Thank you for the link to Hubbert's paper. Just printed it and scanned it. Much of it is familiar to me so just read the part about inflation. I do not agree with his initial assertion "money grows exponentially by the rule of compound interest". Fiat money supply grows when the rate of money creation (from debt issuance, bank asset purchases, dividends, bank bonuses etc) exceeds the rate of money destruction (from debt repayments and interest payments). Interest rates are set by central banks to control the rate of money creation. Interest rates and rate of money creation have an inverse relationship.
Debt and money are two sides of the same coin. You can buy things with money and you can buy things with debt. The difference is in time. When would you offer your labour to cancel (or earn ) the debt/money.
Because Labour was crushed by Capital in the 70's and 80's the earning power of Labour dropped. This caused the velocity of money to tank. Capital decided to offer Labour the opportunity to get into debt so the velocity of money could increase.
The result is we now have a debt based economy. The world owes 100 Trillion. It is this 100 T that has to be shed so that the economy can recover, and real humans can escape their debt shackles.
The purpose of the economy is to serve humans, not to enslave them.
I am agnostic on the role of Gold. It is a useless metal. It is however frungible so that it too can grow, just like bitcoin can grow even though there are a finite number of bitcoin. The value of each bitcoin increases in the same way the value of each ounce of Gold can increase with the expansion of the economy.
Some days I’m very pessimistic about the future. However today I’m going to post something positive.
We currently consume about 200 kWh of energy per day per person in the UK. I reckon we could get that figure down to below 50 and still lead great happy lives. We may not be able to afford a private car, air travel, to heat your whole house, eat out etc but they are not essential. We’ll have to share the available employment more equally but this will release time to grow your own food and help others too old to work. Happiness and energy consumption aren’t correlated (above a threshold at least).
What is the minimum energy per capita we can live on? Interesting question. What I am sure about, our energy consumption will driven down because we will just not be able to afford to consume 200kWh of energy per day.
Thanks Arthur. Beginning to get what your saying.
Here are a couple of hardly-watched videos that are interesting:
http://www.youtube.com/watch?v=4E_69R5B9I8#t=100
http://www.youtube.com/watch?v=jh6Xh9Kk44s#t=269
I am always surprised that in the "peak oil community or circles", a key person in the "oil history" isn't more talked about : James Akins
For an intro see for instance :
http://www.washingtonpost.com/wp-dyn/content/article/2010/07/26/AR2010072605298.html
And especially his key article "the oil crisis, this time the wolf is here" from April 73 (before the first oil shock).
Why ? Before this article is full of insight into the future : he even talks about tar sands and shale (but in the kerogen sense in that case).
But more importantly because, this also corresponds to most "peak oilers", more or less also being stuck in the completely wrong "common image" :
"first oil shock = Yom Kippur/Arab embargo= geopolitical story= nothing to do with geologic constraints"
When the real story was :
- end 1970 : US production peak, the energy crisis starts from there, with some heating fuel shortages for instance (some articles can be found on NYT archive on that)
- Nixon name James Akins to go check what is going on.
- Akins goes around all US producers, saying this won't be communicated to the media, but needs to be known, national security question
- The results are bad : no additional capacity at all, production will only go down, the results are also presentede to the OECD
- The reserves of Alaska, North Sea, Gulf of Mexico, are known at that time, but to be developed the barrel price needs to be higher
- In parallel this is also the period of "rebalance" between oil majors and countries on each barrel revenus (Ghadaffi being the first to push 55/50 for instance), and creation of national oil companies.
- dropping of B Woods in 71 (move to petro $) and associated $ devaluation also put pressure on raising the barrel price for producing countries.
- So to be able to start Alaska, GOM, North Sea, and have some "outside OPEC" market share, the barrel price needs to go up (always good for oil majors anyway) and this is also US diplomacy strategy
- For instance Akins, then US ambassador in Saudi Arabia, is the one talking about $4 or $5 a barrel in an OAPEC meeting in Algiers in 1972 (when it still was around $1)
- Yom Kippur starts during an OPEC meeting in Vienna, which was about barrel revenus percentages, and barrel price rise.
- The declaration of the embargo pushes the barrel up on the spots markets (that just have been set up)
- But the embargo remains quite limited (not from Iran, not from Iraq, only towards a few countries)
- It remains fictive from Saudi Arabia towards the US : tankers kept on going from KSA, through Barhain to make it more discrete, towards the US Army in Vietnam in particular.
- Akins is very clear about that in below documentary interviews (which unfortunately only exists in French and German to my knowledge, and interviews are voiced over) :
http://www.youtube.com/watch?feature=player_embedded&v=fQJ-0jAr3LQ
For instance after 24:10, where he says that two senators were starting having rather "strong voices" about "doing something", he asked the permission to tell them what was going on, got it, told them, they shat up and there was never any leak. The first oil schock "episode" starts at 18:00
(the "embargo story" was in fact very "pratical", both for the US to "cover up" US peak towards US public opinion or western one in general by putting the blame "on the Arabs", but also for major Arab producers to show "the arab street" that they were doing something for the Palestinians).
And then the second oil shock (79) result of Iranian revolution, and leading to the "Carter doctrine", with then the Reagan corollary and creation of CENTCOM.
http://upload.wikimedia.org/wikipedia/commons/thumb/3/35/Seal_of_United_States_Central_Command.png/768px-Seal_of_United_States_Central_Command.png
Followed by the counter oil shock (for a big part the result of Reagan administration pushing the Saudis to produce more in order to bring the USSR down), about this for instance :
http://www.youtube.com/watch?v=02F-3l1EKsA
The global ignorance about all this allows to keep the messages around "old time geopolitics, this is about values, pushing democracy, bad and good guys, etc", and allows the current grotesque propaganda around "US shale boom".
How many Americans knows that US peak was in 1970 ? 5% ? 1% ? less ?
By the way, Akins report to Nixon in 1971 should be a key document, but it is still classified to my knowledge, anybody knows whether it could now be declassified ?
I saw this article/interview referenced on zerohedge yesterday. I found it to be interesting reading.
http://oilprice.com/Interviews/Shale-the-Last-Oil-and-Gas-Train-Interview-with-Arthur-Berman.html
Thanks for this great interview! Your podcasts are very inspirational and full of thought provoking opinions and essential information! If you are looking for interesting people to interview I can highly recommend David Korowitz (expert on risk resilience and complex system analysis) and John Jopling (author of Gaian Democracies)
Great interview! Some great insights here. I too think that the amount of media distortion and PR that was used to extend the shale fairytale and mislead people (even so far that they cannot see clearly the danger of this situation) is particularly disturbing.
I'd like to introduce a somewhat different perspective and a possible solution to the energy problem. I've noticed that the same thing about PR is also true for nuclear fusion research. The international collaboration - ITER - is a huge and complex project that has lot of scientific and economic infastructure tied to it. Case can actually be made that ITER is overly complex and that there are engineering obstacles/problems that might just be too great for it to ever succeed. http://goo.gl/3xESh5
Here's where I see hope:
A team based in New Jersey have actually come up with a very interesting proof of concept-reactor that is orders of magnitude cheaper than the ITER. They totally circumvent the need for continual stable confinement of the plasma - actually running the reactor as a pulsed machine. This reduces the needed materials and engineering work tenfold and makes possible for the whole installation to be small enough to fit into a garage-sized space.
Their problem seems to be lack of funding (public investements are mostly tied to ITER and NIF) and then again underestimating the importance of proper PR work. Their strengths lie in their science/approach which to me seems rather simple and elegant. This type of reactor has a great disruptive potential and in best scenario could be put into production in a relatively short timeframe. I warmly encourage everyone interested to do some research on this subject:
http://www.smartplanet.com/blog/bulletin/new-jersey-firm-claims-nuclear-fusion-triumph/
http://motherboard.vice.com/blog/the-nuclear-fusion-arms-race-is-underway
[quote=Villburn]Great interview! Some great insights here. I too think that the amount of media distortion and PR that was used to extend the shale fairytale and mislead people (even so far that they cannot see clearly the danger of this situation) is particularly disturbing.
I'd like to introduce a somewhat different perspective and a possible solution to the energy problem. I've noticed that the same thing about PR is also true for nuclear fusion research. The international collaboration - ITER - is a huge and complex project that has lot of scientific and economic infastructure tied to it. Case can actually be made that ITER is overly complex and that there are engineering obstacles/problems that might just be too great for it to ever succeed.
[/quote]
I've written before on the very subject of either poor reporting, or great PR, when it comes to fusion.
For example, from the second link you provided at the bottom of your post, we read this:
Now, 40 years later, the game has changed. A recent experiment at the Joint European Torus fusion reactor in the United Kingdom produced 20 million joules. And the National Ignition Facility in California just reached a milestone by producing more energy in a fusion reaction than was needed to start that reaction.Um, no, not even close. No fusion reaction has ever produced more energy than went into starting that reaction. Instead what happened was that more energy came out of the pellet of fuel at the center of the machine than went into that same pellet. The energy that went into the lasers was not counted....and that energy is at least 100 fold larger than was actually released. The scientists who performed the test were very clear on the matter and I am at a loss as to why I have read the expanded claim no less than 5x since. It's not a terribly difficult concept to grasp and then report on clearly. So I am hopeful that there are some better methods out there that may yet surprise us all, and fusion would be very welcome - assuming humans can be trusted with unlimited, clean energy without using it as an excuse to expand to the point that we literally eat all the other species out of home and body.
I smell a rat. Follow the money. Who benefits from the failure of fusion? Big Oil, Big Coal. Big Centralised power Corporations. The People-not so much.
Of cause we are going to have the failure of Hot Fusion waved in our faces, just like a matador waves a red flag to distract a bull.
"Look, Look. See Fusion is So Difficult. and take it from us- there is only one way to achieve fusion- Just like the sun does it. And do you know how hard it is to reproduce the conditions in the Centre of the sun? We are trying our very best, but it is almost impossible."That fusion can only be achieved by kinetics, Heat, is demonstratibly false See Muon Catalyzed Fusion. Don't like it? No Problem- We have many others.
When an Electrical Engineer (Frank Znidarsic) gave a lecture on the state of Cold Fusion to the big power corporations their response was that the big power corporations weren't in the business of making power, they were in the business of making a profit.
Do not be distracted.
Let's assume for a moment that fusion power is in fact (finally) near at hand, and will give us something close to "unlimited cheap, clean energy". This would undoubtedly be the final nail in the coffin of this particular civilization. There'd not be a chance that its power would be used wisely to engineer a graceful descent to a civilization living within the Earth's carrying capacity for homo sapiens. Instead, as with the "fracking bonanza", it'd be used as evidence of the power of human ingenuity to overcome all obstacles, and the industrial foot would press the pedal to the metal.
Remember, using power unavoidably generates "waste energy". Look at the nighttime satellite photos of the earth, with all the lit-up cities and towns, generating heat as well as light. Even with a reduction in carbon emissions by replacing fossil fuel use, exponentially increasing industrial activity would exacerbate global warming.
Of course, as Liebig's law describes, other limits would also kick in at some point. Material resources are still needed, as are food and water (both of which we're busily degrading as fast as we can).
In summary, the "success" of fusion power would likely turn our current overshoot into hypershoot, followed by hypercrash.
Seek, and do not stop looking until you find. When you find you will be perplexed. When perplexed, astounded and rule over the world.Christ in the Gospel of St Thomas. You did very well Dwig but you stopped short. I urge you to keep going. I have addressed and expounded upon your concerns Here through to here.
[quote=Arthur Robey]
Christ in the Gospel of St Thomas. You did very well Dwig but you stopped short. I urge you to keep going. I have addressed and expounded upon your concerns Here through to here. [/quote] Arthur: I have had enough of your moon-pointing nonsense! Please, don't distract me from looking down at my feet because it's only reasonable to boil things down to the bottom line. Most of us here are ethical, rational men and women; we have (barely) learned to sublimate the lure of sensory pleasure, and now we focus on what is possible, on what must be done. We study mean reversion, depletion, inflation, and other statistically significant probabilities, and we see the trajectories written on the wall. This is reality. Then there are a few fools like you:
Seek, and do not stop looking until you find. When you find you will be perplexed. When perplexed, astounded and rule over the world.
Most people live dejectedly in worldly sorrow and joy; they are the ones who sit along the wall and do not join in the dance. The knights of infinity are dancers and possess elevation. They make the movements upward, and fall down again; and this too is no mean pastime, nor ungraceful to behold. But whenever they fall down they are not able at once to assume the posture, they vacillate an instant, and this vacillation shows that after all they are strangers in the world. This is more or less strikingly evident in proportion to the art they possess, but even the most artistic knights cannot altogether conceal this vacillation. One need not look at them when they are up in the air, but only the instant they touch or have touched the ground–then one recognizes them. But to be able to fall down in such a way that the same second it looks as if one were standing and walking, to transform the leap of life into a walk, absolutely to express the sublime in the pedestrian–that only the knight of faith can do–and this is the one and only prodigy. -Soren Kierkegaard
Faith, Faith is an island in the setting sun. But proof, yes Proof is the bottom line for everyone. Paul SimonStonily yours, Hugh
Proof? What an illusion! A fruit only for the gods, it sits at the end of the rainbow. The lash of "proof" is demanded, for proof can never be given by a mortal. Whispered in our ears- demanded by The Beast as a soul destroying demonstration of clay feet.
The knowledge gained is that we will be forever denied the true nature of our reality. Before we accepted, now the veil is ripped. Now we know the profound depths of our ignorance.
Denied Proof, we are given Quality.
Kierkegaard is one of us. He dances along the edge of the Abyss. The closer the edge, the more beautiful the dance. But no matter how close the edge, his feet are clay. He is my Brother.
Look Up, lest you slip!
Below is nothing but feet of clay and the dizzying depths of infinite ignorance and death.
Arthur,
Thanks for the provocative reply. As a software developer for the last half-century, seeking without stopping has been my stock in trade. I've also found again and again that when I'm perplexed, I'm at my peak of creativity (and occasionally astounded by what I discover there).
More recently, as a student of our changing world (much richer, more complex and subtle than any human-engineered system), I find myself in a similar situation, but far more intense. In fact, I think I'm falling in love with Gaia (tough, beautiful, terrifying, and tender); fortunately, I expect nothing in return, except for a while, to join in her dance, sort of a pale shadow of Shiva/Kali dancing over the abyss.
My hopes for the future of my four children and five grandchildren (and that of the cute little girl in "Leapfrog" – yours?) are for human consciousness to evolve to the point where we stop getting in our own and each others' way, and become worthy dance partners for the old gal. This, as with all significant changes in complex dynamic systems, can and must arise emergently out of myriad individual, family, and community commitments to change.
I find "ruling over the world" a complete misunderstanding of what the world is (unless the quote refers to the "inner world"). Also, it's not "a rock" to me, but the only place in the universe that humanity is suited to, has evolved (and is evolving) to be part of.
To me, perhaps the greatest flaw in the dream of "escaping" this planet, is that we'd be taking with us the deficient world view that has led us to ravage it so. Would we be likely to treat our new homes any more kindly? First, we must get our home (ecos) in order, including the "home" between our ears. If we have no peace there, we will never find it anywhere.
Or, as St. Thomas also says, "If you bring forth what is within you, what you bring forth will save you. If you do not bring forth what is within you, what you do not bring forth will destroy you."
It might be a little egocentric of me but I see this as a hugely important moment for H.Sap. My prognostication is that "we" are doomed and will be replaced by something (body?) more fitted for the role. We are a work in progress.My fear is that what we are replaced by will be inferior to us. My feeble efforts are to ensure that that does not happen. But One never know when some small ripple in time might grow to be a mighty wave.
That child is not mine. My granddaughter is astoundingly beautiful.
It fills my heart that you are in love with Gaia, For she must be rescued from this corner that she is trapped in. (I refer to the fact that the Goldilocks zone is drifting outward, and that her-our-feedback loop no is no longer powerful enough to protect her- us.)
Gaia is not the rock on which she exists- she is the living organism of which my granddaughter is an indispensable part. We-Us-Gaia must migrate to a safer distance from the sun.
The difficulty I have with any contemporary humans is their extremely high discount rate and their ego separateness. Even the delightful company of Peak Prosperity have a horizon of no more than a few decades.
I am so pleased that you found the quotation by Christ. It is one of my favorites. It is a bit mystical but it needs repeating.
From memory.
"Bring forth that which is within you. If you bring forth that which is within you what you bring forth will save you. If you do not have that which is within you, what you do not have will destroy you."Arthur
Arthur,
It fills my heart that you are in love with Gaia, For she must be rescued from this corner that she is trapped in. (I refer to the fact that the Goldilocks zone is drifting outward, and that her-our-feedback loop no is no longer powerful enough to protect her- us.)
Gaia is not the rock on which she exists- she is the living organism of which my granddaughter is an indispensable part. We-Us-Gaia must migrate to a safer distance from the sun.I see her differently. If what we've learned so far is correct, Gaia is about 4 billion years old, and as adapted to the geosphere she inhabits as we are to her. In her time, she's undergone many mass extinctions, including 6 great ones (I'm counting the current great extinction, which is largely driven by our activities). She's a tough old lady, not like the soft, fragile-seeming image of "Mother Nature". She'll recover from this extinction as she has from the others, whether or not our species will be along for the ride. As to the eventual death of the Earth itself, that's not something we have the knowledge or resources to deal with. Perhaps a descendant species of ours will learn how to "rescue" her, but the best we can do is to learn how to bring our knowledge and wisdom into balance, thereby laying a better foundation for further evolution. Can you be content to do the foundational work for a task whose completion you won't live to see? For another, large-scale look at a possible future, check out The Next 10 Billion Years, and think about the question at the end. If you're still into trying to move the Earth to follow the Goldilocks zone (or the even more daunting idea of moving Gaia to a different home), take the time to look into Howard Odum's work on the energy basis for life. His book "A Prosperous Way Down" is a good place to start, and his daughter maintains a web site by that name.
[quote=Arthur Robey]It fills my heart that you are in love with Gaia, For she must be rescued from this corner that she is trapped in. (I refer to the fact that the Goldilocks zone is drifting outward, and that her-our-feedback loop no is no longer powerful enough to protect her- us.)…Gaia is not the rock on which she exists- she is the living organism of which my granddaughter is an indispensable part. We-Us-Gaia must migrate to a safer distance from the sun.
[/quote]
Hi Arthur and all,
I was leafing through Reiner Kümmel's The Second Law of Economics: Energy, Entropy, and the Origins of Wealth and I came across this paragraph on page 227:
Also on page 227 is this little gem:
Cheers,
Hugh