Surviving Peak Oil: Planning, Preparation, and Relocation

Peak Oil: "World Oil Production Forecast" by Tony Eriksen (Ace), posted on "The Oil Drum," November 23, 2009

2009-11-28T19:53:00.005-06:00

Tony Eriksen's "World Oil Production Forecast" represents the most accurate forecast of world oil production, as it is based on "an aggregation of individual forecasts from over 80 countries including over 300 major oil projects."See Wikepedia for an explanation of this method.

"World oil production peaked in July 2008 at 74.74 million barrels/day (mbd) and now has fallen to about 72 mbd. It is expected that oil production will decline at about 2.2 mbd per year as shown below in the chart." [click on chart to enlarge]

(CONTINUED HERE)

Blog comment: As noted on this blog previously, 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.

"Peak Oil: Not enough oil for the G20 package," By Kjell Aleklett, Aleklett Energy Mix, Apil 3, 2009

2009-09-26T05:17:00.004-05:00

The world’s wealthiest nations, the G20 group, have decided to light a fire but have forgotten a very important detail – to check whether there is sufficient fuel to enable the fire to burn. Historically we have never had global economic growth without a simultaneous increase in the use of energy. This means, primarily, an increase in the use of fossil fuels. For a few nations – China, USA, Russia, India, Australia and South Africa – coal is a very important fuel. However, the most important fuel for the world economy is oil. All nations of the world use oil.

When the economies of different nations are compared, one usually compares their GDP(PPP), Gross Domestic Product (Purchasing Power Parity) per capita. If one furthermore compares how much oil nations use one can see that, since the Second World War, all nations have had to increase their oil use to get economic growth. If we compare how much oil is needed per 1000 dollar GDP (PPP) per person we get a suitable figure for comparison. The amount of oil different nations use varies. In 1980 Sweden, together with the USA, was the worst in the world since we needed the most oil. Nuclear energy and increased use of biofuels have helped us in Sweden to improve but we are still not as good as, for example, France, Germany and the United Kingdom.

During the last 20 years we have had global economic growth of approximately 3% per annum. Fuel use in the form of oil has increased, on average, by half of this rate, i.e. 1.5% per annum. In the future prognoses made by the International Energy Agency, IEA, they believe that we can increase our efficiency of fuel use but we will still need more oil. The documents that resulted from the G20 meeting assume that this fuel will exist to allow future global growth.

To get an appreciation of the scale of the task we can examine the economic growth that the world experienced from 2003 until 2007. In 2003 oil consumption was 77 million barrels per day and in 2007 it was around 85 million barrels per day, i.e. an increase of 10 percent. At the moment consumption is around 84 million barrels per day. If the stimulus package that the G20 group decided on is to generate the same amount of growth as seen in the 2003 to 2007 period then we will need an increase of 8 to 9 million barrels per day during the next 5 years. Such an increase is not possible.

The Global Energy Systems group at Uppsala University has just published an article in the scientific journal Energy Policy (see article) in which we show that oil production from those fields that are currently in production will decrease by 6 percent per year during the next 5 years. This means a decrease in the rate of production by 18 million barrels per day after 5 years. The G20 nations want to increase oil use but the forces of Nature say that there will be a decrease. For the G20 nations to get what they want the world’s oil industry would need to bring online new production of 25 million barrels per day over the next 5 years.

The USA-based company CERA has studied all the projects that the oil industry currently plans to bring online in the coming years. Last summer they arrived at an optimistic estimate that saw 14 million barrels per day of new production. One week ago they revised this increase downwards by 7.6 million barrels per day since companies are now postponing projects.

The same nations that now require increased oil consumption will meet in December with the world’s other nations in Copenhagen. They will then discuss what measures they can take to reduce oil consumption. They do not discuss what volumes of renewable energy will be needed but we have made an initial preliminary estimate and we find that 30 million barrels of oil per day must be replaced with renewable fuels and electricity by 2030 to keep a GDP(PPP) growth rate of 3 percent. What the G20 group should discuss is what investments will be required for this transformation of the energy system to become reality.

Kjell Aleklett, Professor of Physics
Global Energy Systems, Uppsala University, www.fysast.uu.se/ges
President of ASPO International, the International Association for the Study of Peak Oil & Gas, www.peakoil.net
Mobile: +70 425 0604
Email: kjell.aleklett@fysast.uu.se

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Original article available here

"The Stonewalling of Peak Oil," By Dr. Robert Hirsch, ASPO-USA, September 7, 2009

2009-09-08T05:38:00.007-05:00

Dr. Robert L. Hirsch is the lead author of a seminal report, "Peaking of World Oil Production: Impacts, Mitigation & Risk Management," written for the U.S. Department of Energy’s National Energy Technology Laboratory (DOE-NETL) and released in early 2005.

"When the report was done, management at NETL really didn’t know what to do with it because it was so shocking and the implications were so significant. Finally, the NETL director decided that she would sign off on it because she was retiring and couldn’t be hurt, or so I was told. The report didn’t get widely publicized. It somehow was picked up by a high school someplace in California; eventually NETL put it on their website. The problem for people at NETL—and these are really good people—was that they were under a good deal of pressure to not be the bearers of bad news -- pressure from people in the hierarchy of the DOE. This was true in both Republican and Democratic administrations. There is, I think, ample evidence, and some people in DOE have gone so far as to say it specifically, that people in the hierarchy of DOE, under both administrations, understood that there was a problem and suppressed work in the area. Under President Bush, we were not only able to do the first study but also a follow-on study that looked at mitigation economics. After that, visibility apparently got so high that NETL was told to stop any further work on peak oil.

Yes, that was terrible. And it was strictly politics and political appointees—I have no idea how far up in either administration (the current one and previous one) these issues went or now go. People in the Clinton administration had talked about peak oil, including President Clinton and Vice President Gore, and the same thing is true in the Bush administration, and the same is true, to the best of my knowledge, in the Obama administration.

The peak oil story is definitely a bad news story. There’s just no way to sugar-coat it, other than maybe to do what I’ve done on occasion and that is to say that by 2050 we’ll have it right and we will have come through the peak oil recession—quite probably a very deep recession. At some point we’ll come out of this because we’re human beings, and we just don’t give up. And I have faith in people ultimately. But it’s a bad news story and anybody’s who’s going to stand up and talk about the bad news story and is in a position of responsibility in the government needs to then follow immediately and say “here’s what we’re going to do about it,” and no one seems prepared to do that.

Peak oil is a bigger issue than health care, than federal budget deficits, and so forth. We’re talking about something that, to take a middle of the road position—not the Armageddon extreme and not the la-la optimism of some people—is going to be extremely damaging to the U.S. and world economies for a very long period of time. There are no quick fixes."

(VIEW FULL INTERVIEW)

Blog Comment: Dr. Hirsch says that "there’s just no way to sugar-coat [Peak Oil]," but that is what he does. There is no plan or technology for replacing oil, nor is there time or capital to do so. After listening to his speeches, it is clear that his beliefs in America, technology, and the human will distort his scientific analysis. Denial is way of avoiding the horror of the reality ahead.

"New Oil Discovery in the Gulf of Mexico," By Tom Whipple, ASPO-USA, September 7, 2009

2009-09-08T05:15:00.003-05:00

"Last week, the news was dominated by BP’s announcement on Wednesday that it had made a “giant” oil field discovery called Tiber, 35,000 feet beneath the surface of the Gulf of Mexico. BP did not announce the size of the find, but said it was comparable to other discoveries in the area, leading to press speculation that the Tiber find was on the order of 1-3 billion barrels. Initially the announcement that oil could be found so far below the surface was greeted with much enthusiasm with some stories suggesting that a new era of finding oil was at hand and that exploration in the Gulf would revive.

Within a day reality set in as reporters learned that it was likely to take ten years of difficult and expensive drilling before any oil could be produced and even then less than a third of the oil, and possibly as little as 5 to 15 percent, can be recovered. Given that production from existing fields in the Gulf is likely to start declining rapidly in the next few years, oil from the deep water discoveries is unlikely to be sufficient to increase production from the Gulf.

Production in the Gulf of Mexico accounts for about a quarter of total U.S. oil production, or about 1.2 million barrels a day. Gulf production peaked in 2003 at 1.56 million b/d. Most Gulf production wells tend to hit their peak within a year or two, and then begin to drop steeply several years later. Oil production in federal waters of the U.S. Gulf fell 9.8 percent last year, to the lowest since 1997, as new finds failed to keep pace with declining output from fields discovered in the 1970s and 1980s."

(VIEW FULL ARTICLE)

"Simmons vs Yergin, Lynch et al on Peak Oil," By Kate Mackenzie, Financial Times, September 7, 2009

2009-09-07T16:14:00.004-05:00

Kate Makenzie at the Financial Times is trying to inform readers about Peak Oil. She counter poses William Simmons with Daniel Yergen, Michael Lynch, and Ed Morse. Readers are left with questions about who is right. Here is my my published comment :

Global oil production peaked in 2008 and is now in terminal decline. The evidence is clear. During the period 2004 to 2008, as oil prices climbed, all oil producers were pumping at maximum effort with historically high oil prices. During this period, oil production remained flat, peaked a bit in July 2008 and then began to decline while oil prices were very high and before the October global economic collapse, as documented here. And the depletion picture is far worse than Simmons indicated, as explained here.

"What the IEA Doesn't Want You to Know About Peak Oil," By Lionel Badal, Seeking Alpha, September 6, 2009

2009-09-06T08:33:00.004-05:00

"It is not in the interest of some IEA member states, in particular its most powerful member, namely the USA, that the agency provides an honest assessment of the situation. Admitting Peak Oil is real also means that you acknowledge our current way of life is about to (radically) change. And not everyone wants the public to know that. Irresponsible, dishonest? Absolutely."

(VIEW FULL ARTICLE)

Blog Comment: Mr. Birol, Chief Economist at the International Energy Agency has misinformed the public by indicating that global oil production will peak in the in the long term future.

The global oil production plateau from 2004 to 2008 is clear evidence of the peak. As oil prices climbed during this period, oil production leveled off. For more detail, see:

http://survivingpeakoil.blogspot.com/2008/12/top-story-of-year-global-oil-production.html

And the situation is more dire than Mr. Birol indicates:

http://survivingpeakoil.blogspot.com/2009/06/net-hubbert-curve-what-does-it-mean-by.html

"Oil Spin: Ignore the Optimsts, Peak Oil is Real," By Matthew R. Simmons, Foreign Policy, Sepetmeber 4, 2009

2009-09-04T20:11:00.002-05:00

"Last week, four of the world's most outspoken oil aficionados waded into the controversy of peak oil, publishing articles packed with myth and distortion. This "Gang of Four" all claimed the issue was silly, moot, or simply a myth. The four pieces were Pulitzer Prize-winning author Daniel Yergin's seven-page article in Foreign Policy, energy analyst Michael Lynch's three column op-ed in the New York Times, analyst Edward Morse's essay in Foreign Affairs, and scholar Amy Jaffe's paper published by the Baker Institute at Rice University.

(VIEW FULL ARTICLE)

Peak Oil Impacts: "Millions face shrinking Social Security payments," By Stephen Ohlemacher, Associated Press, August 23, 2009

2009-08-23T18:03:00.002-05:00

"Millions of older people face shrinking Social Security checks next year, the first time in a generation that payments would not rise.

The trustees who oversee Social Security are projecting there won't be a cost of living adjustment (COLA) for the next two years. That hasn't happened since automatic increases were adopted in 1975."

(VIEW FULL ARTICLE HERE)

"Insiders Continue to Sell, Sell, Sell," Seeking Alpha, August 14, 2009

2009-08-17T07:40:00.004-05:00

"We have to send a tip of the hat, to ultra popular finance blogger at Zerohedge.com for alerting us to the huge number of insiders who are selling off stock in their companies."

(VIEW FULL ARTICLE)

Blog Comment: Many Wall Streeters know about Peak Oil. Neil King Jr. at "The Wall Street Journal" gave a talk last year at the annual ASPO conference. Two years ago I sent him my Peak Oil impacts report. He wrote back and said he would read it. I wrote back and suggested that he forward the report to his editors, as it would make writing about Peak Oil easier for him. I have posted my Peak Oil impacts report in comments on financial blogs, including those at "The Wall Street Journal" and "Financial Times," and it has been posted on Engerybulletin.net. Bart Anderson at Engergybulletin.net informed me that this article on Peak Oil and the economy had 3,783 unique page views. Another article on Peak Oil and the economy was likely as popular and has been posed on many blogs. We can conclude that many insiders know about Peak Oil.

"Obama says many months before U.S. exits recession," Reuters, August 1, 2009

2009-08-03T07:52:00.003-05:00

"President Barack Obama warned on Saturday it would take "many more months" for the United States to get out of recession even after GDP figures showed the economy shrank only modestly in the second quarter."

(CONTINUED HERE)

"The Indendent" (London) Warns about Peak Oil

2009-08-02T19:42:00.033-05:00

Peak Oil is now, not a decade away as "The Independent" indicates. According to most independent sources, global oil production peaked in 2008. "The Independent" relies on the optimistic IEA for forecasts. But the IEA is NOT an independent agency, as it tends to speaks for global oil and industrial interests. But the IEA indicates that "the oil crisis begins to grip after 2010."

What are your local, state, and federal governments planning for? Chief Economist Fatih Birol at the International Energy Agency warns that “many governments appeared oblivious to the fact that the oil on which modern civilisation depends is running out far faster than previously predicted...” Birol sees a supply crunch within the next few years that will jeopardize hopes of an economic recovery.

The IEA is one reason that governments are oblivious. The IEA has been downplaying Peak Oil for years, and still is in saying that Peak Oil is 10 years away.

Global oil production peaked in 2008 and depletion is steeper than the "The Independent" indicates.

"20 Ways to Waste Your Money," By Erin Burt, Kiplinger. com, July 23, 2009

2009-07-26T11:30:00.004-05:00

"Whether a newbie or seasoned budgeter, nearly everyone has spending holes -- leaks in your budget that drain money with you hardly noticing.

These small drips can add up to big bucks. Once you find the holes and plug them, you'll keep more money in your pocket. That spare cash could be the ticket to finally being able to save, invest, or break your cycle of living paycheck to paycheck.

Here are 20 common ways people waste money. See if any of these sound familiar, and then look for ways to plug your own leaks."

(CONTINUED HERE)

"Root Cellaring 101," By A Reader of Theoildrum.com, July 23, 2009

2009-07-23T09:35:00.003-05:00

I have read with interest your Campfire posts pertaining to discussions of acquiring practical skills and techniques particularly focused on food production, preservation and storage. Perhaps this would be an appropriate forum to gain feedback from some of your readers on a few ideas I have for the construction of a root cellar. Below is a picture of the spot I have chosen in which to build this. The soil is heavy clay, slope faces northeast and ‘elevation gain’ is approximately 6 feet. My dog marks the spot where I intend on building a root cellar.

Site for root cellar - vertical drop of 6-7 feet. (German Shepherd shown for scale)

Photoshop 'cube' intended place for root cellar, placed back in hillside - roughly 6x8x8
After looking at many designs online, and having one bid ($6000) for a cinderblock constructed cellar, I am thinking an easier and possibly cheaper alternative might be to use 8 ft bunker silo sections. See link attached. http://www.hansonsilo.com/precast.php These precast sections of concrete come in various sizes but I’m considering 6’(H) x 8’(L) for an 8x8 root cellar. Other options I’m considering are poured concrete (pricey no doubt), another old farmer told me ‘in the old days’ they would dig out a cave and line the wall with a thin layer of cement. Additional ideas are greatly appreciated; especially those that cost less and/or are simple enough that I can assist in the construction.

Something like the above would be grand, but likely undoable without premium labor. I'm willing to spend in the $4,000-$6,000 range for a quality permanent cellar and will add my own labor/time to the effort (and possibly my internet addicted boyfriend)

I am also curious to know how many of these skills related to basic needs (e.g. food storage) are still around or if two+ generations of oil/electricity have erased them culturally -even the Amish workers near me didn't know what to make of my cellar request.)

Thanks in advance,
MNB

(FULL ARTICLE AND COMMENTS HERE)

"Some Unemployed are Giving Up," By Liz Wolgemuth, U.S. News & World Report, July 22, 2009

2009-07-23T08:02:00.001-05:00

"In some U.S. states, nearly half of the job seekers who have stopped looking for work have done so because they simply don't believe they'll find anything. Indeed, the number of discouraged workers nationwide has more than doubled in the past year. This trend won't be reflected in the widely publicized unemployment rate, as discouraged workers aren't included among the unemployed. Still, in states as diverse as Mississippi, South Dakota, and New York, the span of this often invisible slice of workers signals a population losing its hope."

(CONTINUED HERE)

Cliff's Tips on Prescription Medicines, Diagnoses, and Treatment

2009-07-20T09:14:00.006-05:00

Prescription medicines are usually expensive in the developed countries. In addition, getting the prescription normally requires an appointment with the doctor.

I have found that with the information available on the Internet and mail ordering medications from United Pharmacies -- http://www.unitedpharmacies.com/ -- I can usually save money and time. United Pharmacies does not require a prescription and their medications are of excellent quality. I have always found United Pharmacies to be honest and efficient. And if I need to go to the doctor, I come prepared with symptoms, diagnoses, and prospective medications and treatments.

The most authoritative source for diagnoses and treatments is National Institutes of Health. The site Wrong Diagnosis is excellent, and there are many others such as Mayo Clinic. For depression, anxiety, panics, nervousness, see Crazy Meds and National Institute of Mental Health. See also the sources on the side bar right of this blog.

"Peak Oil: Myth or Reality -- A List of Countries Past Peak," By Praveen Ghanta, Theoildrum.com, July 18, 2009

2009-07-18T12:11:00.004-05:00

Only 14 of the 54 oil producing nations in the world are still increasing their oil production. The era of cheap oil is definitively over, as shown below. Posted on Theoildrum.com with discussion HERE.

Is peak oil real? The BP Statistical Review of World Energy provides the data needed to answer this question. Using the 2009 edition, I have compiled a list of all oil producing countries and regions in the world, along with the production status of each, ordered by year of peak production. BP groups minor producers into categories like "Other Africa", and "Other Middle East", and that notation is used here. All production numbers are quoted in barrels/day.

Country	Peak Prod.	2008 Prod.	% Off Peak	Peak Year
United States	11297	7337	-35%	1970
Venezuela	3754	2566	-32%	1970
Libya	3357	1846	-45%	1970
Other Middle East	79	33	-58%	1970
Kuwait	3339	2784	-17%	1972
Iran	6060	4325	-29%	1974
Indonesia	1685	1004	-41%	1977
Romania	313	99	-68%	1977
Trinidad & Tobago	230	149	-35%	1978
Iraq	3489	2423	-31%	1979
Brunei	261	175	-33%	1979
Tunisia	118	89	-25%	1980
Peru	196	120	-39%	1982
Cameroon	181	84	-54%	1985
Other Europe & Eurasia	762	427	-44%	1986
Russian Federation	11484	9886	-14%	1987*
Egypt	941	722	-23%	1993
Other Asia Pacific	276	237	-14%	1993
India	774	766	-1%	1995*
Syria	596	398	-33%	1995
Gabon	365	235	-36%	1996
Argentina	890	682	-23%	1998
Colombia	838	618	-26%	1999
United Kingdom	2909	1544	-47%	1999
Rep. of Congo (Brazzaville)	266	249	-6%	1999*
Uzbekistan	191	111	-42%	1999
Australia	809	556	-31%	2000
Norway	3418	2455	-28%	2001
Oman	961	728	-24%	2001
Yemen	457	305	-33%	2002
Other S. & Cent. America	153	138	-10%	2003*
Mexico	3824	3157	-17%	2004
Malaysia	793	754	-5%	2004*
Vietnam	427	317	-26%	2004
Denmark	390	287	-26%	2004
Other Africa	75	54	-28%	2004*
Nigeria	2580	2170	-16%	2005*
Chad	173	127	-27%	2005*
Italy	127	108	-15%	2005*
Ecuador	545	514	-6%	2006*
Saudi Arabia	11114	10846	-2%	2005 / Growing
Canada	3320	3238	-2%	2007 / Growing
Algeria	2016	1993	-1%	2007 / Growing
Equatorial Guinea	368	361	-2%	2007 / Growing
China	3795	3795	-	Growing
United Arab Emirates	2980	2980	-	Growing
Brazil	1899	1899	-	Growing
Angola	1875	1875	-	Growing
Kazakhstan	1554	1554	-	Growing
Qatar	1378	1378	-	Growing
Azerbaijan	914	914	-	Growing
Sudan	480	480	-	Growing
Thailand	325	325	-	Growing
Turkmenistan	205	205	-	Growing
Peaked / Flat Countries Total	-	49597	-	60.6% of world oil production
Growing Countries Total	-	32223	-	39.4% of world oil production

Only 14 out of 54 oil producing countries and regions in the world continue to increase production, while 30 are definitely past their production peak, and the remaining 10 appear to have flat or declining production [1]. Put another way, peak oil is real in 61% of the oil producing world when weighted by production. Since 2008 capped a record run for oil prices, most countries and oil companies were trying all-out to increase production. While a handful of producers (think Iraq) might be limited by above-ground factors, the majority of producers simply couldn't do any better in 2008 [2].

The evidence of the demise of the cheap oil era has become insurmountable. In the face of the highest oil prices on record, the great majority of the world's oil producers were incapable of taking advantage and producing more oil. Many nations including the US saw their oil production peak decades ago - there simply is no turning the clock back. This list shows that we are relying on a small number of countries to keep providing cheap oil. We need to move faster to alternatives and greater energy efficiency, before the last fourteen peak as well.

* More information on these countries:

Russian Federation - Russia's oil production collapsed by the early 90's as the Soviet Union collapsed, but despite a decade of growth, Russia's own oil execs don't think the old peak can be surpassed.
India's production appeared to plateau in 1995, and has stayed within a steady range since. The EIA forecasts Indian oil production to remain flat or decline slightly in the near future.
Republic of Congo (Brazzaville) hit a production plateau in 1998, though current production is still very close to 1999 peak levels.
Other Central & South America - The remaining countries of the Americas hit a production peak in 2003, though it's still too soon to know if this will be final peak.
Malaysia has been on a production plateau since 1995, and the EIA projects flat or falling production.
Other Africa - Oil production in much of Africa is potentially impacted by above-ground constraints, so it's definitely possible that production will rise here. It will rise from a low base of only 50,000 bpd however, and may not have much impact on total world production.
Nigeria is impacted by domestic insurgencies in its oil-producing regions, and may be able to lift production if the political situation improves.
Chad's oil production history is too short to definitively identify a peak in production, but the drop-off since 2005 has been dramatic.
Italy has been on a production plateau for over 10 years, and it's unlikely that a mature economy is significantly under-exploiting its resource potential.
Ecuador's production grew rapidly until 2004, but has leveled off and declined somewhat since then.

[1] To be considered past-peak, a producer's current (2008) production has to be at least 10% less than its best year, and the best year must have occurred prior to 2005. Some countries' production has been artificially constrained by political and other non-geological considerations. But in some of these cases, it will be difficult to pass an old peak because decades of depletion have occurred since that peak. Iraq peaked in 1979, making it all the more difficult to pass that now.

[2] While OPEC maintains formal production quotas, it is widely believed that only Saudi Arabia had true spare capacity in 2008, while all other OPEC nations were producing at capacity. The truth is unclear, since OPEC nations do not provide detailed reserve statistics for their oil fields.

Total has created its own short list of oil producers past peak, and Wikipedia has a list here.

" Twenty Dollars Per Gallon: How the rising price of oil will change our lives.," By Christopher Steiner, Forbes.com, July 16, 2009

2009-07-16T21:34:00.003-05:00

"We sit in a period that's popularly (and appropriately) known as "peak oil," meaning that global production of crude is at a zenith that will never again be realized."

"Middle-class life runs on oil. So we should pay rapt attention to things that could cause the price of oil to increase. As the price increases, our lives will indelibly change--and there are plenty of reasons to think that the price of oil will, in the long term, steadily increase."

(CONTINUED HERE)

"Nine Reasons the Economy is Not Getting Better," By Mortimer B. Zuckerman, US New & World Report, July 15, 2009

2009-07-16T07:18:00.007-05:00

"We are now looking at unemployment numbers that undermine any confidence that we might be nearing the bottom of the recession. The appropriate metaphor is not the green shoots of new growth. A better image is to look at the true total of jobless people as a prudent navigator looks at an iceberg.

What we see on the surface is disconcerting enough. The estimate from the Bureau of Labor Statistics of job losses for June is 467,000. That increases by 7.2 million the number of unemployed since the start of the recession. The cumulative job losses over the past six months have been greater than for any other half-year period since World War II, including demobilization. What's more, the job losses are now equal to the net job gains over the previous nine years, making this the only recession since the Great Depression to wipe out all employment growth from the previous business cycle.

Next year, state budgets will have depleted their initial rescue dollars. Absent another rescue plan, they will have no choice but to slash spending or raise taxes, or both. The complete state and local government sector, which makes up about 15 percent of the economy, is beginning the worst contraction in postwar history in the face of a deficit gap of $166 billion for fiscal year 2010, according to the Center on Budget and Policy Priorities, and a cumulative gap of $350 billion in fiscal year 2011.

That's bad enough. But here are nine reasons we are in even more trouble than the 9.5 percent unemployment rate indicates."

(CONTINUED HERE)

Blog Comment: Peak Oil is the reason for continued economic malaise. Eventually state and local governments will lack the resources to maintain the highways -- which support maintenance for the power grid. Federal assistance to states will decline as federal revenues decline. Some 70% of federal revenues come from income taxes. Read more HERE and HERE.

"Hundreds of Thousands of Workers Will Lose Unemployment Benefits Soon," By Marie Coco, Washington Post Writer's Group, July 10, 2009

2009-07-15T19:49:00.004-05:00

"When a virulent disease is ravaging you like a cancer, you don't want a cacophony of voices promoting different or contradictory cures. Yet that is what we're starting to hear about the economic crisis, not only from a politically divided -- and pretty scared -- capital, but from within the Obama administration itself. In just the past few days, Vice President Joe Biden has said the young administration misread the depth of the recession -- an honest account, since most private economists did as well. Laura Tyson, an outside economic adviser to the White House, said it's wise to start preparing another stimulus package."

(CONTINUED HERE)

"The State of Homelessness in the U.S.," By M.J. Stephey, TimeCNN, July 13, 2009

2009-07-15T19:40:00.004-05:00

"There are few economic indicators as grim as homelessness, as the Department of Department of Housing and Urban Development demonstrates in its 4th annual report on the topic, which found that some 1.6 million Americans stayed at homeless shelters from October 2007 to September 2008. The Department also noticed some troubling trends: more families seeking shelter — particularly in rural and suburban areas — and more people going to shelters from stable living arrangements (instead of jails, institutional settings or the military)."

(CONTINUED HERE)

"Three Plans for Fuel Emergencies in the UK," By Rick Munroe, Energy Bulletin, July 13, 2009

2009-07-13T21:28:00.003-05:00

(FULL TEXT BELOW, ORIGINAL ARTICLE IS HERE)

Three plans for fuel emergencies have recently been released by UK public sector agencies. This review compares the three plans, highlights certain points from each, and provides internet links to the documents.

DECC's Business Continuity Management for Fuel Shortages (Nov. 08)

Although DECC is now the lead ministry during fuel emergencies, their document is the shortest (10 pages) of the three plans and overlooks some fundamental information which is contained in the other two.

DECC warns that local fuel supplies "could be exhausted within 48 hours of an [extreme] incident and it could take up to 10 days before stock levels are fully restored" (p.2).

DECC's Maximum Purchasing Scheme would limit purchase for non-essential users (ie. the general public) to a maximum of 15 litres (roughly 3 gallons) per purchase.

This appears to be an impractical strategy for two reasons:

History: In USA during the 1979 crisis they limited purchases to a $5 maximum, a similar volume. As Daniel Yergin states, "The results were exactly the opposite of what was intended, for it meant that motorists had to come back to gas stations that much more frequently" (The Prize, p. 692).
Common sense: Citizens who are worried about their fuel supply will continually be tempted to top up their tanks. Topping-up creates line-ups which waste time & fuel and increase tensions at the pumps. As Yergin further points out, “One estimate suggested that America’s motorists in the spring and summer of 1979 may have wasted 150,000 barrels of oil waiting in line to fill their tanks!” (The Prize, p. 692).

Other analysts have recommended a fixed limit, say 30 litres (no more and no less) as a way of preventing topping-up.

In Annex A, this document refers to the Designated Filling Stations (DFS) which “would provide priority access to road transport fuels for defined customers requiring them for a priority use” (p. 7). Curiously, there is no mention of the fact that over 650 of these DFS sites have already been identified (a fact which is mentioned in the two NHS documents which follow).

Having a number of pre-identified sites which will be restricted to defined priority users is prudent planning.

Here is the link:

Business Continuity Management for Fuel Shortages

NHS Guidance on Planning for Disruption to Road Fuel Supply (Oct. 08)

At 30 pages, this is the longest of the three documents.

It contains several interesting observations:

In the aftermath of Hurricane Katrina, health facilities had power and their lights acted as a beacon (literally) for displaced citizens, and this created some security issues for those facilities.
The "Myth of a Central Fuel List" (p. 14) indicates how seriously businesses view their fuel supply and gives a hint of the efforts that people will go to in order to gain preferential access/Essential User status.
This document has several warnings not to underestimate the complexities of a fuel shortage.
The recommendation to "attempt to have all workers try public transport options" (p. 14) of course makes sense, but as US fuel emergency analyst Kathy Leotta (2007) points out, "Transit systems have only limited capabilities for quickly increasing services... due to a small supply of extra vehicles and drivers" (Leotta, p. 4).
Switching to public transit will be easier said than done.
Other than its request to ensure that "all unforecasted costs... are captured for audit" (p. 17) there is little acknowledgment of the budgetary concerns which could quickly arise. It seems highly unlikely that any free-market economy could have an extended fuel supply problem without also having an extended price spike.
This document provides a preview of the time and energy which must be devoted to the bureaucratic tasks of identifying, approving, informing, prioritizing, documenting and reviewing. How personnel can reasonably cope with the additional bureaucratic burden (on top of the other practical difficulties caused by a fuel emergency) should be of great concern.

Here is the link:

NHS Guidance on Planning for Disruption to Road Fuel Supply

Heart of Birmingham NHS Fuel Shortage Plan (reviewed June 27/09)

This 21-page plan offers a more detailed look at the complexities of managing the Temporary Logo Scheme (p. 4-5), issues around communicating info to the public (p. 6), concerns about supply chain failures, etc.

Returning to the topic of budgetary problems arising during a fuel emergency, it is puzzling to see no warnings in any of these three documents that pricing during a fuel emergency could prove problematic to their budgets and/or to the service delivery capability of their agencies.

In the Birmingham document, the topic of Financial Implications (Sect. 12.0) is raised, but this section contains only one unfathomable sentence: "There are no significant financial implications anticipated in the implementation of this plan" (p. 13).

Similarly, Sect. 10.0 on Training states: "There are no specific training requirements associated with this plan" (p. 13).

Both NHS documents contain some specific and sensible recommendations for personnel, for delivery of services, accountability re fuel use, etc. One would think that this would surely require detailed consultation with staff (and subsequent training) in order to implement these recommendations.

Here is the link:

Heart of Birmingham Teaching Primary Care Trust Fuel Shortage Plan

Some final comments

To their credit, UK planners have highlighted two central facts:

a fuel emergency can be extremely difficult to administer, and
fuel supply and other emergencies must be addressed primarily at the local level, hence the need for local plans, pre-authorization & empowerment, etc.

In North America, meanwhile, there seems to be no comparable activity to raise the profile of fuel emergencies nor to lay preparatory ground-work at the local level.

However, even the UK planners may be placing insufficient emphasis on the ability of a sustained price spike (potentially coupled by a surge in demand for service) to seriously constrain budgets and the provision of essential services.

These three documents offer a preview of a way of life which most citizens have thankfully never experienced: a society where fuel has suddenly become very expensive, where physical supplies of fuel and food may be restricted, where public services are curtailed, and where the overall economy and the public tax base hang in the balance.

The complexities of managing such an unprecedented situation are enormous.

"Economic Fragility Underestimated - Collapse May Be Imminent ," By Arbitrary Vote, Seeking Alpha, July 2, 2009

2009-07-12T08:59:00.003-05:00

"The mainstream media and government are communicating that the economy is on a positive track toward recovery while downplaying the likelihood of another economic catastrophe similar or worse than that experienced in the fourth quarter of 2008 and first quarter of 2009. In actuality, there is a significant chance that the U.S. will experience a severe economic collapse, beyond what has already been experienced, either this year or within the next few years. If there is a perceived, sustainable economic rebound before this happens, do not be fooled - the underlying economic problems still exist and will likely eventually surface in economic collapse.

This following analysis further explores this warning by describing:

The 4 key reasons an economic collapse is likely imminent
Why these 4 reasons make the economy vulnerable
Warning signs and triggers to monitor to foresee a collapse before it happens
What can result from an economic collapse
Ideas for preparation"

(CONTINUED HERE)

"We're not out of the woods – G8 leaders fear double dip slump," By Larry Elliott and Patrick Wintour, Guardian.co.uk, July 8, 2009

2009-07-12T08:50:00.004-05:00

"The leaders of the west's most powerful countries expressed fears tonight of a double-dip recession and stressed the continued need for emergency measures to boost growth until recovery from the worst post-war global recession was assured."

(CONTINUED HERE)

"California in not such a golden state," By Robert Shrimsley, Financial Times (London), July 9, 2009

2009-07-09T16:14:00.004-05:00

"The scale of California's debt crisis - the state is having to issue IOUs as it grapples with a $26bn deficit - has raised some uncomfortable questions for the US.

Is California too big to fail? If so, might the federal government be forced to nationalise it? There are those who believe California should be allowed to fail as a warning to the others. Many ordinary voters are unhappy at bailing out wealthy Californians who enjoyed a luxury lifestyle of sun and sand while their state was sinking."

(CONTINUED HERE)

BLOG COMMENT: For someone who has taught state politics for 30 years, this article is surealistic. Can I really be reading this in a mainstream publication? Am I dreaming? No, tis not a dream, rather it is Peak Oil reality. We are beginning to wake up from a dream, the Age of Oil.

The Wealthy World at its "Oil Break Point," By Peter Tertzakian, The Calgary Herald, July 6, 2009

2009-07-07T09:19:00.004-05:00

"Another quarter gone by. That makes three since the foundations blew out from underneath Lehman Brothers and six quarters since the start of the U.S. recession at the end of 2007. It seems like the negativity is lasting an eternity, and in terms of economic cycles it is. Since the Great Depression, which lasted 14 quarters, the longest recession has been five quarters long, 1981 to 1982. So, at six quarters and counting, the new tag line for our current malaise, 'The Great Recession,' seems appropriate."

(CONTINUED HERE)

"States set to ring in Independence Day sans budget," By Andrew Welsh-Huggins, Associated Press, July 3, 2009

2009-07-04T01:48:00.007-05:00

"Several states are facing the prospect of government shutdowns and program cuts as they enter the first weekend of the fiscal year and July Fourth holiday without a budget in place.

'This downturn, even more so than previous downturns, really is affecting every state right now,' said Brian Sigritz, a staff associate with the National Association of State Budget Officers.

'Numerous things look worse than some past recessions,' said Bert Waisanen, a fiscal analyst with the Denver-based National Conference of State Legislatures. 'The housing market is worse. Industrial production is worse. Wages are nearly worse.'

'The sputtering economy has created an across-the-board drop in tax collections. Taxes ranging from sales to personal income to property are all down,' Sigritz said."

(CONTINUED HERE)

Blog Comment: Highway maintenance is the Achilles's heel for modern society. Without expensive and energy intensive maintenance, the highways will fail from bridge collapes, washouts from a lack of culvert maintenance, and land slides. The power grid depends on the highways for replacements of huge transformers and pylons. Each winter, ice storms damage the power grid, and thousands of power company crews on trucks repair the damage. State governments maintain the highways. The Peak Oil economic depression is just beginning to cut into state revenues. As unemployment increases, states will have less revenues from sales and income taxes. As oil supplies dwindle, the price of diesel and highway maintenance will increase. Eventually states will not have enough resources to subsidize home heating and highway maintenance. Without the highways and power grid, virtually nothing will come in from "the outside." The federal government will try come to the rescue, but 70% of federal revenues come from individual income taxes.

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

2009-06-28T22:16:00.013-05:00

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

2009-06-19T16:37:00.006-05:00

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

2009-06-19T08:00:00.004-05:00

"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

2009-06-11T22:40:00.005-05:00

"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

2009-06-11T21:01:00.001-05:00

"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

2009-06-09T14:37:00.003-05:00

"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

2009-06-09T11:30:00.003-05:00

"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

2009-06-08T07:26:00.006-05:00

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.

--------------------------------------------------------------------------------

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.."

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Original article available here

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

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

2009-06-07T19:55:00.004-05:00

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.

"7 Industries That Are Still Making Money in a Recession," By Parija B. Kavilanz, CNNMoney.com, May 22, 2009

2009-05-31T21:55:00.002-05:00

"With shopping no longer their favorite pastime, Americans appear to be spending their money in other ways, such as acquiring new skills, getting help with their finances and visiting the dentist."

(Continued HERE).

Peak Oil Current Events, Kenneth S. Deffeyes, Beyond Oil, May 29, 2009

2009-05-31T20:26:00.005-05:00

Click Here >>> Join us as we watch the crisis unfolding

Blog comment:

Professor Kenneth S. Deffeyes correctly forecasted crude Peak Oil in May 2005. By hindsight we will come to understand the Peak as the plateau between 2004 and 2008.

There are many labels for Peak Oil impacts, such as "crisis" or "long emergency." But these terms suggest major problems for a brief period. Because oil depletion is terminal and viable alternatives are non-existent, we face a global catastrophe which has no parallel in all of human history.

Peak Oil Preparation: A Power Blackout in Winter, A Comment by R.C., The Oil Drum, May 7, 2009

2009-05-28T20:53:00.006-05:00

"I recently experienced one of the most educational periods of my life, as well as one of the more traumatic.

About 5 months ago in the U.S., in the state of Kentucky, we experienced the worst ice storm in our history. It was almost mythic in its destruction, destroying trees, power lines and even structures in an hour after hour ice pile-up which moved over the state like a glacier descending from the sky.

I was made homeless, with the power to my home destroyed, the electric meter sheared from the wiring of the house, and the water frozen and bursted on the north side of the home. The house still sits dark and cold. I was forced to relocate to an apartment some 22 miles away. I left the house at 2AM, using a garbage bag and a flashlight to round up some emergency supplies. When I left the house was 22 degrees Fahrenheit (-9.4 Celsius) inside with water frozen in the kitchen sink and water pipes bursted under the home.

The most important lesson I learned was this: If you are not prepared before the event, you cannot prepare for it during the event. The damage of cold and ice occurs very fast. By the time I realized I could not endure in the extreme cold, saving the house from damage was hopeless. I had stayed under mountains of blankets and wearing a parka and ski sweater and jackets, going to my car every 6 hours or so in an attempt to warm up, but I could not cook food, had no heat and no light, so could not bath or even shave (except for "dry shaving" with a disposable razor, with no way to wash my face afterward) By the time I left the home I was dehydrated, hungry, grungy and cold to the point of it being dangerous.

I know one man who stayed with his wife in his home until his feet began to turn black. He almost lost the feet, and the doctor told him once he made it to the emergency room that he had almost lost his life.

The U.K., like the U.S. has an aging demographic, many with health issues such as high blood pressure, bad circulation, diabetes and heart conditions. A collapse in natural gas/electric production that destroys the ability to heat homes scares me FAR more than any gasoline shortage ever could. The great Kentucky ice storm only proved to me what I had already known, but had not prepared for.

The fact is, the U.S. and U.K. would see great suffering and causalities in an emergency involving major loss of home heating and it would occur VERY quickly, almost before the emergency contingency plans could even be put into play.

If we do not prepare now, we cannot prepare when it happens, it will simply be too late."

(This comment and others are found HERE).

Blog Comment:

Emergency planning for a power blackout is wise.

According to Railton Frith and Paul H. Gilbert (U.S. National Research Council scientist testifying before the U.S. Congress), power failures CURRENTLY could paralyze a nation for weeks or months. When a widespread power failure occurs, it is difficult to get power working again, as much equipment depends on electric power. For example, diesel and gasoline are pumped by electric motors.

In an era of multiple crises and resource constraints, power failures will last longer and then become permanent. When power failures occur in winter, millions of people in the U.S., Canada, and Europe will die of exposure. There are not enough shelters for entire populations, and shelters will lack heat, adequate food and water, and sanitation. (5) Water purification and water distribution systems will fail, leaving millions of metropolitan residents without water. (6) Waste water treatment systems will fail, resulting in untreated sewage that will contaminate the drinking water for millions of residents who consume river water downstream. (7) Transportation and communications failures will cripple federal, state and local governments — leaving and residents without emergency services, emergency shelters, police and fire protection, water supplies, and sanitation etc. (8) Mechanized farming will cease, and harvested crops won’t be transported more than a few miles. (9) Fertilizer, pesticides, and herbicides won’t be produced. (10) Due to limited farm acreage near cities (much of it destroyed by suburbanization), most cities and towns will be unable to support their populations with sufficient food from local farming (Paul Chefurka). (11) Homes will lack heating and air conditioning. Even if homes are retrofitted with wood stoves, local biomass is insufficient to provide for home heating, and it will not be possible to cut, split, and move wood in sufficient quantities.

"Social Security and Medicare Finances Worsen," by Martin Crutsinger, Associated Press, May 12, 2009

2009-05-27T17:13:00.003-05:00

"Social Security and Medicare are fading even faster under the weight of the recession, heading for insolvency years sooner than previously expected, the government warned Tuesday. Social Security will start paying out more in benefits than it collects in taxes in 2016, a year sooner than projected last year, and the giant trust fund will be depleted by 2037, four years sooner, trustees reported.

Medicare is in even worse shape. The trustees said the program for hospital expenses will pay out more in benefits than it collects this year, just as it did for the first time in 2008. The trustees project that the Medicare fund will be depleted by 2017, two years earlier than the date projected in last year's report.:

(CONTINUED HERE)

Blog Comment:

These funds will collapse much sooner than indicated here. Most government revenues are derived from the individual income tax. Peak Oil means less employment and less income.

"Job Losses Push Safer Mortgages to Foreclosure ," by Peter S. Goodman and Jack Healy, The New York Times, May 24, 2009

2009-05-27T17:04:00.002-05:00

"As job losses rise, growing numbers of American homeowners with once solid credit are falling behind on their mortgages, amplifying a wave of foreclosures.

In the latest phase of the nation’s real estate disaster, the locus of trouble has shifted from subprime loans — those extended to home buyers with troubled credit — to the far more numerous prime loans issued to those with decent financial histories.

With many economists anticipating that the unemployment rate will rise into the double digits from its current 8.9 percent, foreclosures are expected to accelerate. That could exacerbate bank losses, adding pressure to the financial system and the broader economy."

(CONTINUED HERE).

World Oil Production Forecast - Update May 2009, by Tony Ericksen, The Oil Drum, May 19, 2009

2009-05-27T04:02:00.003-05:00

"World oil production peaked in July 2008 at 74.82 million barrels/day (mbd) and now has fallen to about 71 mbd. It is expected that oil production will decline slowly to about December 2010 as OPEC production increases while non-OPEC production decreases. After 2010 the resulting annual production decline rate increases to 3.4% as OPEC production is unable to offset cumulative non-OPEC declines.

(CONTINUED HERE).

There are a number of interesting comments, especially from this comment to the end of the comments.

Blog Comments:

Tony Ericksen provides an excellent forecast for future oil production. But he concludes that "The US Energy Information Administration (EIA) and the International Energy Agency (IEA) should make official statements about declining world oil production now to renew the focus on oil conservation and alternative renewable energy sources."

But the development of renewables uses up precious fossil energy and yields electric power, which is not needed. We need liquid fuels for food production and transportation. When transportation fails the power grid will fail from lack of maintenance (that depends on the highways). Solar and wind gadgets will stand idle as monuments to ignorance. The problems with renewables are documented here.

The advice should be that governments, the media, business, and individuals need to focus on preparing for Peak Oil impacts and surviving Peak Oil.

"U.S. Public Health Community Begins to Discuss Peak Oil," By Rob Content, Community Solutions, March/April 2009

2009-05-12T10:00:00.004-05:00

On Thursday, March 12, the Johns Hopkins University Bloomberg School of Public Health in Baltimore hosted the world’s first gathering devoted to Peak Oil and Health, with support from the federal Centers for Disease Control and Prevention (CDC) in Atlanta. These are two of the nation’s most prestigious institutions in the fields of public health and health education, and about a hundred people attended in person, with a larger number tuning in to the simultaneous web-cast. The audience was offered a wealth of information about the many ways in which today’s health care services rely on infrastructure and practices that depend upon petroleum. The most likely impacts of Peak Oil on public health were discussed, along with opportunities for public health professionals to prepare for the roles they will play in a post-Peak Oil world.

(CONTINUED HERE)

Blog Comment: The conference provides valuable information. But one conclusion is: "We should begin to devote the remaining oil to ramping up a transfer to renewable energy infrastructures." This is bad advice and misinforms the media, leaders, and the public. The development of renewables uses up precious fossil energy and yields electric power, which is not needed. We need liquid fuels for food production and transportation. When transportation fails the power grid will fail from lack of maintenance (that depends on the highways). Solar and wind gadgets will stand idle as monuments to ignorance. The problems with renewables are documented here.

Peak Oil: London Guardian Photos of the Recession, on Flickr, April 25, 2009

2009-04-25T07:47:00.000-05:00

See hundreds of photos here.

Peak Oil: Picturing the Recession, The New York Times, April 2, 2009

2009-04-25T07:34:00.002-05:00

"NYTimes.com readers are sending in their photos from around the world. How do you see the recession playing out in your community? What signs of hardship or resilience stand out? How are you or your family personally affected? Creative ways of documenting the changes around you are encouraged." Hundreds of photos, arranged by most recent or by topic.

Peak Oil: "Slate's Shoot the Recession Project," Slate Magazine, Hundreds of Photos Posted on Flickr, March 30, 2009

2009-04-24T22:03:00.006-05:00

"Slate is turning to our readers and to the Flickr community to find out—we want to know what the recession looks like to you. Please submit photos to this group that capture our perilous economic moment. "

See photos HERE, and look on the site for newly added photos. Periodically, Slate will publish a selection of striking photos from the group in a slide show on Slate."

Peak Oil: "Scenes from the recession," By Alan Taylor, The Boston Globe, March 18, 2009

2009-04-24T21:40:00.003-05:00

"The state of our global economy: foreclosures, evictions, bankruptcies, layoffs, abandoned projects, and the people and industries caught in the middle. It can be difficult to capture financial pressures in photographs, but here a few recent glimpses into some of the places and lives affected by what some are calling the 'Great Recession'." (35 photos)

(Continued here).

Peak Oil: "Global recession worst since Great Depression, IMF says," By Jeannine Aversa, Associated Press, April 22, 2009

2009-04-24T21:34:00.003-05:00

"WASHINGTON – The global economy is expected to lurch into reverse this year for the first time since World War II with appalling consequences for nations large and small — trillions of dollars in lost business, millions of people thrust into hunger and homelessness and crime on the rise.

And the pain won't stop this year, the International Monetary Fund declared Wednesday, for what it said was "by far the deepest global recession since the Great Depression." To cushion the blow and head off further damage next year, the IMF is calling for more stimulus projects from the word's governments, including major spending for public works projects."

(Continued here).

Peak Oil Financial Crisis: "Fed says gov't ready to save stress-tested banks," By Daniel Wagner, Associated Press, April 24, 2009

2009-04-24T19:44:00.001-05:00

"WASHINGTON – The government signaled Friday that some distressed banks will need to raise more cash to meet stricter standards it has set for the 19 financial firms that took its "stress tests" and suggested it's ready to step in with more federal help."

(Continued here).

Peak Oil: "Growing Food When the Oil Runs Out," By Peter Goodchild, Posted on Speaking Truth to Power, December 14, 2007

2009-04-24T14:51:00.005-05:00

This post provides a good introduction to the challenge of growing food after the last power blackout.

The challenge is greater when we include the absence of all of readily available seeds, tools, wire, shovels, hardware, string, food storage jars, and fertilizer -- to mention just a few of the items that will not be available after the highways and power grid collapse.

Those who are preparing will now store enough of these items to last as long as possible.

Peter Goodchild understands the need to provide both nutrition and sufficient calories. Many Peak Oil gardening websites forget that a minimum of 2,400 calories per person daily is required for 365 day per year for survival. And his post Peak Oil world examines the reality of growing food without the implements of the Oil Age.

Irrigation presents are more challenging obstacle than he indicates. For much of the world, global warming and drought present real challenges to survival. See Globalis (see there: "How to Use Globalis") where you can see how much of the world, including much of the U.S. and Europe receive less and less rainfall every year. Due to persistent droughts, mMost of the U.S. and Europe are not sustainable, that is to say they are not survivable.

Peak Oil Interview with Dr. Colin J. Campbell, Interviewed by Neil Jackson, Posted by Chris Vernon on The Oil Drum, April 20, 2009

2009-04-20T09:01:00.006-05:00

Photojournalist Neil Jackson has recently conducted an interview with Dr. Colin J. Campbell, retired -- Texaco, British Petroleum, Amoco and founder and Honorary Chairman of the Association for the Study of Peak Oil and Gas (ASPO). The interview is reproduced here in full.

Blog comments follow the interview.

Neil Jackson: Why is peak oil important?

Colin Campbell: Peak Oil is a turning point for mankind. It is a big subject.

In short, the population only doubled over the first 17 centuries of the last millennium. But then came coal followed by oil and gas, and the population increased six-fold. These new energy sources, especially oil, the easiest, allowed the rapid expansion of industry, transport, trade and agriculture allowing the economy to expand greatly. It was accompanied by the growth of financial capital as banks lent more than they had on deposit, confident that Tomorrow's Expansion was collateral for Today's Debt.

But now we face the dawn of the Second Half of the Age of Oil when supply declines from natural depletion, meaning that debt goes bad (as is already happening) and the economy contracts. Today's oil supply support 6.7 billion people, but by 2050 the supply will be enough to support no more than about 2.5 billion in their present way of life. So the challenges of using less and finding other energy sources is great.

The transition threatens to be a time of great tension : there are already tribal wars in Africa, disturbances in many places including rioting in Greece. Urban conditions will become especially difficult.

Looming lifestyle changes, derelict housing. Ibrox, Glasgow, UK

NJ: What has been your personal reaction to peak oil?

CC: I happened to have worked in the oil industry and I was not alone in being fully aware of depletion for a long time. But geologists are passive people, given to describing rather than changing things. We can describe the Cretaceous but not change it.

NJ: How are you or your family preparing?

CC: I am too old to do much, but live modestly in an Irish village. My wife however is actively trying to introduce allotments here by which people can feed themselves. We do have a solar panel on the roof, providing hot water from about May to October. If the sun doesn't shine I don't wash.

NJ: Do you think the media are playing the issue down? Has there been much coverage of the issue in the mainstream media? Any ideas as to why?

CC: The media is now taking a serious interest : a trail of journalists and TV crews have been here over the past few years. The BBC and no less than Korean TV was here recently. There are of course vested interests (BP for example) keen to suppress Peak Oil but I think the word is out.

NJ: How about governments? Are they playing the issue down, and if so, what examples can you give? Do you think any governments are approaching Peak Oil correctly? Who?

CC: The position of governments is changing. They are heavily influenced by classical economics and badly advised by such practitioners for whom finding oil is just a matter of investment.

The International Energy Agency is the OECD watchdog, although in practice more of a consumers lobby (not wanting OPEC to know its strength). Ten years ago internally it recognised that peak oil would arrive around 2010, but issued no more than a coded message. Now as Peak Oil arrives it changes its tune, for fear of losing credibility, and begins to admit to it under the slogan let's leave oil before it leaves us.

I happen to know the Irish Minister, who understands the position perfectly and is trying to prepare, but he tells me that the political obstacles are very great. It is promising that Obama has renewables high on his agenda and seems to recognise that the attempted conquest of Iraq's oil failed. Oil discovery in Britain peaked in the 1970s and should have alerted the government that the inevitable corresponding peak of production would follow, but Mrs Thatcher believed in the free market, and exploited the resources as fast as possible, which accelerated depletion.

Britain exported its surplus at low prices but now faces rising imports at high prices. Russia now seems to be aware of its power by controlling Europe's gas supply, and will likely try to conserve what is left for its own use rather than export, which makes sense. It is a big subject, and does not exactly give one much confidence in government.

NJ: It is sometimes said that there are billions of barrels of oil reserves locked up in Canada’s tar sands. Can you say anything about these reserves with respect to peak oil? What are the challenges faced when bringing this oil to market?

CC: The resource in the ground of tarsand in Canada and elsewhere is huge, but extraction is slow and costly, yielding a low or even negative net energy return. My guess is that oil prices in the future will range in the $50-100 range as higher prices would dampen demand by economic recession. If so this is a constraint on developing tarsands (some projects are said to be viable only at $90+) ... and indeed restrain the development of renewable energy).

Poverty and the end of suburbia. Benchill, Manchester, UK

NJ: The discovery of oil peaked some 40 years ago – how much oil are we discovering now and what potential is there for further discoveries--new, significant discoveries? Does the Arctic represent another Saudi Arabia? How about the Antarctic?

CC: It is difficult to get good information on recent discovery, but my best estimate is that it is running in the 5-10 billion barrel a year range. The accessible world has now been thoroughly explored, such that all the major productive provinces and large fields within them have been found.

Attention now turns to the deepwater and Polar regions. I think that the main deepwater areas have also already been found : they depend on very exceptional geological conditions as most of the oceans are definitely non-prospective. I do not entertain great hopes for the Polar regions because I think they are generally deficient in effective source rock, and that seal integrity has been impaired by vertical movements of the crust due to the weight of fluctuating ice caps.

There are a few freak occurrences, such as Prudhoe Bay in Alaska, but generally Polar seems to be a gas-prone domain, with sniffs of encouragement that eventually disappoint. It is unlikely to have any material impact on Peak Oil.

NJ: How familiar do you think the senior staff of Western oil majors are with the concept of peak oil? Do they see it as a serious problem either for their business or the wider global economy?

CC: In earlier years, major oil companies did tend to be run by people with exploration experience, for whom peak oil has long been evident (Harry Warman once Exploration Manager of BP was one of the first to publish on it), but now most are run by financiers and engineers, who lack the deeper resource insights. But generally I think they understand.

The Seven major companies are now reduced to four by merger, which is a sign of contraction, and they are selling off subsidiary refineries and marketing chains, evidently recognising that falling supply will give downstream over-capacity.

But remember that the job of managers is to sing to the Stock Market to protect their shareholders' interests under the present system whereby the merits of a firm dividend have surrendered to speculative movements on the Market, which is largely a public relations exercise, as these brokers can have little real understanding of the businesses in which that take positions ("investment" is hardly the word). It is simply not the job of oil company managers to concern themselves with global issues. But that said they do begin to hint and half admit to the obvious truth : Total and Chevron are probably the most forthright, with BP being the least.

NJ: How does oil form, when did it form, where does it form - what does this tell us about the likelihood of finding significant new oil in the middle of the Atlantic... or in the Arctic?

CC: The bulk of the world's oil was formed under special conditions of global warming 90 and 150 million years ago.

Algae proliferated in warm sunlit tropical waters, and the hot surface water prevented normal circulation such that stagnant anoxic conditions occurred at depth. The algal organic remains were accordingly preserved in rifts. On burial to about 2000 meters, it was cooked enough to be converted into oil, which then began to move upwards. Much escaped or was dissipated, but some was trapped at the top of geological structures (arch-like anticlines or against faults).

In addition to these two main epochs there were other local occurrences of little global significance. Naturally, the older the source-rock the greater the chance of loss over geological time.

The crash of supermarket culture. Ibrox, Glasgow, UK

NJ: What is your opinion on reserve growth?"

CC: Assessing the size of an oilfield early in its life poses no particular scientific challenge, although it is naturally subject to a degree of uncertainty. Reporting its size is another matter.

The oil companies were subject to strict Stock Exchange rules designed to prevent fraudulent exaggeration while smiling on under-reporting as commercial prudence. Accordingly the major companies reported only as much as they needed to deliver a satisfactory financial outcome. The resulting upward revisions gave a comforting but misleading image of reserve growth.

Those days are however substantially over as the giant fields offering the main scope for upward revision mature. OPEC for its part greatly exaggerated in the 1980s when they were vying with each other for quota based on what they reported as reserves. The industry has developed various technologies (steam, nitrogen, CO2 injection and horizontal drilling plus sophisticated seismic to map the reservoirs in detail) which can increase the recovery, and hence give reserve growth. But the scope for doing so could easily have been foreseen early in the life of the field, even if it was not normal to report it.

NJ: At the ASPO meeting after the Barcelona conference you were talking about retiring from the newsletter at the end of 2008 - and after around 1000 items. The future plan was for individual national ASPO chapters to produce newsletters, or submit items for someone else to correlate. Is that still going ahead?

CC: Yes, I am a bit undecided about the future of the ASPO Newsletter. Obviously I can't keep doing it for ever, and also the main message has been delivered, so I find myself touching more and more on political subjects on which I lack any expertise.

ASPO has evolved as a loose organisation lacking any normal management or cohesion or rules, but that is a good thing as the different entities can do whatever is appropriate and possible in their own countries. I suppose in one sense the Newsletter does hold them together giving a certain common purpose.

One model might be to rotate the overall direction (including the newsletter), but in practice I doubt if that will happen. In one sense its mission has been accomplished as dealing with life in the Second Half of the Oil Age when everything is in decline calls for very different approaches.

NJ: Are we progressing towards implementing technologies to utilize alternative energy sources at a fast enough rate to prevent an economic collapse, or at least to minimize the impact the advent of Peak Oil is having/will have on the global economy?

CC: I doubt that renewable energies will ever replace oil and gas sufficiently to maintain the past order of things or still less allow economic growth to continue. They are of course greatly needed for the surviving communities.

My own preference is tidal energy to tap the massive regular lateral flows of water. Apparently they can build funnel-like walls on the sea bed forcing the tides to speed up through the constriction, and turn a rotor, generating electricity. But apparently such schemes did not compete with cheap oil and gas so far.

There is of course massive scope for using less energy : turning off all those loudspeakers and TV screens in public places would help.

NJ: What effect do the new technologies have on the projections for when production will peak?

CC: I don't think new technologies will have any impact on the date of peak, which I estimate to have been passed in 2008 ("all liquids"), but they can of course ameliorate the subsequent decline. I think most of the necessary technologies are already well known, so the issue is more about applying them than inventing a magic wand.

NJ: There is a lot of debate about why oil prices were so high during this summer, why they've dropped so quickly since then. What is the explanation for this? Were high prices due to "speculation" as many have argued or was it supply and demand, or both, or something else?

CC: I think that Regular Conventional oil peaked in 2005 and prices began to rise, although the shortfall was partly made up by costly tarsands and deepwater production. The rising price trend attracted the interest of the traders who started buying futures and so forth. It might also have made sense for the industry to keep the tanks full, watching them appreciate in value.

But eventually the rising price had an adverse impact on the real economy and the shrewd traders started to unload, selling short on the futures market. The industry too might have started draining its tanks.

But perhaps more important was the flood of petrodollars that the high prices delivered to the governments and royal families of the Middle East, where it still costs $10-15 to produce oil. They probably sent the surplus to western banks who promptly loaned it out on ever less sure collateral. The petrodollars were not really money in the sense of representing work or barter, but simply profiteering from shortage.

The whole flimsy financial edifice has now crashed, and some of the sillier governments are now pumping yet more fictional money into the system to encourage new consumption. Such policies may briefly succeed, but will only make the subsequent crash worse.

We enter a new world, as the principal energy that drove the anomalous past two centuries heads into decline from natural depletion. This is not necessarily a doomsday message. I have known many simple people in different parts of the world who smiled and laughed not being part of the consumer society.

There are encouraging signs. A BBC film crew who was here recently told me that they had become so convinced of the Peak Oil issue, which they had studied to make their programme, that they had decided to quit the BBC and buy a small farm in the west of England on which to build a simple sustainable future. That was most encouraging, I thought.

The end of the road for one petrol station. Near Derby, UK

---
Photojournalist Neil's slideshow, which looks in part at Peak Oil, can be viewed here.

Blog comments:

Dr. Campbell provides a valuable historical and global perspective on Peak Oil, geology, oil reserves, and the economy.

ASPO has been forecasting not only when Peak Oil and Gas would occur, but also how oil production will decline. ASPO could continue to conduct research on future oil production and net oil and gas production. As oil and natural gas production decline, more oil and natural gas energy is expended in extraction and refining processes, and less net oil and natural gas are actually produced. Because the net production curve toward depletion is steeper than the production curves that we see on most all charts, this is an important question. For much deep water oil and gas extraction, the point at which the amount of oil/gas expended equals the amount of oil/gas produced is reached quickly, especially when all of the oil/gas used for manufacturing all of the ships, pipelines, platforms, refineries, parts, their manufacture in factories that use energy, and all of the employee/stock owner salaries/dividends/pensions for all of the companies (salaries/dividends/pensions are spent and use oil/gas), and transportation for all of the above parts and employees.

Dr. Campbell concludes that alternative energies will not make up for much of the decline in fossil energies, and he favors developing tidal energy. My analysis indicates that alternatives and renewables will use up much fossil energy and liquid fuel in their development and yield electric energy, which is not the liquid fuel we need for tractors/combines, trucks, trains, and ships. And objective analysis indicates that tidal energy will not be developed due to siting limitations. And again, it yields electric energy, which is not needed as factories, commercial centers, and offices close.

Peak Oil Recession: "IMF sees long and severe slowdown," BBC News, April 16, 2009

2009-04-18T09:06:00.008-05:00

"The current global recession is likely to be 'unusually long and severe, and the recovery sluggish,' the International Monetary Fund has warned."

"Slowdowns linked with financial crises tend to be severe, while synchronised slowdowns last longer, it said.

The current global crisis has also been strongly felt in emerging economies, it said in its World Economic Outlook.

The global links between financial sectors have intensified the speed the downturn has spread across the world.

With the financial crisis intensifying, more countries are coming to the IMF for help and its supply of funds to loan may run out."

But...................no mention of oil production or Peak Oil.

(Article and video)

The Great (Peak Oil) Recession, Who's to Blame, and How People Adjust, TIME/CNN, April 17, 2009

2009-04-17T08:04:00.011-05:00

Here you find lots on: who is to blame for the financial crisis; how some people in the U.S. are adjusting to the "Great Recession;" photos of failed retail stores; and a poll on attitudes; and how people are handling the "recession."

But there is not a photo display of how this impacts poor Americans or those in the economically less developed countries.

Missing on the blame list are those who issued fairy tales about future oil production and future oil prices -- the Energy Information Agency (EIA), International Energy Agency (IEA), U.S. Geological Survey (USGS), Cambridge Energy Research Associates, and private and national oil companies.

There is no mention of Peak Oil or high oil prices. No mention that last year economists quoted in "The Wall Street Journal" said that if oil goes above $125 per barrel we will go into recession. No mention that Dr. Colin Campbell, ASPO Ireland, ASPO International, Congressman Roscoe Bartlett, the U.S. General Accountability Office, the Hirsch report, Jim Puplava, James Kunstler, Chris Shaw, Gail the Actuary, Matt Savinar, Peter Goodchild, Kathy McMahon, me, and many others warned about a looming Peak Oil recession. And no mention that many voices now warn that the recession will grow into an ever worsening economic depression.

Peak Oil Financial Crisis: "General Growth files largest U.S. real estate bankruptcy," By Ilaina Jonas and Emily Chasan, Reuters, April 16, 2009

2009-04-16T22:06:00.004-05:00

NEW YORK (Reuters) - "General Growth Properties Inc, the second-largest U.S. mall owner, declared bankruptcy on Thursday in the biggest real estate failure in U.S. history.

Ending months of speculation, General Growth, along with 158 of its 200-plus U.S. malls, filed Chapter 11 while it tries to refinance its debts.

But the ongoing global financial crisis made it impossible for General Growth to restructure outside of bankruptcy and could signal further troubles for other financial institutions who are General Growth creditors."

(Continued here.)

Dr. Colin Campbell Predicted the Peak Oil Credit Crunch in 2005

2009-04-16T21:00:00.003-05:00

Dr. Colin Campbell Predicted the Peak Oil Credit Crunch in 2005.

Dr. Samsam Bakhtiari (deceased), a former senior analyst for the National Iranian Oil Co. (NIOC) of Tehran, Iran warned of similar economic impacts in 2006.

"Preparing for a Post Peak Life Video," By Prepared for the Peak, 2009

2009-04-14T09:02:00.007-05:00

"Preparing for a Post Peak Life Video: Why You Should Prepare and How You Should Get Started" provides good explanations of Peak Oil, the economy, and basic preparations.

But don't count on jobs in the renewable energy sector, as those jobs will be among the first to disappear.

Also, the authors do not focus on the reality of a final power blackout and a fast collapse at some point. Richard Heinberg appears to forecast this collapse between now and 2030. I guesstimate the collapse will occur before 2020. After this, things will get "challenging."

We are facing the collapse of the highways that depend on diesel trucks for maintenance of bridges, cleaning culverts to avoid road washouts, snow plowing, roadbed and surface repair. When the highways fail, so will the power grid, as highways carry the parts, transformers, steel for pylons, and high tension cables, all from far away. With the highways out, there will be no food coming in from "outside," and without the power grid virtually nothing works, including home heating, irrigation, water and waste water treatment, pumping of gasoline and diesel, airports, communications, and automated systems.

This is documented in a free 48 page report that can be downloaded, website posted, distributed, and emailed: http://www.peakoilassociates.com/POAnalysis.html

In June I took a trip to Albany to talk to 3 audiences on Peak Oil impacts. In the group that invited me, the Capital Regional Energy Forum CREF), is a physicist who teaches solar energy at a major university, and who had served in the Peace Corps.

He has solar powered just about everything, including a solar powered canoe which we went for long ride in on a lake in the Adirondacks, and a PV solar powered house and pump for his well. He repairs about everything on his house himself and he heats much with passive solar. So the guy knows his stuff. He is no ivory tower academic.

We talked for hours about survival in the northeast after the last power blackout.

It looks "challenging."

Eventually batteries and even the solar panels deteriorate. He thinks that he could store dry batteries with the liquid stored in glass and thus make "new batteries" after they conk out. But eventually the batteries and solar panels give out.

Cutting and moving wood without trucks, horses, and wagons will be a major effort and very time consuming. There are not many horses around and it will take decades to breed enough horses to go around. Horses require food, care, vets, and medicine. No one is making wagons these days locally.

Wood stoves break, just like everything else. You could keep one or 2 extras, but eventually you have none and can't get more, because there is no transportation on the highways.

Asphalt roof shingles need to be replaced, and houses need to be painted and maintained.

Food must be grown in with a short growing season, and all of the farm stuff that used to be in a 1890 Sears catalog is no longer available. Last summer I took a tour of a farm and saw how dependent farming is on oil -- transportation and manufacture of plastic feeding bowls, containers to store grains/feeds, straw, roofs for animals and storage areas, wire, rope, wood boards, cement, fencing, antibiotics for animals, asphalt shingles etc. Seed and hardware used to be available at the local hardware store, no more.

Then there is clothing which is manufactured and transported from afar. Making cloth is a major operation from growing cotton to making cloth. I have studied the textile mills of Lowell National Historical Park in Lowell, MA for years, as I used it as an example of the confluence of capital, technology, and labor for a course I taught on Global Urban Politics at the University of New Hampshire. I know that the parts in those factories were manufactured in many places with a vast transportation network. After the last power blackout, those factories will not be built again. And there are not many sheep around, nor animals for making leather clothes. Eventually down coats and comforters wear out, as do blankets. It sounds like just keeping warm will be a major problem.

Potable water is another problem, and sanitation also.

And there will be no modern pharmacies or hospitals.

After auto and air transport end (which could be next week if there is some "untoward activity" in the Middle East), there will be no way of getting here, or from here to there. Bus and train reservations will be backed up for years. You know the old Maine joke, "can you get there from here?" Well this time the answer will be no you can't. I keep reading in the newspapers that some of the folks over there in the Middle East are tired of others (including the elites in their own countries) getting most of that oil, and that they are trying to shut down the flow of oil to us.

Wasn't it that guy Murphy who said that if something can go wrong it will.

When the music stops (that is when air and automobile transportation ends) where you are is important, because that is pretty much where you will stay.

Peak Oil Financial Crisis: "Moody's Downgrades The Whole Country," By Joe Weisenthal, The Business Insider, April 8, 2009

2009-04-13T23:24:00.002-05:00

"The Federal government is still AAA, but every municipal debt issuer is now suspect and shaky according to Moody's.

For the first time ever, the ratings agency placed all munis on negative outlook, a precursor to potential downgrades. Historically, the agency looked at munis individually and considered them to be too diverse to make blanket statements about."

(Continued here).

Peak Oil Homeless: "Homeless In Tent City, USA," By Kathy Sanborn, CounterPunch, April 3-5, 2009

2009-04-13T22:56:00.003-05:00

"Homeless encampments around the country are mushrooming, much to the embarrassment of government officials, may of whom prefer to hear no evil, see no evil. In Fresno, California, a shantytown called “New Jack City” is host to newly poor, unemployed electricians and truck drivers, who share space with drug addicts and the mentally ill who have been homeless for years."

(Continued here).

Peak Oil Financial Crisis: "Best Places to Get a Part-Time Job," By Kate Klonick, SmartMoney.com, April 10, 2009

2009-04-13T07:51:00.001-05:00

"Best Places to Get a Part-Time Job"

Peak Oil Crime, Personal & Home Security: "Boom in Gun Sales Fueled by Politics and the Economy," By Sean Gregory, TIME.com, April 8, 2009

2009-04-11T21:35:00.001-05:00

"Americans are afraid of this economy. As a result, they're getting locked and loaded. To wit: Jacquita Baker, a soft-spoken single mother from Kentwood, Mich., near Grand Rapids. She works as an administrative assistant at the Grand Rapids Urban League and is studying criminal justice at a local university. As of Monday, she's the proud owner of a shotgun. Why bear arms now? "The economy played a large part in my decision," says Baker, 27. 'When people don't have jobs, they might go breaking into people's homes. I want to be safe in my home.'"

(Continued here).

Peak Oil Crime, Personal & Home Security: "Equity and Guns," Airdale, April 11, 2009

2009-04-11T21:16:00.003-05:00

One response in a recent blog discussion of equality after resource depletion:

Airdale on April 11, 2009 - 8:35pm

Perhaps I am not understanding the concept here.

If we are speaking post powerdown then with most communications lost then whose is to know who is where on the economic rung?

Right now let me make an observation that may tend to show what the future might hold.

I recently went to two guns shows. I also in the last week visited two sporting goods stores where one dealt solely with firearms.

What I saw was astounding and has happened just within a few months.

The gun shows first. One before Jan 2009. Moderate supplies of all items. Moderately full of purchasers and browsers .Trade was brisk with quite a few new firearms and quite a bit of ammunition. Prices were a bit above normal. This was around Nov 2008.

The next gun show was two weeks ago. The difference was amazing. First it was so crowded you had to stand behind someone to get to a table. There were over 500 tables/setups by those selling. The crowd was enormous and you had to shuffle slowly down the aisles.
There was few new firearms. Most all was used and rather used at that. Ammunition was almost non-existant and was very expensive. I saw really few firearms of real value. This was mostly older stuff that was used and dealers were making a killing at high prices.

I might add that the attendees were not your run of the mill gunowning types. Yes some collectors but what I saw was families. Women with their husbands and children. Buying,buying and buying. Walking out with lots and lots of purchases. The parking lot was overcrowded.

Then the two dealers. One used to have many shelves full of powder,bullets, brass and all the rest. Now all his shelves had been taken down and he had mere handfuls of ammo. Some very oxidized meaning very old. Nothing at all is the most desired calibers. He had zero reloading equipment. No restocking in a couple months and no more inventory on the way , he said. Shocking to me. I always stop by when in the neighborhood.

The next was just a firearms dealer. He had NOTHING. Maybe a rack of older used shotguns and a few rifles and almost no handguns. His shelves were totally bare. He said "Can't sell what I can't get."

I don't see how he was going to stay in business.

So it seems to me that firearms and defense is going to be a huge part of the 'equality' issues. Surely everyone is stocking for a couple reasons.

One. They finally have realized we are sinking fast. They are now on board and most will by weapons vs land and gardening. What they have they value I believe they are intent on defending.

Two. Obamas mutterings and House Bills that are out and out threats to make very big changes in the laws governing firearms. They see it as an assult on their freedoms to defend themselves and their property.

This to me is where the equality or lack of it wlll manifest itself.

Money might become meaningless to many shortly. We are seeing extreme weather changes. That storm that blew thru Arkansas and Tennessee came up here. I heard it roaring like 100 locomotives as it passed just to the north of me by 2 miles. Hail and hard hard rain.

So yesterday I saw the damage. A 75 ft radio tower toppled. A barn in the path totalled. A huge grain bin with an big kink in its side. Some hi tension twin leg power lines thrown on the ground like tinker toys. It was very localized. Only a mile wide and no circular movements. Just one very very strong wind. Never heard wind blow like that in all my years and I have been in several nearby tornadoes.

The times are achanging. We really can't see to what except it won't be BAU.

Airdale-perhaps OT but I wanted to make these observations. Folks are arming up rapidly and fully. If someone comes to take their weapons? Then hell will start immediately.

Peak Oil Financial Crisis: "It's Now a Renter's Market," by Prashant Gopal, Business Week, April 10, 2009

2009-04-11T19:54:00.001-05:00

"Across the U.S., desperate landlords are coming up with novel ways to attract new tenants and retain old ones."

Peak Oil Financial Crisis: "Fox orders downsizing reality series," By James Hibberd, The Hollywood Reporter, April 8, 2009

2009-04-11T16:55:00.002-05:00

""You're fired" -- but for real.

Fox has ordered a one-hour unscripted series that turns real-life company layoffs into a reality contest.

The show's working title is "Someone's Gotta Go." Employees are called to a meeting and informed there will be layoffs, but with a reality show twist: The staff will be allowed to determine who is fired.

The employees will have access to the company's internal information -- budgets, HR files, salaries, etc. -- to help make their decision."

(Continued here).

Peak Oil Financial Crisis: "Recession Anxiety Seeps Into Everyday Lives," By Pam Belluck, The New York Times, April 8, 2009

2009-04-11T16:50:00.002-05:00

"Anne Hubbard has not lost her job, house or savings, and she and her husband have always been conservative with money. But a few months ago, Ms. Hubbard, a graphic designer in Cambridge, Mass., began having panic attacks over the economy, struggling to breathe and seeing vivid visions of “losing everything,” she said."

(Continued here).

Peak Oil Financial Crisis: "The American mood: Is the angst bottoming out?" By Ted Anthony, Associated Press, April 11, 2009

2009-04-11T15:59:00.003-05:00

CLIFTON, NEW JERSEY -- "Want some economic angst? That's easy, too. Drive straight up Bloomfield Avenue into Glen Ridge, Montclair and Verona. Gaze at the empty Volvo and Jaguar dealerships and the deserted bank. Contemplate the thinned-out blocks of storefronts, defunct restaurants, abandoned shops and "For Lease" signs in one of the region's more affluent areas.

More doom on the horizon? Or will happy days soon be here again? Take your pick. The confusion is enough to play havoc on a person's mood — or an entire nation's. "Everybody is looking at it through their own personal lens," says Liza Dawson, a self-employed literary agent from Glen Ridge."

(Continued here).

Upcoming Teleseminar May 1st: Managing Peak Oil Blues, Kathy McMahon, Psy. D.

2009-04-11T15:40:00.004-05:00

Friday, May 1st, 11:00 am -12:30 pm. Eastern Standard Time - “Emotional Realities in Managing the Big Three E’s (Energy, Environment, Economy): What Do We Know After Three Years of ‘Peak Oil Blues’?”with Dr. Kathy McMahon, the "Peak Shrink." Cost: $30.00. Register at: info@peakoilblues.com by April 27th, 2009.

(More information here)

"Pathways to Community Collapse: Can We Intervene?" By Kathy McMahon, Peak Oil Blues Blog, April 10, 2009

2009-04-11T10:11:00.006-05:00

"As communities are facing high unemployment, economic hardship and deteriorating infrastructure, they will be left even more vulnerable when fossil fuel once again rises in price. In the early stages of distress, appeals to the “common good” or “cooperative engagement” may be met warmly and enthusiastically by townspeople.

However, there are predictable changes as hardship, deprivation and even violence escalates, which impacts on this spirit of altruism. One size does not fit all when working within a community setting. It is a skill to recognize the level of community functioning, or at what stage of collapse the system is functioning, and to work within these circumstances skillfully. Is an important skill for concerned citizens and community activists alike."

(Continued here).

Peak Oil Financial Crisis: "Job fair turnout creates gridlock," By Michael Cousineau & Pat Grossmith, The New Hampshire Union Leader, April 10, 2009

2009-04-10T15:42:00.009-05:00

MANCHESTER, NH – "A massive turnout at the Project Economy Job Fair sponsored by WMUR triggered gridlock around the Mall of New Hampshire and traffic tie-ups elsewhere yesterday."

"About 10,000 people lobbied employers to obtain one of at least 1,500 available jobs."

(Continued here).

Note: Seasonally Adjusted Unemployment Rates - February 2009

United States 8.1%
New Hampshire 5.3%

Peak Oil Crime, Personal & Home Security: Auto GPS and Home Robbery, April 10, 2009

2009-04-10T13:29:00.003-05:00

A security expert poses as a burglar to show the biggest safety mistakes homeowners make. (short video).

Peak Oil Financial Crisis: Regulatory "Stress Tests" for banks to determine their capital needs under more adverse economic conditions.

2009-04-10T11:54:00.007-05:00

"Banks asked to keep quiet on stress tests"

By Karey Wutkowski, Reuters, April 10, 2009

WASHINGTON – "The U.S. Treasury Department is asking banks not to mention the regulatory 'stress tests' as part of their first-quarter earnings results, according to a source familiar with government discussions."

(Continued here).

Most readers won't understand this article. It appears that the U.S. Treasury Department is not as optimistic about the economy as public statements would indicate. This is a study to see how much more money the public will have to fork out to subsidize the banks and their friends as the economy implodes.

Some of the financial crisis is due to Peak Oil, but most is caused by years of corporate and government mismanagement and corruption. Who is paying for this? The poor and unemployed.

Rather than subsidizing the banks and affluent, the government could provide public works and public service employment. But that would mean "subsidies for the poor" and "make work" for millions of unemployed workers. Public works and public service employment could be directed to building a national rail system to prepare for Peak Oil impacts.

Peak Oil Financial Crisis: "US home price drops set records in January," By Alan Zibel, Associated Press, March 31, 2009

2009-04-09T18:03:00.002-05:00

"WASHINGTON – Home prices sank by the sharpest annual rate on record in January, and the pace continues to accelerate, but there were a handful of battered metro areas where price declines slowed, according to data released Tuesday."

(Continued here).

Peak Oil Preparation: "Save $50 a Day, How Three Super Savers Do It," By Kiplinger.com, March 31, 2009

2009-04-09T17:53:00.002-05:00

"Take a look at how real people put cost-cutting ideas into action and watch their savings add up."

Peak Oil Preparation: "Suze Orman's New Ideas on Credit Card Debt," By Kimberly Palmer, U.S.News & World Report, April 3, 2009

2009-04-09T17:38:00.005-05:00

"Top priority: build as much of an emergency cash fund as you can." "Consumers now need to make creating an emergency fund with eight months worth of expenses their top priority." Says the Queen of Personal Finance Suze Orman.

(Continued here).

Peak Oil Financial Crisis: "Homelessness up as families on the edge lose hold," By Wendy Koch, USA TODAY, Updated April 9, 2009

2009-04-09T10:32:00.002-05:00

"Cities and counties are reporting a sharp increase in homeless families as the economic crisis leads to job loss and makes housing unaffordable."

(Continued here).

Peak Oil Financial Crisis: "New jobless claims fall more than expected to 654K," By Christopher S. Rugaber, Associated Press, April 9, 2009

2009-04-09T10:22:00.004-05:00

WASHINGTON (AP) -- "New jobless claims fell more than expected last week but are stuck at elevated levels, while the number of people continuing to receive unemployment insurance approached 6 million, setting a record for the 10th straight week."

"The Fed expects the unemployment rate -- now at a quarter-century high of 8.5 percent -- will probably "rise more steeply into early next year before flattening out at a high level over the rest of the year," according to minutes from the central bank's March meeting released Wednesday. Many private economists expect the rate will hit 10 percent by year's end."

(Continued here).

This would put the total unemployment rate at some 18% by year's end.

Peak Oil Preparation:"The Wall Street Journal" Gives Advice for the Recession, April 1, 2009

2009-04-08T10:55:00.003-05:00

"Five Financial Moves You Should Definitely Make -- and Five You Shouldn't."

Some of the advice is good: "Guard Against Inflation."

But some advice is questionable. Unless you really know where to invest, the stock market is probably not a good idea, as permanent economic depression will undermine stock values. Investing in retirement is always a good idea, but the stock market is not the way to go. Investing in what will benefit you before and after economic and societal collapse is best. Answering that question will take much thought and planning.

Peak Oil Financial Crisis: "Quarter of companies globally set to freeze pay," Reuters, April 7, 2009

2009-04-07T08:19:00.003-05:00

"A quarter of the world's companies, and 40 percent in the United States, plan to freeze salaries this year, but employees in South America and India can look forward to robust rises, a global survey shows."

(Continued here).

Peak Oil Financial Crisis: "One in 10 Americans gets help from U.S. to buy food," Reuters, April 2, 2009

2009-04-05T09:38:00.002-05:00

WASHINGTON (Reuters) – "A record 32.2 million people -- one in every 10 Americans -- received food stamps at the latest count, the government said on Thursday, a reflection of the recession now in its 16th month."

Continued here)

Peak Oil Financial Crisis: "Shrinking airlines park more planes in the desert," By Joshua Freed, Associated Press, April 4, 2009

2009-04-05T09:30:00.005-05:00

MARANA, Arizona – "Old jets come here, empty engine pods shrink-wrapped in white, tall red tails fading to pink in the desert sun. More will come soon. Some will never fly again."

"Eventually, some will be sold, some scrapped, some will sit at desert facilities in southern California, Arizona, and New Mexico. But at the moment, their number is growing faster than expected. The banking crisis has made it very difficult to get loans to buy aircraft, and the drop in commodity prices has gutted their scrap value."

(Continued here).

Peak Oil Planning: The G20 Global Plan for Economic Recovery Is an Illusion

2009-04-03T20:35:00.008-06:00

In 2004, geologist Colin Campbell (retired -- Texaco, British Petroleum, Amoco) cautioned, "Throughout history, people have had difficulty in distinguishing reality from illusion. Reality is what happens, whereas illusion is what we would like to happen. Wishful thinking is a well-worn expression. Momentum is still another element: we tend to assume that things keep moving in the same direction. The world now faces a discontinuity of historic proportions, as nature shows her hand by imposing a new energy reality. There are vested interests on all sides hoping somehow to evade the iron grip of oil depletion, or at least to put it off until after the next election or until they can develop some strategy for their personal or corporate survival. As the moment of truth approaches, so does the heat, the deceptions, the half-truth and the flat lies." (Reality and Illusion source)

The 2009 G20 global recovery plan is an illusion, and ASPO President Kjell Aleklett explains why in detail:

"Not enough oil for the G20 package," originally published in the Swedish newspaper "Uppsala Nya Tidning," April 4, 2009 and translated into English on his blog here.

Peak Oil Financial Planning: "America's oil bust: setting ourselves up for another price spike, " By Steve Hargreaves, CNNMoney.com, April 3, 2009

2009-04-03T14:15:00.004-06:00

"The collapse in oil prices from over $147 a barrel has caused many oil producers to pack up their rigs and stow their jacks. Some fear the drop in production activity will lead energy prices to spike once the economy recovers."

(Continued here).

High oil prices mean that inflation is just around the corner, as noted in a previous post.

Peak Oil Employment: "Hired! 5 successful job seekers share their secrets," CNNMoney.com Fortune Magazine, April 3, 2009

2009-04-03T14:04:00.002-06:00

Read 5 Case Studies here.

Peak Oil Financial Crisis: "Small business lending drops 57%," By Emily Maltby, CNNMoney.com April 3, 2009

2009-04-03T13:55:00.001-06:00

"President Barack Obama warned recently that small business lending had declined so sharply that the Small Business Administration was on track to back only half as many loans this year as it did last year. The SBA's lending data for the just-ended quarter bears out that bleak forecast: The number of loans the agency backed though its flagship program declined 57%."

(Continued here)

Peak Oil Financial Crisis: "Unemployment Rate Bolts to 8.5%, 663,000 Jobs Lost in March, " By Jeannnne Aversa, Associated Press, April 3, 2009

2009-04-03T12:17:00.006-06:00

"If part-time and discouraged workers are factored in, the unemployment rate would have been 15.6 percent in March, the highest on records dating to 1994, according to Labor Department data released today."

"It's fresh evidence of the toll the recession has inflicted on America's workers, and economists say there's no relief in sight."

(Continued here)

Peak Oil Employment: "How to get a job," By Jia Lynn Yang, March 30, 2009 CNNMoney.com Fortune Magazine

2009-04-01T07:39:00.009-06:00

"It's brutal out there. But the people getting hired aren't necessarily the most connected - they're the most creative. From food diarists to Twitter stalkers to candidates tapping the "hidden" job market, here's what's working now." (Continued here).

Peak Oil Employment: "How to Get a Job When No One's Hiring," By Jia Lynn Yang, March 30, 2009 (FortuneonCNNMoney.com)

2009-03-31T07:31:00.006-06:00

"David Perry, a longtime headhunter, says you're wasting your time if you're looking for job postings online. And he should know: he's often the guy on the other side helping companies lure new talent. Perry, who's based in Ottawa, says that in the last 22 years he has accomplished 996 searches totaling $172 million in salary. And the bottom line in today's economy, he says, is you have to tap the 'hidden job market'."
(Contined here)

Peak Oil Financial Planning: "Gallows Humor Lightens The Recession," by Ann Berkeley

2009-03-30T19:45:00.002-06:00

"Bankers And Corporations Butt Of Jokes"

Peak Oil Financial Planning: Living the Frugal Life

2009-03-29T07:42:00.004-06:00

Introducing "Living the Frugal Life" a blog on "How we live well on less. Frugal recipes, practical tips, money confessions, and a dollop of modern homesteading technique," by Kate of Southeastern Pennsylvania.

See Kate's Most Popular Posts and Topical Topics

Guest Post by Sebastian Ronin: “Post-Peak Oil and NAmerican Regional Secession”

2009-03-26T20:46:00.004-06:00

In a web posted article, Sebastian Ronin concludes that national economic policies and Peak Oil mean that national governments will fail. A regional legal structure will be needed. Clearly, after the last power blackout national governments will not be able to govern. No communications and no transportation mean no national government.

Sebastin’s introduction to “Post-Peak Oil and NAmerican Regional Secession:”

I am an entropist. Being an entropist entails a meta-perspective upon this world that captures and stamps all natural, social, political and economic phenomena within its unique parameters of qualification. It applies equally from the build-up of clutter in a household, to global warming and climate chaos, to financial meltdown, to the implosion of the large industrial nation-state, as it does to the departure of a soul from the constraints of its body. It is a worldview, a Weltanschauung, a philosophical Babushka doll of many layers and complexities. It is my hope that one day the Laws of Thermodynamics will be taught at the grade school level, matching if not displacing, a false and jingoistic Pledge of Allegiance.

Albert Einstein is purported to have said about the Second Law of Thermodynamics, “It is likely the truest law in the physical universe.” The Second Law is the Entropy Law. It foreshadows and dictates that our world rushes towards a state of maximum disorder. Nowhere is this more evident than with the events we witness on a daily basis, events that signal the pinnacle and beginning collapse of industrial civilization. The only hypothetical antidote to the dictates of entropy is the creation of small pockets of negative entropy, the creation of small eco-states inclusive.

Industrial civilization has arrived at its apex, as is so clearly signaled by the ever-increasing acknowledgment of Peak Oil. It is all about energy, or lack thereof, as laid out by the Second Law: the ability to do work is dependent on access to energy; without energy, social institutions collapse/implode, the institution of the large industrial nation-state inclusive.

As an historical metaphor, I offer the following: we live in Copernican times. A new worldview, a true paradigm shift, is birthed from out of the cauldron of crisis. As the false notion of the earth being the center of the universe was rejected because it had to be rejected, I maintain that the false notion of the large industrial nation-state will in time be rejected because it also has to be rejected.

The rationale and motives for my being a secessionist revolve around my first of all being an entropist. Cultural and ethnic drivers towards secession, even the bourgeoning States’ Rights movement, are contained within the meta-conditions and meta-dictates of the Second Law. It is my hope that the paper, Post-Peak Oil and NAmerican Regional Secession, offers the reader an introductory glance, with the benefit of wearing entropic spectacles, at secessionist tendencies in play on the North American continent. It is my hope that one will perceive that our destiny as citizens lies in responsibly embracing a political philosophy of secession-by-default in order to seize the opportunity at hand, in order to begin the creation of new eco-states upon this continent, in order to extend social and political liberties and responsibilities beyond the cadaver of the industrial nation-state, and lastly, in order to survive and continue the human adventure.

The article is found here.

Peak Oil Financial Planning: High Oil Prices and Inflation Loom

2009-03-26T15:24:00.005-06:00

"Financier sees oil shock from credit crunch," By Christopher Johnson
Reuters, March 26, 2009

"The global financial crisis and collapse in the oil market have stalled vital investment in oil exploration and production and are likely soon to lead to a sharp spike in prices," says energy investment banker Matthew Simmons. "We are three, six, maybe nine months away from a price shock. We are not talking about three to five years away -- it will be much sooner." (Continued here)

Thus, in addition to the dollar losing value from "printing dollars" to pay for bailouts the dollar will weaken from inflation brought on by high oil prices. This will bring about tighter credit and reduced investment in oil production and ageing/corroding oil production infrastructure.

Soon, governments will have to subsidize oil production and the unemployed, as well as heating oil and natural gas for heating their homes.

Peak Oil Financial Planning: Get Out of the U.S. Dollar Now

2009-03-25T07:03:00.005-06:00

"Why you should get out of the US dollar now!" By Justice Litle in CommodityOnline.com

"Get out of the U.S. Dollar. NOW. Do not pass go, do not collect $200, do not stop to conduct an impromptu inventory of your unmentionables." (Continued here)

This article is based on concerns that "China wants the dollar replaced as reserve currency." But regardless of this, printing dollars means inflation, and Peak Oil inflation is just around the corner. All currencies, pensions, retirement plans, life insurance, health insurance, and long term care insurance are promises to be able to buy oil in the future (all depend on oil). As oil supplies diminish, these promises evaporate in inflation and bankruptcies.

Gold and silver are mentioned as possible safe havens, but are not. The prices of gold and silver have not been going up as the world economy collapses. Both are used in electronics and jewelry and therefore the demand for these metals is collapsing. Gold and silver are a bubble waiting to burst.

Peak Oil: Myth or Reality

2009-03-20T19:23:00.000-06:00

Oil and stock analyst Tony Ericksen of the Oil Megaprojects Task Force concludes that global oil production peaked in 2008:

"World oil production peaked in 2008 at 81.73 million barrels/day (mbd). 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 million barrels per day. However, if oil sands are also excluded then crude oil and lease condensate production peaked in 2005 at 72.75 mbd.

The US Energy Information Administration (EIA) and the International Energy Agency (IEA) should make official statements about declining world oil production." (continued here).

Other sources have concluded much the same.

The Peak Oil Economic Depression Has Arrived

2009-03-06T08:23:00.009-06:00

A headline from Chicagotribune.com states: "Jobless rate bolts to 8.1 percent, 651K jobs lost in February."

"The net loss of 651,000 jobs in February came after even deeper payroll reductions in the prior two months, according to revised figures. The economy lost 681,000 jobs in December and another 655,000 in January," based on U.S. Department of Labor statistics."

But the real unemployment rate is now more like 12 or 13 percent, according to analyst Lee Adler, writing in "The Wall Street Examiner." Adler concludes that, "today’s deterioration is at least as rapid, and probably more rapid, than the beginning of the Great Depression."

Dow Jones concludes that today's stock market decline mimics the Great Depression.

Thus, both increasing unemployment and declining stock values indicate that we are entering an economic depression similar to the Great Depression.

Although it is difficult to determine how much of this economic depression is caused by Peak Oil impacts and how much stems from mismanagement of the economy as well as from business and government corruption, ASPO-Ireland explains that Peak Oil plays a major role.

But the current economic depression is permanent, due to declining global oil production, according to a recent post on EnergyBulletin.net.

We are entering the "Greatest Depression."

In the Great Depression of the 1930s, government programs and the build up for World War II stimulated the economy. The East Texas oil boom powered the factories, highways, trucks, tractors, trains, transportation, and infrastructure to make it possible.

Now, the problem is declining oil production, and there is no energy boom to help us pull ourselves up by the bootstraps.

There is no plan for developing energy alternatives that will power trucks, trains, ships, tractors, and combines, nor is there time or capital to develop alternatives. Capital is scarce due to declining oil production. Chris Shaw explains that energy is the source of capital, and hence, capital declines as oil production drops.

A review of government and scientific studies indicates that regardless of the time or capital available, no alternatives will begin to make up for declining global oil production.

Whatever alternative energy we attempt to develop will consume valuable oil (mining, manufacturing, and transportation) and not deliver the liquid fuels that we need. Chris Shaw call this the "quicksand effect."

The Congress and president will be at a loss of how to manage this ever-worsening economic collapse. They would be wise to commission the National Academy of Sciences (NAS) to provide the nation with advice. Chaos will result from the advice of contradictory interest groups, organizations, bloggers, and individuals. The NAS is the most credible source for such advice. The NAS and other scientific sources have already undertaken the basic research needed for a policy study to advise the nation. The NAS could provide an energy policy study within a year and could then provide advice on a continuing basis.

The best advice for individuals and organization is to prepare for Peak Oil impacts. No federal or state agencies are studying Peak Oil impacts and contingency planning. A few local governments and organizations are beginning to make plans.

This is what we must plan for. With increasing costs for gasoline and diesel, along with declining taxes and declining gasoline tax revenues, states and local governments will eventually have to cut staff and curtail highway maintenance. Eventually, gasoline stations will close, and state and local highway workers won’t be able to get to work. We are facing the collapse of the highways that depend on diesel and gasoline powered trucks for bridge maintenance, culvert cleaning to avoid road washouts, snow plowing, and roadbed and surface repair. When the highways fail, so will the power grid, as highways carry the parts, large transformers, steel for pylons, and high tension cables from great distances. With the highways out, there will be no food coming from far away, and without the power grid virtually nothing modern works, including home heating, pumping of gasoline and diesel, airports, communications, water distribution systems, waster water treatment, and automated building systems.

Peak Oil Preparation: Dow Jones decline rate mimics Great Depression

2009-03-03T21:48:00.002-06:00

By Dawn Kawamoto, March 2, 2009

With the Dow Jones Industrial Average falling below the psychological watermark of 7,000 on Monday, investors may be wondering how it all stacks up against the stock market crash of the Great Depression.

It's not looking good. (continued here)

Peak Oil Preparation: Protecting Your Financial Assets

2009-03-03T08:42:00.004-06:00

From MONEY and MARKETS, "Beginning Now: The Panic Phase of the Collapse"

By Martin D. Weiss, Ph.D. February 3, 2009 (Excerpts)

The panic phase of this collapse is about to begin.

The panic phase is an acceleration in the economic decline … a chain reaction of debt explosions … a free-fall in the financial markets … and a series of rude awakenings that will accelerate the decline even further.

First and foremost, get your money to safety. (Continued here)

Peak Oil and the Global Economy

2009-02-01T11:49:00.005-06:00

Recent news headlines reveal that the U.S. economy is deteriorating rapidly: “Be Prepared for More Cutbacks,” “Mass Layoffs Continue at Rapid Pace,” and “Economy’s Plunge is Worst in Quarter-Century.”

The Work Bank forecasts that the recession of 2008 will extend into 2009 and probably to 2010:

“A pronounced recession is believed to have begun in mid-2008 in Europe, Japan, and most recently, the United States. This recession is projected to extend into 2009. The possibility of a serious global recession cannot be ruled out. Even if the waves of panic that have inundated credit and equity markets across the world are soon brought under control, the crisis is likely to cause a sharp slowdown in activity stemming from the deleveraging in financial markets that has already occurred and that is expected to continue.”

The World Bank sees some signs of optimism for 2010, but concludes that “global recession is likely to be protracted” and “an even sharper recession is likely.”

A variety of analysts of The Wharton School, forecast a deep recession extending through 2010 and possibly beyond.

Gerald Celente, Editor and Publisher of "The Trends Journal," forecasts a global economic collapse beginning in 2009 (interview summary, not quoted directly):

The global economy will collapse in 2009, resulting in the worst recession in the post WW II period. The commercial real estate sector is highly leveraged and will collapse beginning in late February or early March as major retailers fail, leaving vacant rental space that will not be filled. This will lead to further failures in the finance and banking sectors and higher unemployment which is at 13% and growing.

Some two-thirds of the U.S. economy is based on consumerism, which is declining rapidly due to increasing unemployment. Declining personal income means a shrinking tax base and a need to raise state, local, and federal taxes and user fees.

This economic collapse, Celente believes, will lead to the "Greatest Depression," more corporate fraud, increased street crime, taxpayer revolts, rioting, and revolution. Survival is now a real concept as people lose investments and jobs. A return to frugality and self-sufficiency will characterize the economy in years to come.

Financial analyst Gail Tverberg explains the economic crisis in terms of a “Tower of Debt.” Because most debt ultimately rests on personal income, as personal income declines most debts are at risk: unfunded pension liabilities, unfunded Medicare and Medicaid, Social Security debt, publicly held federal debt, government sponsored enterprises (such as Fannie Mae and Freddie Mac), state and local government debt, financial businesses, businesses, and household debt (mortgages, credit cards, and education loans). This supports Gerald Celente’s forecast. When personal income declines (due to increasing unemployment), consumerism declines, retails businesses fail, highly leveraged commercial centers fail and default on loans, causing banking and financial institutions to collapse.

ASPO-Ireland examines the economy in light of Peak Oil (excerpts from the ASPO Newsletter):

“Oil demand had begun to outpace supply around 2005, when the production of Regular Conventional Oil passed its peak. The shortfall was however relatively small and was partly met without undue difficulty by a modest reduction in consumption.

But as prices began to firm, oil traders and other speculative financial institutions began to take a position in the market, which had the effect of driving up the price. Gradually the process built momentum as huge notional profits were reaped from the appreciating asset. In a conventional market such movements would soon be countered by increased production, but in the case of oil, there was no spare capacity to release, and the speculative surge fed on itself leading to an extreme escalation in price which reached about $150 a barrel by July 2008. However as this peak [in prices] was approached, the traders began to conclude that a limit was close and began to buy future options at lower prices, which began to undermine the price in a self-fulfilling process. In parallel the high prices began to undermine many other aspects of the economy with for example airlines and automobile manufacturers facing difficulties. They themselves relied heavily on debt, which itself was traded between banks without adequate genuine collateral, and were forced to unload their speculative oil positions in order to try to shore up their failing businesses. Gradually the whole edifice collapsed, and oil prices fell to around $50 a barrel, although nothing particular had changed in the actual supply/demand relationship.

The flaw in the system was to treat a finite resource whose production was largely controlled by the immutable physics of the reservoir as if it were a normal commodity capable of responding to ordinary market pressures. If the price of potatoes increases, farmers can grow more and the market responds, but oil is different.

Governments responded to the crash by pouring yet more money, itself lacking genuine collateral, into the system in the mistaken belief that this would restore the position of assumed eternal growth, and quite possibly the stock market will respond positively as traders sense a new upward direction. They have no real interest in reality: their job being to try to reap rewards from short term movements.

But if there is an economic recovery, that would serve to increase the demand for oil, which is in a sense the lifeblood of the modern world, and oil prices would again begin to surge. Probably, it will take several such vicious circles before governments and, more important, people at large at last come to grasp the reality of the situation, which will likely prompt radical changes in the human condition.

Meanwhile, desperate efforts are being made around the world to shore up the crumbling financial system. For example, the Bank of England has radically reduced interest rates in a country facing a severe recession, effectively taking money from savers to give to spenders.

The Government has evidently failed to grasp the underlying causes of recession and hopes that pumping a bit of money into the system will restore it to its previous condition. That was premised on eternal economic growth, which is a somewhat unrealistic proposition for a Planet of finite dimensions, but Governments subject to re-election are by nature short-term in their thinking.

One is led to conclude that the entire Stock Market, including especially the oil market, has become a thoroughly debased speculative institution. In earlier years, investors clubbed together to build a specific project, such as a canal or railway, with the resulting dividend being the prime motivation. Things seemed to have gone wrong when such investments were traded on markets by financial institutions which naturally can have no serious knowledge of the underlying business or the true value to be placed upon it.”

Energy investment banker Matthew Simmons, like ASPO-Ireland, notes that today’s low oil prices and credit shortage will reduce investments needed for oil production, resulting in lower oil production in the future, followed by increasing oil prices as demand out strips supply, which will then cause another economic downturn in the future. Simmons also notes that the aging oil infrastructure of drilling rigs, rusting platforms, pipelines, and refineries must be renovated, requiring trillions of dollars in investments at a time when credit is tight..

Independent studies indicate that Peak Oil occurred between 2005 and 2008 and that global crude oil production will now decline from 74 million barrels per day to 60 million barrels per day by 2015. During the same time, demand will increase. Oil supplies will be even tighter for the U.S. As oil producing nations consume more and more oil domestically they will export less and less. Because demand is high in China, India, the Middle East, and other oil producing nations, once global oil production begins to decline, demand will always be higher than supply. And since the U.S. represents one fourth of global oil demand, whatever oil the U.S. conserves will be consumed elsewhere. Thus, conservation in the U.S. will not slow oil depletion rates significantly. More and more oil is expended in oil production and processing as lower grades of oil are extracted from an increasing number of smaller oil fields that are located in hard to access ocean depths. These factors will increase the oil production decline rate above the six percent that is forecasted in a few years

These Peak Oil factors suggest that there will be no economic recovery following the economic collapse of 2009 and that the recession will deteriorate into a permanent economic depression that will worsen over time.

In 2007, the U.S. General Accountability Office (advised by a panel of 13 scientists of the National Academy of Sciences) examined the potential of alternative energies for replacing liquid fuels (that are vital for transportation and food production):

“An imminent peak and sharp decline in oil production could have severe consequences. The technologies we examined [ethanol, biodiesel, biomass gas-to-liquid, coal gas-to-liquid, and hydrogen] currently supply the equivalent of only about 1% of U.S. annual consumption of petroleum products, and DOE [U.S. Department of Energy] projects that even under optimistic scenarios, these technologies could displace only the equivalent of about 4% of annual projected U.S. consumption by around 2015. If the decline in oil production exceeded the ability of alternative technologies to displace oil, energy consumption would be constricted, and as consumers competed for increasingly scarce oil resources, oil prices would sharply increase. In this respect, the consequences could initially resemble those of past oil supply shocks, which have been associated with significant economic damage. For example, disruptions in oil supply associated with the Arab oil embargo of 1973-74 and the Iranian Revolution of 1978-79 caused unprecedented increases in oil prices and were associated with worldwide recessions. In addition, a number of studies we reviewed indicate that most of the U.S. recessions in the post-World War II era were preceded by oil supply shocks and the associated sudden rise in oil prices. Ultimately, however, the consequences of a peak and permanent decline in oil production could be even more prolonged and severe than those of past oil supply shocks. Because the decline would be neither temporary nor reversible, the effects would continue until alternative transportation technologies to displace oil became available in sufficient quantities at comparable costs. Furthermore, because oil production could decline even more each year following a peak, the amount that would have to be replaced by alternatives could also increase year by year.”

There is no plan nor capital for a so-called electric economy. And most alternatives yield electric power, but we need liquid fuels for tractors/combines, 18 wheel trucks, trains, ships, and surface mining equipment.

The independent scientists of the Energy Watch Group conclude in a 2007 report titled: “Peak Oil Could Trigger Meltdown of Society:”

"By 2020, and even more by 2030, global oil supply will be dramatically lower. This will create a supply gap which can hardly be closed by growing contributions from other fossil, nuclear or alternative energy sources in this time frame."

With increasing costs for gasoline and diesel, along with declining taxes and declining gasoline tax revenues, states and local governments will eventually have to cut staff and curtail highway maintenance. Eventually, gasoline stations will close, and state and local highway workers won’t be able to get to work.

We are facing the collapse of the highways that depend on diesel and gasoline powered trucks for bridge maintenance, culvert cleaning to avoid road washouts, snow plowing, and roadbed and surface repair.

When the highways fail, so will the power grid, as highways carry the parts, large transformers, steel for pylons, and high tension cables from great distances.

With the highways out, there will be no food coming from far away, and without the power grid virtually nothing modern works, including home heating, pumping of gasoline and diesel, airports, communications, and automated building systems.

Governments, business and individuals should prepare for the impacts of Peak Oil.

Economy's New Plunge is Worst in Quarter-Century, by Jeannine Aversa

2009-01-30T20:15:00.002-06:00

January 30, 2009
Washington, D.C.
Associated Press

Economy has worst slide since `82 -- and tailspin is accelerating as Americans ax spending

Battered by layoffs, debts and dread of worse to come, shoppers clutched ever tighter to their wallets in the final three months of 2008 and thrust the economy into its worst downhill slide in a quarter-century. Americans cut spending on everything from cars to computers, and it's only getting worse so far in the new year. (Continued here)

Mass Layoffs Continue at Rapid Pace, by Christopher S. Rugaber

2009-01-29T23:17:00.002-06:00

January 28, 2009
Washington, D.C.
Associated Press

Mass layoffs involving 50 or more workers increased sharply last year, and large job cuts appear to be accelerating in 2009 at a furious pace.

Boeing, Pfizer, Home Depot and other U.S. corporate titans have announced tens of thousands of job cuts this week alone.

The economy is likely to continue to shed jobs for the rest of this year, even if an economic stimulus bill pushed by President Barack Obama is approved, economists said. (Continued here)

The Wall Street Journal: "Be Prepared for More Cutbacks," by Anna Prior

2009-01-29T21:53:00.004-06:00

January 26, 2009

The Wall Street Journal notes that "Unemployment is hitting numbers we haven't seen in over a decade," and that many companies are cutting costs through layoffs and salary reductions and freezes. The Journal offers advice for cutting family expenses and securing your job.

Gerald Celente: Economic Trends for 2009

2009-01-23T21:15:00.009-06:00

Gerald Celente is Editor and Publisher of "The Trends Journal"
Interivew MP3 January 17, 2009

Summary of the Interview: (not quotations)

The trend for 2008 was panic, a crashing stock market, some major retail store closings, and the loss of 2 million jobs in the last quarter of 2008.

The global economy will collapse in 2009, resulting in the worst recession in the post WW II period. The commercial real estate sector is highly leveraged and will collapse beginning in late February and March as major retailers and financial institutions fail, leaving vacant rental space that will not be filled. This will lead to further failures in the finance and banking sectors and higher unemployment.

Real unemployment is 13% and growing.

Some two-thirds of the economy is based on consumerism, which is declining rapidly due to increasing unemployment. Declining personal income means a shrinking tax base and a need to raise state, local, and federal taxes and user fees.

This will lead to the "Greatest Depression," increased street crime, more corporate fraud, taxpayer revolts, rioting, and "revolution." Survival is now a real concept as people lose investments and jobs. A return to frugality and self-sufficiency will characterize the economy in years to come.

ASPO Examines the Economy and Peak Oil: December 2008

2009-01-21T19:52:00.009-06:00

Excerpts from the Association for the Study of Peak Oil and Gas (ASPO-Ireland) December 2008 Newsletter. The full article is available here.

In years ahead, analysts may look back on the current crisis and identify its causes. They may conclude that oil demand had begun to outpace supply around 2005, when the production of Regular Conventional Oil passed its peak. The shortfall was however relatively small and was partly met without undue difficulty by a modest reduction in consumption.

But as prices began to firm, oil traders and other speculative financial institutions began to take a position in the market, which had the effect of driving up the price. Gradually the process built momentum as huge notional profits were reaped from the appreciating asset. In a conventional market such movements would soon be countered by increased production, but in the case of oil, there was no spare capacity to release, and the speculative surge fed on itself leading to an extreme escalation in price which reached about $150 a barrel by July 2008. However as this peak [in prices] was approached, the traders began to conclude that a limit was close and began to buy future options at lower prices, which began to undermine the price in a self-fulfilling process. In parallel the high prices began to undermine many other aspects of the economy with for example airlines and automobile manufacturers facing difficulties. They themselves relied heavily on debt, which itself was traded between banks without adequate genuine collateral, and were forced to unload their speculative oil positions in order to try to shore up their failing businesses. Gradually the whole edifice collapsed, and oil prices fell to around $50 a barrel, although nothing particular had changed in the actual supply/demand relationship.

The flaw in the system was to treat a finite resource whose production was largely controlled by the immutable physics of the reservoir as if it were a normal commodity capable of responding to ordinary market pressures. If the price of potatoes increases, farmers can grow more and the market responds, but oil is different.

Governments responded to the crash by pouring yet more money, itself lacking genuine collateral, into the system in the mistaken belief that this would restore the position of assumed eternal growth, and quite possibly the stock market will respond positively as traders sense a new upward direction. They have no real interest in reality: their job being to try to reap rewards from short term movements.

But if there is an economic recovery, that would serve to increase the demand for oil, which is in a sense the lifeblood of the modern world, and oil prices would again begin to surge. Probably, it will take several such vicious circles before governments and, more important, people at large at last come to grasp the reality of the situation, which will likely prompt radical changes in the human condition.

The election of Mr Barrack Obama seems to have been greeted with rapture in the United States and around the world. Certainly he projects an attractive personality and speaks fluently and well, but the main enthusiasm seems to lie in his mixed racial background. Part of his family emanates from Kenya, possibly having some Arab blood, and the Irish stake claim to other antecedents. Some observers hope that his election will spell regime change and the end of the so-called War on Terror, which seems to have failed to extend global economic hegemony. On the other hand, his election, which required massive funding, suggests that he relied on more than the simple ballot box. Indeed, the financier, Rahm Emanuel, who has apparently served in the Israeli Army and is the son of a former member of the Irgun Zvai Leumi terrorist movement, has been appointed as Chief of Staff, suggesting that the established influences will remain in power. But by all means, most people welcome the change, and look forward with enthusiasm to new policies with which to face the unfolding situation, imposed ultimately by dwindling oil-based energy.

The new Presidency will certainly have to work a radically new situation for which no one is truly prepared. Even the leading American intelligence organisation, the National Intelligence Council (NIC) has issued a report entitled Global Trends 2025: A World Transformed which concludes that the days of US global economic and military power are over, foreseeing an end to the western model of economic liberalism, as the State is forced to take a more active role.

Meanwhile, desperate efforts are being made around the world to shore up the crumbling financial system. For example, the Bank of England has radically reduced interest rates in a country facing a severe recession, effectively taking money from savers to give to spenders.

The Government has evidently failed to grasp the underlying causes of recession and hopes that pumping a bit of money into the system will restore it to its previous condition. That was premised on eternal economic growth, which is a somewhat unrealistic proposition for a Planet of finite dimensions, but Governments subject to re-election are by nature short-term in their thinking.

The reporting of economic parameters: the official US numbers are apparently also highly suspect. The US Bureau of Labor Statistics (BLS) reports that US Consumer Price Inflation (CPI) is running at 5%, having changed the procedure for doing so in 1990. According to shadowstats.com, a more realistic estimate would be 13%. The Federal Reserve Bank no longer reports the so-called M3 for the creation of new money, but the same source suggests it is currently running at 13%, contributing to inflation. Officially, Gross Domestic Production (GDP) has increased by 2%, whereas the alternative source suggests that it is declining at 3%. Likewise, official estimates of unemployment at 6% contrast with the alternative estimate of 15%. Added credibility for the alternative assessment comes from no less than General Motors, which reports that global passenger car sales fell by 6% during the Third Quarter of this year. Apparently, various hidden agencies related to the Federal Reserve Bank may be manipulating gold and silver prices, which have fallen since the financial crisis broke. The fall does not seem a natural response, given that gold is the traditional safe haven in times of stress and growing inflation. Indeed according to the August issue of the Bank Participation Report, Bear Stearns had a large short position on COMEX silver at the time of its forced merger with JP Morgan in March. The transfer was undertaken by the US Treasury under somewhat dubious procedures. No doubt gold holdings are also involved in the labyrinthine dealings.

One is led to conclude that the entire Stock Market, including especially the oil market, has become a thoroughly debased speculative institution. In earlier years, investors clubbed together to build a specific project, such as a canal or railway, with the resulting dividend being the prime motivation. Things seemed to have gone wrong when such investments were traded on markets by financial institutions which naturally can have no serious knowledge of the underlying business or the true value to be placed upon it.