2010: The Year For Making Contact

Another year. Another decade. Older, wiser and on an unchanged trajectory. Though it may not feel like it, 2010 puts us 5 years beyond the annual peak in world oil production. 2005 was also the inaugural year of this website [TOD] – devoted generally to exploring the details, constraints and opportunities accompanying energy depletion. Just behind oil’s apex was credit’s peak, and as energy and debt have been the two primary drivers of economic growth, GDP won’t be far behind in declining from all time highs, though it has been temporarily supported by sovereign debt infusions masking public/private credit decline. Though I suspect 2010 will be a watershed year for many in dealing with reality, a new year also allows for some self-reflection, and perhaps a reassessment of purpose and tactics, both as individuals and as a culture. The below essay is a short summary on where we are, what brought us here, and some resolutions for the coming year.
Energy has been the primary driver of economic growth – take away energy and technology and productivity melt away. Fossil fuels allow us to run myriad processes at 2-3 cents per kWh input (w/oil at $75) whereas human labor globally costs over $10 per kWh (and considerably higher in USA). Without this immense stable labor subsidy everything changes, from our international trade system to our local food, water, heat and medicine delivery systems and most of the in between components.

Everything did in fact start to change in the 1970s, as US energy per capita consumption peaked, real wages peaked, US oil production peaked, and we started to use debt (spatial and temporal reallocation of real wealth) to increasingly supplement energy’s role in current growth. Urged on by socially acceptable excess consumption via advertising, borrowing from the future also became socially acceptable, and the linkages between real capital (natural, built, human and social) and financial markers for this real wealth became blurred. I should clarify: I think we have plenty of energy, resources, technology and materials for this many or more humans for a generation or so to come, just not at current levels of consumption, aspiration, and the perceived extant (digital) wealth.

Given this backdrop and without further preamble, let me share my own thinking about 2010 in the form of my personal resolutions given my perspective on the world, and society. You may notice a general theme throughout the list.

The Oil Drum