Peak Oil is You
Donate Bitcoins ;-) or Paypal :-)
Page added on April 4, 2014
Peak Oil: This Bears Repeating
Richard Heinberg and Chris Martenson, two of the most respected and thoughtful advocates publicly urging greater awareness of peak oil, recently teamed up for a broad and informative discussion about energy supply. [Unless otherwise noted all quotes here are taken from their conversation.]
While their intent did not appear to be to break new ground, they reiterated vital points and considerations which should be much more consistently voiced in public discussions about current and future fossil fuel supplies. The drawing down of a finite resource, and current efforts to draw down supply from alternative sources (i.e., shale formations, deep-water reserves) to replace the depleting supply of conventional crude oil we’ve relied upon for several generations, will in time create an assortment of problems and challenges too few of our fellow citizens appreciate. Adding to the difficulties would not be in anyone’s best interests.
Heinberg and Martenson began their talk with a mutually-agreed observation that the recent oil production boom derived from shale formations here in the U.S. is on the verge of reaching its own peak—perhaps as soon as sometime next year. That would not be good news for any of us. They also cover a topic I’ve likewise discussed frequently in recent months: the suspension of major oil production investments by the oil industry. Also not good news.
Despite the current high prices in the marketplace, the truth—as many of us have been pointing out for quite some time, industry denials notwithstanding—is that the ever-increasing costs, production obstacles, and harder-to-find/extract shale and off-shore reserves are simply making the entire process uneconomical for the industry. An increase in prices won’t help. If costs to the consumer rise even higher, consumer demand will decline. That’s a no-win situation for an industry whose primary objective, as Richard noted, is not to supply oil but to make money.
If we aren’t buying because the price is too high, they aren’t generating profits. They’re also not generating the supply we’re now counting on to keep our energy supply and demand considerations in balance. Even more not good news. As Richard noted, speaking of efforts to convince the public that shale gas and tight oil will save the day:
[I]t is all down to public relations. The assumptions are disconfirmed by the actual drilling data.
Facts still suck!
Assuming the massive effort and investment needed to transition our society away from fossil fuel dependence to renewables, the reality is that the development of that entire substitute infrastructure will in the first instance require fossil fuels. The same ones we’ll all be clamoring for. Not good news Number 4.
[I]ntermittent [renewable] 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.
‘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….’
[E]nergy 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.
There’s little doubt that this tactic is enabling the fossil fuel industry to continue to earn impressive profits right now. But that’s just right now. The decks are starting to stack against them—perhaps not right now, but too soon nonetheless. What possible justification will industry and government officials offer to us to explain why these matters have not been front and center in policy discussions starting several years ago. What will happen?
Richard asks a question many more of us should ponder as well, while insisting on full disclosure from those in the know—not the cherry-picked, feel-good nonsense which has been the norm:
[I]s 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.
It is. That’s where we begin….
8 Comments on "Peak Oil: This Bears Repeating"
Davy, Hermann, MO on Fri, 4th Apr 2014 12:02 pm
I am still debating PO awareness except at the highest level and for self-motivated individuals building life boats. I imagine the unintended consequences of a serious mitigation and awareness effort at the highest levels focused on the whole population is collapse of confidence and panic leading to economic contraction. I am firmly against market distortions by the lobby of plenty and technological exuberance. These folks include the oil industry lobbyist, many Wall Street’ers, and “feel good” politicians. This group is motivated by greed and self-interest over public safety. Their blind faith in the market and their psychopathic drive for returns is dangerous. We need a high level acceptance of sober policies which include mitigation efforts and decent planning. This is unlikely except around the edges for a system that is a runaway train in search of growth of any kind real or unreal. What these folks are promoting are ideas and policy that puts our energy and economic system at increased risk at a time it is facing great risk. If we are at a time of limits of growth and diminishing returns then policies that promote false plenty can and will lead to bad investments. This at a time of diminishing capex and increasing costs. At this point in time when we have multiple predicaments we cannot afford bad investments. Those problems we can solve need investments. Mitigation and adaptation efforts need solid investments. An economic contraction at this point could terminate the multiple efforts to mitigate this global growth decent. We will never be prepared fully for what is coming but the decent efforts we have thus far are minuscule to what is needed. Much progress is being made with many great efforts gaining speed. We need a critical mass to plant seeds for a society to build on. We need a gentle decent to avoid a large loss to our support systems in the transition from status quo BAU to the end of the global system and or much lower economic activity within a dying global system. We have maybe 5 to 10 years before the dam burst. The decent has begun for the majority of the global population. The dam could burst any day so the 5 to 10 prediction is only a brick wall we will hit if status quo BAU is lucky enough to survive that long. The high net worth individuals are the only segment experiencing growth. This growth is achieved through debt and wealth transfer. It basically is robbing the future generation through debt and cannibalizing the lower classes through wealth transfer and debt side effects. Let us not add to that poor investment decisions in the psychopathic quest for greed and excessive returns. Most of the excessive returns today are nothing more than parasitic drain on real wealth creating by a financial system many times its proper size.
Makati1 on Fri, 4th Apr 2014 12:43 pm
Somewhere after 2005, the money printing presses started to replace oil energy in the capitalist, reserve banking economies. That is a losing game, but it is allowing the top few to continue to drain the real wealth of the world into their own pockets. I wonder if no one has ever told them that it will not add more years on their life and that they cannot take it with them?
Northwest Resident on Fri, 4th Apr 2014 4:51 pm
It is only better to know if you can do something about it. Otherwise, knowing you are totally and irrevocably screwed without any chance of escape beforehand leads to stress, despondency and incitement to do things like say “screw it, I’m toast anyway, might as well raise a little hell.” Exactly what TPTB don’t want the general population to do.
Calhoun on Fri, 4th Apr 2014 5:05 pm
I never cease to be amazed how Chris Martenson has embedded himself at the highest level of the Peak Oil crowd. I mean, here’s a guy who came out of nowhere, basically repeating what others had said many times over, built himself a nice website, and now rubs elbows with the likes of Heinberg and Kunstler. Last spring he was predicting a 60% decline in the stock market by summer.
Heinberg has been writing intelligently on the subject of energy and resources for years in a modest but compelling manner. Martenson is clearly a self promoter. His understanding of economics and money creation is sophomoric but he’s found his niche as a “professional scary person”.
J-Gav on Fri, 4th Apr 2014 10:29 pm
Calhoun -Well, gotta expect your kinda troll to swish through here occasionally, don’t we?
Calhoun on Sat, 5th Apr 2014 9:43 am
What makes my comment “trollish”? If you search for my comments on this and other sites I think you will find them balanced and lacking of invective. I do, however, have a particular peeve with Martenson and I don’t mind expressing it. Is that trolling?
Davy, Hermann, MO on Sat, 5th Apr 2014 12:01 pm
Calhoun said – I do, however, have a particular peeve with Martenson and I don’t mind expressing it.
Calli, Martenson is appealing to a group of people who don’t think like you. He is appealing to investors and financial people. He was one of them and he went off line in relation to where he was to where he is now. Sure he made a prediction of a big market correction. Every fundamental and the business cycle position point to a big correction waiting in the wings. What is different now is financial repression of fundamental and the business cycle position. The global debt based Ponzi scheme bubble with huge default swap interconnections is what it is mainly “confidence control” repressing a normal financial cycle. As long as the investors of consequence know the global central banks have their backs they will maintain market stability and wealth transfer growth. Their confidence is what matters. When the 1%ers run for the hills then market panic will ensue. This could take a long time even with the many varied and ugly unintended consequences in the US, EU, Japan, and most notably China. China is the scariest because the whole debt situation there is one of excess and corruption of fundamentals. For example how many times can you use collateral in China??? In some cases in China they are unable to determine ownership because the collateral has so many claims on it. It may turn out it will be like Nero fiddling when Rome burns for these top 1%ers. The mobs will be rioting outside their Hampton gates with lynch mobs and looters then they will panic. So, Martenson crowd is a high net worth financial group along with normal middle class financial types. This site appeal more to engineers and geologist types with dooomers and cornucopians chiming in.
meld on Sun, 6th Apr 2014 7:23 pm
@Calhoun – Martenson is at the top because he’s the best at what he does, and he put a lot of work into the crash course which he gives away for free.