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Drumbeat: May 18, 2011

Wed, 18 May 2011 08:39:03 -0700

The Oil Drum - By Leanan - May. 18 (Opinion) - Peak Oil Has Shattered The North American Housing Sector Of the many asset classes to be victimized by the end of cheap energy, residential real estate is perhaps the most vulnerable. A call option on future wage growth, and, leveraged to our liquid-fuel based transport system, housing in North America is currently making its way back to the stable, but barely appreciating asset it once was. However, having started this journey only recently there is still a long way to go. A long way in price that is, for housing to fall. The housing crash is currently in the midst of its next leg down. In similar fashion to those who missed the initial crash, the past year has seen a number of observers calling for a bottom. One of my favorite calls came last year from Karl Case’s in an editorial in the Wall Street Journal. In A Dream House for All, Mr Case made the following argument: because house prices had fallen so much already, housing was now more affordable. But of course that wasn’t true at all. Not then, and not now. Oil Rises From Three-Month Low as Cushing, Fuel Supplies Fall Oil rose from a three-month low after an industry-funded report showed U.S. gasoline stockpiles dropped and crude inventories at the delivery point for New York futures declined the most since June. Prices gained as much as 1.1 percent today. Gasoline supplies last week fell 676,000 barrels, the American Petroleum Institute said. An Energy Department report today will show they increased 950,000 barrels, according to a Bloomberg News survey. Crude inventories at Cushing, Oklahoma, the delivery point for the benchmark West Texas Intermediate grade, slid 1.5 million barrels, the API said. Jim Rogers says Oil Price to Rise “beyond anyone’s expectations” Speaking with the BBC, Tuesday, Jim Rogers said he believes oil prices will rise “beyond anyone’s expectations” in coming years. The billionaire investor, author and co-founder of the legendary Quantum Fund also said the U.S. economy will “slow down” as a result of headwinds brought on from higher oil prices. In firm responses to the host of BBC Hardtalk Stephen Sackur’s contentious questions, the 68-year-old Rogers reminded viewers of last year’s published IEA data, which strongly suggest that world oil production appears to have peaked in 2006—though the agency’s 2010 annual report didn’t make a definitive statement along the lines of the ‘peak oil’ theses. JPMorgan Says Crude Oil, Gold to Drive Rebound in Commodities on Shortages Crude oil and gold will lead a rally in commodities as production fails to keep pace with demand, said Ray Eyles, chief executive officer of JPMorgan Chase & Co. (JPM)’s commodity business in Asia. Oil supply will trail consumption in the second half as the Organization of Petroleum Exporting Countries and other producers won’t increase output fast enough, the bank said in a report May 6. Rabobank Groep expects shortages in corn and cotton this year while Barclays Capital is predicting deficits in copper, nickel, tin, lead and platinum. Jeff Rubin: Will export restrictions on energy echo those on food? Higher prices are supposed to encourage more world supply. It’s standard textbook economics. But what happens when, instead of export-oriented global firms, it’s governments that control supply. They may not respond to price signals the same way as profit-maximizing companies. In fact, they may respond in the exact opposite way. Instead of soaring food and energy prices encouraging food and energy producers to export more, they may export less and divert more of their output to domestic markets. The reason is simple: to keep domestic prices from matching soaring world prices. 7 in 10 Americans say high gas prices hurt As gas prices hover near $4 a gallon, nearly seven in 10 Americans say the high cost of fuel is causing financial hardship for their families, a new USA TODAY/Gallup Poll finds. More than half say they have made major changes to compensate for the higher prices, ranging from shorter trips to cutting back on vacation travel. For 21%, the impact is so dramatic they say their standard of living is jeopardized. Bring on the gas hikes “Peak oil’’ theorists argue that someday soon — maybe even now — we’re going to run out of new oil supplies and prices will rise permanently. Maybe. But today’s rise seems more ephemeral, a consequence of the Arab Spring, the newly reviving economy, and speculation by oil traders. Indeed, a week ago per-barrel prices were almost $105. Now they are down in the high $90s. Gas, I’m betting, will soon be inexpensive again. High gas prices depress Ohio Turnpike car traffic YOUNGSTOWN, Ohio (AP) - The Ohio Turnpike says fewer cars used the toll road during the first month of its new, higher speed limit. A spokeswoman says high gasoline prices have hurt passenger vehicle traffic. The turnpike upped its top speed from 65 mph to 70 mph in April, partly to lure more traffic onto the highway and off smaller, parallel roadways. Russia's Vankor to ship 13 mln t crude in 2011 PURPE, Russia (Reuter) - Rosneft's Vankor oil field, a key source of new output for Russia as it struggles to sustain production, will deliver 13 million tonnes into the pipeline system, pipeline operator Transneft said on Wednesday. China forced to ration electricity Chinese provinces are rationing electricity as soaring coal prices squeeze power generation companies, underlining the challenges facing the world’s largest energy consumer as global fuel prices rise. While China experiences power cuts each summer, some provinces have started rationing earlier than usual this year. In recent days Hunan, Zhejiang, Jiangsu and Anhui provinces have implemented cuts, alongside Shanghai and Chongqing. Iran president to chair next OPEC meeting TEHRAN, Iran (AP) -- Iranian President Mahmoud Ahmadinejad will head the upcoming OPEC meeting in Vienna in his capacity as the country's caretaker oil minister, state media reported Wednesday. Ahmadinejad dismissed Oil Minister Masoud Mirkazemi last week as part of a Cabinet restructuring plan under which the government is required to merge eight ministries into four. The move puts him temporarily at the helm of the country's most vital sector. Iran also holds the Organization of the Petroleum Exporting Countries' rotating presidency this year. Libya rebels eye OPEC meeting as oil minister 'defects' Rebels fighting to topple strongman Moammar Gaddafi's regime by contrast were growing in confidence and laid claim on Wednesday to being able to represent Libya at the June 8 meeting of oil cartel OPEC in Vienna. Tunisian source: Libyan oil minister defects TRIPOLI, Libya - Libya's oil minister defected and fled to Tunisia, a Tunisian security official said Tuesday, one of the highest profile figures to abandon Moammar Gadhafi's government. Shukri Ghanem, the head of the National Oil Co. and Libya's oil minister, crossed into Tunisia by road on Monday and defected, the Tunisian official said. The official, based in the region around the Ras Jdir border crossing, spoke on condition of anonymity because he was not authorized to speak to the media. Rebels accuse Gadhafi fighters of shelling mountains in west, say people lack food, medicine TRIPOLI, Libya — Forces loyal to Libyan leader Moammar Gadhafi shelled villages and towns to try to take control of the high ground in a western mountain range as NATO widened its campaign of bombings and leafletting to persuade government troops to stop fighting. Frustrated U.S. warns Pakistan of cuts in aid Washington — Congressional Republicans and Democrats warned Pakistan on Tuesday that billions of dollars in American aid are at stake if Islamabad doesn't step up its efforts against terrorists, a clear sign of the growing exasperation after the U.S. takedown of Osama bin Laden deep inside Pakistan. Pakistani troops, NATO helicopters engage in firefight ISLAMABAD, PAKISTAN — Pakistani paramilitary troops shot at NATO helicopters that crossed from Afghanistan into Pakistan early Tuesday, triggering a firefight that left two soldiers wounded, military officials here said. Syrian government denies mass grave found near Daraa (CNN) -- The Syrian government is denying claims that a mass grave was found near the embattled city of Daraa, a focal point in the nationwide wave of anti-government rage. The country's Interior Ministry said the news was untrue and is part of a "campaign of incitement and slandering," Syrian state TV reported Tuesday. Interior chief asks for shorter drilling time WASHINGTON – The Obama administration is asking Congress to shorten the time energy companies get to start drilling on public lands they lease, as part of the government's strategy to boost oil and gas production. US Senate blocks bill targeting oil firm subsidies WASHINGTON (AFP) – The US Senate defeated a bill taking aim at some $2 billion in annual subsidies to some of the world's largest and most profitable oil companies amid deep voter anger at high gasoline prices. Lawmakers voted 52-48 to end debate on the measure, falling short of the 60 required and effectively killing a proposal that the White House's Democratic allies had portrayed as a belt-tightening step in cash-strapped Washington. Is Obama’s call for more drilling bad messaging or cynical policy? One thing we know for certain -- more domestic drilling starting now will have exactly the same impact on prices that the increased domestic drilling in the last two years had. Zilch. BP Defeat Puts Arctic Oil Trove Back in Play The collapse of BP Plc (BP/)’s alliance with Russia’s state-run oil company brings one of the world’s largest untapped drilling opportunities back onto the market. Medvedev raps Sechin over BP-Rosneft deal failure SKOLKOVO, Russia (Reuters) - Russian President Dmitry Medvedev has rapped Premier Vladimir Putin's top deal maker for lapses that contributed to the collapse of a major oil deal between Rosneft and BP. Rosneft receives new proposals from BP MOSCOW (AFP) – Russia's state-run oil firm Rosneft said on Wednesday it had received new cooperation proposals from BP after their joint Arctic exploration agreement collapsed this week. The Russian giant did not give details nor make clear whether they included a potential new Arctic agreement covering joint exploration of Russia's northern reserves. Russia's Medvedev says Ukraine gas price may change SKOLKOVO, Russia (Reuters) - Russia's President Dmitry Medvedev said on Wednesday the gas price formula for its neighbour Ukraine could be subject to change in future. Ukraine's government has called the current price agreement, set in January 2009 when the government of Yulia Tymoshenko was in power, "unfairly high". It hopes new talks will lead to lower gas prices that would benefit Ukraine's economy. PetroChina to expand overseas, eyes progress in Sino-Russian pipeline BEIJING (Xinhua) -- Senior executives of PetroChina Co., Ltd., said Wednesday that the company will continue to seek opportunity for overseas merger and acquisition (M&A) and further expand its Latin American presence. In an interview with Xinhua at PetroChina's annual shareholders' meeting, Chairman Jiang Jiemin said current high oil and gas prices don't make it an ideal time for overseas M&A, but the company won't miss a profitable chance when it comes along. Pennsylvania fines Chesapeake Energy $1.1 million HARRISBURG, Pa. - Pennsylvania has fined Chesapeake Energy Corp. $1.1 million for contaminating well water and causing a tank fire during natural gas drilling operations. The state environmental protection department said Tuesday that the well contamination fine was the largest it ever imposed against companies drilling in the Marcellus shale, energy-rich formations under the Appalachians. Judge at Heart of Landmark Oil Pollution Case Unfazed by Spotlight LAGO AGRIO, Ecuador -- Sitting in a dimly lit office with blue paint peeling off the walls, Judge Nicolas Zambrano is remarkably relaxed for a man responsible for the biggest environmental damage ruling in history. In February, Zambrano ordered Chevron Corp. to pay up to $18 billion for oil pollution in the region around this hard-edged frontier town on the fringe of the Amazon jungle. Sasol Considers Plans to Produce Fuel from Shale Gas, Coal in China Sasol Ltd. (SOL), the world’s largest maker of motor fuels from coal, is open to adding plants to convert coal to fuels in regions of China such as Xinjiang, said John Armstrong, company president for the country. The Johannesburg-based company will also consider projects to turn shale gas into liquid fuels should the nation allow access to such an industry in the future, Armstrong said in an interview in Tianjin today. ID Summit: Warning over oil liability cap MUNICH Re’s controversial plan to pull together a $20bn drilling liability product for the Gulf of Mexico created an unrealistic sense of available capacity among US regulators, and with proposals to lift the oil spill liability cap back on the agenda, oil companies are anxious that the same mistakes are not repeated. According to Robert Stauffer president and chief executive of Bermudian energy industry mutual Oil Insurance Ltd (Oil), US legislators had considered using Munich Re’s aspirational $20bn figure as the basis for setting the new cap, which he said would have left only the largest oil companies able to afford cover. Tepco revises plan for cooling reactors TOKYO — Confronted with worse-than-expected damage at its battered nuclear plant, Tokyo Electric Power Co. on Tuesday revised its strategy for cooling Fukushima Daiichi’s reactors. However, the utility company reaffirmed its goal of stabilizing the facility — and ending the country’s nuclear crisis — within six to nine months. A Worldwide Nuclear Slowdown Continues Aftershocks from Fukushima shake political confidence in nuclear—and provide a boost for rewewables. Why Japan's Shift Away from Nuclear Is Good for Business Seven/Eleven convenience stores in Japan may seem like just another chain of 24/7, overly lit, electricity-burning businesses wasting this island nation's precious energy resources. But in fact, they are among a host of forward-looking companies helping set the pace for change within the nation's energy policy. With over 13,000 locations nationwide, the convenience store chain plans to spend over $123 million to switch to energy efficient LED lighting at about 6000 outlets in Tokyo, and will install solar panels on roofs of 1,000 stores around the country over the next few months. The plan will not only save 125KW a day per store, but also benefit manufacturers of LED lighting and solar cell panels — a win-win for all. Americans ready for vacation, despite high gas prices Many Americans, fed up with being pent up, appear determined to go on vacation this summer — even though they know it's going to cost them more than in recent years. More seniors going hungry Although programs that address senior hunger also are on the rise, Ziliak says the growth hasn't been enough to compete with the growing need. An AARP Public Policy Institute analysis of data released last fall showed that between 2006 and 2008, the percentage of poor and near-poor seniors who were hungry more than doubled, from 4.7% to 10.1%. Six irrational ideas about oil and gas prices debunked It's not pretty when several irrational ideas collide. On May 12, the Senate conducted a hearing to discuss the removal of a $2 billion per year tax break for the top five oil companies. The New York Times called the testimony at the hearing "a big whine for big oil." Eliminating a tax break like this should be a no-brainer, but that idea is blocked by six irrational notions from the right that come together in an explosion of false logic: Beyond Petroleum. Or Not. Can Big Oil figure out the climate-friendly future of energy? Does it actually want to? Can natural gas fuel the U.S.? The United States does not have a decades-long supply of inexpensive, locally sourced natural gas, according to a new report commissioned by the Post Carbon Institute, a nonprofit think tank that examines issues related to the economy, energy and the environment. No silver bullet for energy crisis Mount Carroll, Ill. — The search goes on. Because we are so resistant to the idea of conserving energy, we hope for the silver bullet. Since the disaster in Japan has fueled doubts about the safety of nuclear energy, concerns for powering our future have taken a front seat. Australia: Solar dishonesty Last year I entered into a contract with the NSW Government to feed solar electricity into the state's power grid. It was a contract without deception, one in which both I and the NSW Government knew what was offered and expected. I was to pay to install a solar system at my home and the NSW Government was to pay me 60 cents a kilowatt-hour until the end of the 2016. Late last week the O'Farrell government announced that it was going to renege, that it was going to reduce the payment from 60 cents a kilowatt-hour to 40 cents. The O'Farrell government tries to portray me and the other 120,000 contracted producers of solar power as greedy and selfish by describing its payments to us as windfall profits. Windfall? Unexpected? Accidental? What nonsense! The government knew very well what the scheme was to cost, what it was to pay, what solar producers were to receive, and Barry O'Farrell and his fellows supported the introduction of the scheme in 2009. The government made an offer and I, somewhat late in the day, accepted it. I have met my obligation in the contract by installing the solar system, at a cost to me of $15,000, now Barry O'Farrell and his Coalition government say it won't meet their obligation. Wind resistance Opponents of Horizon Wind Inc.’s wind farm plans have a message for Ontario’s premier and the area’s two MPPs – no Liberals, no turbines. Open house "It’s not something that Western society really has a choice about. You’ve heard the term peak oil I mean there really isn’t any more so the prices of that are going to escalate. We know the problems that it is causing so we have to make a switch," Zwig said. But most questions raised by the over 120 people attending the first open house, in a large tent on the grounds of Blake Hall, were more concerned with location than green energy. Nor’Wester Mountain Escarpment Protection Committee spokesman Mike Payne said the committee came to get answers about the project but none were given despite six Horizon representatives on-site. Group responds to potential NW wind power shutdown PORTLAND, Ore. – Wind power companies facing a springtime shutdown to accommodate a surge of hydropower in the Northwest said Tuesday the region's main power manager has a conflict of interest, using authority over transmission lines to protect its business interests. The claim by the American Wind Energy Association follows the Bonneville Power Administration's announcement last week that it plans to curtail use of wind power because of a surplus of energy from hydroelectric dams. The month in sustainable development Last month was a tough one. As a card-carrying optimist working on the sustainable development agenda, I was struck by how pessimistic the expert community has become about humankind's prospects this century. Do More With Less Or Things Will Get Ugly: Study As it stands, economic growth is largely dependent on resource consumption. As a country grows, so does its use of natural--and limited--high-quality resources like oil, gold, and copper. But this is untenable in the long run, especially as growing countries like India and China model themselves increasingly on American habits of consumption (a car, two cell phones, and 30 pounds of meat for all!). The seemingly impossible solution: separating resource use and environmental impact from economic growth--a process with the unfortunate moniker "decoupling." Our potential can become our reality The city centre attracts visitors and local residents alike as a safe, friendly and culturally vibrant place. A beautification project launched by the city has resulted in the planting of many trees, flower gardens and community vegetable gardens that have added to the character of the neighbourhoods. The once dominant car culture is receding as the impact of peak oil sinks in. The majority of our food is grown locally. Readily accessible and affordable public transit makes it easy to travel around and appreciate the natural beauty and architectural heritage of the area. The streets are people friendly and there are many pedestrian areas throughout the city that limit or are closed to traffic. Weather permitting, cyclists are a common sight on bicycle lanes and trails. As Aired on Discovery's Planet Green, Passion River Films Releases on DVD "Houston We Have A Problem," Documentary About the Future of Energy Featuring interviews with the Chairman of BP Capital, the Executive Director of the Sierra Club, the Former President of Shell Oil, and other top oil companies, "Houston We Have A Problem" seeks the truth about our nation's dependence on foreign oil. Screened at our Nation's Capital and nationwide for Earth Day, and featured on Discovery's Planet Green as part of its Reel Impact series, the documentary is now available on DVD. The Draw of Doomsday: Why People Look Forward to the End Apocalpytic beliefs have been on rise for the past 40 to 50 years, said DiTommaso, who has been researching doomsday believers for an upcoming book, "The Architecture of Apocalypticism." What ties these disparate groups together is a sense that the world's problems are too big to solve, DiTommaso said. "Problems have become so big, with no solutions in sight, that we no longer see ourselves able as human beings to solve these problems," DiTommaso said. "From a biblical point of view, God is going to solve them. From other points of view, there has to be some sort of catastrophe." Stagnant wages, high unemployment slam Wal-Mart US sales CHICAGO — Wal-Mart Stores Inc's U.S. same-store sales have fallen for two straight years, as customers struggle with high unemployment and wages that are not keeping up with rising prices for food and other basics. "Rising gas prices, high unemployment and increasing inflation continue to be the most important issues facing our customers today," Bill Simon, chief executive of Wal-Mart's U.S. stores, said on a recorded message for investors. Blacks' exodus reshapes cities Taylor's decision to live outside Chicago makes him part of a shift tracked by the 2010 Census that surprised many demographers and urban planners: He is among hundreds of thousands of blacks who moved away from cities with long histories as centers of African-American life, including Chicago, Oakland, Washington, New Orleans and Detroit. At the other end of the spectrum, in Maine, is the Lewiston-Auburn area, which saw a 476% increase in its black population from 2000 to 2010. Most of the newcomers are refugees from Somalia, says Phil Nadeau, deputy city administrator in Lewiston. Habitat ReStore outlets growing Habitat for Humanity officials say ReStores are finding success in part because more people are doing home improvement projects themselves to save money, and partly because of a greater concern for the environment. There's also the chic factor associated with thrift stores, which have seen a resurgence in popularity among those who enjoy hunting for unique or eccentric items, Gluth says. Climate Panel Announces Reforms The Intergovernmental Panel on Climate Change, rocked by controversy in recent years, has adopted a series of reforms of its management and governance to increase transparency and improve the quality of its hugely influential climate change reports, the group says. U.K. to Cut CO2 Emissions in Half by Mid-2020s, Most in Industrial World “Our ambition is to effect the transformation of our economy into a new low-carbon model,” Greg Barker, a minister in the energy department, said in an interview last night after Huhne’s statement to Parliament in London. “This will give investors the certainty they need to invest in clean energy and will put Britain at the cutting edge of the new global industrial transformation.” Carbon rule may clip wings of China's aviation sector The European Union has set Jan 1 as the starting date for all flights, incoming and departing from the continent, to meet emission limits or pay penalties for breaking them. The four Chinese airlines - Air China, China Eastern Airlines, China Southern Airlines and HNA Group - that operate flights between China and Europe have been asked to abide by the rule. The airlines have protested strongly, criticizing the EU's emission program as a "unilateral and indirect" mechanism that violates widely accepted principles on fighting climate change. However, experts say China's chances of being exempted from the program are slim. Central China Hit by Drought, as Reservoirs Become ‘Dead Water’ As of Sunday, 4 medium-size reservoirs and 1,388 small reservoirs in Hubei had dropped below the allowable discharge levels for irrigation, the official Xinhua News Agency reported, citing the director of the reservoir management office for the Hubei Provincial Water Resources Department. One-fourth of all small reservoirs had what officials called “dead water” remaining, which could be pumped for use only in an emergency. The drought adds to concerns over the effect that a gargantuan water-diversion project will have on the central provinces of China. The project, called the South-North Water Diversion, is supposed to move water from the Yangtze and its tributaries north to Beijing along a canal, and to Tianjin along an eastern route.

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Fleeing Vesuvius: The psychological roots of resource over-consumption

Wed, 11 May 2011 12:34:12 -0700

The Oil Drum - By Nate Hagens - May. 11 (Opinion) - The essay below is an updated and edited version of a post I wrote here many years ago, I'm Human, I'm American and I'm Addicted to Oil. Richard Douthwaite, Irish economist and activist, (and a fellow at the Post Carbon Institute), invited me to contribute it as a chapter in the just released book Fleeing Vesuvius, which is a collection of articles generally addressing "how can we bring the world out of the mess it finds itself in"? My article dealt with the evolutionary underpinnings of our aggregate behavior - neural habituation to increasingly available stimuli, and our evolved penchant to compete for status given the environmental cues of our day. And how, after we make it through the likely upcoming currency/claims bottleneck, we would be wise to adhere to an evolutionary perspective in considering a future (more) sustainable society. Below the fold is the table of contents from Fleeing Vesuvius, followed by my article. Preface to the Irish edition – Eamon Ryan Minister for Communications, Energy and Natural Resources, Ireland Introduction – Richard Douthwaite The people who began using fossil fuels to increase their productivity 300 years ago set the world on its path to the present crisis. About the contributors Part 1: Energy availability David Korowicz – On the cusp of collapse: complexity, energy and the globalised economy If less energy is available in future, our economic system will not contract in a gentle, controllable manner. Instead it is likely to collapse. Chris Vernon – Future energy availability: the importance of ‘net energy’ Although there is a lot of oil still left in the ground, its supply will contract very rapidly indeed and the world may have run out of oil to burn for energy by 2050. Tom Konrad – Calculating EIRR, the Energy Internal Rate of Return If a standard assessment tool, the internal rate of return, is used to compare the net energy yield of various projects, it shows which to prioritise for the energy transition. Nate Hagens and Kenneth Mulder – Energy and water: the real blue-chips The world needs to abandon money as its measure if it is to invest its scarcest, most limiting resources in the best possible way. Part 2: Innovation in business, money and finance Richard Douthwaite – The supply of money in an energy-scarce world If less energy is available in future the existing stock of money can either lose its value gradually through inflation or suddenly because of the collapse of the banking system that created it. Graham Barnes – Liquidity Networks: a debt-free electronic currency system for communities No currency will work unless people accept it from each other so this novel form of money will be put into circulation by being given to those who are accepting and spending it most. Chris Cook – Equity partnerships: a better, fairer approach to developing land A new way of organising developments promises better buildings, more affordable rents and a stake in the outcome for everyone. James Pike – Using equity partnerships to rescue building projects hit by the downturn Community land partnerships provide an alternative way of becoming a property owner and gaining a voice in the management of the development in which one lives. Tim Helweg-Larsen – Trying to form an equity partnership to buy a Welsh farm Because there isn’t a market yet for shares in an equity partnership, it proved hard to convince would-be investors that someone would pay a fair price for their holding when they wanted to move on. Oscar Kjellberg – The Mondragon bank: an old model for a new type of finance A new type of institution is needed to handle non-debt finance. It should help promoters plan their projects and then find outside investor-partners in return for a share of each project’s income. Patrick Andrews – Re-thinking business structures: how to encourage sustainability through conscious design choices Business could be the most powerful force in the world in achieving higher levels of sustainability and resilience but its potential is blocked and shareholders’ interests are put before those of society and the planet. Dan Sullivan – Why Pittsburgh real estate never crashes: the progressive reform that stabilised an economy Site value taxation is the reason why Pittsburgh’s foreclosure rates are low despite the downturn, its home prices are climbing slightly and construction rates are increasing. Dmitry Orlov – Definancialisation, deglobalisation and relocalisation Attempts at recovery will fail. Anyone who recognises this should spend whatever money they have engaging with their neighbours and the land. Part 3: New ways of using the land Emer O’Siochru – Cutting transport costs and emissions though local integration Rather than bringing similar activities closer together to reap the benefits of scale and agglomeration, different activities should be situated beside each other to be more energy and carbon efficient. Bruce Darrell – The nutritional resilience approach to food security Very few soils have a perfect balance of minerals. If the option of filling one’s plate from all over the world disappears, human health will likely decline unless the missing minerals are applied to the soil while it is still possible to do so. Corinna Byrne – Refocusing the purpose of the land: from emissions source to carbon sink Ireland needs to implement new policies in order to get its land to absorb CO2 rather than release it. Biochar could reduce nitrous oxide and methane emissions and build up the fertility and carbon content of the soil. Part 4: Dealing with climate change Alex Evans – Future global climate institutions Any framework for dealing with the climate crisis should distribute the global carbon budget among the world’s nations according to a transparent, equitable formula. To achieve this, global climate institutions will have to change. Laurence Matthews – Cap and Share: Simple is Beautiful Cap & Share is a fair, effective, cheap, empowering and simple way to reduce emissions from the burning of fossil fuels. It could form the basis of a wider global climate framework but how realistic is it to call for its introduction? Julian Darley – Influencing high-level, strategic decision-making towards a sustainable, low-carbon economy Decision-making at a global level is governed by a number of non-economic factors which need to be taken into account if the new systems required to deal effectively with climate change are to be introduced. Part 5: Changing the way we live Brian Davey – Danger ahead: prioritising risk avoidance in political and economic decision-making Now that the financial and political parts of the present system have largely discredited themselves, a fluid situation exists that might allow more viable options to emerge. Davie Philip – Transition thinking: The Good Life 2.0 We need to make an evolutionary leap in the way we do things if we are to make a controlled, planned transition to a post-industrial, low-carbon society. The Transition Towns movement provides a potential model. Dmitry Orlov – Sailing craft for a post-collapse world Land transport will be costly, difficult and dangerous after the industrial system has broken down. Moving goods and people by water will be a better option even for quite short distances. Part 6: Changing the way we think Nate Hagens – The psychological roots of resource over-consumption Humans have an innate need for status and for novelty in their lives. Unfortunately, the modern world has adopted very energy- and resource-intensive ways of meeting those needs. Mark Rutledge and Brian Davey – Seven reasons for humanity’s inertia in the face of disaster and how they can be overcome Why have humans failed to curb their excessive resource consumption? Seven reasons are outlined here, some of which are systemic, others the result of the way humanity evolved. John Sharry – Cultivating hope and managing despair Modern psychological models of motivation and change suggest strategies that can be used to help individuals come to terms with the nature and extent of the changes facing them. Lucy McAndrew – Collapse or no collapse: we need to respect to survive Respect for ourselves, for others and for nature is fundamental to survival because it is what gives us a sense of our place in the world and, when we lose that, we float free of the network of relationships that sustains us. Anne Ryan – Enough: a worldview for positive futures There is a crucial need for a new, self-limiting worldview which recognises that “enough is plenty”. Adopting such a worldview would nourish a culture in which social justice could prevail. Part 7: Ideas for action Fleeing Vesuvius: the emergency plan Compiled by Caroline Whyte Contributors to this book suggest steps they think should be taken to escape disaster in four areas – in one’s family, in one’s community, in one’s country, and in the world. Richard Douthwaite A three-step emergency plan for Ireland (appendix to Irish edition) ======================================================================================================================================================= Here is my updated chapter from Fleeing Vesuvius The psychological roots of resource over-consumption Humans have an innate need for status and for novelty in their lives. Unfortunately, the modern world has adopted very energy- and resource-intensive ways of meeting those needs. Other ways are going to have to be found as part of the move to a more sustainable world. Most people associate the word “sustainability” with changes to the supply side of our modern way of life such as using energy from solar flows rather than fossil fuels, recycling, green tech and greater efficiency. In this essay, however, I will focus on the demand-side drivers that explain why we continue to seek and consume more stuff. When addressing ‘demand-side drivers’, we must begin at the source: the human brain. The various layers and mechanisms of our brain have been built on top of each other via millions and millions of iterations, keeping intact what ‘worked’ and adding via changes and mutations what helped the pre-human, pre-mammal organism to incrementally advance. Brain structures that functioned poorly in ancient environments are no longer around. Everyone reading this page is descended from the best of the best at both surviving and procreating which, in an environment of privation and danger where most ‘iterations’ of our evolution happened, meant acquiring necessary resources, achieving status and possessing brains finely tuned to natural dangers and opportunities. This essay outlines two fundamental ways in which the evolutionarily derived reward pathways of our brains are influencing our modern overconsumption. First, financial wealth accumulation and the accompanying conspicuous consumption are generally regarded as the signals of modern success for our species. This gives the rest of us environmental cues to compete for more and more stuff as a proxy of our status and achievement. A second and more subtle driver is that we are easily hijacked by and habituated to novel stimuli. As we shall see, the prevalence of novelty today eventually demands higher and higher levels of neural stimulation, which often need increased consumption to satisfy. Thus it is this combination of pursuit of social status and the plethora of novel activities that underlies our large appetite for resource throughput. Status Evolution has honed and culled ‘what worked’ by combining the substrate of life with eons’ worth of iterations. Modern biological research has focused on the concept of ‘relative fitness’, a term for describing those adaptations that are successful in propelling genes, or suites of genes, into the next generation and that will have out-competed those that were deleterious or did not keep up with environmental change. Though absolute fitness mattered to the individual organisms while they were alive, looking back it was ‘relative fitness’ that shaped the bodies and brains of the creatures on the planet today. Status, both in humans and other species, has historically been a signaling mechanism that minimised the costs of competition, whether for reproductive opportunities or for material resources. If you place ten chickens in an enclosure there will ensue a series of fights until a pecking order is established. Each bird quickly learns who it can and cannot beat and a status hierarchy is created, thus making future fights (and wastes of energy) less common. Physical competition is costly behaviour that requires energy and entails risk of injury. Status is one way to determine who one can profitably challenge and who one cannot. In our ancestral environment, those men (and women) that successfully moved up the social hierarchy improved their mating and resource prospects. Those at the bottom of the status rung did not only possess fewer mating opportunities but many did not mate at all. Status among our ancestors was probably linked to those attributes providing consistent benefits to the tribe: hunting prowess, strength, leadership ability, storytelling skills etc. In modern humans, status is defined by what our modern cultures dictate. As we are living through an era of massive energy gain from fossil fuels, pure physical prowess has been replaced by digital wealth, fast cars, political connections, etc. It follows that the larger a culture’s resource subsidy (natural wealth), the more opportunity there is for ‘status badges’ uncorrelated with basic needs such as strength, intelligence, adaptability, stamina, etc. Though ‘what’ defines status may be culturally derived, status hierarchies themselves are part of our evolved nature. Ancestral hominids at the bottom of the mating pecking order, ceteris paribus, are not our ancestors. Similarly, many of our ancestors had orders of magnitude more descendants than others. For example, scientists recently discovered an odd geographical preponderance for a particular Y chromosome mutation which turns out to be originally descended from Genghis Khan. Given the 16 million odd male descendants alive today with this Y marker, Mr. Khan is theorised to have had 800,000 times the reproductive success than the average male alive on the planet in 1200 AD. This does not imply that we are all pillagers and conquerors — only that various phenotypic expressions have had ample opportunity to become hardwired in our evolutionary past. [1] Mating success is a key driver in the natural world. This is all studied and documented by evolutionary research into the theory of “sexual selection”, which Charles Darwin once summarised as the effects of the “struggle between the individuals of one sex, generally the males, for the possession of the other sex.” [2] Biologists have shown that a primary way to reliably demonstrate one’s ‘quality’ during courtship is to display a high-cost signal — e.g. a heavy and colourful peacock’s tail, an energy-expending bird-song concert, or a $100,000 sports car. [3] These costly “handicap” signals are evolutionarily stable indicators of their producer’s quality, because cheap signals are too easy for low-quality imitators to fake. [4] In this sense ‘waste’ was an evolutionary selection! Think of three major drawbacks to a male peacock of growing such a hugely ornate tail: the energy, vitamins and minerals needed to go into the creation of the tail could have been used for other survival/reproductive needs, the tail makes the bird more likely to be spotted by a predator, If spotted, the cumbersome tail makes escape from a predator less likely. Overall, though, these negative “fitness hits” must have been outweighed by the drab female peahen’s preference for males with larger, more ornate tails. With this filter, we can understand the rationale and prevalence of Veblen goods (named after the 19th-century economist who coined the term ‘conspicuous consumption’) — a group of commodities that people increasingly prefer to buy as their price gets higher because the greater price confers greater status. This biological precept of signalling theory is alive and well in the human culture. Novelty Modern man evolved from earlier hominids under conditions of privation and scarcity at least until about 10,000 years ago. The period since then has been too short a time to make a significant change to millions of years of prior neural sculpture. Nature made the brain’s survival systems incredibly efficient. The brain is based on about 40% of all our available genes and consumes over 20% of our calorific intake. Incremental changes in how our brains recognise, process and react to the world around us either contributed to our survival and thus were carried forward, or died out. Some changes affected salience, the ability to notice what is important, different or unusual. Salience recognition is part of what’s called the mesolimbic dopamine reward pathway. This pathway is a system of neurons integral to survival efficiency, helping us to instantly decide what in the environment should command our attention. Historically, immediate feedback on what is ‘new’ was critical to both avoiding danger and procuring food. Because most of what happens around us each day is predictable, processing every detail of a familiar habitat wastes brain energy. Such activity would also slow down our mental computer so that what are now minor distractions could prove deadly. Thus our ancestors living on the African savanna paid little attention to the stable mountains on the horizon but were quick to detect any movement in the bush, on the plains, or at the riverbank. Those more able to detect and process ‘novel cues’ were more likely to obtain rewards needed to survive and pass on their suites of genes. Indeed, modern experimental removal of the (dopamine) receptor genes in animals causes them to reduce exploratory behaviour, a key variable related to inclusive fitness in animal biology. [5] We are instinctually geared for individual survival — being both reward-driven, and curious. It was these two core traits that the father of economics himself, Adam Smith, predicted in The Wealth of Nations would be the drivers of world economic growth. According to Smith, uniting the twin economic engines of self-interest (which he termed self-love) and curiosity was ambition — “the competitive human drive for social betterment”. About 70 years later, after reading Adam Smith’s Theory of Moral Sentiments, Charles Darwin recognised the parallel between the pursuit of wealth in human societies and the competition for resources that occurred among animal species. Our market system of allocating resources and ‘status’ can therefore be seen as the natural social culmination for an intelligent species finding an abundance of resources. But, as we shall soon see, the revered Scottish philosopher could not have envisioned heli-skiing, Starbucks, slot machines, Facebook, email and many other stimulating and pleasurable objects and activities that people engage in today and to which they so easily become accustomed. The mesolimbic dopaminergic reward system “Americans find prosperity almost everywhere, but not happiness. For them desire for well-being has become a restless burning passion which increases with satisfaction. To start with emigration was a necessity for them: now it is a sort of gamble, and they enjoy the sensations as much as the profit.” Alexis de Tocqueville, Democracy in America 1831 Traditional drug abuse happens because natural selection has shaped behaviour-regulation mechanisms that function via chemical transmitters in our brains. [6] Addicts can become habituated to the feelings they get from cocaine, heroin or alcohol, and they need to increase their consumption over time to get the same neurotransmitter highs. This same neural reward architecture is present in all of us when considering our ecological footprints: we become habituated via a positive feedback loop to the ‘chemical sensations’ we receive from shopping, keeping up with the Joneses (conspicuous consumption), pursuing more stock profits, and myriad other stimulating activities that a surplus of cheap energy has provided. An explosion of neuroscience and brain-imaging research tells us that drugs of abuse activate the brain’s dopamine reward system that regulates our ability to feel pleasure and be motivated for “more”. When we have a great experience — a glance from a pretty girl, a lovemaking romp in the woods, a plate of fresh sushi, hitting 777 on a one-eyed bandit, catching a lunker pike, watching a sunset, hearing a great guitar riff etc. — our brain experiences a surge in the level of the neurotransmitter dopamine. We feel warm, ‘in the zone’ and happy. After a while, the extra dopamine gets flushed out of our system and we return to our baseline level. We go about our lives, looking forward to the next pleasurable experience. But the previous experience has been logged into our brain’s limbic system, which, in addition to being a centre for pleasure and emotion, holds our memory and motivation circuitry. [7] We now begin to look forward to encores of such heady stimuli and are easily persuaded towards activities that promise such a chemical reprise. These desires have their beginnings outside our conscious awareness. Recent brain-imaging research shows that drug and sexual cues as brief as 33 milliseconds can activate the dopamine circuitry, even if a person is not conscious of the cues. Perhaps there are artistically shaped sexual images hidden in advertisements for whiskey after all… Historically, this entire system evolved from the biological imperative of survival. Food meant survival, sex meant survival (of genes or suites of genes), and additional stockpiles of both provided success relative to others, both within and between species. There was a discrete payoff to waiting hours for some movement in the brush that signaled ‘food’, or the sound of a particular bird that circled a tree with a beehive full of honey, etc. Our pattern recognition system on the Pleistocene would have been a grab-bag of various environmental stimuli that ‘excited’ our brains towards action that correlated with resources (typically food). In sum, the brain’s reward pathways record both the actual experience of pleasure as well as ensuring that the behaviours that led to it are remembered and repeated. Irrespective of whether they are ‘good’ for the organism in the current context — they ‘feel’ good, which is the mechanism our brain has left us as a heritage of natural selection. The (very important) mechanism of habituation Habituation — getting used to something — and subsequent substance abuse and addiction develops because of the way we learn. Learning depends crucially on the discrepancy between the prediction and occurrence of a reward. A reward that is fully predicted does not contribute to learning. [8] The important implication of this is that learning advances only to the extent to which something is unpredicted and slows progressively as a stimuli becomes more predictable. [9] As such, unexpected reward is a core driver in how we learn, how we experience life, and how we consume resources. Dopamine activation has been linked with addictive, impulsive activity in numerous species. Dopamine is released within the brain not only to rewarding stimuli but also to those events that predict rewards. It has long been known that two groups of neurons, in the ventral tegmental and the substantia nigra pars compacta areas, and the dopamine they release, are critical for reinforcing certain kinds of behaviour. Neuroscientist Wolfram Schultz measured the activity of these dopamine neurons while thirsty monkeys waited for a tone which was followed by a squirt of fruit juice into their mouths. After a series of fixed, steady amounts of juice, the volume of juice was suddenly doubled. The rate of neuron firing went from about 3 per second to 80 per second. But after several trials, after the monkeys had become habituated to this new level of reward, their dopamine firing rate returned to the baseline rate of 3 firings per second after the squirt of juice. The monkeys had become habituated to the coming reward! The opposite happened when the reward was reduced without warning. The firing rate dropped dramatically, but eventually returned to the baseline rate of 3 firings per second. [10] The first time we experience a drug or alcohol high, the amount of chemical we ingest often exceeds the levels of naturally occurring neurotransmitters in our bodies by an order of magnitude. [11] No matter how brief, that experience is stored in our neural homes for motivation and memory — the amygdala and hippocampus. Getting drunk with your friends, getting high on a ski-lift, removing the undergarments of a member of the opposite sex for the first time — all initially flood the brain with dopamine alongside a picture memory of the event chemically linked to the body’s pleasurable response to it. As such we look forward to doing it again, not so much because we want to repeat the activity, but because we want to recreate that ‘feeling’. But in a modern stimuli-laden culture, this process is easily hijacked. After each upward spike, dopamine levels again recede, eventually to below the baseline. The following spike doesn’t go quite as high as the one before it. Over time, the rush becomes smaller, and the crash that follows becomes steeper. The brain has been fooled into thinking that achieving that high is equivalent to survival and therefore the ‘consume’ light remains on all the time. Eventually, the brain is forced to turn on a self-defence mechanism, reducing the production of dopamine altogether — thus weakening the pleasure circuits’ intended function. At this point, an ‘addicted’ person is compelled to use the substance not to get high, but just to feel normal — since one’s own body is producing little or no endogenous dopamine response. Such a person has reached a state of “anhedonia”, or inability to feel pleasure via normal experiences. Being addicted also raises the risk of having depression; being depressed increases the risk of self-medicating, which then leads to addiction, etc. via positive feedback loops. In sum, when exposed to novel stimuli, high levels of curiosity (dopamine) are generated, but it is the unexpected reward that causes their activation. If I order a fantastic array of sushi and the waiter brings me a toothpick and my check, I am going to have a plunge in dopamine levels which will create an immediate craving for food. It is this interplay between expected reward and reality that underlies much of our behavioural reactions. Ultimately, as it relates to resource consumption, repeated use of any dopamine-generating ‘activity’ eventually results in tolerance. Withdrawal results in lower levels of dopamine and continuous use is required to keep dopamine at normal levels, and even higher doses to get the ‘high’ levels of initial use. Consumers in rich nations are arguably reaching higher and higher levels of consumption tolerance. If there was such a thing as ‘cultural anhedonia’, we might be approaching it. America's Addictions - Time Magazine - July 2007 America and addiction It would be pretty hard to be addicted directly to oil; it’s toxic, slimy and tastes really bad. But given the above background, we can see how it is possible to become addicted to the energy services that oil provides. Humans are naturally geared for individual survival — curious, reward-driven and self-absorbed —but modern technology has now become a vector for these cravings. Material wealth and the abundant choices available in contemporary US society are unique in human (or animal) experience; never before in the history of our species have so many enjoyed (used?) so much. Within a culture promoting ‘more’, it is no wonder we have so many addicts. High-density energy and human ingenuity have removed the natural constraints on our behaviour of distance, time, oceans and mountains. For now, these phenomena are largely confined to developed nations — people living in a hut in Botswana or a yurt in Mongolia cannot as easily be exposed to the ‘hijacking stimuli’ of an average westerner, especially one living in a big city in the West, like London or Los Angeles. Many activities in an energy-rich society unintentionally target the difference between expected and unexpected reward. Take sportfishing for example. If my brother and I are on a lake fishing and we get a bite, it sends a surge of excitement through our bodies — what kind of fish is it? How big is it? etc. We land an 8-inch perch! Great! A minute later we catch another 8 inch perch — wow, there must be a school! After 45 minutes of catching nothing but 8-inch perch, our brain comes to expect this outcome, and we need something bigger, or a different species, to generate the same level of excitement, so we will likely move to a different part of the lake in search of ‘bigger’ and/or ‘different’ fish. (Though my brother claims he would never tire of catching fish 8-inch perch I think he’s exaggerating). Recreational fishing is benign (if not to the fish), but one can visualise other more resource-intensive pastimes activating similar circuitry. New shoes, new cars, new vacations, new home improvements, new girlfriends are all present on the modern unexpected reward smorgasbord. The habituation process explains how some initially benign activities can morph into things more destructive. Weekly church bingo escalates to $50 blackjack tables; the Sports Illustrated swimsuit edition results, several years down the road, in the monthly delivery (in unmarked brown packaging) of Jugs magazine or webcams locked in on a bedroom in Eastern Europe; youthful rides on a rollercoaster evolve into annual heli-skiing trips, etc. The World Wide Web is especially capable of hijacking our neural reward pathways. The 24/7 ubiquity and nearly unlimited options for distraction on the internet almost seem to be perfectly designed to hone in on our brains’ g-spot. Shopping, pornography, gambling, social networking, information searches, etc. easily out-compete the non-virtual, more mundane (and necessary) activities of yesteryear. Repetitive internet use can be highly addictive, though psychiatrists in different countries are debating whether it is a true addiction. For better or worse, the first things I do in the morning is a) check what time it is, b) start the coffee machine then c) check my e-mail, to see what ‘novelty’ might be in my inbox. Bills to pay, and e-mails from people who are not important or interesting, wait until later in the day, or are forgotten altogether. There are few healthy men on the planet today who do not respond in social settings to the attention of a high-status, attractive 20- to 30-something woman. This is salient stimuli, irrespective of the man’s marital status. But here is one example of where nature and nurture mesh. Despite the fact that 99+% of our history was polygynous, modern culture precludes men from running around pell-mell chasing women; we have rules, laws, and institutions such as marriage. However, habituation to various matrimonial aspects combined with exposure to dozens or even hundreds of alternatives annually in the jet age may at least partially explain the 60%+ divorce rate in modern society. The entire brain and behaviour story is far more complex than just one neurotransmitter but the pursuit of this particular ‘substance’ is clearly correlated with anxiety, obesity, and the general increasing of conspicuous consumption in our society. That dopamine is directly involved is pretty clear. Parkinson’s Disease is a condition where dopamine is lacking in an area of the brain necessary for motor coordination. The drug, Mirapex, increases dopamine levels in that area of the brain, but since pills are not lasers, it also increases dopamine in other areas of the body, including (surprise) the reward pathways. There are numerous lawsuits currently pending by Parkinson’s patients who after taking the drug, developed sex, gambling, shopping and overeating compulsions. [12] Our brain can also be tricked by the food choices prevalent in an abundant-energy society. We evolved in situations where salt and sugar were rare and lacking and signaled nutrition. So now, when we taste Doritos or Ben and Jerry’s Chocolate Fudge Brownie ice cream, our reward pathways say ‘yes yes — this is good for you!!’ Our ‘rational’ brain attempts to remind us of the science showing obesity comes from eating too much of the wrong type of foods, but often loses out to the desire of the moment. Fully 30% of Americans are now categorised as obese. And, since we are exporting our culture (via the global market system) to developing countries, it is no surprise that China is following in our footsteps. From 1991 to 2004 the percentage of adults who are overweight or obese in China increased from 12.9% to 27.3%. [13] Furthermore, we can become habituated to repeated presentation of the same food type; we quickly get tired of it and crave something different. [14] We like variety — in food and in other things. Finally, when we overstimulate the brain pleasure centres with highly palatable food, these systems adapt by decreasing their own activity. Many of us now require constant stimulation from palatable (fatty) food to avoid entering a persistent state of negative reward. It is this dynamic that has led scientists to recently declare that fatty foods such as cheesecake and bacon are addictive in the same manner as cocaine. [15] And as we shall see, both what we eat and experience not only alters our own health, but also makes it more difficult to act in environmentally benign ways. Impulsivity, discount rates and preparing for the future Overconsumption fueled by increasing neural high water marks is a problem enough in itself, but such widespread neural habituation also diminishes our ability to think and act about the coming societal transition away from fossil fuels. Economists measure how much we prefer the present over the future via something called a ‘discount rate’. (See Mark Rutledge’s essay in this book). A discount rate of 100% means we prefer the present completely and put no value on the future. A discount rate of 0% means we treat the future 1000 years from now equally the same as 5 minutes from now. Certain types of people have steeper discount rates than others; in general, gamblers, drinkers, drug users, men (vs. women), low IQ scorers, risk-takers, those exhibiting cognitive load, etc. all tend to show more preference for small short-term rewards rather than waiting for larger, long-term ones. [16] On average, heroin addicts’ discount rates are over double those of control groups. Furthermore, in tests measuring discount rates and preferences among opium addicts, opioid-dependent participants discounted delayed monetary rewards significantly more than did non-drug using controls. Also, the opioid-dependent participants discounted delayed opium significantly more than delayed money, more evidence that brain chemicals are central to an organism’s behaviour and that money and other abstractions are secondary. [17] Research has also shown that subjects deprived of addictive substances have an even greater preference for immediate consumption over delayed gratification. [18] Even if we are not snorting cocaine or binge drinking on a Tuesday night, in a world with so much choice and so many stimulating options vying for our attention, more and more of our time is taken up feeding neural compulsions. In any case, facing large long-term risks like peak oil and climate change requires dedicated long-term thinking — so having neural wiring that, due to cultural stimuli, focuses more and more on the present instead, is a big problem. The fallacy of reversibility A.K.A “The ratchet effect” Though our natural tendency is to want more of culturally condoned pursuits, many such desires do have negative feedbacks. For instance, I can only eat about three cheeseburgers before my stomach sends a signal to my brain that I am full — and at 4 or 5 my stomach and esophagus would fill to the level I couldn’t physically eat another. However, this is not so with virtual wealth, or many of the “wanting” stimuli promoted in our economic ‘more equals better’ culture. Professor Juliet Schor of Boston University has demonstrated that irrespective of their baseline salary, Americans always say they’d like to make a little more the following year. [19] Similar research by UCLA economist Richard Easterlin (whose “Easterlin Paradox” points out that average happiness has remained constant over time despite sharp rises in GDP per capita.) followed a cohort of people over a 16-year period. The participants were asked at the onset to list 10 items that they desired (e.g. sports car, snowmobile, house, private jet, etc.) During the 16 study, all age groups tested did acquire some/many of the things they originally desired. But in each case, their desires increased more than their acquisitions. [20] This phenomenon is termed the “Hedonic Treadmill”. I believe this behaviour is at the heart of the Limits to Growth problem, and gives me less confidence that we are just going to collectively ‘tighten our belts’ when the events accompanying resource depletion get a little tougher. That is, unless we somehow change what it is that we want more of. The Ratchet Effect is a term for a situation in which, once a certain level is reached, there is no going back, at least not all the way. In evolution the effect means once a suite of genes become ubiquitous in a population, there is no easy way to ‘unevolve’ it. A modern example of this is obesity — as we get fatter the body creates more lipocytes (cells composing adipose tissue). But this system doesn’t work in reverse; even though we can lose some of the weight gain, the body can’t eliminate these new cells — they are there to stay. After peak oil/peak credit, the ratchet effect is likely to mean that any rules requiring a more equitable distribution of wealth will not be well received by those who amassed wealth and status when oil was abundant. In biology, we see that animals will expend more energy defending freshly gained territory than they would to gain it if it was unclaimed. In humans, the pain from losing money is greater than the pleasure of gaining it. Economists describe and quantify this phenomenon as the endowment effect and loss aversion. And, as an interesting but disturbing aside, recent research suggests that the dopamine that males receive during acts of aggression rivals that of food or sex. [20] [21] All these different dynamics of ‘what we have’ and ‘what we are used to’ will come into play in a world with less resources available per head. Old brain, new choices Humans have always lived in the moment but our gradual habituation to substances and activities that hijack our reward system may be forcing us, in aggregate, to live so much for the present that we are ignoring the necessity for urgent societal change. Unwinding this cultural behaviour may prove difficult. The sensations we seek in the modern world are not only available and cheap, but most are legal, and the vast majority are actually condoned and promoted by our culture. If the rush we get from an accomplishment is tied to something that society rewards we call it ambition, if it is attached to something a little scary, then we label the individual a ‘risk taker’ and if it is tied to something illegal — only then have we become an ‘addict’ or substance abuser. So it seems culture has voted on which ways of engaging our evolutionarily derived neurotransmitter cocktails are ‘good’ to pursue. Drug addiction is defined as “the compulsive seeking and taking of a drug despite adverse consequences”. If we substitute the word ‘resource’ for ‘drug’, have we meaningfully violated or changed this definition? That depends on the definition of ‘drug’. “A substance that a person chemically comes to rely upon” is the standard definition but ultimately it is any activity or substance that generates brain chemicals that we come to require/need. Thus, it is not crude oil’s intrinsic qualities we crave but the biochemical sensations to which we have become accustomed arising from the use of its embodied energy. Take stock trading for example. Neuroscience scans show that stock trading lights up the same brain areas as picking nuts and berries do in other primates. I think people trade for money/profit (to compete/move up the mating ladder), the feeling of being ‘right’ (whether they ever spend the money or not) and the excitement/dopamine they get from the unexpected nature of the market puzzle. While these three are not mutually exclusive, it is not clear to me which objective dominates, especially among people who have already attained infinite wealth. (Technically, infinite wealth is their annual expenses divided by the interest rate on Treasury bills. This gives the sum of money that would provide them with an income to buy all they want forever). When I worked for Lehman Brothers, my billionaire clients seemed less ‘happy’ on average than the $30k-a-year clerks processing their trades. They had more exciting lives perhaps, but they were not happier; that is, their reward baseline reset to zero each morning irrespective of the financial wealth they had amassed in previous days or years,. They wanted ‘more’ because they were habituated to getting more — it was how they kept score. Clearly, unless you inherit, you don’t get to be a billionaire if you are easily satisfied. MRI scans show that objects associated with wealth and social dominance activate reward-related brain areas. In one study, people’s anterior cingulate (a brain region linked to reward) had more blood and oxygen response to visual cues of sports cars than to limousines or small cars. [22] If compulsive shopping was a rational process, and our choices were influenced only by need, then brand-name t-shirts would sell no better than less expensive shirts of equal quality. The truth is that many shopping decisions are biased by corporate advertising campaigns or distorted by a desire to satisfy some competitive urge or emotional need. For most of us, the peak ‘neurotransmitter cocktail’ is the moment we decide to buy that new ‘item’. After a brief euphoria and a short respite, the clock starts ticking on the next craving/purchase. Adaptation executors There is a shared mythology in America that we can each enjoy fame and opulence at the top of the social pyramid. 78% of Americans still believe that anybody in America can become rich and live the good life [23]. Although in our economic system, not everyone can be a Warren Buffet or Richard Branson — there are not enough resources — it is the carrot of potential reward that keeps people working 50 hours a week until they retire at 65. All cannot be first. All cannot be wealthy, which makes our current version of capitalism, given the finite resources of the planet, not dissimilar from a Ponzi scheme. Envy for status is a strong motivator. Increasing evidence in the fields of psychology and economics shows that above a minimum threshold of income/wealth, it’s one’s relative wealth that matters, not absolute. In an analysis of more than 80,000 observations, the relative rank of an individual’s income predicted the individual’s general life satisfaction whereas absolute income and reference income had little to no effect. [24] The “aspiration gap” is economic-speak for the relative fitness/status drive towards who/what is at the top of the cultural status hierarchy. For decades (centuries?), China has had a moderate aspiration gap, but since the turbo-capitalist global cues have spread across Asia, hundreds of millions of Chinese have raised their pecuniary wealth targets. Economist Robert Frank asked people in the US if they would prefer living in a 4,000-square-foot house where all the neighboring houses were 6,000 square feet or a 3,000-square-foot house where the surrounding houses were 2,000 square feet. The majority of people chose the latter — smaller in absolute terms but bigger in relative size. A friend of mine says that when he last visited Madagascar, the 5th poorest nation on earth, the villagers huddled around the one TV in the village watching the nation’s most popular TV show Melrose Place, giving them a window of desire into Hollywood glitz and glamour, and a beacon to dream about and strive for. Recently, a prince in the royal family of U.A.E. paid $14 million for a licence plate with the single numeral “1”. “I bought it because I want to be the best in the world”, Saeed Abdul Ghafour Khouri explained. What environmental cues do the kids watching TV in the U.A.E. or the U.S. receive? As a species, we are both cooperative and competitive depending on the circumstances, but it’s very important to understand that our neurophysiological scaffolding was assembled during long mundane periods of privation in the ancestral environment. This is still not integrated into the Standard Social Science Model that forms the basis of most liberal arts educations (and economic theory). A new academic study on relative income as a primary driver of life satisfaction had over 50 references, none of which linked to the biological literature on status, sexual selection or relative fitness. Furthermore, increasing cognitive neuroscience and evolutionary psychology research illustrates that we are not the self-interested ‘utility maximisers’ that economists claim, but are highly ‘other regarding’ — we care about other people’s welfare as well as our own. Though high-perceived relative fitness is a powerful behavioural carrot, inequality has pernicious effects on societies; it erodes trust, increases anxiety and illness, and leads to excessive consumption. [25] Health steadily worsens as one descends the social ladder, even within the upper and middle classes [26]. When a child is born, he has all the genetic material he will ever have. All his ancestors until that moment had their neural wiring shaped for fitness maximisation — but when he is born, his genes will interact with environment cues showing those ways to compete for status, respect, mating prospects, and resources etc. which are socially acceptable. From this point forward, the genes are ‘fixed’ and the infant goes through life as an ‘adaptation executor’ NOT a fitness maximiser. What will a child born in the 21st century ‘learn’ to compete for? Historically, we have always pursued social status, though status has been measured in dramatically different ways throughout history. Currently, most people pursue money as a short-cut fitness marker, though some compete in other ways — politics, knowledge, etc. Thus, a large looming problem is that the Chinese and other rapidly developing nations don’t just aspire to the wealth of average Americans — they want to go the whole hog to be millionaires. Conclusions We are a clever, ambitious species that evolved to live almost entirely off of solar flows. Eventually we worked out how to access stored sunlight in the form of fossil fuels which required very little energy/natural resource input to extract. The population and growth trajectory that ensued eventually oversatisfied the “more is better” mantra of evolution and we’ve now developed a habit of requiring more fossil fuels and more clever ways to use them every year. There also exists a pervasive belief that human ingenuity will create unlimited substitutes for finite natural resources like oil and water. Put simply, it is likely that our abundant natural resources are not only required, but will be taken for granted until they are gone. This essay has explored some of the underlying drivers of resource depletion and planetary consumption: more humans competing for more stuff that has more novelty. The self-ambition and curiosity that Adam Smith hailed as the twin engines of economic growth have been quite effective over the past 200 years. But Adam Smith did caution in Moral Sentiments that human envy and a tendency toward compulsions, if left unchecked, would undermine the empathic social relationships that would be essential to the successful long-term operation of free markets. Amidst so much novel choice and pressure to create wealth, we are discovering some uncomfortable facts, backed up by modern neurobiology, that confirm his concerns. In an era of material affluence, when wants have not yet been fully constrained by limited resources, the evidence from our ongoing American experiment conclusively shows that humans have trouble setting limits on our instinctual cravings. What’s more, our rational brains have quite a hard time acknowledging this uncomfortable but glaring fact. This essay undoubtedly raises more questions than it answers. If we can be neurally hijacked, what does it suggest about television, advertising, media, etc? The majority of the neuro-economic sources I used in writing this were a byproduct of studies funded by neuromarketing research! How does ‘rational utility’ function in a society where we are being expertly marketed to pull our evolutionary triggers to funnel the money upwards? How does Pareto optimality — the assumption that all parties to an exchange will be made better off — hold up when considering neuro-economic findings? Recent studies show that American young people (between ages of 8-18) use 7.5 hours of electronic media (internet, Ipod, Wii, etc) per day and, thanks to multi-tasking, had a total of 11 hours ‘gadget’ exposure per day! [27] The children with the highest hours of use had markedly poorer grades and more behavioural problems. How will these stimuli-habituated children adapt to a world of fewer resources? Not all people pursue money, but our cultural system does. An unbridled pursuit of profits has created huge disparities in digitally amassed monetary wealth both within and between nations, thus holding a perpetually unattainable carrot in front of most of the world’s population. So it is not just the amount we consume that is unsustainable, but also the message we send to others, internationally, nationally and in our neighbourhoods. Meeting in the middle? The arrowed circle on this Inglehart Curve represents the highest level of well-being/survival consistent with a low level of resource use. It is therefore a target at which a society should aim. (Source: N. Hagens and R. Inglehart 1997) At the same time, traditional land, labour and capital inputs have been subsidised by the ubiquity of cheap energy inputs, and more recently by a large increase in both government and private debt, a spatial and temporal reallocator of resources. These cheap energy/cheap credit drivers will soon be a thing of the past, and this will curtail future global growth aspirations. When this happens, and we face the possibility of currency reform and what it might mean to start afresh with the same resources but a new basket of claims and assumptions, we will need to remember the neural backdrops of competition for relative status, and how people become habituated to high neural stimuli. Perhaps, given the supply-side limits and neural aspirations, some new goals can be attempted at lower absolute levels of consumption by at least partially lowering the amplitude of social rank. We cannot easily change our penchant to want more. We can only change cultural cues on how we define the ‘more’ and thereby reduce resource use. In the cross-cultural study referenced in the diagram above, we can see that well-being increases only slightly as GNP increases above some minimum threshold. The arrowed circle would be a logical place for international policymakers concerned about planetary resource and sink capacity to aim to reach via taxes, disincentives to conspicuous consumption and subsidies. However, I fear that nations and governments will do little to slow their consumption and will get increasingly locked into defending the status quo instead. In a society with significant overall surpluses, people who actively lower their own economic and ecological footprint might get by very well because their relative status — which is typically above average — allows them to make such reductions without reaching limits that compromise their well-being. As these people allocate time and resources away from financial marker capital and towards social, human, built and natural capital, they have an opportunity to redefine what sort of ‘wealth’ we compete for and thus potentially lead by example. However, personal experience with people in the lifestyle section of the chart leads me to believe that they will probably continue to pursue more resources and status even if it doesn’t improve their well-being. Put aside peak oil and climate change for the moment. Though it is difficult, we have it in us as individuals and as a culture to make small changes to the way our brains get ‘hijacked’ and, as a result, achieve more benign consequences. For example, we can choose to go for a jog/hike instead of sending ten emails and websurfing, we can choose to have a salad instead of a cheeseburger, we can choose to play a game or read a story with our children instead of making business phone calls. But most of these types of choices require both prior planning and discipline if our brains are not to fall into the neural grooves that modern culture has created. It takes conscious plans to change these behaviours, and for some this will be harder than for others But in choosing to do so, besides slowing and eventually reversing the societal stimulation feedback loop, we are likely to make ourselves healthier and happier. In neuro-speak, many of the answers facing a resource-constrained global society involve the rational neo-cortex suppressing and overriding the primitive and stronger limbic impulses. So, ultimately, we must start to address new questions. In addition to asking source/sink questions like ‘how much do we have’ we should begin asking questions like ‘how much is enough?’ Reducing our addictive behaviours collectively will make it easier to face the situations likely to arise during an energy descent. Changing the environmental cues on what we compete for, via taxes or new social values, will slow down resource throughput and give future policymakers time to forge a new economic system consistent with our evolutionary heritage and natural resource balance sheet. We will always seek status and have hierarchies in human society but unless we first understand and then integrate our various demand-side constraints into our policies, culture and institutions, sustainability will be another receding horizon. Though there is probably no blanket policy to solve our resource crisis that would both work and gain social approval, an understanding of the main points of this essay might be a springboard to improve one’s own happiness and well-being. Which would be a start… Endnotes http://news.nationalgeographic.com/news/2003/02/0214_030214_genghis.html Darwin, C. (1871) The Descent of Man and Selection in Relation to Sex John Murray, London Miller, G. F. (1999). “Sexual selection for cultural displays” in R. Dunbar, C. Knight, & C. Power (Eds.), The evolution of culture. Edinburgh U. Press, pp. 71-91 Zahavi, A. and Zahavi, A. (1997). The handicap principle: a missing piece of Darwin’s puzzle. Oxford University Press Dulawa et al, “Dopamine D4 Receptor-Knock-Out Mice Exhibit Reduced Exploration of Novel Stimuli”, Journal of NeuroScience, 19:9550-9556, 1999 Gerald, M. S. & Higley, J. D. (2002) “Evolutionary Underpinnings of Excessive Alcohol Consumption”. Addiction, 97, 415–425. Whybrow, Peter, “American Mania” Waelti, P., Dickinson, A. and Schultz, W.: “Dopamine responses comply with basic assumptions of formal learning theory”. Nature 412: 43-48, 2001 Rescorla R.A., Wagner A.R., “A theory of Pavlovian conditioning: Variations in the effectiveness of reinforcement and nonreinforcement” in: Classical Conditioning II: Current Research and Theory (Eds Black A.H., Prokasy W.F.) New York: Appleton Century Crofts, pp. 64-99, 1972 Schultz, W., et al., “A Neural Substrate of Prediction and Reward”, Science, 275 :1593-1599. Dudley, R. (2002) “Fermenting Fruit and the Historical Ecology of Ethanol Ingestion: Is Alcoholism in Modern Humans an Evolutionary Hangover?” Addiction, 97, 381–388. Dodd et al., “Pathological Gambling Caused by Drugs Used to Treat Parkinson Disease”, Arch Neurol. 2005;62:1377-1381 Popkin, Barry. “The World Is Fat”, Scientific American, September, 2007, pp. 94. ISSN 0036-8733. Ernst, M., Epstein, L. “Habituation of Responding for Food in Humans”, Appetite Volume 38, Issue 3, June 2002, Pages 224-234 Johnson, P., Kenny, P., “Addiction-Like Reward Dysfunction and Compulsive Eating in Obese Rats: Role for Dopamine D2 Receptors”, Nature: Neuroscience 3/28/2010 Chablis et al, “Intertemporal Choice” — The New Palgrave Dictionary of Economics, 2007 Madden et al., “Impulsive and Self-Control Choices in Opioid-Dependent Patients and Non-Drug Using Control Participants: Drug and Monetary Rewards”, Environmental and Clinical Psychopharmacology (1997), Vol 5 No 3 256-262 Giorodano, L et al, “Mild opioid deprivation increases the degree that opioid-dependent outpatients discount delayed heroin and money”, Psychopharmacology (2002) 163: 174-182 Schor, Juliet, The Overspent American: Why We Want What We Don’t Need, Harper Perennial 1999 Easterlin, Richard “Explaining Happiness” September 4, 2003, 10.1073/pnas.1633144100 (Especially Table 3) Couppis, M., Kennedy C., “The rewarding effect of aggression”, Psychopharmacology, Volume 197, Number 3 / April, 2008 Erk, S, M Spitzer, A Wunderlich, L Galley, H Walter “Cultural objects modulate reward circuitry.” Neuroreport. 2002 Dec 20;13 (18):2499-503 12499856 Samuelson, Robert, “Ambition and it Enemies” Newsweek Aug 23, 1999 Boyce, C., et al, “Money and Happiness — Rank of Income, Not Income, Affects Life Satisfaction”, Psychological Science Feb 2010 Wilkinson, Richard; Pickett, Kate “The Spirit Level – Why Greater Equality Makes Societies Stronger”, Bloomsbury Press 2010 Marmot, Michael, “The Status Syndrome: How Social Standing Affects Our Health and Longevity”, Holt Publishing 2005 Generation M2 – Media in the Lives of 8-18 Year Olds, Kaiser Family Foundation 2010

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The Ethanol Rhetoric Ramps Up

Tue, 23 Nov 2010 00:00:00 -0800

The Oil Drum - By Robert Rapier - Nov. 23 (Opinion) - It has been interesting to watch the flurry of ethanol rhetoric since the recent elections. With the $0.45 per gallon subsidy (called the VEETC) and the ethanol tariffs both set to expire at the end of next month, both sides feel that there is a lot at stake, and they have really ramped up the rhetoric. One side will claim that ethanol is the greatest thing since sliced bread, then the other side claims it is an environmental disaster. Around and around the claims go. Misinformation abounds.

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The Cost of Energy Independence

Mon, 21 Jun 2010 00:00:00 -0700

The Oil Drum - By Robert Rapier - Jun. 21 (Opinion) - In the clip above, presidents mention many different options for reducing our oil dependence. The problem is that they are all more expensive than oil, aren’t fungible with oil, and/or are themselves dependent upon oil. So politicians ultimately only pay lip service to the idea of energy independence (very popular) but don’t take tough measures (very unpopular) to actually achieve the goal.

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What happens when energy resources deplete?

Thu, 17 Jun 2010 00:00:00 -0700

The Oil Drum - By Gail Tverberg - Jun. 17 (Opinion) - The popular myth among people concerned about peak oil is that difficulties do not really start until oil production begins its down-slope. In my view, the difficulties start much sooner--as soon as oil supply cannot be provided at close to a constant price.

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Renewables to the rescue?

Wed, 16 Jun 2010 00:00:00 -0700

The Oil Drum - By Euan Mearns - Jun. 16 (Opinion) - Somewhat ironically, it is BP that provides the energy world with a priceless service through their annual review of world energy that was published last week (with little fanfare) which this year, for the first time, includes data on renewable energy.

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Energy Transitions Past and Future

Mon, 07 Jun 2010 00:00:00 -0700

The Oil Drum - By Cutler Cleveland - Jun. 07 (Opinion) - In the coming decades, world oil production will peak and then begin to decline, followed by natural gas and eventually coal production. There is considerable debate about when these peaks will occur because such information would greatly aid energy companies, policy makers, and the general public. But at another level, the timing of peak fossil fuel production doesn't really matter. A more fundamental issue is the magnitude and nature of the energy transition that will eventually occur.

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Proposed Tax Changes on US Oil and Gas Producers

Thu, 21 May 2009 00:00:00 -0700

The Oil Drum - May. 21 (Opinion) - Last week, the government released a lengthy document, General Explanations of The Administrations 2010 Revenue Proposals, which includes a 12 page segment titled "Eliminate Oil and Gas Company Preferences". I've excerpted some of these below the fold. It strikes me that the authors of these rules do not grasp that oil has peaked, and we can't continue business as usual nor pay back our financial debts by importing 70%+ of our oil. My thoughts follow the excerpts.

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Why Oil Shortages May Cause Price Decreases, Rather than Increases

Mon, 18 May 2009 00:00:00 -0700

The Oil Drum - May. 18 (Opinion) - A lot of people think peak oil is no longer a problem because prices are no longer in the stratosphere. It seems to me that standard economic models start breaking down when production for a commodity like oil starts becoming difficult to expand and there are no good substitutes.

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Europe | Post-peak mechanized agriculture: the RAMSES project

Tue, 28 Apr 2009 00:00:00 -0700

The Oil Drum - Apr. 28 (Opinion) - Today, agriculture in the industrialized world is a task for a minuscule fraction of the workforce; people whose job is to operate heavy machinery powered by fossil fuels. But, with peak oil arriving, or perhaps already arrived, we are going to see big changes. In itself, mechanization does not affect agricultural yields, but higher costs of fossil fuels are already affecting food prices. And, without power from mechanical engines, farming would have to go back to the old ways; relying again on human and animal muscles. Richard Heinberg has spoken of the need of "50 million farmers" for agriculture in the USA. But that would imply transforming overweight and under-excercised office workers into the kind of lean and fit peasants who are the typical workforce of countries where the industrial revolution has not arrived yet. It won't be easy, especially if we were forced to do it in a short time.

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Iraqi Oil: Black Gold or Black Hole?

Mon, 27 Apr 2009 00:00:00 -0700

The Oil Drum - Apr. 27 (Opinion) - However, six years after the fall of Baghdad, the country is nowhere close to producing 6 million barrels a day. As a matter of fact, the country is still not producing at the same level it did before the war (2.2m bpd vs 2.5m bpd before the war). It is worth noting that the pre-war level was achieved despite years of war and crippling economic sanctions. Yet despite current access to capital and technology, the country could not yield better results than oil production under the Saddam regime in the midst of war and sanctions.

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Limits to Growth Model Worth Another Look

Fri, 24 Apr 2009 00:00:00 -0700

The Oil Drum - Apr. 24 (Opinion) - There are only finite resources in the world, but population continues to grow. How will this situation resolve itself? This was a question a group of scientists (Meadows et al), commissioned by the "Club of Rome," attempted to answer back in 1972, in a book called Limits to Growth. The model they presented predicted growing resource scarcity, increasing pollution, and eventual population decline, all prior to 2100.

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Further Evidence of the Influence of Energy on the U.S. Economy - Part 2

Thu, 23 Apr 2009 00:00:00 -0700

The Oil Drum - Apr. 23 (Opinion) - I will show an even greater connection between energy prices, interest rates, and the financial sector, based in large part on a review of minutes of the Federal Reserve Open Market Committee (FOMC) from the end of 2002 to 2007. It appears the Fed’s inflation expectations were very closely linked to petroleum prices. Because of this, the rise in oil prices led the Fed to raise interest rates in an attempt to control inflation, which in turn had unintended consequences.

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Forecasting Coal Production Until 2100

Tue, 07 Apr 2009 00:00:00 -0700

The Oil Drum - Apr. 07 (Opinion) - A model capable of projecting mineral resources production has been developed. The model includes supply and demand interactions, and has been applied to all coal producing countries. A model of worldwide coal production has been developed for 3 scenarios. The ultimately recoverable resources (URR) estimates used in the scenarios ranged from 700 Gt to 1243 Gt. The model indicates that worldwide coal production will peak between 2010 and 2048 on a mass basis and between 2011 and 2047 on an energy basis. The Best Guess scenario, assumed a URR of 1144 Gt and peaks in 2034 on a mass basis, and in 2026 on an energy basis.

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A North American Energy Plan for 2030: Hydro-electricity - The forgotten renewable energy resource

Mon, 06 Apr 2009 00:00:00 -0700

The Oil Drum - Apr. 06 (Opinion) - Presently 38% of North American electricity is produced from carbon free sources (nuclear 19%, hydro 18% and wind energy 1.7%). N America has substantial oil, natural gas and coal reserves, exceptional potential solar and wind resources, a large hydro electric capacity, and unique natural hydro storage lakes that can be used for short and long term energy storage.

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Where we are headed: Peak oil and the financial crisis

Wed, 25 Mar 2009 00:00:00 -0700

The Oil Drum - By Gail Tverberg - Mar. 25 (Opinion) - The current financial crisis is a direct result of peak oil. There may be oscillations in the economic situation, but generally, we can't expect things to get much better. In fact, there is a very distinct possibility that things may get very much worse in the next few years.

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Senate Testimony on the Energy Water Nexus

Tue, 24 Mar 2009 00:00:00 -0700

The Oil Drum - By Michael E. Webber, Nate Hagens - Mar. 24 (Speech) - My testimony today will make four main points: 1. Energy and water are interrelated, 2. The energy-water relationship is already under strain, 3. Trends imply these strains will be exacerbated, and 4. There are different policy actions that can help.

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World Oil Production Peaked in 2008

Tue, 17 Mar 2009 00:00:00 -0700

The Oil Drum - By Tony Eriksen - Mar. 17 (Special Report) - World oil production peaked in 2008 at 81.73 million barrels/day (mbd) shown in the chart below. This oil definition includes crude oil, lease condensate, oil sands and natural gas plant liquids. If natural gas plant liquids are excluded, then the production peak remains in 2008 but at 73.79 mbd. However, if oil sands are also excluded then crude oil and lease condensate production peaked in 2005 at 72.75 mbd.

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Europe | Fire or Ice? The role of peak fossil fuels in climate change scenarios

Mon, 09 Mar 2009 00:00:00 -0700

The Oil Drum - Mar. 09 (Opinion) - Will the world end in fire or in ice? That is, are we going to be hit by global warming or are we going to freeze because of lack of fossil fuels? We don't know yet, but here is a brief summary of the recent papers that have appeared on the subject.

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Mechanics of Future Oil Price Volatility (A Flubber Cobweb)

Thu, 05 Feb 2009 00:00:00 -0800

The Oil Drum - Feb. 05 (Opinion) - The fundamental problem facing oil markets at present it this: while present supplies are sufficient to meet present weak demand, these sources of production face rapid decline. The current low oil prices are not sufficient to support the long term investment in future supplies, conservation, and consumption efficiency that will be necessary to mitigate the impact of this decline. Because of the time-lag between a sufficient price signal and oil reaching the market (or demand being reduced), and because of the impact of the recent price collapse on producer psychology, volatility will rapidly incrase as the market's price signal must make incrasingly exaggerated moves to bring supply and demand into equillibrium.

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Obama's Energy Policy Announcement

Tue, 27 Jan 2009 00:00:00 -0800

The Oil Drum - Jan. 27 (Opinion) - Yesterday, President Obama delivered remarks on his plan to "reverse our dependence on foreign oil while building a new energy economy that will create millions of jobs". In this post, I provide Obama's remarks on his plans to reduce our dependence on foreign oil (not really "energy independence", as some have called it), plus some graphs of current imports to put these remarks in context.

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Advice to Pres. Obama (#5): One Engineer's Advice for Energy Policy

Mon, 26 Jan 2009 00:00:00 -0800

The Oil Drum - Jan. 26 (Opinion) - For much too long, US energy legislation (I hesitate to call it policy, because it lacks the coherence to justify the label) has been aimed at short-term patches on problems which have only gotten worse. CAFE regulations have barely held fuel economy steady, while low fuel prices caused consumption to skyrocket. "Free trade" allowed cheap oil imports to kill movement toward efficiency and substitutes. The auto industry lobbied against fuel taxes to promote its short-term interest in selling profitable trucks, with the long-term result that all 3 US automakers will go bankrupt in the next year if nothing is done. We've had change before, but the results put us where we are now. It's time for the right change.

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Energy Taxes and the Electric Grid

Fri, 16 Jan 2009 00:00:00 -0800

The Oil Drum - Jan. 16 (News Analysis) - The tax code is not at all generous with respect to investments in the electric grid. The effective tax rate on these investments is very close to the unadjusted statutory tax rate of about 39%. If investment is to be encouraged in the electric grid, Dr. Metcalf believes that this tax rate must be lowered.

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Advice To Pres. Obama: Yes We Can, But Will We?

Thu, 15 Jan 2009 00:00:00 -0800

The Oil Drum - Jan. 15 (Opinion) - We are at a major crossroads in the history of our nation and our world. There are dozens if not hundreds of salient aspects of our supply and demand situation, each with its own cheerleaders, opponents and unaware. Myopic focus on any particular issue runs the risk of creating more long term harm than good.

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Floating Offshore Wind Power

Tue, 09 Dec 2008 00:00:00 -0800

The Oil Drum - Dec. 09 (Opinion) - Ideally, offshore wind farms will be far enough away from land to avoid being seen from the shoreline, eliminating any residual objections from local residents. Current offshore projects tend to site turbines in waters less than 20 metres deep - going further offshore would mean locating them at depths of 50 meters or more, which is too deep to build supporting towers or trusses down to the sea floor at an affordable cost.

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