Future at the end of the Oil Age

SUBHEAD: Building resilience in a resource-constrained world at the end of the Oil Age. [Publisher's note: The following article is the text version extracted from an online "slide" presentation by Dmitry Orlov. Slide 1 is the title page.] By Dmitry Orlov on 25 March 2010 in ClubOrlov - (http://cluborlov.blogspot.com/2010/03/our-future-and-end-of-oil-age-building.html) Image above: detail of chart from Slide 4 "HOPE: for an alien intervention?" [Publisher's note: The following article is the text version extracted from an online "slide" presentation by Dmitry Orlov. Slide 1 is simply the title page. See online version below.] Slide 2: Peak Oil Theory vs. Reality Theory
  • Global oil production peaks and declines gradually; slow growth.
  • Alternative and renewable energy ramps up to compensate
  • Challenging economic environment, many social and political problems.
  • Massive spikes in oil prices crash financial markets and kill growth.
  • No money for alternatives or further oil exploration and production.
  • Financial, commercial, political collapse followed by something completely different.
Slide 3: HOPE: for an alien intervention?
  • Peak Oil models work well for individual countries. Prima facie: most of USA peaked in 1970 (Alaska peaked later).
  • Individual countries compensate by importing oil from countries that have not peaked yet.
  • When the entire planet peaks, there is nobody left to import from - except aliens from outer space, of course!
  • Industrial economies cannot grow without increasing fossil fuel consumption (empirical result).
  • Without growth, debts go bad, economic and political problems mount, and economies collapse.
Slide 4: HOPE: for an alien intervention? Without help from friendly space aliens, we won't have the energy to power a gradual energy descent. It will be a cliff. The right-hand side of this graph is pure science-fiction. Slide 5: Scraping the bottom of the oil barrel The new oil is not like the old oil:
  • Energy Returned on Energy Invested has gone from 100:1 to 10:1 and is heading down.
  • We are using up the dregs: deep offshore, heavy/sour crude, tar sands, arctic oil.
  • Oil consumers will run out of money before oil companies run out of places to drill
  • The agony of the industrial age can be prolonged by destroying what's left of the biosphere.
Slide 6: Scraping the bottom of the oil barrel
  • Net Energy = Usable Acquired Energy / Energy Expended
Slide 7: The bottom of somebody else's barrel
  • The US has to import over 2/3 of its transportation fuels.
  • High oil prices mean extra revenue for oil exporters.
  • Oil exporters invest that money in their domestic economy.
  • Their domestic oil consumption increases.
  • Consequently, there is less oil for them to export.
  • Net exporters become net importers even while they are still pumping some oil (just as the USA did in 1970).
  • Many oil importers end up left out in the cold.
  • Oil importers who ride scooters and use kerosene lamps do a lot better than oil importers who drive SUVs.
  • This is not a contest for who can use the most oil.
  • This is a contest for who can grow their economy using the least amount of oil.
Slide 8: HOPE: for an alien intervention?
  • The aliens better bring us some money too...High energy prices cut into personal budgets, making individuals unable to service their debts.
  • Banks are burdened with nonperforming loans, toxic assets, foreclosed properties.
  • Governments step in to bail out banks.
  • Fractional reserve banking? Volcker: 12:1, Greenspan: 30:1, Bernanke: infinity to 1.
  • Economy continues to shrink, job losses mount, tax revenues collapse.
  • Who bails out the governments? Why, aliens from outer space, of course!We have already lost; let's regroup and try again.
Slide 9: Lifeblood transfusion?
  • "You see, the flow of credit is the lifeblood of our economy." - Obama SOTU speech, February 2009
  • According to Treasury data, the long-term trend is that by 2015 an additional dollar of debt will produce zero additional GDP growth.The short-term trend is that debt is rising rapidly as the economy is continuing to shrink (so we may be there already!)
  • The economic patient is hemorrhaging too fast for the transfusion to work
Slide 10: More debt, anyone?
  • The Treasury borrows trillions from the Federal Reserve and promises to repay this debt with even more debt.
  • Everyone is supposed to believe that this activity is somehow meaningful.
  • Actually we are just writing ourselves IOU's and periodically moving them from one pocket to another (not convincing)
Slide 11: Why can't this show go on?
  • A system that evolved in conditions of continuous growth of material resources cannot shrink controllably.
  • The key ingredient is confidence; once faith in the future is lost, everyone's behavior changes radically.
  • Everyone at the top already knows that this show cannot go on and are (attempting to) plan accordingly, for themselves.
  • The name of the game is "Keep the rest of them fooled for as long as possible".
  • People are still paying down their mortgages, putting money in their retirement accounts, etc.
  • Being fooled this way can make people very angry.
Slide 12: The logic of diminishing returns
  • Joseph Tainter, in his "Collapse of Complex Societies", pointed out that social complexity increases until further investment in complexity becomes counterproductive.
  • He also pointed out that complex systems do not self-simplify; they collapse catastrophically and are eventually replaced with much simpler systems.
  • Diminishing returns are observable and measurable.
  • Diminishing returns cannot be explained using the internal logic of the systems involved.
  • The people involved in maintaining these systems struggle along, but are eventually forced to give up.
Slide 13: Examples of diminishing returns
  • Each additional dollar of debt causes the economy to shrink even faster.
  • Each additional dollar of defense spending makes the country less safe.
  • Each additional dollar spent on health care makes the country sicker.
  • Each additional dollar spent on education makes the people more ignorant.
  • Each additional dollar spent on the justice system increases injustice.
  • Each additional dollar spent on job creation increases unemployment.
Slide 14: Escaping from diminishing returns What can we do to avoid wasting our efforts on perpetuating doomed systems? How do we construct alternatives?
  • Lower your official exposure/profile
  • Decrease your environmental footprint and burn rate
  • Avoid financial arrangements and legal documents
  • Rely on personal connections and relationships
  • Avoid the mainstream, look for fertile margins, fringes, niches
  • Be hard to classify (use the SEP field to your advantage)
  • Each additional dollar contributed to a political campaign makes the people even more powerless
Slide 15: Reasonable expectations
  • Money will not be very common or useful (government defaults, growing joblessness, savings wiped out or taxed away, access to imports lost, etc.).
  • As the US loses ability to import 3/4 of transportation fuels, economy will stall and population will become stranded.
  • Political system will maintain appearances as long as possible - "Proud and Purposeful Paralysis".
  • Many local authorities will fail (close police stations and fire departments, stop supplying sewer, water and garbage removal services).
  • Other local authorities will try to charge confiscatory rates, and fail just a little bit later.
  • Various officious busybodies will have a hard time figuring out whose side they are on, and will probably need help.
Slide 16: The Big Transition BEFORE
  • Cars and trucks
  • Municipal water supplies
  • Municipal sewage
  • Trash removal
  • Garbage removal
  • Fast food
  • Supermarkets
  • Hospitals
  • High Schools
  • Colleges
  • Office work
  • Bicycles, boats, 2 feet
  • Rainwater collection, wells
  • Composting toilets
  • Local junkyards, incinerators
  • Local compost piles
  • Community kitchens
  • Open-air markets
  • Local clinics
  • Home Schooling
  • Apprenticeships
  • Physical labor
Slide 17: The future is very unpopular
  • Each resident of North America employs the equivalent of 100 "energy slaves": services provided by machinery that runs on fossil fuels. But emancipation is at hand!
  • People do not like to be persuaded by fact or logical argument.
  • People like their comforts: cars, HVAC, etc.
  • People are seduced by TV, consumerism.
  • Manual labor and farming are low-status activities.
  • People lack the skills to lead a non-mechanized existence.
  • It is almost impossible to convince people to do what will be necessary - until it becomes necessary.
  • It will be almost impossible to do what is necessary without a significant amount of preparation.
  • Those who take the trouble to prepare will be a tiny minority.
Slide 18: The Pre-Collapse Checklist
  • Food
  • Water
  • Shelter
  • Lighting and communications
  • Medical care
  • Transportation
  • Security
These have to be provided
  • Without access to savings,
  • Without a positive cash flow,
  • Without an official economy.
Slide 19: Food
  • Enough food to feed a family can be grown on 2000-3000 sq. feet (It takes a bit of practice to get this going.)
  • Some foodstuffs (cooking oil, grains, wine, coffee, chocolate) need to be "imported" somehow.
  • A lot of wild foods can be gathered (berries, mushrooms, roots & shoots, nuts, [white] acorns.
  • "Edible Forest Gardens" can be planted on public lands - useful plants surrounded by thorny thickets.
  • Community kitchens are more efficient than personal ones.
  • Eliminate all food waste: chickens, rabbits, guinea pigs, carp, catfish, crayfish - something out there will eat it all up.
  • Nanny goats can provide milk for infants/children.
  • Seasonal migration out to the land to grow food.
  • Harvests have to be "floated out" (road transport expensive).
Slide 20: Water
  • Municipal water = bad risk.
  • Flushing with potable water = insanity!
  • Many grades: drinking water, washing water, irrigation water, gray water, "lively" water.
  • Sewage is a very bad idea; composting much better.
  • Roof rainwater collection, barrels, filters for drinking water.
  • Swales dug into hillsides can boost groundwater.
  • Hot water for washing: rocket stoves fed by brush piles.
  • Passive irrigation systems instead of pumps and hoses.
  • Runoff from disused parking lots and other structures can be saved in cisterns.
  • Flat roofs can be planted with sod to soak up water and keep buildings cool.
  • Proper placement of shade trees and evaporation pools can make air conditioning unnecessary.
Slide 21: Shelter
  • Single-family dwellings are no longer affordable for nuclear families; single-family dwellings become extended-family GULAGs where the residents eventually go insane.
  • There is a lot of unused commercial real estate that will belong to nobody in particular once all parties are bankrupt.
  • There are a lot of unused shipping containers that are very easy to customize for a wide variety of uses.
  • Large structures are cheaper and easier to retrofit for off-grid use than small ones.
  • Transportation needs are much reduced if the entire town relocates into the shopping mall and the office park.
  • Basements of demolished suburban houses can be flooded and used for aquaculture, or for tree nurseries, etc.
  • Freed-up land can be used for community agriculture.
Slide 22: Lighting and Communication
  • Relying on the electric grid - a high-risk, high-cost proposition.
  • Keeping the existing system running through "renewable" means is not achievable, sustainable or renewable.
  • Using wind/solar/micro-hydro to power to run AC appliances is an expensive proposition - not affordable.
  • All it takes is 100-200W of solar and/or wind to power a few LED lights, radio, laptop, 2-way radio, cell phone charger, etc. That's something that can be put together for a few thousand dollars.
  • It's all made in China! Yikes! Get yours now! (Install it later).
  • 12V batteries, alternators and voltage regulators will come from scrapped cars/trucks - then what? (Food for thought).
Slide 23: Medical "care"
  • Stay healthy: eat little, mostly vegetables, avoid exercise, but do some physical labor, sleep plenty and get lots of rest, avoid stress, have a sense of humor.
  • Avoid doctors and hospitals (they prescribe toxic drugs, spread disease and deplete family savings).
  • Know how to treat/cure yourself and the people around you - good hygiene, herbs, massage, rest & TLC.
  • For serious medical needs, have a medical evacuation plan in place - to a country with a functioning medical system (Canada, Mexico, Cuba, Russia...).
  • Know when it's time for you to go (your life isn't worth half a million to extend by a year or two, no matter who you are - the country can't afford it).
Slide 24: Medical "care" - steer clear of fraud
  • Avoid American medical "care" if at all possible.
  • Making a profit off of sick people is deeply unethical.
  • Health is not insurable. If all houses burned down, there would be no fire insurance. Nobody dies healthy.
  • Resist efforts to tie you to a "job" by the threat of cutting off your access to medical "care".
  • Resist efforts to force you or your family into medical bankruptcy through medical extortion.
  • You have no choice of doctor who isn't an American doctor and violates the Hippocratic oath by putting financial and legal considerations ahead of what's good for the patient.
  • And now, you have no choice but to buy federally mandated private health insurance.
Slide 25: Transportation
  • To recap: 2/3 of transportation fuels are imported, and these entire 2/3 are going away.
  • Daily trips to town by private motor-car will once again be reserved for the aristocracy (chauffeur not included).
  • There is not much hope for continuation of air travel, air freight or interstate trucking.
  • Rail freight could actually be revived at very little cost (much more cost-effective than road freight).
  • Water freight is supremely efficient, especially if by sail.
  • Our harbors, bays, sounds, estuaries, rivers and canals are our prime regional transportation assets.
  • Many people will be delighted to once again be able to make a living on the water.
Slide 26: Security
  • One happy family: former military, former prisoners, former police, former government spooks, plus some drug lords.
  • An "online community" is a hacker's playground.
  • Easy pickings: loaners (armed or not), people who can be tracked using their GPS cell phones and other gizmos.
  • Hard nuts to crack: cohesive communities that deal face to face and are electronically "dark".
  • Having a lot of witnesses about makes crime more difficult.
  • A 24/7 watch/patrol is an excellent idea.
Obvious ideas:
  • Surround yourself with people you know.
  • Mistrust electronic communications.
  • Cultivate friendships in places high and low.
Slide 27: In conclusion
  • Many people can't be persuaded by either fact or reason. Let's hope you are not one of them.
  • Running out the clock on our current living arrangement is a bad idea: the longer you wait, the fewer options you will be left with.
  • A rather exciting time to be alive, wouldn't you say?
Below in online version of the slide presentation of Dmitry Orlov's "Our Future and the End of the Oil Age: Building Resilience in a Resource-Constrained World". .

1 comment :

Tom Anthony said...

This is the best encapsulation of the current situation I have read. This guy is a practical genius with a "lights on" read on reality.

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