Peak Oil is You
Donate Bitcoins ;-) or Paypal :-)
Page added on October 14, 2014
The cure for a high oil price – is a high oil price. But where to next?
I love the saying that the best cure for a high oil price is a high oil price. Mankind’s ingenuity ensures that the world always finds surprising ways to adjust to seemingly intractable economic challenges. Not long ago analysts were fretting about “peak oil” – and how the world would be able to cope with an oil price of over $200 a barrel. Innovations in exploitation of shale gas, solar and wind energy has seen off that threat. So where to for oil now? Sanlam’s Olof Bergh reminds us that although the oil price has dropped sharply in the past few months, it remains at historically high levels in real terms. And oil’s inability to rise on geopolitical tensions tells a story of its own. – AH
ALEC HOGG: Geopolitical risks that include ISIS, Gaza, Ukraine, and Syria dominate our headlines. What impact are these events having on global markets and where can you find value in this turbulent world we inhabit today? Joining us now from Cape Town to answer these questions is Olof Bergh. Olof, I guess if the Middle East didn’t have so much oil, there would be so much attention paid to what’s going on there. I guess, just adding onto that, the problem is that the Americans are becoming less and less reliant on oil imports, are paying a little less attention and we’ve seen the oil price come down. The whole equation could change.
OLOF BERGH: Yes Alec, that’s correct. Firstly, just from the Middle East: it is in terms of global GDP – not a big contributor to the overall picture. The 17 countries, including big countries like Turkey, Egypt, the UAE, and even Qatar overall contributes about five percent of the overall world’s GDP. As a GDP contributor, economic upheaval, or disruption in that particular geography, shouldn’t really affect or disrupt the global GDP growth perspective. It is a big exporter of oil. OPEC, as a whole, exports between 30 percent and 40 percent of the world’s oil and most of OPEC’s oil comes from the Middle East, so it is incredibly important from an oil export perspective. In the past, oil itself has had big impacts on global economies and global market. Whenever there’s geopolitical disruptions, risk, or upheavals in the Middle East, it often has a knock-on effect on the oil price and subsequently, on economies and the consequence of that is often, weaker markets because of the link between economic growth and long-term market performance.
ALEC HOGG: One wonders what the oil price would be today if you didn’t have all of that turbulence going on in the Middle East, given the way the price has fallen over the last couple of months.
OLOF BERGH: Sure. Isn’t it remarkable that even with the economic upheaval (or what they call the geopolitical tension) in the Middle East with ISIS being particularly prevalent and disruptive in Syria and Iraq, that the oil price has actually come down from the lower hundreds to current levels of below 90? That certainly has surprised us. We’ve been busy with a client presentation where the theme was the geopolitical risk in the Middle East and the effect thereof on the global oil price, and our key takeaway was that we thought the geopolitical risks weren’t a major concern and that they wouldn’t result in oil price spikes as we’ve historically seen. Again, our thesis there was that it always is dependent on supply and demand. The supply and demand game has change somewhat in that America has become a lot more energy-independent through the shale gas revolution. In so doing, the supply of alternatives has increased. What has brought on this revolution in international energy markets? There, our primary thinking is that the oil price is very high. It’s been high for some time and that’s been encouraging – the development of alternatives – as we’re seeing in the Middle East and Europe, with alternative energies increasingly coming to the fore and contributing to the overall picture, more than it has ever done in the past. We’ve been surprised with the decrease.
ALEC HOGG: You have to start worrying about the future oil price in an African context. We’ll get there in a moment, but America’s not the only people who have shale. In South Africa, we have about half of what the Americans have and we’re only number eight in the world. There are other shale gas deposits everywhere else, including very big ones in China. Africa’s sitting on 60 percent of its exports being generated by the exports of oil, is very vulnerable in this respect.
OLOF BERGH: Alec, broadly speaking, I think you’re right. Africa is reliant on oil exports. South Africa is independent geography. Outside of Africa is much less reliant on oil exports. We would be greatly benefitted by a weakening Dollar oil price/Rand oil price. If and when we develop our shale assets, we think that the economic benefits for South Africa, because of the cheaper energy source, would offset the potential negative impacts of a decreasing growth outside South Africa, due to a declining oil price and the impact on those geographies, which are oil exporters.
ALEC HOGG: Olof, just to close off with, the S&P was down last night by one-and-two-thirds percent. That brings its decline in the last little while to seven percent already. They only need three percent to get a fully-fledged bear market. Do you think it’s going to get there?
OLOF BERGH: Gee, that’s a tough question, Alec. Our short answer is that we still think that risks assets offer the best medium to longer-term prospective returns. We believe that the monetary authorities in the developed world will keep their interest rates lower for longer because we think that their economies are generally fragile. We know that the U.S. has shown some signs of increased growth in the last couple of quarters. Nevertheless, as a collective, we believe that the economies are fragile and not able to withstand rapid increases in interest rates. As interest rates are so low, asset classes (or assets themselves) justify higher valuations. Many economic commentators and asset managers have commented that the valuations of traditional asset classes are high. We think they’ll remain high for some time, given that interest rates are so low, resulting in all fixed-income assets delivering very low returns and in so doing, justifying other risk assets.
Whilst are not surprised by the pullback, given the very strong performance over the last three years, we think it’s time to add to risk assets like equities. Investors who do so and take that brave stance will be rewarded in the medium-term.
ALEC HOGG: Somewhat of a contra-cyclical view, but one that looks through the turbulence of the moment. Thanks to Olof Bergh who is an Analyst at Sanlam Private Investments.
17 Comments on "The cure for a high oil price – is a high oil price. But where to next?"
bobinget on Tue, 14th Oct 2014 4:11 pm
Swiped from another energy board:
So who is protecting the price of oil or running the price down as in this case , doesn’t seem to be the Saudi’s. Maybe, just maybe the price which has been fluctuating between $77 and $110 is about right given supply and demand. Nobody should be fooled that all that shale oil is overwhelming demand, it isn’t , both have been growing in lockstep this past few years. IEA today says demand will be 93.5 mill BPD next year , in 2012 it was 89 mill BPD, they are expecting supply to be 93.8 mil BPD next year. Not a lot of wiggle room in those two as they just about meet up, sentiment is probably greater factor in price in the short run as the paper chase dictates spot.
The Saudi Oil Enigma
by Reuters
|
John Kemp
|
Tuesday, October 14, 2014
LONDON, Oct 14 (Reuters) – “I cannot forecast to you the action of Russia. It is a riddle wrapped in a mystery inside an enigma,” Winston Churchill told his listeners in a radio broadcast in October 1939.
Much the same can be said about Saudi Arabia – one of the most compulsively secretive countries in the world at the start of the 21st century.
Almost nothing is known about how the kingdom’s rulers reach decisions on political and economic reform, foreign policy and oil market strategy (or indeed about anything else).
Outsiders are strongly discouraged from enquiring into matters of long-term policy and how decisions are made.
The kingdom’s rulers have a communications strategy, reaching out privately to friendly journalists, analysts and other opinion formers.
But for the most part it is deployed to shut down discussion and speculation they consider unhelpful rather than to convey or explain the context for long-term policy and strategy decisions.
In almost 20 years of writing about oil markets and the Middle East I have not come across anyone who could consistently offer a deep insight into the government’s policymaking.
Myths About Oil PolicyIn the absence of hard information, plenty of theories have grown up around Saudi Arabia’s strategy in the oil market, most of which contain some truth but are often incomplete or misleading.
The first myth is that there is a “grand bargain” in which Saudi Arabia provides a secure, reliable and affordable oil supply in exchange for a U.S. security guarantee.
This myth conveys an essential truth but does not help much in understanding the complex relationship between the world’s largest oil exporter and its greatest military power.
Saudi Arabia and the United States have enjoyed a uniquely close relationship ever since the kingdom chose to sign a concession agreement with the Standard Oil Company of California in 1933 and King Abd al-Aziz met President Franklin Roosevelt on board on the U.S.S. Quincy in the Suez Canal in 1945 (“King Faisal of Saudi Arabia: personality, faith and times” 2012).
U.S. petroleum engineers and geologists developed the kingdom’s oil industry throughout the 1940s, 1950s and 1960s. The United States has had a discreet military presence since 1946 and the two countries were close allies throughout the Cold War in opposing the spread of communist influence through the Middle East.
More recently, the two countries found common cause opposing Iran’s revolutionary government following the overthrow of the shah and were allied throughout the Iran-Iraq war and both the first and second Gulf Wars.
But the overall closeness of the relationship did not prevent them ending up on opposite sides during the Six Day and Yom Kippur wars, or the Saudis imposing an oil embargo on the United States in 1973, and the kingdom has pursued a contradictory line to the United States following the Arab revolutions that erupted in 2011 (“The caravan goes on: how Aramco and Saudi Arabia grew up together” 2013).
More generally, the close military and strategic links have not translated into an agreement on oil prices and production: it is emphatically not the case that pricing policy is the result of discreet negotiations between Washington and Riyadh. To their chagrin, a succession of U.S. presidents has discovered the limits of their influence over the Saudis when it comes to oil prices and production.
Questions About CapacityDiplomats and even some economists often assert Saudi Arabia upholds its part of the bargain, in part, by holding spare production capacity with which to meet disruptions in oil supplies from other producers. Only Saudi Arabia has the financial capability and the foresight to invest in spare capacity to help stabilise global oil prices.
The problem is that there is almost no evidence to support this claim. Since the kingdom’s exports peaked at almost 10 million barrels per day in 1980, most of the spare capacity has been in the form of reduced output from older fields as new ones have come onstream.
Most spare capacity appears to have been the result of past errors in forecasting oil demand and efforts to increase the amount of oil eventually recovered by lowering production rates from ageing fields like Ghawar to sustain reservoir energy and prevent water inundating the wells while bringing on new fields like Manifa.
Nearly all of the kingdom’s reported spare capacity has followed a downturn in prices and demand, notably during the 1980s and 1990s, which suggests that capacity is the result of planning errors rather than deliberate policy.
There is no evidence that Saudi Arabia has deliberately developed large new fields simply to allow them to left idle “just in case” there is a supply interruption elsewhere in the world.
Reluctant Swing ProducerSaudi Arabia is often described as the oil market’s “swing producer”, a role which senior policymakers are said to dislike after the trauma of seeing exports shrivel from almost 10 million barrels per day in 1980 to less than 3 million in 1985.
But if Saudi Arabia once played that role, it does so now to a much smaller extent, if at all.
According to the BP Statistical Review of World Energy, Saudi Arabia’s share of world oil production has been remarkably stable at around 12-13 percent and at about 30-35 percent of OPEC output since the mid-1990s (http://link.reuters.com/sam23w).
Some observers have suggested Saudi Arabia has stepped in to fill the supply gap left by sanctions on Iran and the turmoil which has cut output from Libya, Sudan and Syria.
But Saudi exports have remained broadly stable since 2011, and are essentially unchanged since 2003-4. U.S. shale oil, not Saudi Arabia, has filled the supply gap (http://link.reuters.com/vam23w).
The kingdom is sometimes likened to a central bank managing the global oil market, adding or withdrawing supplies to control prices. But that vastly overstates the degree of influence, let alone control, which the kingdom can really exercise over the market.
In the short term, the Saudis, acting in concert with close allies Kuwait and the United Arab Emirates or OPEC as a whole, may exercise a mild restraining influence on price movements.
But there is no evidence that Saudi Arabia, or OPEC, has had a decisive impact on medium and long-term price trends. The big price movements of the last 30 years have all originated outside the cartel (“OPEC: 25 years of prices and politics” 1988).
Limits of OPEC’S InfluenceOPEC members accounted for just over 50 percent of world oil production in 1973. In recent years that share has been as low as 40 percent.
The big movements in prices have been the result of production trends in countries outside OPEC, whether the development of Alaskan, Russian, Chinese and North Sea oil in the late 1970s and through the 1980s, or the shale revolution in the United States since 2008.
“Unless it controlled the world’s entire production, OPEC could not possibly maintain the new status quo forever,” one historian wrote of the cartel’s difficulties in the mid-1980s (“A century in oil: the Shell transport and trading company” 1997).
OPEC has never come anywhere near that degree of control since the mid-1970s. It can slow the rate at which prices move by adding or removing some barrels from the market, but there is no evidence that Saudi Arabia or OPEC can choose the level of prices or guide the market to a particular level and keep it there.
The Saudis themselves seem aware of their limitations. In the last two decades, pricing and production policy appear to have been geared to maintaining market share rather than grander strategic aims which are the stuff of international relations specialists (such as bankrupting Iran and Russia, stifling the U.S. shale revolution, or strengthening ties with the United States).
Realism About Lower PricesThe recent drop in Brent oil prices below $100 per barrel has encouraged much speculation about whether Saudi Arabia would respond by cutting production, either on its own or as part of a wider package of agreed reductions within OPEC.
Saudi officials have tried to squash the rumours in a series of meetings with customers and market analysts over the past week, Reuters reported on Monday (“Privately, Saudis tell oil market: get used to lower prices” Oct 13).
There is a widespread view Saudi Arabia might permit prices to trade below $100 per barrel, and perhaps even below $90 or $80, for an extended period to curb the amount of shale drilling in the United States as well as investment in high cost production outside OPEC such as deepwater off the coasts of Africa and Latin America.
In practice, the kingdom has little choice but to follow this course. Oil prices above $100 appear unsustainable because they incentivise too much growth in shale production as well as high-cost offshore drilling, and because they are encouraging too much conservation, efficiency and substitution.
If Saudi Arabia, with or without OPEC support, cut its own output in a bid to keep prices high, it would be buying a temporary reprieve on prices but only at the expense of market share. With the shale boom continuing, and demand stagnant, any reprieve could only be temporary. In a few months or a year, Saudi Arabia and OPECagain, and again.
Ultimately, Saudi Arabia and OPEC would end up with a combination of lower market share and lower prices, the worst of all outcomes, just as they did in 1985. The best strategy for the Saudis, indeed the only effective one, is to allow prices to fall until the market rebalances naturally, with slower growth in shale and bigger increases in demand.
Allowing prices to fall is not a matter of choice but necessity. If the Saudis, and OPEC, choose to trim their output slightly in the months ahead, it would be an attempt to smooth the process of adjustment, not arrest it.
Northwest Resident on Tue, 14th Oct 2014 4:34 pm
“Nobody should be fooled that all that shale oil is overwhelming demand, it isn’t.”
Excellent point, IMO.
A rash of new articles combined with yesterday’s articles and many previous articles explain exactly how much a Ponzi scheme the shale oil extraction business is. I have read more than one article recently that speculates the QE easy money and other investment fortunes that shale oil extraction absolutely needs to continue operations is maxed out, which in turn means that a lot of shale oil companies and perhaps even a majority are on the very brink of going belly up anyway. Shale oil extraction has played its role, but that role was never going to be long term or a significant contributor to global energy anyway. Why would the Saudi’s feel a need to do anything substantial to counter American shale oil production, knowing how limited the competition from shale oil actually is?
In regards to Saudi Arabia’s unstated goals, I like the speculation in an article posted a couple days ago at Automatic Earth:
“This is not a purely economic issue, it’s political. The US has a large voice in it in the director’s role, and the House of Saud plays the part of the protagonist. This is a major development in world politics, it’s not just some financial market-driven move.
World power relations are being hugely changed on the fly as we’re all watching and trying to figure what to make of all this. One thing’s for sure: the world will never be the same.
Why it happens now is a great question, which is impossible to answer. And that’s fine: it’s enough to try and understand exactly what is going on, let alone why.
But I bet you it has to do with the US and Europe realizing they can no longer keep pretending their economies are growing or recovering or doing fine.
We’ve landed in the next phase of what arguably started in 2007, but what you could place back many years before that, an economic system based on the fantasy that is debt driven growth, inflated by a factor of a trillion, give or take a few zeros.
That system is in the process of dying. And the people who have tried to make you believe, and succeeded, that it would all be fine in the end, are now jockeying for position in the aftermath of the demise of a world built on debt.”
ghung on Tue, 14th Oct 2014 6:47 pm
Bob: “Ultimately, Saudi Arabia and OPEC would end up with a combination of lower market share and lower prices, the worst of all outcomes, just as they did in 1985.”
I would add that KSA’s population has more than doubled since 1985; even more oil-reliant demographics. When it comes to wiggle room, I would posit that they are in their own ‘triangle of doom’.
Perk Earl on Tue, 14th Oct 2014 8:36 pm
“We’ve landed in the next phase of what arguably started in 2007”
I was just thinking about that today. Definitely a distinctly new phase, and part of what is interesting about that is I don’t recall historically so much concern about oil prices going down before. But, we are now pinched into a small range in which price too high or too low causes negative repercussions.
“But I bet you it has to do with the US and Europe realizing they can no longer keep pretending their economies are growing or recovering or doing fine.”
NWR, is your thinking that those two concluded high oil prices were pushing both towards the abyss, so they made some ‘moves’ to squeeze the price down to buy some more time?
I can see that, but on the other hand it has the unfortunate knock-on effect of possibly making tight oil unprofitable.
Any way it gets cut, we’re in a pickle.
Makati1 on Tue, 14th Oct 2014 9:19 pm
Time to pull up that recliner, pop the tab on your favorite beverage, make some popcorn and watch the greatest show on earth, the collapse of civilization as we have known it.
Ever watch a huge flock of birds? They move together like they are joined. They seem to all decide to land at once and withing a minute, thousands can be on the ground.
This play now has 7,100,000,000+ actors and the last scenes are not yet written. Which black swan will land first? Or will all of them decide to land at once? Better than any movie or TV series…
Northwest Resident on Tue, 14th Oct 2014 9:59 pm
Perk Earl — Honestly, I have no idea what is going on with the Saudi’s not only cutting their price, but announcing to the world that it is going to stay that way for a while. Something really big is happening here, I think, but there’s no way to know what the real reason is behind it. I kind of think that the shale oil “boom” is about to go bust in a big way, the powers that be want an excuse to deflect blame, and the Saudi’s cutting their oil prices is a great scapegoat. But that’s just pure speculation. It does seem likely that this announcement by SA is a harbinger of really big changes yet to come — and seems to be a big step toward that collapse we all know is coming.
Perk Earl on Tue, 14th Oct 2014 11:01 pm
There was some guy (didn’t make a note of the name) on PBS tonight who was saying (let’s call this scenario 1) it was the Saudi’s that decided to push the price much lower and estimates it will go down another 10 bucks, to shut down US fracking & Canadian tar sands with the message that they (SA with OPEC) can bring oil to market cheaper than they can, because they have had enough of their exports being reduced to north America, AND because they want to have a negative effect on Iran & Russia for what is happening in Syria.
But he did not mention the other reason I’ve read; (scenario 2) because of the rising dollar vs. other currencies, recession in the EU and investors fear of the economic impact from rising interest rates in early 05 from selling presto magic out of thin air created QE bonds (from that program slated to end later this month).
I’ve also heard a 3rd scenario; market manipulation by the US.
My thinking is the price has come down so far, so quickly it is dropping for multiple reasons in part or all of scenario 1 & 2.
If the plan is to drop price enough to shut tar sands and tight oil, the big matso-ball question out there is how high would price need to go later for those operations to kick start again.
Lots of interesting things going on here, but certainly dropping price has to raise a big concern for future oil supply.
GregT on Tue, 14th Oct 2014 11:53 pm
“That system is in the process of dying. And the people who have tried to make you believe, and succeeded, that it would all be fine in the end, are now jockeying for position in the aftermath of the demise of a world built on debt”
This is exactly what is going on IMO. There is a global power shift occurring right now. TPTB that have been in control for the last 6 decades are not about to let that happen. They know that the ‘gig’ is almost up. Russia and China are a threat to their ‘hegemony’. They will do anything in their power to stop that from happening. Including crashing global economies, or war.
Northwest Resident on Wed, 15th Oct 2014 12:28 am
I may have mentioned on another post my belief that the shale oil “boom” was never an energy play, but an economic play. It was never going to last. A Ponzi scheme from the very beginning and all the way to the end, big money moving around, top notch jobs and salaries and lots of economic activity — but losing money every step of the way, accumulating untold debt, lying and obfuscating to cover it up. But hey, it kept the economy churning for a while, and I am certain that was the intended purpose.
It is hard for me to see this move by SA as anything other than the beginning of the very end for the shale extraction industry. It’s a knife in the back. I also do not believe that SA would have made this move without the full support and endorsement of certain financial and political powers in America. Which leads me to speculate that TPTB have decided that now is the time to put an end to fracking and all the other high-cost oil production, and this is how they’re going to go about doing it.
It does look like we’re moving into a new phase. Maybe in retrospect we’ll look at this as one of the big steps down, maybe not. Sure seems like it is to me.
When the world realizes that fracking was a hoax and that there will be no further increases in oil production, that we are undeniably on the back side of peak oil and sliding down with no hope of picking it back up, the psychological impact will be enormous.
Whether this particular event leads to that is still not decided, but it at the very least gives us a feel for what that final recognition that we are past peak oil will feel like, and a taste of the uncertain future we’ll all be facing.
Northwest Resident on Wed, 15th Oct 2014 1:17 am
If The Oil Plunge Continues, “Now May Be A Time To Panic” For US Shale Companies
Plant, you’re going to love this article. Read the next line:
“It would truly be the crowning achievement of Obama’s career if, amazingly, he manages to bankrupt the US shale “miracle” next.”
You see, the truth is, it is all Obama’s fault. His totally inept attempt to attack Russia financially by enlisting SA to lower their price will result in fracking companies going belly up. How could Obama and his advisors possibly have been so stupid as to not consider that possibility?
The true believers are going to suck it up.
This article looks to me to be one of those underhanded pieces that a PR department would put out to mold opinion. Unproven speculations are asserted as fact, and subsequent arguments built on that base. This article makes me believe that their are busy little elves hard at work in some basement PR office on a mission to prep the masses mentally for the coming demise of fracking, and they want to deflect blame from the parties actually responsible for the fiasco.
ht tp://www.zerohedge.com/news/2014-10-14/if-oil-plunge-continues-now-may-be-time-panic-us-shale-companies
Davy on Wed, 15th Oct 2014 6:20 am
I have to echo Perk here with his thoughts above. I think it is hubris to think anyone at any level can control oil prices. Sure you can take actions to influence oil but these influences are within a complex, global, and interconnected system with consequences and unintended consequences. There are so many players that can influence this market with no one player being in charge in a sense of steering. The economy has a massive momentum and can’t just be steered like a ship. I find it simplistic and overly generous to give TPTB, and or KSA and Obama much benefit for this. If it is Russia they want to hurt that policy could boomerang. If Russia can survive this they surely could have higher oil prices in the future showing a longer term benefit. The economy may already be in a bear market of demand destruction reducing supply as part of the BAU end game. Either way when we leave the goldilocks range we see economic tensions in a global economy brittle and weak. The global economy is not healthy. If it were healthy there would not be financial repression of markets and debt costs. There would not be massive injections of phantom debt just to maintain liquidity. There is little relative productivity coming out of these debt injections. They are in fact propping up the system at the top through wealth transfer.
GregT on Wed, 15th Oct 2014 8:23 am
The US and Britain have been vetoed by Russia and China four times in their attempt to overthrow Assad in Syria. They have supported the FSA, a radical Islamic fundamentalist group hell bent on Sharia law. It is reported that 160,000 Syrians have been killed so far in this conflict. Assad may be no saint, but neither is the regime in charge of Saudi Arabia. Why do they continue to ignore the atrocities of one regime, while waging a proxy war against the other, in support of the very ‘terrorists’ that the war on terror is supposedly being fought against?
This is nothing more than a plan of continued destabilization of the ME. Iran is the ultimate target for destabilization.
““We simply cannot accept a document under Chapter 7, one which would open the path for pressure of sanctions and further to external military involvement in Syrian domestic affairs,” the Russian ambassador, Vitaly I. Churkin, told the Council in explaining the Russian veto.
Mr. Churkin had his own reply to Western critics of Russia’s position. What they really want, he told reporters outside the Council chambers, is Mr. Assad’s downfall because that would severely weaken the influence of Iran, Syria’s only ally in the region.”
http://www.nytimes.com/2012/07/20/world/middleeast/russia-and-china-veto-un-sanctions-against-syria.html
Mike999 on Wed, 15th Oct 2014 11:57 am
1) Buy a Hybrid already, they’ve been on the market for more then 10 YEARS. Or, go Directly to an EV.
2) Double the insulation in your house.
3) Convert to a High Efficiency Oil Boiler / Furnace, the highest efficiency you can afford, because here is where you will save the Most Money.
4) Get a Hybrid Hot Water Heater, and during the summer you can suck the heat out of your house and put it into your hot water tank.
This isn’t magic.
They have no Plan B. You need to MAKE them have a Plan B.
Davy on Wed, 15th Oct 2014 12:55 pm
Mike, I am all for what you are preachin but don’t fool yourself into thinking that is going to make much of a difference.
GregT on Wed, 15th Oct 2014 5:02 pm
1) Buy an arable plot of land far away from densely populated areas
2) Learn how to grow your own food
3) Buy an efficient wood burning stove
4) Install a passive solar hot water system
This isn’t magic.
They have no plan B. We are not going to MAKE them have a plan B.
You need to have your own plan B. THEY are not going to take care of us. They will be too busy taking care of themselves.
ghung on Wed, 15th Oct 2014 5:43 pm
Whoever ‘they’ are, stop worrying about what they’ll do. Whatever your plan B is, you need to start living it. Forced transition is a lot harder than a graduated, voluntary one, and it takes time to get integrated into a new social structure; new levels of consumption.
Davy on Wed, 15th Oct 2014 7:49 pm
G-man & Greg, I am echoing your thoughts. My biggest experience with prepping is get started with anything “NOW”. Time is of the essence and time cannot be bought or replaced. You will find that once you start the whole process will grow on you. Prepping is actually a fascinating field to get into and it has a purpose. It is multifaceted and eclectic. It is a higher order activity to engage in. Survival and protection of the family unit, tribe and community has always been in our human tradition. I feel it will be an area where we will find the heroic. The heroic has been lost in modern society. It has been dumbed down and butchered by Hollywood and advertising. We as humans are so much more than what we see in the modern society meme. When SHTF the best and worst will come out in us and society. Get prepared and trained to make positive correct decisions. This may be a matter of life and death.