"The Net Hubbert Curve: What Does It Mean?" By David Murphy, The Oil Drum, June 22, 2009

A recent post on this blog reviewed Tony Eriksen's study of declining oil production, which is summarized in this Figure. These data show a slow decline in global crude oil production currently and then accelerating after December 2010.

Because oil is used to produce oil, we should focus on net oil production, which is what we have left after oil is consumed to extract, refine, and deliver oil products to market. The rate of decline in net oil production is much steeper than for all oil produced, as shown in Murphy's Figure 3.

The drop in net oil production will probably be steeper than Murphy forecasts. Matthew Simmons estimates that 100 trillion dollars of investment is need to replace the globe's rusting infrastructure of pipelines, drilling rigs, platforms, and refineries. Much of this investment will consume oil to manufacture, transport, and assemble this infrastructure. And everyone who works on these 100 trillion dollars of projects will use their pay to buy products made out of oil or transported by oil. Currency is a ticket to buy oil. Thus less net oil will be produced than shown in Murhpy's Figure 3.

Also, as oil exporting nations consume more oil domestically they export less to the developed nations; hence, the oil supply available to developed countries will be considerably less than shown in Murphy's Figure 3.

This analysis indicates that oil supplies for the developed world will decline precipitously beginning in the next two years and the decline will accelerate over time.

This suggests that a rapid economic global collapse will occur in less than 10 years.

"Adventures In Post-Oil Paradise," By Peter Goodchild, Countercurrents, April 27, 2009

In this article, Peter Goodchild covers seven years when he and his wife worked to become self-sufficient on four acres in a rural area near Ontario, Canada. Although he concludes that "we learned that it is possible to live with some independence from modern civilization," they depended on modern civilization for much, including a chain saw, bow saw, wood stove, building materials, wire fencing, seeds, and clothing.

After the last power blackout, such things will become unavailable, as he notes himself in another article.

"World hunger reaches the 1 billion people mark," By Alessandra Rizzo, Associated Press, June 19, 2009

"One in six people in the world — or more than 1 billion — is now hungry, a historic high due largely to the global economic crisis and stubbornly high food prices, a U.N. agency said Friday.

Compared with last year, there are 100 million more people who are hungry, meaning they receive fewer than 1,800 calories a day, the Food and Agriculture Organization said in a report." (CONTINUED HERE).

"California nears financial 'meltdown' as revenues tumble," By Jim Christie, Reuters, June 11, 2009

"California's government risks a financial 'meltdown' within 50 days in light of its weakening May revenues unless Governor Arnold Schwarzenegger and lawmakers quickly plug a $24.3 billion budget gap, the state's controller said on Wednesday.

California's revenues have been on a dramatic slide as a result of recession, rising unemployment and its lengthy housing downturn.

The state's revenues from personal income taxes tumbled by 39.3 percent in May from a year earlier while revenues from corporate taxes fell by 52.1 percent and revenues from sales taxes sagged by 7.6 percent, according to a report released by Chiang's office." (CONTINUED HERE).

'Most banks still getting weaker, analysis shows," By Bill Dedman, MSNBC, June 11, 2009

"Bad loans on real estate continue to push harder on the nation's banks.

At the end of the first quarter, six out of every 10 banks in the U.S. were less well prepared to withstand their potential loan losses than they had been at the end of 2008, according to a new analysis by msnbc.com and the Investigative Reporting Workshop at American University in Washington. Overall, bad loans rose another 22 percent in the quarter as the recession continued." (CONTINUED HERE).

"The Depression Quietly Deepens," By Ambros Evans-Pritchard, Telegraph.co.uk, June 6, 2009

"The global slowdown has been deeper than that seen during the Great Depression, according to Barry Eichengreen." (CONTINUED HERE.)

"Why Home Prices May Keep Falling ," By Robert J. Shiller, The New York Times, June 8, 2009

"Home prices in the United States have been falling for nearly three years, and the decline may well continue for some time.

Even the federal government has projected price decreases through 2010. As a baseline, the stress tests recently performed on big banks included a total fall in housing prices of 41 percent from 2006 through 2010. Their 'more adverse' forecast projected a drop of 48 percent — suggesting that important housing ratios, like price to rent, and price to construction cost — would fall to their lowest levels in 20 years.

Such long, steady housing price declines seem to defy both common sense and the traditional laws of economics, which assume that people act rationally and that markets are efficient. Why would a sensible person watch the value of his home fall for years, only to sell for a big loss? Why not sell early in the cycle? If people acted as the efficient-market theory says they should, prices would come down right away, not gradually over years, and these cycles would be much shorter."

(CONTINUED HERE).

Why We Need the National Academy of Sciences to Study Peak Oil (petition), By Phyllis Sladek

from Energy Bulletin, June 8, 2009

Peak Oil: Our need for immediate scientific investigation – and action

A growing number of international geologists and analysts warn of a looming catastrophe with the onset of the decline in the global supply of oil (2). Likewise, reports by several federal agencies, including the US Army Corps of Engineers, point to the need for immediate action, because the foreseeable impacts on our infrastructure and economy are without precedent (3).

Please sign our petition, calling on President Obama and Congress to direct an immediate scientific investigation by the National Academy of Sciences (NAS).

Peak Oil will present our Nation with multiple and continuing crises that will require hard decisions. With a near-term peak, for example, we face the likelihood of shortages of gasoline and diesel fuel, along with the problem of how to allocate limited supplies. Beyond the direct effect on the movement of people and goods, we might well have difficulty maintaining components of our vital infrastructure such as roads, pipelines and the electrical grid. (4).

The National Academy of Sciences is the only source that can provide unbiased and authoritative answers to the questions of how to manage in the era of the “remorseless decline” in available oil and natural gas. The Academies occupy a special place, due to their unique history and mission as the scientific advisors to the Nation (5).

The Academies will have the opportunity to lay out the pieces of the peak oil crises in a clear overview that can provide a factual basis for the emotionally difficult reality we face. We can make our political process work for us to make changes in oil use and energy policy – and influence other nations to do the same…before it is too late.

This complete picture of “peak oil”, along with the Academies recommendations for policy guidelines, can galvanize our top political leaders to dramatically change the course of world history.

Our petition specifically asks for these specific and positive directions, so we will know what constructive actions might be taken at the national, state and local levels on short notice, such as community-based emergency plans and bolstering local food production.

Please sign our petition asking President Obama and Congress to act now.

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Full text of 'A Petition for the NAS to Study the Decline of Worldwide Oil Production'

A Call to President Barack Obama and to the Congress of the United States of America to Commission a Comprehensive Study of Oil Production Decline (termed “Peak Oil”): Facts, Impacts and Mitigation and Preparedness Options to be undertaken by the National Academy of Sciences (NAS), the National Academy of Engineering (NAE), the Institute of Medicine (IOM) and the National Research Council (NRC).

Whereas, noted governmental, industrial and scientific authorities indicate the Nation and the World face unprecedented challenge and hardships due to the decline of worldwide oil production (1);

Whereas, many of these authorities indicate that time is of the utmost importance (1);

Whereas, many studies also conclude that leaving the problem unaddressed will result in major economic dislocations and the possibility of global economic collapse (3);

Therefore, we, the undersigned, petition the Congress and the President to commission the NAS, NAE, IOM and NRC to undertake a comprehensive, nonpartisan analysis of the facts, impacts and implications of “Peak Oil” in order to advise the Nation on appropriate responses (4).

Further, we request that this comprehensive study be undertaken with speed and with a formal mechanism whereby independent analyses regarding causes, impacts, and mitigation, risk management, and contingency options will be considered by members of the study committees.

1 US Army Corps of Engineers, Energy Trends and Their Implications for the US. Army Installations. Construction Engineering. Sep 05. ERDC/CERL TR-05-21. analysis of “primary issues affecting energy options” and the Executive Summary, p IV, states "Domestic production of both oil and natural gas are past their peak and world petroleum production is nearing its peak." http://stinet.dtic.mil/cgi-bin/GetTRDoc?AD=A440265

International Energy Agency (IEA) World Energy Outlook 2008. English Executive Summary, p. 3 “Current global trends in energy supply are patently unsustainable”, and on page 7 “Some 64 mb/d of additional gross capacity – the equivalent of almost six times that of Saudi Arabia today – needs to be brought on stream between 2007 and 2030.” http://www.worldenergyoutlook.org/docs/weo2008/WEO2008_es_english.pdf

2 US Department of Energy: Peaking of World Oil Production: Feb 5, 07. DOE/NETL-2007/1263. p6 “The mitigation of the post peaking oil shortage will require extremely large-scale action, starting roughly 20 years before the onset of peaking” http://www.netl.doe.gov/energy-analyses/pubs/Peaking%20of%20World%20Oil%...

3 DOE NETL. Peaking of World Oil Production: Impacts, Mitigation, & Risk Management. February 2005 Hirsch, R.L., Bezdek, R., Wendling, R “… the failure to act on a timely basis could have debilitating impacts on the world economy.” p.60 http://www.netl.doe.gov/publications/others/pdf/Oil_Peaking_NETL.pdf ; also see (1) above..

4 US Government Accountability Office, Report to Congressional Requesters. Crude Oil. Uncertainty about Future Oil Supplies Makes It Important to Develop a Strategy Addressing a Peak and Decline in Oil Production. February 7, 2007. GAO-07-283. In the Highlights section , “no coordinated federal strategy for reducing uncertainty about the peak’s timing or mitigating its consequences.” http://www.gao.gov/new.items/d07283.pdf

More about the petition

We are dedicated to promoting the understanding of “peak oil” and the interlocking problems that relate to the impending decline in our global energy supply.

We urge a comprehensive, objective and integrated “peak oil” study by the US National Academy of Sciences and the affiliated Academies, to include a study of impacts and policy advice.

We support creative and practical strategies for sustainability, based on the values of civil liberties and fundamental human rights for all people.

Author of blog – Phyllis Sladek. Please note: The best way to reach us is to submit your comments on the blog. You can also send an email to understandingpeak (at) gmail.com.

What can you do?

• Our elected representatives need to hear from us about “peak oil”! We want the National Academy of Sciences to investigate the likelihood of “near-term” peak and its impacts. Please tell your friends and neighbors!
• Want to do a one minute action? Go here to sign the petition.
• Would you like to take another effective action? To reach your Congressperson, copy and paste the petition into this site
• Please take a minute to follow-up with a phone call to your Senators and members of Congress. The toll-free number is (866-220-0044.) Let them know you want a “peak oil impacts” study by our National Academy of Sciences – now!
• You can also paste the petition into President Obama’s contact page here.
• And, you can call and leave your message for the President at (202) 456-1111.

Editorial comment - Phyllis Sladek, coordinator of the petition, welcomes hearing from people who would like to help promote it. In addition, she offers some ideas: "People can download a copy of the petition, take it to a "Transition Town" potluck or other event, then gather, say, ten signatures, and arrange a meeting with their member of Congress. They can take the petition w. signatures to the meeting.

We can also try to get the petition adopted by some of the major environmental and other kinds of related groups.."

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Original article available here

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A Review of Neil Jackson’s Photo Essay "Conflict"

In “Conflict” photojournalist Neil Jackson examines the causes and consequences of ethnic, national, and international violence. He employs 134 of his photographs along with quotations that explain and document his work. The photographs place us where we have better sense of conflict.

This is an important work that will interest anyone who wants to learn about modern history. Knowledgeable historians and astute political observers will be challenged to think deeper about the causes of conflict. Students of history at all levels will be challenged to think about who we are and why governments often act with malice.

Jackson examines a variety of issues and conflicts, including: education; the Second World War; Bosnia; Northern Ireland; Scotland; control of oil resources; British banking and government deception and manipulation in the economic collapse of 2008 and 2009; and the Peak Oil energy catastrophe. We gain a better understanding of modern conflict, the twilight days of the age of oil, and the end of modern civilization.

Education doctrines that date from a century ago to the present explain much about how the western world evolved into patterns of authoritarianism, popular submission, civil war, genocide, international conflict, and atrocities.

We learn how industry, government, media, and the public and relate to values, democracy, authoritarianism, manipulation, power, domination, violence, and war.

Neil Jackson’s work supports a quote in his introduction: “Almost all conflict is about the allocation of resources. People fight in war or in civil society to get a better deal.” His work can also demonstrate that conflict stems from hatred, xenophobia, vengeance, arrogance, authoritarianism, racism, ignorance, and stupidity, as well as from the hopes and dreams of the poor and the young who seek a better life. Neil Jackson can expand his study in many directions.

How is it that the U.S. fell into the trap set by Osama Bin Laden? Despite the recent lessons of the USSR in Afghanistan and the U.S in Vietnam, the U.S. is now trapped in a guerilla war in economically destitute Muslim Afghanistan. The story of David and Goliath is shared by Christianity and Islam. Yet the U.S. does not see that the Muslim world views Bin Laden as David and the U.S. as Goliath.

Revolution is a form of conflict and the Middle East is the world’s tinderbox of revolution. Here, the greatest oil wealth is squandered on the world’s largest indoor snow park and Rolls-Royces while the masses suffer in poverty. What were the motives of the young men who gave their lives in the terrorist attack of 9/11. Were they religious fanatics or do their motives have to do with the poverty of the masses who are excluded from the benefits of national wealth? Did political alienation drive religious fanaticism? Who supplies the elites with weapons needed to suppress revolution in the Muslim world? Did the U.S. imprison and torture Bin Laden’s followers in order to silence discussion of their motives?

War is often folly and many aggressors fail miserably. Adolph Hitler promised Germany a Third Reich that would last 1,000 years, but it lasted barely 12 years. Hitler committed suicide in a pathetic fashion to avoid the humiliation of a trial before the world, including the Jewish people he hated.

Oil is central to Jackson’s study of conflict, and much of the Second World War, Cold War, and the two Bush/Cheney wars are about oil. The very survival of the globe’s population depends on oil. How is it that virtually all of us squandered this vital liquid on automobiles, pleasure boats, suburban living, get-away vacations, luxuries, and vanities? What does this tell us about us?

Neil Jackson’s work evolves as he learns. I will check back from time to time to learn from what he is learning.