Saturday, November 1, 2008

Peak Oil Survival: Choosing Reality or Illusion

I observed much about Peak Oil while traveling in Spain for the month of October, mostly driving: Madrid, Alicante, Granada, Cordoba, Sevilla, Merida, Barcelona, Aranjuez, and Segovia. I talked with taxi drivers, hotel workers and owners, shop workers and owners, tourists from all over the world, and a business owner relative who knows the economy of Spain, Europe, and the world well. I learned much as I traveled, including much reading of the "International Herald Tribune," "El Pais," "Times of London," "Financial Times," and the "Wall Street Journal," as well as viewing CNBC, CNN, and the local TV news.

Building construction in Spain has almost ceased and construction cranes stand idle. Capital is scarce. No amount of government priming will change that. Few new solar panels and wind turbines will be added to the thousands in use. Commercial centers, factories, and offices are all slowing down and many will close in the months ahead. Spain will soon have spare electric power. The large number of tourists on the streets is a hold over from the pre-recession economy. Tourism is declining rapidly. This is like much of Europe and the U.S.

Global oil production has been plateaued since early 2005. So, the oil flow rate has been much the same, but now more oil is consumed by China, India, and the oil producing nations. Europe, the U.S., Japan, Australia, etc. are consuming less. Peak Oil is here, regardless of the most recent U.S. Energy Information Agency data which show some possible recent minor increase. When oil production is the same after 4 years of trying hard to increase it, we are at Peak Oil.

Very soon oil production will begin to decline, probably about right now (2012 at the latest, according to independent studies). Unless they are transported to the Middle East, China, or India, those idled construction cranes in the U.S. and Europe will remain idle.

Despite a media clamor in Spain for more wind and solar investment, it won't happen. Soon all of the capital will go to subsidizing unemployment (currently at about 15% and rising rapidly) and to public works in order to employ people. The manufacture of solar panels and wind turbines produces few jobs. As soon as oil production begins to decline, global recession will devastate the global economy and capital and government revenues will evaporate.

We need to examine solar and wind power. But no one has a real plan on how solar/wind will power tractors and combines, transport food and goods, or fertilize crops. Showing a photo of an electric powered tractor, truck, or train or saying we can do it is not a plan. What would the infrastructure for the electric economy look like? Where would the trillions of Euros in capital come from? How can governments pay for it when people are out of work and governments have little revenue? Where will the oil come from to manufacture, transport, and maintain the electric economy? Where will people get the money to buy electric vehicles when they are out of work and have little trade in value on their gasoline/diesel powered cars?

How can we maintain the power grid without diesel for trucks? When the highways fail from a lack of maintenance, there won't be replacement parts for the power grid, wind turbines, and solar panels. As I cruised the highways of Spain, I saw some huge transformers and gigantic wind turbine blades being transported by trucks. Everything depends on trucks moving on the highways. Most food, goods, and people in Europe move by trucks, not trains. But like the construction cranes, those trucks will be idle one day -- and there goes food distribution, the power grid and everything. Without electric power, almost nothing mechanical or modern functions -- lights, sanitation, water purification and distribution, refrigeration, heating and air conditioning, pumping of diesel and gasoline, building systems, elevators, communications, emergency services, etc. Without the power grid, wind turbines and solar panels are mostly useless. In the future, wind turbines and solar panels will sit idle, monuments to misdirected policies that wasted fossil energy to manufacture, transport and maintain devices to produce electric power, when we need liquid fuels. The same can be said for nuclear power.

Shall we plan and prepare for the real future: a world without oil and without electric power. Or, shall we continue to avoid reality, dream about what will never happen, and waste time, effort, and capital on illusions?