advised, this thread is about the ramifications of the end of energy/economic growth, therefore "there will be no energy shortage" is off topic and will be deleted.

GHung wrote:Since so many here conveniently ignore debt levels, or think it doesn't matter, I will point out that central banks have pumped $trillions into the global economy ( at ZIRP/NIRP rates); about $7 trillion in the US alone, since this paper was published. Assuming that its conclusions are still valid may not be very useful.

Then, again, this unprecedented run up in global debt may make the paper's conclusions more likely.

In section IV two reasons for a looming globally destabilising financial shock are broadly outlined. The first is the outcome of decades of credit expansion and growing global imbalances. The most perplexing thing so far in this crisis is that there has been neither the anticipation of, nor the preparation for, a worsening of the crisis by those with most responsibility for dealing with the consequences. The inbuilt dynamics of credit expansion, debt deflation and the structure of the monetary and banking system make further deterioration inevitable. The break-up of the Eurozone, as has been emphasised elsewhere,
would be a devastating shock, and one for which we have scant preparation. This is not to cast blame, merely to reflect on society’s inability to manage novel risks that threaten the foundations of their welfare.

And yet there is no pillar of the economy more all-encompassing than the financial and monetary system: it links almost every good and service in the world. The fabric underpinning the exchange of real goods and services is enabled by money, credit, and financial intermediation. Money and credit have no intrinsic value. We swap a piece of paper or entries in a computer for the real labours and skills of billions of strangers across the world. This works if they too believe that those digits can be exchanged elsewhere for real things or services at a later time. What is implicit in such trust is faith in monetary access, stability and bank intermediation.

Maybe. I am a firm believer in having emergency provisions available to last at least a week for a possible "host of eventualities.

onlooker wrote:If I need at least 1 years worth of toilet paper, I am sure I will be using something other than toilet paper LMAO. HAHA