How Fast Can We Change?

How Will Events Unfold?

Whether Peak Oil is on top of us now, or we have a few more years before the downturn, I think it is a problem that we will soon face. I believe that those born in the 1990’s and beyond – like my kids – will grow up in a world of declining energy resources. And because like most parents I am deeply concerned about my children’s futures, I am deeply concerned about the ramifications of Peak Oil.

We know the horror stories: Billions dead as oil depletes. Chaos. The aftermath of Hurricane Katrina played out on a worldwide scale. Many rational people are anticipating this scenario. (In case you are completely unfamiliar with the massive die-off arguments, spend some time at Die Off or Life after the Oil Crash).

Even though I understand the reasoning, my mind just won’t accept the scenario in which billions die. And I would add that I think some people toss those scenarios around pretty casually, without really reflecting on the horror of what it would mean if a billion plus people died of starvation. Look at your family, imagine them starving, and then imagine this playing out on a horrific scale. Then maybe we can get past the casual talk of billions dying off.

Not a day goes by that I am not thinking about how this is all going to play out. A lot of variables are going to come into play. How much time do we have? Will our political leaders wake up in time and pass energy legislation that truly helps to mitigate falling production? Will production plateau for a few years and then decline, or will it peak sharply and decline at 5% or more each year? Will we see a totally unanticipated technology breakthrough? But for me, I think the most important question is: How fast can we change?

Powering Down

I drive a car that gets 50 mpg, and I don’t drive it that many miles a year. My family will tell you that I keep the house too hot in the summer and too cold in the winter. In fact, I almost always wear a jacket in the house during the winter. I am obsessive over our programmable thermostat; I don’t want energy wasted when nobody is home. My direct fossil fuel usage is maybe 25% of the average usage for the U.S., and well less than the average for the U.K. (Indirect usage – like fossil fuels to produce the food I eat – is much harder to estimate, but one way I minimize this is by minimizing the meat in my diet).

I don’t behave like this because I am cheap. (Don’t ask my wife about that). I try to minimize my fossil fuel usage because 1). I want to be prepared to make do with less in the near future; 2). I want to know just how low I can reasonably go if things get really bad; 3). I am aware of the negative environmental externalities of using fossil fuels; and 4). I want to set a good example. But if the stakes were high, could I cut my direct fossil fuel usage even more than I already have? Yes, I think I could still cut it in half. I have given a lot of thought to what I would do if the gas stations were out of fuel tomorrow. It wouldn’t be a fun exercise. But I don’t think it would be immediately life-threatening either.

So, if I have areas identified where I can still cut if I have to – and conservation is already very important to me – then I imagine the average person has a lot of consumption that they can cut. Those long commutes? If you had to cut your gasoline usage in half, you would find a car pool or public transportation, and in the longer term get the most fuel efficient car you could get. You would start cutting out unnecessary trips. At home, you would start to adjust your thermostat and be more aware of lights and TVs that are habitually left on.

Don’t get me wrong. I don’t expect this to be a picnic. I don’t expect technology to save us. But I also don’t expect this to be the end of civilization. On the other hand, I don’t completely discount the worst-case scenarios. I do allow for the possibility. But I think what we are likely to see is that people will start to Power Down when supplies start to shrink and fossil fuels become much more expensive. The best possible situation in my opinion is for Peak Lite to play out for several years before true peak. This will provide for a less rapid loss of available supplies, and would give us a better chance at managing a Power Down.

Conclusion: Planning for the Worst

My personal plans do involve preparing for the possibility that things may get pretty bad. You don’t prepare for a disaster only if you know there is going to be a disaster. You try to plan for worst case scenarios that have a reasonable probability of occurring. (I have no plan for a Texas-sized asteroid impact). So this is what I have attempted to do.

I have no debt. My savings are protected against both energy inflation and a collapsing dollar. I have my eye on farmland in some locations that I think would fare well if things look like they are going really sour. I have a decent amount of food in storage. But I am hopeful that I never have to put my plans into action. If we can change fast enough, I don’t think I will have to.

Governments could play a huge role here by getting serious about a long-term energy strategy. But on this point, I don’t hold out much hope as it would require that the public is asked to sacrifice – usually not something that will make you popular when running for reelection.

Coming Soon

Before long we need to revisit those involuntary decline scenarios for Saudi Arabia that were all the rage earlier this year. Those who favored that hypothesis may want to go back and look at where Saudi production was predicted to be in late 2007 based on assumptions of no spare production and an involuntary production decline. To me, even if we discount Saudi’s recent announcements that they will raise production, those assumptions appear to have been false. At the latest, this will be addressed in a year-end post in which I also discuss the results – win or lose – of the $1000 bet on oil prices; a bet that I made because of my confidence in the voluntary decline/spare capacity scenario.

54 thoughts on “How Fast Can We Change?”

  1. I have an observation, coupled with a question. I have been reading your blog for several months, and this post is quite different in tone from nearly everything I’ve been reading.

    Is there a reason?

  2. For a while I tried to see how low I could go in energy use, for the purposes of global warming and peak oil. I’ve backed off a bit, but with the Prius and the efficient appliances I’m not using too much energy.

    I satisfied myself that happy and efficient lifestyles are possible, for anyone with a little creativity.

    I think the really strange thing about doomers is that no matter how much we change, or how much creativity we demonstrate, they will assume a steady state … that we are on a fixed path that we must “change” through some monumental one-time effort.

    You recommend PowerDown, who’s editorial review starts:

    If the US continues with current policies, the next decades will be marked by war, economic collapse, and environmental catastrophe. Resource depletion and population pressures are about to catch up with us, and no one is prepared. The political élites, especially in the US, are incapable of dealing with the situation, and have in mind a punishing game of “Last One Standing.”

    That’s a one-dimensional and paranoid version of this world. This world, the real one, is reinvented every minute. The world that existed when those words were written is gone.

    We “can” change at least as fast as we did in WWII, but how fast we “will” change depends on what comes down the pike.

  3. RR-
    I commend RR on every action he takes to limit energy consumption. I do the same.

    On the other hand, CERA (Cambridge Energy Research Associates) reiterated their belief that no oil shortage is pending. A synopsis follows:

    GLOBAL OIL FIELD DEPLETION: DEALING WITH UNCERTAINTY

    Among the many factors influencing projections of future oil supply, a reliable calibration of individual field production decline rates is critical. Even small differences in decline rates can have a major impact on our view of the future. The consequences of miscalculating conventional crude oil requirements are extremely serious.

    In this Private Report, CERA summarizes the conclusions of a detailed study of the production histories of 811 fields. The raw data were rigorously screened to provide a reliable and representative dataset that can be used to calibrate future field decline rate trends for existing fields and new projects.

    The results of this work support CERA’s conclusion that global productive capacity will continue to rise strongly for the foreseeable future. At the same time the comprehensive decline rate framework we have produced does not substantiate the view of an imminent peak and subsequent dramatic fall in global oil production.

    Several key conclusions emerge from our analysis of 811 separate fields:

    The aggregate global decline rate for fields in production is approximately 4.5 percent per year.
    Individual field decline rates can range to over 20 percent.
    Annual field decline rates are not increasing with time.
    Decline rates are a function of reservoir physics and investment strategies

    The key sentence in the synopsis is “global productive capacity will continue to rise strongly for the foreseeable future.”

    I have no connection to CERA. But they strike me as hardheaded, sensible people. Where is the profit in predicting ample supples, unless it is genuine? On the other hand, scare stories put a premium on people with energy experience or alternative fuels.

    It seems to me that CERA would make more money by predicting shortages, and positioning itself as an investment advisor. To their credit, I sense they are calling the shots as they see it, and letting the chips fall where they may.

    Another evolution: World crude demand is weak. I think we may be at Peak Demand right now. At more than $60 demand was flatlining, and now we are past $80 a barrel. When demand falls, we get extra decades of supply, even assuming Peak Oil. Most doomster scenarios predict 2.2 percent annual growth in demand, then cliff time. Suppose it is instead 0.3 percent negative annual growth?

    Lastly, I am surprised at RR’s dark missive of the day, although we all have moods. He knows our national electrical grid could handle PHEVs, even now, and especially if boosted by wind, solar, geothermal and nukes. And PHEVs are but a few years away from commercial introduction. If oil goes to even higher levels, the public will embrace PHEVs. PHEVs offer radical reduction in oil demand – imagine too if China and India go the PHEV route. The much-predicted boom in oil demand could fizzle.

    There are advances being made in lighting (by a company named Ceravision) which could cut power bills substantially (lighting is about 20 percent of electrical demand).

    I see no reason we cannot migrate to PHEVs if we have to. Sheesh, we blowing $200 billion a year in Iraq. We could build untold clean power plants in the United States for that money.

    So, where is the disaster in this scenario? I don’t see it. If anything, I see a cleaner and more prosperous United States. I hope it happens.

  4. I think, Benjamin, that one of the standard sources of pessimism in peak oil comes (as I say above) from extrapolation.

    I change, Robert changes, you change … but it seems that most people don’t change. Should we extrapolate from them or from us?

    (Technically the trends constantly ebb and flow. Hybrid sales climb, but then so do pick-up sales.)

    I think we have to step back and see how it looks to a true outsider, a semi-informed US consumer. He is likely facing lower energy prices than he did in the 1990s (when you adjust for both inflation and family income). He hears from ‘peak oil’ proponents that they have graphs and models showing shortages and higher energy prices in the future. They also (if not the same ones, other people at the same conferences) talk about die off, population crashes, and the end of civilization.

    At the same time CERA (and others) are saying “not yet.”

    Is there any surprise that the reaction is not always ‘preparation for the worst’ but an edging toward the door?

    It’s important to remember that we are looking at ‘pre-adaption’ here. That is, adaption for higher prices and (possibly) shortages to come.

  5. I misremembered a bit, here is the data on gasoline prices and incomes by quintile

    It’s not a prefect model, but useful. In particular the graphs assume a fixed 1000 gallon consumption across income bands. We might expect that the affluent burn more and that the less well off have already reduced their consumption.

    It might also explain why some of us are starting to get off the stick.

  6. Here in New England, we heat the house to 55 in winter and use a wood stove in the livingroom if we want it warmer. We’ve discovered that below 55, it’s hard to use a pen, and that’s our limiting factor. But a sweater indoors makes 55 doable.

    Without asking for stock tips, I’d be interested in your thinking on investing in such away that you’re protected from both energy inflation and a declining dollar.

  7. No matter when peak oil comes, I think things are going to get pretty bad before they get better. There are a number of reasons for this. For example, (1) Inertia. Governments don’t want to change, and people don’t want to change. Especially when we are all enjoying such a profligate lifestyle. (2) Since we aren’t going to give up extravagance without a fight, don’t expect the developing world to give up trying. And one other major factor in this category is the American sense of entitlement. This is going to make things worse for everyone. (3) All the big players are trying to gain economic or military control over as much remaining oil and gas as possible. As reserves wind down, the fight will worsen. At the very least, their military forces require lots of oil. Energy geopolitics will bring misery and death to millions. (4) Wishful thinking. Too many people (including politicos) don’t even want to contemplate a world of dwindling energy. So no matter what, they just keep working from the same assumptions. Case in point: the municipality where I live (in Japan) recently developed a 10-year plan and held a public meeting to ask for comments and suggestions. I pointed out that the plan is built on the mistaken assumption that food and oil imports will continue unchanged over the next decade (Japan imports 60% and 100% of its food and oil, respectively). “How do you account for this?” I asked. No one had an answer. After talking in private with one of the plan’s developers, I found that he is aware of peak oil. So the whole plan is built on the quicksand foundation of wishful thinking.

    So, expect things to get very bad before they get better.

  8. Robert, I will have to say that it is refreshing to find someone else who seems to have at least the same level of thought going into preparedness. Great blog, also!

    I grew up in the midwest, and EVERYONE had food cellared…winter was harsh! I now live in Napa Valley, and have spent the last several years in energy, technology, and agriculture. The little town I live in(yountville) only has two houses with solar on them, mine being one them(and I rent!). This is a town with enormous wealth, and you would generally think that this might lead to at least SOME forward thinking. I do not find this to be the case at all. The general consensus is that it will always be like this, and how can I preserve my way of life, which, here, is mainly about consumption.
    I drive a VW TDI, which is converted to run on grease from local restaurants, of which there are many. It works for me, but it is painfully obvious that it is not a solution for even my small community. I have worked at creating change here, as an experiment. My town is small, and I interact with lots of people. In some ways, a perfect situation to create a more sustainable, sensible community. I should probably add a note here that I am not a hippy, with dead sticker on my VW bus. I am a geek who helps people understand technology everyday( a basis for some of what I do). That being said, I have had virtually not luck in even creating a forum for discussion. Someone else used the word inertia, which works perfectly. We have built an entire society based on consumption. Heck, california has this down to an art form. Many here associate consumption with social status, and go after wasting things with a gusto. Any talk of consuming less is not met with happy words, believe me. I believe that, on average, this is current american thinking. I could be wrong, but I do not think this will change without a very compelling reason to do so. It is said that history repeats itself, which I think is not exactly correct. A better way to put it might be that human NATURE doesn’t change, and we keep doing the same things, then seem surprised that ‘history’ repeated, again! With that in mind, there are so few times in recorded human history where people saw disaster approaching, and changed course to prevent it, that I am not confident we might do so here. I was in a discussion recently with some sharp folks who are principles in tech companies in silicon valley. Almost all(better than 90%)thought that government should force automakers to build more efficient cars…but looking at the parking lot of the restaurant we met at, it was obvious that none of them would be buying those efficient cars. The one person who drove a prius just spent $49,000 on his 6,500 square foot house so he could run his AC without feeling guilty. I believe that when this is conventional wisdom, the solutions we really need will not be implemented. That said, I am not a doomer. There are solutions out there, but in my opinion, we have built a society perfectly suited for what we mostly do, which is consume, and drive. My personal belief is that is will change, and drastically, at least if you live in an industrial society. If you live in BFE, Honduras, you might not really notice much change, but when you live at the top, you have a long way to fall…
    Whether it is global climate change, PO, the house of Saud taking a dump, or something not on anyone’s radar yet, the chance for status quo seems very small. My pick is climate change, since ALL the models(and the corresponding reality) have progressed MUCH faster than predicted. I can envision a possibility where we are simply told to stop using oil because greenland is melting, and the map of florida is about to really change. If americans keep driving(and consuming FFs)at the same rate, and Bangladesh goes under, we might well find ourselves to be the most reviled society on the planet. Me, I believe this might be hard, but there are some lights in the dark. There are lots of people who dream of a connection with others in their community, and this may be the catalyst. Blockbuster won’t be what most do every night, instead we might get together and visit. Libraries might come back in vogue again, even for kids, imagine! Gardening might be more than a casual hobby.
    One thing is for dang sure, we live in interesting times…
    BTW, since someone asked about investing thoughts, every time silver drops, I stash some more under my pillow.

  9. You want investing advice? Take the plunge. Buy some puts at $50, say three years out. We all might be pleasantly surprised.
    Evidently, we are headed to a refinery overcapacity situation, and possibly a crude glut in two year years.
    Making predictions is always difficult, especially about the future. The thug states who control the world’s oil are not nice guys, and that could throw a monkey wrench in the system.
    On the other hand, in recent four-week periods, the US has been using the same amount of gasoline as a year ago. Already! Consumers are responding.
    World oil demand rose 3.1 percent in 2004, then 1.4 percent in 2005, then 0.7 percent in 2006 (BP stats). You see a pattern here?
    Add that to CERA saying there will be plenty of crude for at least the next 30 years.
    If you buy puts, you can only lose as much as you buy. So, buy $3,000. If oil only goes to, say, $60 next year, you could easily double your money. If oil goes to $40, you could get a 10-to-1 bang.
    Be prepared to kiss the 3k goodbye. Only bet what you can lose.
    But look at it his way: How much would going to Vegas cost you? You save that, and the gas you would have consumed getting there. That is two “goods” already. But there is more.
    Your gamble is “on” everyday for years, providing tons of entertainment. Plus, watching your bets, you inform yourself about the world. Two more “goods.” Not bad for $3k.
    One last piece of advice: What sometimes seems safe, is not safe. Buying US Treasuries in the 1970s was a disaster. Seemed safe, the Dow was going nowhere. Instead, Treasuries lost badly. So did blue chips, from 1967 to 1982.
    Right now, oil stocks look safe, even good. But everybody thinks so. That is when you want to sell.
    I am putting a small portion of my wordly wealth on puts. Maybe it will be crying time.
    Odograph: I contend that most adaptation to higher oil prices is yet to come, but even so tremendous progress has been made. The elasticity of demand is small in the early years of an oil price hike. Thereafter, it becomes larger, and also glacial. That is, once consumers have smaller cars, they do not buy big ones right away after oil prices break. So you have continually declining demand, even as oil prices begin to go back down. That is when you get a real bath, and oil goes to $20.
    This time around, all the oil thug states may not allow that, not through cunning, but sheer buffoonery. They are running their countries into the ground, while thug elites consume the oil wealth. Not enough reinvestment. Think Mexico, Libya, Iran and Iraq. Russia and former SU states. KSA.
    However, the screw may turn. They may find in a few years not only can they not pump more oil as they have not developed their fields, but their oil is worth less, as the world has moved on to other energy sources.
    They will practically have to give the stuff away. It may happen.

  10. When James Kunstler spoke at the Congress for the New Urbanism in Pasadena, CA two years ago I asked him a similar question.

    After a lot of thought it’s seemed to me that there is so much energy waste in the US that we could reduce a few percent each year without major breakdown. The far-flung suburbs don’t of necessity dry up and blow away, as Kunstler suggests, if people ride-share, switch to more efficient vehicles, etc.

    The cities don’t starve if fuel is allocated to agriculture, and higher meat prices reduce meat consumption.

    His best reply was turbulance, more or less that systems break down under stress.

    My parents were children during the Depression, reasonably comfortable, but still live with that frugality. My father just recalled the standard “A” gasoline ration during World War II was four gallons a week. These suggest to me that people can and will adapt.

    In my self-interest I’d quickly do a PHEV conversion to my Prius if gas lines return.

  11. I have been reading your blog for several months, and this post is quite different in tone from nearly everything I’ve been reading. Is there a reason?

    Would you accept that I forgot to take my Ritalin yesterday?

    Seriously, I think about Peak Oil every day. I started writing primarily because I was concerned about Peak Oil. I have run through the scenarios numerous times in my mind. As Odograph noted, people change. I think this is the wild card that those who project worst case scenarios don’t really consider in depth. We are resilient. Are we resilient enough? I think we can cut consumption very quickly in a crisis. And I think the crisis will be slow enough to develop that we will start making changes before we wake up to find all of the service stations out of gas and the supermarkets with no food.

    As far as the reason for the post, I have seen a rash of posts lately on various boards that are suggesting that the end is upon us. It is true that oil production has been flat for 2 years, but I think there are some other reasons for that. Regardless, someone asked me in a recent e-mail whether – despite my optimisim – I am making preparations if things don’t go according to the way I see them.

    And the answer is, “Yes, I have plans that I don’t ever expect to put into action.” I also have insurance for the car wreck I never intend to be in. The tone of this post was not intended to be, as Benjamin Cole suggested, a “dark missive.” Perhaps that what others felt as well. To the contrary, it was intended to be a statement that I don’t think things are going to play out according to the worst case scenarios; that I see reasons for optimism. But I do have a contingency plan.

    RR

  12. To Benjamin Cole:

    You are quite into the idea that demand destruction will keep things smelling sweet. It seems to be a theme for you, which is ok. That sort of implies that having enough oil is the only real problem.
    In the late 90s, my own personal question was “what will we run out of first: oil, or environment?” At some point it may become even more obvious than it already seems to be- environment. There are virtually no models currently in use that look rosy and comforting, especially if you have children. We may have an unlimited supply
    (of oil), but no means of using it. If is becomes obvious to everyone, then we probably already have a very serious problem. Also, I will also be more in your camp when I see even one industry using anything other than oil to mine or refine the things we need to make all these energy innovations happen…just one would be fine. An ethanol refinery that ran on ethanol, or uranium mined using electricity…heck, anything! Then I could at least see how that vision of the future might happen.
    Again, my though is that if we wait until there is an obvious issue, it may be too late. Oh, and to the guy who thinks that CERA is evenhanded, all I can say is that take a casual look at who pays them the big bucks. As with most things in capitalism, following the money can be very revealing about motives…

  13. One other thing I would add is that I often do these essays as a quick brain dump. Sometimes the responses tell me that the essay came across in a way that wasn’t intended. Since this will be posted at The Oil Drum in a few days, this gives me a chance to go back and see where I might tweak it a bit so it comes across in the way it was intended.

  14. Robert,

    You do a great job, thank you. Even when I have no spare time to read anything else on the innerwebs, I make it here. Your energy analysis is definitely the best available, online or elsewhere.

    One weakness you have, though, is a belief that the government can legislate us through peak lite. For example, you say “Will our political leaders wake up in time and pass energy legislation that truly helps to mitigate falling production?”

    I’m pretty sure that if you step back and think about it for a bit, you’ll realize they cannot (with one simple exception).

    In another column, you quite accurately note that CAFE standards don’t work. You quote Fortune, “Start charging American drivers $8 a gallon and they’ll switch to small cars in a New York minute.”

    On CAFE standards, you hit the nail on the head. No amount of regulation is going to “fix” gasoline consumption. Even if we mandated Toyota Priuses (Prii?) for everyone, the low cost of fuel will just encourage more mileage. But a big gas tax will drop consumption as rapidly as possible. Folks and businesses will use gasoline only when the value of the trip exceeds price of gasoline.

    This is true for all energy consumption. So we don’t need energy legislation, we need a re-worked tax structure — Pigouvian taxes on all (carbon only?) forms of energy. Drop the individual and/or corporate income tax rates to make it revenue-neutral.

    The last thing we need is the government mandating more research into alternative energy. We’ll just end up with more corn-based ethanol solutions (i.e., ones that benefit a constituency directly instead of the country as a whole).

    Expensive carbon-based energy, OTOH, will provide plenty of incentive for non-fossil alternative fuels. Very critically, make the alternative energy sources (and public transportation, etc.) to pay full price for carbon based fuels. No more natural gas-fired ethanol plants that simply “hide the ball” on fossil-fuel consumption.

    (http://en.wikipedia.org/wiki/Pigovian_tax)

  15. Robert Rapier goes dark?

    Yes, a bit gloomy I think. Why is it that present generations always look at the future and believe that things will be worse off when history shows it is just the opposite?

    I am probably the opposite of Robert in that my energy consumption is at a peak. I have 2 teenagers who can’t seem to turn off a light or a computer, I commute 30 miles each day to work. We have a big house with a pool, in a hot climate and use lots of A/C. But I’m planning for the future as well.

    Energy use will be a major factor in purchasing our next vehicles and home. I’ve already said that I’m buying the “King of Katy” hybrid vehicle (small Ford Ranger pickup and 100 shares of XOM). That nearly doubles my current mileage.

    I’ve started thinking about what my next house might look like. I will consider ground effect heat pump. Plus I’m reading up on solar. Energy efficiency and comfort will be integrated into the design.

    I have been riding my bicycle more for short trips that don’t require hauling. Over the weekend I left our van at the shop for the annual inspection and rode my bike back to the house.

    As someone else said, Americans lived through the depression and WWII and managed to get by on less consumption with much less efficient devices. We will get along just fine, whatever our energy future.

  16. Robert, I don’t think your kids will live in a world of declining energy supplies. Declining oil and gas, yes. But there are ample reserves of coal alone to see civilisation through the 21rst century, and ample reserves of uranium to run it for 100s/1000s of years without a powerdown a la Heinberg. All of that completely discounts renewables and conservation. I expect that we will see some level of pull back in energy use but it won’t be driven by lack of possible supply, but rather by other factors such as cost and environmental side-effects.

  17. I’ve come to the conclusion that the concern about declining energy supplies is overated. The useful EROEI of oil is ridiculous. The only thing that will decline is energy wastage. The doomer crowd agonizes endlessly about how the world will be forced to use less energy. The WORLD already is using less! WE are just wasting it! Energy wastage will decline because people will CHOOSE to use less, and CHOOSE to buy more efficient vehicles, houses and appliances; why is this a bad thing?

  18. It is difficult to be a doomer when you read stories like this one:

    href=”http://www.washingtonpost.com/wp-dyn/content/article/2007/10/07/AR2007100701412_pf.html” Metro Leaves the Lights on For You

    This is twofer for me. Enviros LOVE public transportation. As you can read, public transport corporations are hardly paragons of virtue when it comes to energy savings. It turns out that the only time the CEO of our local Metro actually rode the system was in a TV commercial he appeared in. The park & ride is only 2 miles from his house and drops him 1 block from the office. In fact, less than 25% of the employees at Houston Metro actually ride it, even though they get a free pass!

    In the interest of full disclosure, I can’t turn the lights off in my office either. The light over my desk has a switch, but the room lights come at 6:30am and shut off at 5:30pm, along with the A/C. I can

  19. I think I’m in the same boat as our host. We will have to cut back, but the question is how fast, and for how long?

    It’s pretty clear to me that we could handle a 0% decrease in supply indefinitely — the ‘efficiency wedge’ would act to make more supplies available over time. Short term, we’d probably see a recession as we adjusted to the new reality, but we’d figure it out.

    It’s equally clear that a 20% YoY decline in supply would get us into big trouble. We just can’t adapt that fast, and we would have shortages, cascading failures, and likely some riots.

    The question for me, then, is the location of the breaking point. Can we handle a long-term 5% decline? 10%? I just don’t know.

    So depending on what news I’m reading, I’m optimistic…or I’m not.

  20. as the many responses indicate, some see brightness some darkness–civilization will ebb and flow as it has for eons. we probably will muddle thru as done thruout history[ from cave people to GREEKS/ROMANS to DARK AGES and back to a grander ROME.].

    as has been said–we can’t know that which we don’t know. we can’t plan for it either.

    best to take/live life as it comes, do the best we can as we think we should.
    some will consider more the furure, others less.

    THAT’S LIFE!! ENJOY IT

    fran

  21. Winelover-
    Hey, I am a committed environmentalist. I don’t know anybody else who lives in a used Airstream trailer or walks to work. My car, which I have ad snce 1990, is a 1986 Isuzu Trooper, four cylinder. I even grow my own vegetables on an asphalt parking lot I dug up myself. With an effing pick-axe.
    On CERA, I don’t know who pays them. If it is big oil, then CERA should be harping on coming shortages, trying to help drive the price even higher.
    That is one part oof the TOD mentality I just don;t understand. That being that there is some cabal going on, hiding the truth about pending oil shortages. Except that the people hiding the truth would be the prime beneficiaries if that “truth” got out.
    KSA oil would be worth more if Peak Oil is true. Instead KSA says they can pump plenty more. So…that means KSA is part of a cabal of liars? It doesn’t add up.
    The price mechanism works wonders, especially in commodities markets. USA gasoline demand is just about flat in recent months compared to year earlier figures. Soon, it will start going down. Thenm, all developed nations will be using less fossil oil every year. Already! Imagine what the future will bring. Even as GDP has been growing.
    That’s another mistake my greenie friends make: They hate prosperity, when what they should hate is pollution, waste and thug governments. I want higher GDP for everyone on the planet. I want everyone to have a roof, food, health care, even some time for culture. I hope world GDP booms – and I hope we go to PHEVs, and environmentally practices to get there.
    Morever, urbanization is good. Saves the land. Produces wealth, economies of scale. Every back-to-the-earther I know has torn up some piece of rural land, scarred the earth, scared off local wildlife, and consumes gobs of gasoline getting around. They talk about being independent, but need an automobile. Now, what kind of society can produce an automobile? A highly advanced industrialized society.
    A Manhattanite can use public transportation, and he does not destroy some part of nature loving it.

  22. Robert,
    Roger Conner Jr here,
    As for those cultists who worship at the big die off temple, I have gotten to where I pretty much ignore them. Theirs is a belief system, and is not based in factual evidence. Likewise the horse and buggy crowd.

    The problem is, there are people out there, already vunerable, who are being terrified by this kind of catastprophic wishful thinking on the part of the neo anarcho/primitivists.

    I recently talked to a single young woman who was shattered after reading some of this stuff, said she cried for days, couldn’t do her college work, etc. She was bought in that the doomsday stuff was science, absolutely assured to happen.

    Even ASPO shows as much oil being produced in 2038-40 as was being produced in 1980, and as much natural gas being produced in 2045 as is being produced now, and remember, the ASPO has had to change their forecasts upward several times to reflect reality.

    http://www.aspo-ireland.org/contentFiles/newsletterPDFs/newsletter82_200710.pdf

    This does not mean that Peak is not going to happen, and that we do not need to take action now. But, we do not have to replace every single barrel of oil/gas consumed with alternatives.

    We simply have to stay under the production curve. THAT alone will be hard enough, but it can be done. As you say, for the sake of our children (I speak editorially, I have none, but I do have some adorable nephews, a neice and some young cousins), IT MUST BE DONE.

    RC

  23. Robert Conner-

    That is what the price mechanism is for. It rations goods and services.
    As oil becomes more scarace (thug staes or otherwise), the price will go up. It will be a relatively smooth transition.
    By the way, if you do not read The Energy Blog, take a crack at it. It is a great tonic. You will see hundreds of examples of market responses to higher prices, and why we can obtain even greater prosperity while cutting fossil oil consumption.
    I argue not only will we be more prosperous, we will have a cleaner environment.
    What is not to like in this picture?

  24. Anybody take a peek at that video?

    I bet if anyone did he would endorse it for everyone else.

    It would be interesting to see some ‘migrating bubble’ charts on energy production, consumption, intensity.

  25. That’s an interesting one. I had to watch it a few times to make sense of it.

    We all get richer FASTER than we increase CO2 emissions, yes?

    And the US stayed fairly flat as we got wealthier.

  26. Odograph,

    Thanks for the TED link, it made my day !!

    Clee, thanks for that heads up !

    gapminder looks to be an awesome tool !

    RBM

  27. I just found the video of this year’s presentation by the same guy. He’s mostly upbeat about the health of the world population, but about 9 to 10 minutes in, he shows a migrating bubble chart and claims that no one has been able to decrease infant mortality without increasing per capita CO2 emissions.
    http://www.gapminder.org/video/talks/ted-2007—the-seemingly-impossible-is-possible.html
    But when I go to gapminder and plot infant mortality vs CO2 emissions, Sri Lanka and Albania look pretty good to me.

  28. Odo & Clee – nice graphs. The one I like to plot is GDP vs. CO2 emissions per capita. This should make you feel slightly better about us.

    Look at the US in 1976. GDP was $20,735/person on 21 tons CO2. Jump ahead to 2002: $34,567 on 20 tons CO2. So per capita GDP went up 37% but CO2 emissions went down. Over the same period, China increased GDP 10x but only doubled CO2.

    This shows that modern economies are getting more efficient at using energy. The richer a country becomes, the cleaner and less energy intensive (on a GDP basis) it becomes.

    It may be that burning fossil fuels now to create more wealth, better education, etc. Will allow us to deal with potential global climate change problems in the future. The doomers advocate drastic changes in fossil fuel consumption that could make us poorer and LESS able to deal with climate change (if it happens, and if it is bad).

  29. dear anonymous,
    I completely agree with everything you wrote.
    My family and I have bot a farm near Philo which we plan to go off grid and grow healthy, beyond organic food. We also hope to get active in building community (common unity) in the Anderson Valley once we get settled. Feel free to contact me should you wish further discussion. Jwl11@hotmail.com

  30. “Odo & Clee – nice graphs. The one I like to plot is GDP vs. CO2 emissions per capita. This should make you feel slightly better about us.”

    I have thought more about this. I think the graphs do make me feel better about human progress, and human adaptiveness – but more as it pertains to wealth and energy than to environmental services and global warming.

    Nations may be gravitating toward some high level of CO2 intensity (per capita), but (1) more nations are doing so, and (2) there are more “capita” all the time.

    I think we’ve yet to see any down-trend in total national or regional emissions.

    And I’m not sure we are motivated enough to do that. We may have to suffer whatever climate we get, even if it does prove to be a bad one.

    (A long time ago I blogged about a Fermilabs talk on oil and global warming. BP’s Chief Scientist said “energy no problem, global warming is a problem.” That still might be the bottom line.)

  31. And I would add that I think some people toss those scenarios around pretty casually, without really reflecting on the horror of what it would mean if a billion plus people died of starvation.

    I’m sure you know this, but the attractiveness of a given outcome has absolutely no bearing on its probability. Reality doesn’t care whether you like it or not.

    It is the unimaginable horror of such outcomes that makes it essential that we discuss them. Closing your eyes and hoping for the best is no more effective as a risk-management strategy than it is as a form of contraception.

    Having said all that, I’d like to think that I’m not the typical disasterbater. While I do think that there are several potential die-off scenarios with high enough probabilities to be concerned about, I’m certainly far from sanguine about it. For one thing, I certainly don’t assume that I’m likely to be one of the lucky ones.

    As for the actual probability of a die-off, I’d be a heck of a lot less worried about it if we only faced one or two major societal problems – say, FF depletion and climate change. However, when you add soil erosion, freshwater depletion, and biodiversity loss into the equation, then things start to look more problematic. Any one of these problems we could probably deal with in isolation, but when they all gang up at once… Well, we’ve got our work cut out.

  32. Oh, my favorite quote from that:

    We pride ourselves on being the only species that understands the concept of risk, yet we have a confounding habit of worrying about mere possibilities while ignoring probabilities, building barricades against perceived dangers while leaving ourselves exposed to real ones.

  33. Nations may be gravitating toward some high level of CO2 intensity (per capita), but (1) more nations are doing so, and (2) there are more “capita” all the time.

    Perhaps not. The developed world leads the way in showing the developing world both how and HOW NOT to develop. Asian countries caught up to the OECD countries in medical advances because medical technology transferred from the rich nations to the poor ones. US city planning and economic development happened during the era of cheap energy. That doesn’t mean that other countries will follow the same path. Already we see places like China and Dubai urbanizing around central city cores with mass transit extending out. Would Los Angeles look like it is today if gasoline prices had been high back in the 1950’s?

    Secondly, post developed world the trend is small families, long life. Much of Europe is depopulating itself. The US is growing only slightly, but through immigration.

    So I see 2 trends, 1 towards lower carbon emissions per capita, and fewer people per capita of those on the upper range of CO2 emissions per capita.

    I would like to see what accounts for my 20 tons CO2. How much is industry, transportation, electricity, etc. I think I could cut my emissions back to 10 tons, back to a typical European, without sacrificing much of my lifestyle.

  34. Odograph writes I think we’ve yet to see any down-trend in total national or regional emissions.

    How about Sweden? 1970: 11 tons per capita, population 8,043,000. 2002: 5.8 tons per capita, population 8,924,000. Though, their emissions have gone up since 1999.

  35. so really, our attraction or aversion is beside the point. it really comes down to whether we can make the case rationally, or build it out of whole cloth (assumptions upon assumptions).

    I really don’t think there’s any question there. In fact, I think it’s more-or-less what I said. It takes some ludicrous assumptions to generate a case where a die-off scenario is as near to impossible as doesn’t matter, therefore the only remaining question is that of probability.

    We’re currently depleting topsoil and fossil aquifers at such a rate that much of the world’s best agricultural land will be more-or-less useless within 50-100 years at current rates. That’s not an assumption, it’s a cold hard fact.

  36. […] therefore the only remaining question is that of probability.

    Then here’s the question for you – can you calculate that probability?

  37. Then here’s the question for you – can you calculate that probability?

    Well, no, I can’t, and I’m not convinced that anyone can currently do so with any real degree of accuracy. (And yes, I am using the term in its mathematical sense.) There are a rather large number of variables involved, many of which are not even theoretically knowable, and many of which are dynamically linked.

    So, given that the actual probability of a catastrophic die-off is essentially unknowable, and that any estimate we might make would have extremely wide error bars, we have no basis for assuming that the value is very close to zero. We also have no basis for assuming that it’s very close to one. We just don’t know, which is the worst possible situation from a risk-management perspective. We know the risk is there, but we can’t accurately quantify it.

    What we can do is devise mitigation strategies.

    Just in case I haven’t made myself absolutely clear, I am not wedded to any particular scenario. I can think of at least a dozen broad outlines, each comprising tens or hundreds of sub-scenarios. Many of those are better (IMHO) that the world we currently live in, many of them are more-or-less neutral, many of them are worse. A minority are catastrophic. I don’t think we can currently make meaningful assessments of the relative (or absolute) probabilities of any of them.

    Anybody who claims that they know how it’s all going to pan out is a fool or a liar. I would like to think that I’m neither.

    So, to turn the question around: Do you think you can calculate any of these probabilities?

  38. I think that Time magazine article is about people who feel a visceral connection with one risk or another, despite not knowing the odds.

    Man, all of us who think we know something about ‘peak oil’ as a risk, or debate what we actually know should read that new book.

    Note, from the review at amazon:

    Within the complex explanations, Sunstein does a reasonable job of achieving his three goals: to understand individual responses to worst-case scenarios (usually to plan far too much [or] far too little); to suggest more sensible public policy regarding low-probability risks of disaster; and to dispassionately evaluate CBA as a tool, especially as it pertains to policy making in the future

    And also note the blurb line quoted at MR:

    “If you make a plan, God laughs. If you make two plans, God smiles.”

    I think that bit in the long quote about “plan far too much” and in the shorter quote about “a plan” nails it.

    Peak oil doomers have chosen their one risk, and made their one plan. They have given up on flexibility, and forget that they do not actually know the odds.

  39. A couple of points:

    As far as the hope that the government will wake up and fix things, here is the reality. Presently you can contract on the futures markets to have oil delivered in 2015 for under $75/bbl, less than it is selling for today. If and when Peak Oil becomes accepted by society, prices of future oil prices will shoot upward. This will drag up today’s prices, inducing immediate conservation.

    The point is, by the time the theory is well enough established to hope for government action, markets will already have reacted and raised present-day oil prices to the level which optimizes conservation. The real problem that Peak Oilers face is that nobody believes their theory yet. That’s why they think oil is too cheap and we are wasting it. If that theory becomes accepted, market pricing will fix the problem. Government action will be belated and entirely superfluous at the time.

    A related point is with regard to the Pigouvian tax concept raised by Jon. While good in theory, in practice most realistic estimates of the harm from CO2 will not do much to move gas prices. Dingell proposed a $50/tC tax but that works out to less than 15 cents a gallon! Yet it doubles the price of coal. I saw an analysis recently concluding that the real effect of a global-warming oriented carbon tax is to take coal-to-liquids out of the picture as a possible replacement for gasoline. By itself it will do virtually nothing to gas prices and will do nothing to induce conservation. A Pigouvian tax is really a tax on coal and will affect electricity generation but not gasoline consumption.

    I am personally sorry to see Robert seemingly throwing in with the doomsayers. It reminds me of many smart people I have known over the years who became survivalists based on evidence that looked to them just as strong as Peak Oil does today to Robert. All their efforts were wasted, and a good part of their lives in some cases.

    No doubt we will have our disaster eventually, even a stopped clock is right twice a day, but it is not something you can build your life around in the way Robert describes. Listen to the market, it is the consensus of the processing power of the greatest computational engine ever created, 7 billion human minds straining to improve their condition and get an edge on one another. They are collectively smarter than me and smarter than you. Once the market sees a real problem here, I will believe it, but not before.

  40. Dear Hal,

    Where was the collective wisdom of 7 billion minds in 1929 ? The stock market is manipulated (at least in part) by the big players. It does not reflect reality.

    Five years ago one of my Dot.com stocks fell through the floor. It is now worth twice (on paper) what it was at the bottom. Is the company worth twice what it was 5 years ago ? I doubt it.

    J

  41. Are you sure “bubbles” are the best proof that “peak oil” is a justified fear?

    We had a bubble of y2k fear was well. It was interesting in that it was a problem. People did work to solve it.

    But the crashes and catastrophes did not materialize. That bubble of fear popped.

    Now, we aren’t supposed to talk about some stalwarts now in peak oil having been stalwarts in y2k fear then … but isn’t there a possibility that the fission of fear attracts a certain sort?

  42. This paper examines scientific and government studies in order to provide reliable conclusions about Peak Oil and its future impacts. Independent studies indicate that global oil production peaked in 2006 (or will peak within a few years) and will decline until all recoverable oil is depleted within several decades. Because global oil demand is increasing, declining production will soon generate high energy prices, inflation, unemployment, and irreversible economic depression. Alternative sources of energy will replace only a small fraction of declining oil production. Because oil under girds the world economy, oil depletion will result in global economic collapse and population decline. As oil exporting nations experience both declining oil production and increased domestic oil consumption, they will reduce oil exports to the U.S. Because the U.S. is highly dependent on imported oil for transportation, food production, industry, and residential heating, the nation will experience the impacts of declining oil supplies sooner and more severely than much of the world. North American natural gas production has peaked, importation of natural gas is limited, and the U.S. faces shortages of natural gas within a few years. These shortages threaten residential heating supplies, industrial production, electric power generation, and fertilizer production. Because U.S. coal production peaked in 2002 (in terms of energy provided by coal), the U.S. will experience significantly higher coal and electric prices in future years as coal production declines. The U.S. government is unprepared for the multiple consequences of Peak Oil, Peak Natural Gas, and Peak Coal. Multiple crises will cripple the nation in a gridlock of ever-worsening problems. Within a few decades, the U.S. will lack car, truck, air, and rail transportation, as well as mechanized farming, adequate food and water supplies, electric power, sanitation, home heating, hospital care, and government services.
    http://www.peakoilassociates.com/POAnalysis.html

  43. This paper examines scientific and government studies in order to provide reliable conclusions about Peak Oil and its future impacts. Independent studies indicate that global oil production peaked in 2006 (or will peak within a few years) and will decline until all recoverable oil is depleted within several decades. Because global oil demand is increasing, declining production will soon generate high energy prices, inflation, unemployment, and irreversible economic depression. Alternative sources of energy will replace only a small fraction of declining oil production. Because oil under girds the world economy, oil depletion will result in global economic collapse and population decline. As oil exporting nations experience both declining oil production and increased domestic oil consumption, they will reduce oil exports to the U.S. Because the U.S. is highly dependent on imported oil for transportation, food production, industry, and residential heating, the nation will experience the impacts of declining oil supplies sooner and more severely than much of the world. North American natural gas production has peaked, importation of natural gas is limited, and the U.S. faces shortages of natural gas within a few years. These shortages threaten residential heating supplies, industrial production, electric power generation, and fertilizer production. Because U.S. coal production peaked in 2002 (in terms of energy provided by coal), the U.S. will experience significantly higher coal and electric prices in future years as coal production declines. The U.S. government is unprepared for the multiple consequences of Peak Oil, Peak Natural Gas, and Peak Coal. Multiple crises will cripple the nation in a gridlock of ever-worsening problems. Within a few decades, the U.S. will lack car, truck, air, and rail transportation, as well as mechanized farming, adequate food and water supplies, electric power, sanitation, home heating, hospital care, and government services.
    http://www.peakoilassociates.com/POAnalysis.html

  44. “Within a few decades, the U.S. will lack car, truck, air, and rail transportation, as well as mechanized farming, adequate food and water supplies, electric power, sanitation, home heating, hospital care, and government services.”

    You have a fundamental misunderstanding of projection and probability.

    And really, this is why I worry about Robert’s comment up in the main body:

    “We know the horror stories: Billions dead as oil depletes. Chaos. The aftermath of Hurricane Katrina played out on a worldwide scale. Many rational people are anticipating this scenario. (In case you are completely unfamiliar with the massive die-off arguments, spend some time at Die Off or Life after the Oil Crash).”

    I mean, maybe these people are intelligent, kind, and rational in other aspects of their lives … but we are all human.

    We all suffer from what the scientists call “bounded rationality”.

    So the question, really, when we hear a prediction that the US “will” lack car, truck, air, and rail transportation … is how rational a case has been made in that specific instance.

    Are these rational people demonstrating their bounds?

    I think so, if they talk about what “will” happen, as opposed to the risks we face, etc. I say that simply because no truly rational human knows what “will” happen, especially in the far future.

  45. I read a lot of comments that say “I think XYZ. I suggest that reading the facts and then thinking is a good idea. The facts do really have much to say. It is a fact that we will run out of oil, natural gas, and coal too. And it is a fact that there are no alternatives that will replace but the massive amount of oil we are using. Read the facts at:
    http://www.peakoilassociates.com/POAnalysis.html

  46. I read a lot of comments that say “I think XYZ. I suggest that reading the facts and then thinking is a good idea. The facts do really have much to say. It is a fact that we will run out of oil, natural gas, and coal too. And it is a fact that there are no alternatives that will replace but the massive amount of oil we are using. Read the facts at:
    http://www.peakoilassociates.com/POAnalysis.html

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