Thinking the Unthinkable; The End of Oil:
Good Morning
So if not high profits, is it the shrinking dollar that is driving the oil price skyward? Nah, the devaluation of the dollar has some influence, but not much. So it must be the speculators that Wall Street talks about huh? No, not that either, speculators couldn’t speculate long if no one paid the asking price for oil.
The legendary oil man T. Boone Pickens put it nicely yesterday when he explained that daily demand for crude is more than 2,000,000 barrels higher than production. He also explained that world production has peaked. Uh-oh, it’s that darn economics 101 in play again.
Just a tid-bit of information that you may find useful; King George went to Saudi Arabia and asked them to turn up the juice a little. The Prince for all practical purposes told the King that, “She won’t take no more captain, we’re doing all she’ll stand.” Besides, the
My opinion is that nothing short of a world recession could significantly lower the price of crude. And, should there actually be a deep world recession; the price of crude may be well down on your list of concerns.
What I’m saying is that the world is running out of oil and we have no plan “B” for that coming event. As the imbalance in supply and demand increases…well lets say affordability will become an issue of great concern to motor home drivers.
Not being able to afford oil, is the same as not having oil. And, that will be the fate of many Americans, which fate will follow the standard practice of rising from the bottom up. When our poorest people can’t afford fuel for a motor scooter, our more affluent will be taking shorter trips to
Running out of oil is a terrible thought that I’m thinkin’ few have ever thought. Am I correct? One of those TV lawyers that offer to fight for your rights may influence manmade law, but they don’t have much influence on the “big guy” when it comes to universal law.
I know what some of you are thinking… “Technology will come up with a new fuel, so why worry?” We don’t pave roads and make plastic with technology, we pave roads and make plastic with oil. Technology is simply a tool to make things work better, not a substitute for natural resources. “Well Bill, we’re out of concrete, what say we pour this floor with technology?”
The American geophysicist, Marion King Hubbert had this to say, “We are not in the position we were in 1929-30 with regard to the future. Then the physical system was ready to roll. This time it’s not. We are in a crisis in the evolution of human society. It’s unique to both human and geologic history. It has never happened before and it can’t possibly happen again. You can only use oil once.”
On
So what did Morris K. Udall have to say? ,–”this inflation that we are all so concerned about now may not necessarily be mismanagement of the economy or some temporary problems necessarily, but may be built into this whole problem of exponential growth in terms of the population and use of resources, and so on. Is that what you are saying?”
And the good Dr. Hubbert answered, “It has been going on, the record is unequivocal, since 1910, disregarding the disturbance of World War I.”
So….Congress admittedly knew we had a problem in 1974? Coining the phrase from the good Dr. Hubbert, “the record is unequivocal.”
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Hey Mike, in reality we might as well consider the world out of oil when you consider the immense growth potentials of China and India. Aside from oil, food is becoming scarce for many different, but inter-related reasons. Oil, of course, is needed to grow and market foods and food is being sacrificed for oil replacements. Talk about putting a spin on things! Logic and common sense have gone out the window so war has become the popular way of gaining each countries needs or protecting what they do have. Madness has become a full contact sport. When you start thinking about survival your first thoughts are of where can I go to have the best chances. With mankinds “advances” there is very little safe spots left, if any. Sure paints a purty picture, don’t it! Try to take it easy Mike!
Michael,
I’m not sure that any of us can truly comprehend what this country will look like without sufficient oil to go about our misguided adventures through Fantasy Land.
And yet, Morris Udall, protector of the Universe, knew “the rest of the story,” in 1974.
Kathy P. added a link to yesterdays column that claims that $12 to $15 per gallon gas is coming.
As you pointed out, China, India, Korea and a host of others need that oil just as badly as we do. And since we depend on them to loan us some $2 Billion per day to keep this leaky boat afloat, it’s not looking good for future loans.
Hey Mike. You know the one word I have not heard yet is “rationing”. How long will it be before we start rationing gas? Instead of waiting until it is actually getting scarce wouldn’t it be to our advantage to start slowing down our usage “voluntarily”. If we slowed our consumption manually instead of waiting until the crunch hits it would be less devastating to everyone. Since this would make sense I am sure the currant government would not know how to do this without screwing it up. It feels like we are pushing a chain when it comes to getting things done in DC. Have a good one Mike!
Michael,
I believe that gas will be rationed by price and not by legislation. I think that $5 to $6 gas could be the norm by summer’s end and that will certainly cut down on usage.
The problem is that the U.S. runs on oil and with rationing will come even further hits to an already weak economy.
I just watched a program on the airlines where on official said that if they charged enough to cover their costs, no one would fly. American is now going to charge $15 for even one bag! Pack light.
We may well be facing the worst economic times that the U.S. has ever seen.
Mike, the only problem with using price to ration oil is that it hurts the poor and newly poor(middle class) far more than the rich and powerful. Rationing the DOD would be a great place to start. Give them enough fuel to get back from Iraq and that’s all. The worst part of the airlines luggae and gas add-ons is that it is a nickle and dime penalty they hide from us instead of simply including it in the price of the ticket(up front). It is similar to the small print of advertising, sort of a magic trick to confuse us into paying way more than advertised. The word “Ethics” might as well be removed from the dictionary since it does not seem to exist anymore. Why must all of this be so frustrating? Have a good nite Mike!
Michael,
I’m not talking about fairness, I’m talking about American politics. As you suggest, the price of gas will hurt the poor people first. Being that Congress is not comprised of poor people, who cares?
Unrestricted Capitalism cannot exist in a finite world as it demands exponential growth and puts profits ahead of people and resources. The pyramid scheme has about played out.
Hi Mike and commenters,
My observations of the small piece of the world I live in indicate that self-rationing is already starting. Traffic in my small town is way down. It usually increases markedly by this time of year when the “snowbirds” return to the north.
Everyone in my circle talks about not going “to town” for just one errand, but combining a week’s worth in one trip.
I own a cruising sailboat which is due to be launched tomorrow. The marina in which we keep it is a “dockominium” in which slips are owned. Many slip owners are not putting in their boats this season, and more slips are for sale this season than ever. The tax assessment valuation of the slips went down this year. I’ve seen more sailboats pass in front of my house (on Lake Huron) than powerboats so far.
This weekend (Memorial Day) will be a real indicator of how things will go this summer. My community is highly dependent upon seasonal recreational activities by “downstaters” who drive 300 or so miles to get up here. Gas is $3.99 this week. We’ll see how the self rationing affects us very soon.
We must be at the stage of “acceptance” of the crisis and imminent lifestyle change because we are trying to envision much more concretely (as opposed to abstractly) what our lives will be like. I’ve read several books on the topic, and agree that Kunstler’s “The Long Emergency” is probably the best. “Powerdown” by Richard Heinberg outlines four options for industrial societies:
1. Last One Standing: the path of competition for remaiing resources;
2. Powerdown: the path of cooperation, conservation and sharing;
3. Waiting for a Magic Elixir: wishful thinking, false hopes, and denial; and
4. Building Lifeboats: the path of community solidarity and preservation.
Which path will be followed?
Kathy
Kathy,
This was just an excellent post and goes to what I believe is an immediate emergency.
I believe that we will follow different paths in different places. America is very divided and very different, as is being demonstrated by the primary election results.
Small towns will adopt solution # 4 “Building Lifeboats: the path of community solidarity and preservation,” far more readily than the cities.
The urban dwellers in large part of having little other choice, will go for #3. Waiting for a Magic Elixir: wishful thinking, false hopes, and denial;
Once #3 fails, (which it will) the city dwellers will go for #1. Last One Standing: the path of competition for remaining resources;
#2, Powerdown: the path of cooperation, conservation and sharing; will not be seen as a solution due to my opening comment about the vast differences in culture and thinking. We need only to look as far as the division between our political parties for evidence to that end.
As an aside, my fellow author Peter Murphy who wrote “Five Short Blasts” (the maritime signal for imminent collision) reported that boat ownership is in retreat in the U.S.
This is an exceptional thread that we shouldn’t lose sight of. That cooperative spirit of exchanging ideas is oh-so important.
I believe that the upcoming 2008 presidential election will define the ability of our nation to survive in the coming era of extinct oil. If any one of the three are elected, it is my opinion, we do not have the mental capability to come out of the mix with hopes of anything better than 3rd world status. -bb
It seems to me that posing Heinberg’s alternatives to the presidential candidates would be quite revealing, if they would even deign to acknowledge the issue. I’m not particularly optimistic about any of them either, Billyb.
I’d have thought that you had read Heinberg, Mike, but then recalled an essay in the May 12 New Yorker Magazine entitled “In the Air.” The point of the article is that many thinkers arrive at the same stage of innovative thinking (or even world changing inventions) at the same time. There seems to be an inevitable advance to higher and better stages of thinking given a shared foundation of knowledge and thought.
Another tangent this is taking me to is Bob Altemeyer’s book, “The Authoritarians,” in which he describes the response of leaders with different worldviews to something called the Global Change game. The entire book is available free online at http://www.theauthoritarians.com, and the chapter that addresses the leaders’ response is Chapter 5. The choices to a global crisis pretty much follow Heinberg’s Last One Standing or Powerdown. IThe entire book is worth reading, if you have a relatively small amount of time (it goes very quickly), and it’s very revealing. Maybe it’s a way to view the presidential candidates.
Kathy