Nowhere ro go but down

SUBHEAD: The fiscal cliff may be seen in retrospect as a driver of leadership and adaptive genius.

By Richard Heinberg on 24 December 2012 for Post Carbon Institute
(http://www.postcarbon.org/blog-post/1365191-fiscal-cliff-nowhere-to-go-but)


Image above: Wiley Coyote goes over the cliff. He'll live. From (http://www.antfarmersalmanac.com/2010/09/index.html).

Most folks in Washington and on Wall Street are desperate to avoid the fiscal cliff. That’s because the automatic spending cuts and tax increases that would take effect if we go over the edge would mean an end to recovery and a resumption of economic contraction. But the only way to steer clear of the cliff is for the President and Congress to agree on somewhat smaller spending cuts and tax increases that would substantially reduce federal deficits over time. The assumption all around is that deficits are unsustainable, but we can still have economic growth if we rein them in.

But what if, as I have argued in my book The End of Growth (and as Canadian economist Jeff Rubin explains in his book Flatline, and as U.S. economist Robert Gordon speculates in his paper “Is U.S. Economic Growth Over?”), the nation’s ability to expand its economy has effectively dissipated? In the early-to-mid 20th century, cheap oil and electrification fueled rapid growth of manufacturing and trade, but that was a historic anomaly that economists and policy makers mistakenly assumed was the permanent new normal.

Since the 1970s, growth has been maintained to an ever-greater degree simply by borrowing. For most of these past three to four decades, rising consumer debt was the engine: households took on bigger mortgages, higher credit card balances, larger student loans, and steeper home equity lines of credit in order to pay for more consumption—and rising consumption meant a growing economy. During this period, debt rose at three times the rate of GDP growth. As debt ballooned, the financial industry increased in size relative to manufacturing, agriculture, and the other components of the economy. The financial industry got rich, bought Congress, deregulated itself, and started blowing bubbles in order to milk the system for ever more extravagant profits.

The most recent and by far the biggest of those bubbles was of course the housing bubble of the last decade; when it burst in 2007-2008, households lost trillions in wealth. Americans no longer had the ability to increase their indebtedness (in many cases they couldn’t make payments on existing debt, and banks didn’t want to loan them more). Consumption plummeted. The U.S. economy started shrinking.

Since 2008 Federal Reserve actions have forestalled a banking crisis, while government deficit spending (initially via stimulus programs) has generated a faux-recovery. Most new debt entering the system has been government debt. Federal borrowing, at a rate of about $100 billion a month, has kept the economy on a drip-feed of new money, preventing a collapse of consumption, a disappearance of jobs, and the sort of general self-reinforcing contraction that we got a strong taste of in late 2008 and early 2009.

It’s clear that if we go over the fiscal cliff contraction will resume soon and sharply. But what if we go the gentler route? The hope is that, as government reduces deficit spending, private enterprise and household consumption will resume their historic roles as generators of growth. But (if analysts like me are right) that’s just not going to happen. We’ve reached the limits of what private debt can do for us, and there’s no other route to increasing consumption. Moreover, it’s becoming plain that our existing rates of consumption are undermining the planet’s basic life-support systems and we need to back off the accelerator if we are to leave intact ecosystems to provide for future generations.

So what should we do? The first and most important thing is to clarify our aims. The presumptive goal of policy makers is to return to our “normal” condition of growth. But in fact the key thing to do right now is to recognize that growth is over. It was a temporary and anomalous condition that cannot be extended into the future. That doesn’t mean it’s the end of the world.

But it does mean we will have to abandon economic thinking that sees growth as inevitable, normal, and essential. We will need new and different economic strategies and ways of measuring progress over the next few years and decades as we transition back to the true historically normal condition of almost-zero growth—different banking models, a less globalized trade regime, and more locally-based cooperative enterprises. Along the way we will have to shed unsustainable debt burdens through a massive, organized jubilee if we are to avoid years of default and decline.

If we recognize the inevitability of this historic moment and embrace a return to an economy running on local enterprise rather than centralized and globalized debt-driven madness, there will be winners and losers (as there always are during moments of great social and economic change), but most people will find themselves better off in ways that really count in the end.

The fiscal cliff may be seen in retrospect as a driver of leadership and adaptive genius if we take it as an opportunity to examine our assumptions. Otherwise it’s a problem without a solution, a game of chicken in which nearly everyone will lose.



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Gift of the Maya

SUBHEAD: This is what sustainability actually looks like when it is practiced for several thousand years.

By Albert Bates on 21 December 2012 for Permaculture Reseach Institute -
(http://permaculturenews.org/2012/12/21/the-gift-of-the-maya/)


Image above: The Milpa Cycle in photographs. From original article.


At the end of one long count and the beginning of another, our understanding of the Mayan world is rapidly being transformed by new knowledge.

The traditional Mayan narrative in western literature is perhaps best exemplified by the writings of Jared Diamond and Joseph Tainter, who ascribe the collapse of the Classic Period to an over-exploitation of resources, and in particular, a deforestation of the lowlands that exacerbated climate swings, leading to extreme drought, fire and famine. Some now-familiar scenes in Mel Gibson’s Apocalypto were of lime-quarry workers, dusted head-to-toe in white powder, slaking lime to make renders for buildings and pyramids. These images resonate with our stereotypes of tone-deaf ruling classes directing their work-slaves to perform catastrophically civilization-destructive activity.

There is another story of Mesoamerica that is emerging through the work of biologists, botanists, and ethno-agronomists exploring and attempting to replicate the ancient systems that produced traditional foods. One example now familiar to permaculturists can be seen the chinampas of Xochlimilco, near modern-day Mexico City, which combined urban waste-disposal, canal dredging, and plant and animal production from both aquatic and terrestrial horticultural complexes. The Aztec’s elegantly interconnected system, which was not confined to just that society or to the tropics, produces more food per hectare than any system discovered before or since, and it does it by cooperating with nature.

Two Mayan examples can be seen in the large-scale experiments in Belize of archaeologist Anabel Ford and cacao-farmer Christopher Nesbitt. Ford’s farm, El Pilar, straddles the border between northern Belize and Guatemala in the Petén. Nesbitt’s is located in southern Belize, in the Maya Mountains. Both occupy flanks of semi-buried and overgrown pyramid cities from the Classic Period around 1,100–1,000 years ago.

We have described the Maya Mountain Research Farm here before and suffice it to say the best way to get a full picture is to go there and experience it. We offer a permaculture design certificate course there every spring. This year our course is being preceded by a tour of development projects in Southern Belize and followed by an advanced edible forest design course.

Built on the ruins of the midland city of Uxbantun, part of the archeological complex of Luubantun (best known for the discovery of the crystal skull by the teenage daughter of archaeologist F.A. Mitchell-Hedges in 1926), MMRF is a tree-based agricultural system that resembles the structure, complexity and interconnectivity of the traditional Maya, providing sustainability services such as erosion control, air purification, soil formation, water retention and wildlife habitat.

In 1978, While living in Guatemala and guiding her archaeology graduate students from UC Santa Barbara in field work, Anabel Ford mapped a 30-km transect between the Petén sites of Tikal and Yaxhá. In the process, she could not fail to ignore the ongoing cultivation by present Maya residents of many of the same crops found in the archaeological record, and in some cases the same identical cacao trees, regrown from stump cultures, and kept in production more than 1000 years. This cultivation pattern she described as “forest islands,” and she immediately grasped that it was precisely this style of agriculture that enabled the Maya to not only build successive monumental civilizations, but to still inhabit Central America in large numbers today.

In 1983, she discovered and later mapped the ancient city of El Pilar. In 1993, after conducting a settlement survey and excavations, she launched a multidisciplinary program to understand the culture of El Pilar by replicating its agriculture. In a 2011 article for Popular Archeology, Ford described that agriculture in this way:

The Maya milpa cycle sequences from a closed canopy forest to an open field. When cleared, it is dominated by annual crops that transform into a managed orchard garden, and then back to a closed canopy forest in a continuous circuit. Contrary to European agricultural systems developed around the same period, these fields are never abandoned, even when they are forested. Thus, it is more accurate to think of the milpa cycle as a rotation of annuals with succeeding stages of forest perennials during which all phases receive careful human management.
[...]
Extensive evidence exists on the management of forest resources, the flora and fauna, and the subtleties of Maya ecological knowledge. Traditional practices of forest gardening support a model of long-term, sustainable management of natural resources by the Maya. We see the Maya as managers rather than as destroyers, and this is an essential step in understanding how to conserve this and other threatened tropical ecosystems today. Rather than using the Maya model as one of destructive behavior – a “failed society” – their responsible interaction with their environment can provide us with a model of global sustainability. — popular-archeology.com

Ford’s working experiments at El Pilar, and also what Chris Nesbitt is doing at MMRF, are at the leading edge of what is coming to be called “action archaeology.” Says Jeremy Sabloff, former president of the Society for American Archaeology, “The idea that archaeology can play a critical role in the world today is a rising trend — and a very exciting one.”

The role shift is from academic scholar or forensic technician to community activist and trainer. What action archaeology brings to campaigns to eradicate poverty, stop resource wars and reverse climate change is the recovered knowledge of what sustainability actually looks like when it is practiced for several thousand years.

One of the main things it looks like is a forest.

 • Albert Bates has been Director of the Global Village Institute for Appropriate Technology since 1984 and the Ecovillage Training Center at The Farm in Tennessee since 1994, where he has taught sustainable design, natural building, permaculture and restoration ecology to students from more than 50 countries. He was one of the first to write about climate problems 30 years ago. His latest book is The Biochar Solution: Carbon Farming and Climate Change.

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Forecast 2013

SUBHEAD: James Kunstler says we're set to go for Contraction, Contagion and Contradiction.

By James Kunstler on 31 December 2012 for Kunstler.com -
(http://kunstler.com/blog/2012/12/forecast-2013-contraction-contagion-and-contradiction.html)


Image above: Stock photo of crystal ball gazer. From (http://www.123rf.com/photo_9519798_swami-gazing-into-a-crystal-ball.html).

The people who like to think they are managing the world's affairs seem fiercely determined to ignore the world's true condition -- namely, the permanent contraction of industrial economies. They just can't grok it. Two hundred years of cheap fossil fuel programmed mankind to expect limitless goodies forever on an upward-swinging arc of techno miracles. Now that the cheap fossil fuels have plateaued, with decline clearly in view, the hope remains that all the rackets of modernity can keep going on techno miracles alone.

Meanwhile, things and events are in revolt, especially the human race's financial operating system, the world's weather, and the angry populations of floundering nations. The Grand Vizier of this blog, that is, Yours Truly, makes no great claims for his crystal ball gazing (Dow at 4,000 - ha!), but he subscribes to the dictums of two wise men from the realm of major league baseball: Satchel Paige, who famously stated, "Don't look back," and Yogi Berra, who remarked of a promising rookie, "His whole future's ahead of him!"

In that spirit, and as for looking back, suffice it to say that in 2012, the world's managers -- and by this I do not mean some occult cabal but the visible leaders in politics, banking, business, and news media -- pulled out all the stops to suppress the appearance of contraction, and in so doing only supplied more perversion and distortion to the train of events that leads implacably to an agonizing workout, or readjustment of reality's balance sheet. There's a fair chance that these restraints will unravel in 2013, exposing civilization to a harsh new leasing agreement with its landlord, the Planet Earth.

On a personal note, I published a book in 2012 titled Too Much Magic: Wishful Thinking, Technology, and the Fate of the Nation. By an interesting coincidence, folks in the USA were engaged that year in manifold strenuous exercises in wishful thinking, ranging from fantasies of "energy independence," to belief that central bank interventions could take the place of productive economic activity, to the idea that winks, suggestions, and guidelines were an adequate substitute for the rule of law, to the omnipresent mantra invoking "technology" as the sovereign remedy every problem of existence (including the problems caused by technology), to the dominions of utter stupidity where climate change deniers hold hands with the funders of "creation" museums.

Since wishful thinkers, by definition, are allergic to arguments against wishfulness, my book failed to make an impression. Anyway, gales of propaganda were blowing across the land, especially from the oil and gas fraternity, with the added cognitive dissonance hoopla of a presidential election -- so the public was left wishfully bamboozled as it whirled around the drain of its hopes and dreams.

The Oil and Money Predicament

If you understand the basic formula that ever-increasing cheap energy resources were the fundamental condition for industrial growth for two centuries, then you must realize that they are also behind the modern operations of capital, especially the mechanism that allows massive volumes of interest on debt to be repaid -- hence behind all of contemporary banking. And if you get that, it is easy to see how the end of cheap energy has screwed the pooch for modern finance.

In fact, let's step back for a panoramic view of what happened with that relationship in recent times: In 1970 you get American peak oil production at just under 10 mmbd (million barrels a day). This chart tells the story:

US Oil production 1920 to 2012

That event was little noted at the time, but by 1973, the rest of the world was paying attention, especially the OPEC countries led by the big exporters in the Middle East. All they had to do was look at the published production figures and by 1973 the trend was apparent. They apprehended that US production had entered decline -- predicted by American geologist M. King Hubbard -- and that they, OPEC, could now put the screws to the USA. Which they commenced to do during a decade of rather messy oil crises (messy because they were accompanied by geopolitical events such as the Yom Kippur War and the 1979 revolution in Iran).

OPEC could put the screws to the USA because our still-growing industrial economy required a still-growing oil supply -- the growth of which now had to be furnished by imports from other nations. The catch was that those other nations raised the price substantially, virtually overnight, and since everything in the US economy used oil in one way or another, the entire cost structure of our manufacture, supply, distribution, and retail chains was thrown askew.

The net effect for the USA was that our economy went off the rails for a decade and lots of strange things started happening in the financial sector. They called it "stagflation" -- stagnant economic activity + rising prices. It was hardly a conundrum. The OPEC price-jackings of 1973 and 1979 made everything Americans had to buy more costly, in effect devaluing the dollar while throwing sand in the gears of industrial production. Meanwhile, dazed and confused American industry started losing out to Japan and Europe in things like electronics and cars. Price inflation was running over 13 percent in the late '70s. Interest rates skyrocketed. When Federal Reserve chair Paul Volker aggressively squashed inflation with a punitive prime rate of 20 percent in 1981, the economy promptly tanked.

Now look at this chart:

Notice that our oil consumption kept rising from the early 1980s until the middle of the early 2000s. Now look at the circle in the chart below. That rise of production from the late 1970s to about 1990 is mostly about production from the Prudhoe Bay oil fields in Alaska -- one of the last great discoveries of the oil age (along with the North Sea and the fields of Siberia). US production did not regain the 1970 peak level, but it put a smile on the so-called Reagan Revolution and on Margaret Thatcher's exertions to revive comatose Great Britain.

Post Peak Bump up from Alaskan Oil

Now look at the price of oil (chart below). You can see what a fiasco the period 1973 to 1981 was for US oil prices: huge rapid price rises in '73 and '79. But then the price started to fall steeply after 1981 and stayed around the same price levels as its pre-1973 lows.

1970s Oil Price Spike and Thereafter 

   

Notice the price started to fall after 1981 and landed close to its pre-1973 levels by 1986 and hung out there (though more erratically) until the mid-2000s. Because of those aforementioned last great giant oil field discoveries, OPEC lost its price leverage over world oil markets. Through the 1980s and 90s the price of oil went down until it reached the modern low of about $11 a barrel. That was when The Economist magazine ran a cover story that declared the world was "drowning in oil." It was the age of "Don't worry, be happy."

The price behavior of the oil markets after 1981 had interesting reverberations in both the macro economy and the financial sector (which is supposed to be part of the macro economy, not a replacement for it). A consensus formed in business and politics that it was okay to yield manufacturing to other nations. It was dirty and nasty and caused pollution, so let other countries have it. We followed the siren call of clean and tidy forms of production: "knowledge work!" The computer revolution had begun in earnest.

The financial sector began its metastasis from 5 percent of the economy to, eventually, 40 percent, and really cheap oil prompted the last great suburban sprawl-building pulsation into the Martha Stewart bedecked McMansion exurbs. In effect, financial shenanigans and sprawl-building became the basis for the vaunted "Next Economy." It lasted about 20 years.

That incarnation of the US economy failed spectacularly as soon as oil prices started to creep up in the early 2000s. And, of course, the final suburban sprawl boom went hand-in-hand with all the shenanigans in banking. So when it all blew up, beginning in 2007 with the collapse of Bear Stearns, the USA was left with a gutted economy, insolvent banks, and a living arrangement with no future.

The Current Situation

We're now entering the seventh year of a smoke-and-mirrors, extend-and-pretend, can-kicking phase of history in which everything possible is being done to conceal the true condition of the economy, with the vain hope of somehow holding things together until a miracle rescue remedy -- some new kind of cheap or even free energy -- comes on the scene to save all our complex arrangements from implosion. The chief device to delay the reckoning has been accounting fraud in banking and government, essentially misreporting everything on all balance sheets and in statistical reports to give the appearance of well-being where there is actually grave illness, like the cosmetics and prosthetics Michael Jackson used in his final years to pretend he still had a face on the front of his head.

The secondary tactic has been intervention in markets wherever possible and the intemperate manipulation of interest rates, all of which has the effect of defeating the principle purpose of markets: price discovery -- the process by which the true value of things is established based on what people will freely pay. For instance the price of money-on-loan. The functionally less-than-zero percent interest rates on money loaned between giant institutions like central banks and their client "primary dealers" (the Too Big To Fails) essentially pays these outfits for borrowing, which is obviously a distortion in the natural order of things (because it violates the second law of thermodynamics: entropy) as well as an arrant racket.

The campaign of intervention and manipulation also deeply impairs the other purpose of markets, capital formation, by the resultant mismanagement and misallocation of whatever real surplus wealth remains in this society. What's more, it allows these TBTF banks to become ever-bigger monsters which hold everybody else hostage by threatening to crash the system if they are molested or interfered with.

Which brings us to the third tactic for pretending everything is all right: complete lack of enforcement and regulation by all the authorities charged with making sure that rules are followed in money matters. This includes the alphabet soup of agencies from the Securities and Exchange Commission to the Commodities Futures Trading Commission, to the Federal Housing Authority, and so on (the list of responsible parties is very long) not to mention the Big Kahunas: the US Department of Justice, and the federal and state courts.

Aside from Bernie Madoff and a few Hedge Fund mavericks nipped for insider trading and arrant fraud, absolutely nobody in the TBTF banking community has been prosecuted or even charged for the monumental swindles of our time, while the regulators have behaved in ways that would be considered criminally negligent at best, and sheer racketeering at less-than-best, in any self-respecting polity.

The crime runs so deep and thick through all the levels of money management and regulation that one can say the whole system has gone rogue, up to the President of the US himself, the chief enforcement officer of the land, who has not lifted a finger to discipline any of the parties involved. The fact that Jon Corzine, late of MF Global, is still at large says it all.

Fourth-and-finally, the news media in league with the public relations industry have undertaken a campaign of happy talk to persuade the public that everything is okay and all the machinations cited above are kosher so that there is absolutely no political agitation over these crimes against their own interest, which is to say, the public interest. The PR/media happy talk racket is also aimed at maintaining various subsidiary fictions about the economy, such as the fibs that the housing market is bouncing back, that "recovery" is ongoing, and that the channel-stuffing monkeyshines of the car industry amount to booming sales of new vehicles.

Perhaps the most pernicious big lie is the bundle of fairy tales surrounding shale oil and shale gas, including the idea that America will shortly become "energy independent" or that we have "a hundred years of shale gas" as President Obama was mis-advised to tell the nation. It is pernicious because it gives us collectively an excuse to do nothing about changing our behavior or preparing for the new arrangements in daily life that the future will require of us.

The Shale Ponzi

Well, because that's what it is: a Ponzi scheme, aimed at gathering in sucker-investors to boost share prices of oil and gas companies, with the hope that some miracle will occur to make financially broke societies capable of paying three or four times the price for oil and gas than their infrastructure for daily life was set up to run on, back when it seemed to be running okay. This is just not going to happen.

Let's start with shale gas. The gas is there in the "tight" rock strata, all right, but it is difficult and expensive to get out. The process is nothing like the old conventional process of sticking a pipe in the ground and getting "flow." It's not necessary to go into the techno-details (you can read about that elsewhere) but to give you a rough idea, it takes four times as much steel pipe to get shale gas out of the ground. I have previously touched on the impairment of capital formation due to machinations in banking - themselves a perverse response to the loss of capacity to pay back interest at all levels of the money system, which was caused by the world's running out of cheap oil and gas. (Note emphasis on cheap.) The net effect of all that turns out to be scarcity in another resource: capital, i.e. money, rather specifically money for investment in things like shale oil and gas.

Ironically, plenty of money was available around 2004-5 when the campaign to go after shale oil and gas got ramped up over premonitions of global peak oil. How come there was money then and not now? Because we were at peak cheap oil and hence peak credit back then, which is to say peak available real capital. So, the oil and gas companies were able then to attract lots of investment money to set out on this campaign. They brought as many drilling rigs as they could into the shale oil and gas play regions and they drilled the shit out of them. Natural gas was selling for over $13 a unit (thousand cubic feet) around 2005, and it was that high precisely because conventional cheap nat gas production was in substantial decline.

That was then, this is now. As a result of drilling the shit out of the gas plays, the producers created a huge glut for a brief time. They queered their own market long enough to wreck their business model. Unlike oil, nat gas is much more difficult to export -- it requires expensive tankers, compression and refrigeration of the gas to a liquid, seaboard terminals to accomplish all that (which we don't have), so there was no way to fob off the surplus gas on other nations. The domestic market was overwhelmed and there was no more room to store the stuff. So, for a few years the price sank and sank until it was under $2 a unit by 2011. Since shale gas production is just flat-out uneconomical at that price, the companies engaged in it began to suffer hugely.

In the process of all this a pattern emerged showing that shale gas wells typically went into depletion very quickly after year one. So all of the activity from 2004 to 2011 was a production bubble, aimed at proving what a bonanza shale gas was to stimulate more investment. It required a massive rate of continuous drilling and re-drilling just to keep the production rate level -- to maintain the illusion of a 100-year bonanza -- and that required enormous quantities of capital. So the shale gas play began to look like a hamster wheel of futility.

After 2011 the rig count began to drop and of course production leveled off and the price began to go up again. As I write the price is $3.31 a unit, which is still way below the level where natural gas is profitable for companies to produce --say, above $8. The trouble is, once the price rises into that range it becomes too expensive for many of its customers, especially in a contracting economy with a shrinking middle class, falling incomes, and failing businesses. So what makes it economical for the producers (high price) will make it unaffordable for the customers (no money).

Because of the complex nature of these operations, with all the infrastructure required, and all the money needed to provide it, the shale gas industry will not be able to go through more than a couple of boom / bust cycles before it begins to look like a fool's game and the big companies throw in the towel. The catch is: there are no small companies that can carry on operations as complex and expensive as shale requires. Only big companies can make shale gas happen. So a lot of gas will remain trapped in the "tight" rock very far into the future.

Obviously I haven't even mentioned the "fracking" process, which is hugely controversial in regard to groundwater pollution, and a subject which I will not elaborate on here, except to say that there's a lot to be concerned about. However, I believe that the shale gas campaign will prove to be a big disappointment to its promoters and will founder on its own defective economics rather than on the protests of environmentalists.

Much of what I wrote about shale gas is true for shale oil with some departures. One is that the price of oil did not go down when US shale oil production rose. That's because the amount of shale oil produced -- now about 900,000 barrels a day -- is working against the headwinds of domestic depletion in regular oil + world consumption shifting to China and the rest of Asia + the declining ability of the world's exporters to keep up their levels of export oil available to the importers (us). We still import 42 percent of the oil we use every day.

The fundamental set up of life in the USA -- suburban sprawl with mandatory driving for everything -- hasn't changed during the peak cheap oil transition and represents too much "previous investment" for the public to walk away from. So we're stuck with it until it manifestly fails. (Life is tragic and history doesn't excuse our poor choices.) The price of oil has stayed around the $90 a barrel range much of 2012. Oil companies can make a profit in shale oil at that price. However, that's the price at which the US economy wobbles and tanks, which is exactly what is happening. The US cannot run economically on $90 oil. If the price were to go down to a level the economy might be able to handle, say $40 a barrel, the producers of shale oil would go broke getting it out of the ground.

This brings us back to the fact that the issue is cheap oil, not just available oil. As the US economy stumbles, and the banking system implodes on the incapacity of debt repayment, there will be less and less capital available for investment in shale oil. As with shale gas, the shale oil wells deplete very rapidly, too, and production requires constant re-drilling, meaning more rigs, more employees, more trucks hauling fracking fluid, and more capital investment. This is referred to as "the Red Queen syndrome," from Lewis Carrol's Through the Looking Glass tale in which the Red Queen tells Alice that she has to run as fast as she can to stay where she is.

The bottom line for shale oil is that we're likely to see production fall in the years directly ahead, to the shock and dismay of the 'energy independence' for lunch bunch. 2012 may have been peak shale oil. If the price of oil does go down to a level that seems affordable, it will be because the US economy has been crushed and America is mired in a depression at least as bad as the 1930s, in which case a lot of people will be too broke to even pay for cheaper oil. Hence, the only possibility that America will become energy independent would be a total collapse of the modern technological-industrial economy.

The shale oil and gas campaign therefore must be regarded as a desperate gambit by a society in deep trouble engaging in wishing and fantasy to preserve a set of behaviors that can no longer be justified by the circumstances reality presents.

Macro-economic Issues

Major fissures began to show in the Ponzified global financial system in 2012 and it is hard to imagine them not yawning open dangerously in 2013. All the Eurozone countries are in trouble. Its collective economy has been tanking faster than the US economy because the member nations can't print their own money and it is harder to conceal the financial tensions between debt accumulation and government expenditures. These tensions end up expressed as "austerity" -- meaning fewer and fewer people get paid, which makes people angry and makes governments unstable.

Bailout procedures are transparently laughable under the European Central Bank and the other bank-like "facilities," giving money to governments so that they can give it to insolvent banks, so the banks can buy government bonds, which only stuff the banks with more bad paper, and take the national debts higher. Several Euro member countries are contenders for default this coming year: Greece, Spain, possibly Italy, and perhaps even France, which is now a basket-case dressed in Hollandaise sauce.

A perfect storm in the global bond market has formed with Europe crippled, Canada and Australia entering their own (long-delayed and spectacular) housing bubble busts, the USA sharply losing credibility as it fails to politically address its balance sheet problems -- or even continue to pretend that it might -- and Japan utterly floundering under a new lack of commitment to nuclear power, the need to import virtually all the fossil fuels it needs for its industrial economy, a consequent negative balance of trade (for the first time in decades), and a deadly debt-to-GDP ratio around 240 percent. Many observers see the new Japanese government under Shinzo Abe as determined to inflate his own currency away to nothing in an effort to unload exports and erase debt, and nobody understands how that strategy turns out well.

My own view, expressed here before, is that Japan is on a fast track to become the first advanced nation to opt out of industrialism and go medieval. It might sound like a joke, but its not. And it would be consistent with Japan's historic cultural personality of making stark choices, even if it was not clearly articulated in the political theater. The journey to that destination could include a war with China, which also would be consistent with Japan's suicidal inclinations, so clearly displayed in its last major war with the US.

The global bond market is held together with baling wire and hose clamps. Since money is loaned into existence (in the words of Chris Martenson) the global financial system is underwritten by its bonds, and the bonds are underwritten only by the faith that issuers can pay the interest due to bondholders. Risk rises in an exact ratio as that faith wanes. And interest rates must rise hand-in-hand with that rising risk -- unless the ruling authorities (central banks and governments) conspire to repress them.

These "unnatural" interventions will only cause the trouble to be expressed elsewhere in collapsing currencies and economies. It is already happening under the various ZIRP regimes, setting up a feedback loop in which it becomes even less likely that bond-holders will be paid and more faith erodes until nobody wants any bonds and the market for them seizes up and all that paper becomes worthless.

These days, the only sovereign nation in the Eurozone with real financial credibility (i.e. tangible surplus wealth) is Germany. The European Central Bank has only a printing press and the European Financial Stability Facility only pretends to have access to pretend money. At some point, the Germans will have to decide whether they truly want to pick up the tab for all the unpaid bills of the Eurozone. Either they pay for life support for their customers or they let them go under and either way, they end up in the black hole of a contracting export economy, which is to say depression. Now, imagine Germany having to bail out France.

Wouldn't that be a moment of plangent historical symmetry? I'm not the only one to propose that Germany may shock the world in 2013 by pulling out of the Euro on short notice and taking shelter behind the Deutschmark. It may limit the damage, but otherwise they are stuck where they are geographically and as the other nations in Europe ride their economies down, Germany's will contract, too.

One idea behind the Eurozone was to get its members so economically interdependent that war would be an unthinkable option. The period following the Napoleonic Wars (1815 - 1914) was exceptionally peaceful in Europe, too. Then, the 20th century rolled onstage with the unspeakable horror of two consecutive "world wars." They occurred amid a phenomenal uptrend of increasing industrial wealth and burgeoning technology.

Note that the defeat of the French army at Waterloo in 1815 was accomplished by a coalition of British and German (Prussian) forces. (The teams change through history.) Note also that the end of the long peace of the 19th century, the First World War, was a trauma the real cause of which continues to mystify the historians -- did England, France, Germany care that much about Serbia to destroy their economies?

The Second World War was an extension of the unresolved business of the first, especially the question of who owed what to whom for all the damage. One thing we do know: the world was not prepared for the consequences of industrial-strength warfare with high tech weapons: the massacres of the trenches, aerial bombing of cities full of civilians, and the assembly-line style crematorium.

The atom bomb finally sobered folks up in 1945. The ensuing period has been another age of peace and plenty in Europe. The next act there will be played out against the backdrop of declining wealth and unraveling techno-industrial complexity.

It may be a set of low-grade grinding struggles rather than an operatic debacle like the two world wars, and it will surely include internal civil strife in this-or-that country, which could turn outward and become contagious. The next time Europe finds itself a smoldering ruin, the capital will not be there to rebuild it. I'm not sure whether it matters all that much whether the single currency Euro survives or not. Everything economic is hitting the skids in Europe now led by plunging car sales.

Record high youth unemployment is epidemic, including now in France. The debt problems there can only be solved by deleveraging and/or default. The chance of coordinated cooperative fiscal discipline among the Euro member nations is nil. I see Europe poised to follow Japan into a re-run of the medieval period, though much less willingly. The quandary is: how do you have a wonderful and peaceful modern culture without an economy to support it.

The United Kingdom stands outside the Euro currency club (though it is in the European Union of trade agreements) but London remains the financial hub of the continent, if not the money-laundering center of the universe. The financial mischief there is allowed to go on because washing and rinsing money is the only major industry left in Old Blighty. Its own finances are in terrible disarray, the people have been subject to painful "austerity" for some time before the PIIGS started squealing, and its energy resources are dwindling away to nothing.

The governing coalition of David Cameron's Tories and the Nick Clegg's Liberal Democrats is cracking up under the austerity strain, with Nigel Farage's Independence Party creeping up in the polls. With the LIBOR scandal entering the adjudication phase, monkey business in the London gold and silver bullion market, and half the world's daily churn of interest rate derivatives, "the City" (London's Wall Street) is one black swan away from provoking a world-scale financial accident that could daisy-chain through all the world's big banks and create a "nuclear winter" of capital. It's too bad the UK didn't keep making chocolate bars and those wonderful tin soldiers I played with as a child. Instead, the nation became a casino with a lot of excellent Asian restaurants.

It is nicely positioned to be the whipping boy for the rest of Europe as everybody's fortunes turn down, but it has enough military hardware to strike back and cause a whole lot more trouble. Imagine England becoming the Bad Boy of Europe in the 21st century, having to be disciplined now by the Germans!

Russia is a few wealthy cities in an enormous flat alternative universe of ice and fir trees. Perhaps global warming will perk up the long-suffering Russian people. Meanwhile, 50 percent of Russia's economy is tied to its oil and gas production. Their great Siberian fields are petering out just like the Alaskan and North Sea giants that were discovered around the same time.

They have been throwing huge numbers of drilling rigs into depleting fields to keep production up and pursuing some "tight" rock plays with help from the USA's Halliburton and Schlumberger, with few environmental protests in the wilds of Siberia, and I'm not persuaded that exploration for oil in the offshore Arctic region will have a great outcome.

Where does the capital investment come from if every other advanced industrial economy is broke? Even if the sea ice melts it will be difficult and expensive to work in the Arctic seas, and the thawing permafrost of Siberia will leave an endless soggy patch of mosquito-infested mush between the offshore rigs and customers in Europe and elsewhere.

Anyway, those customers will be increasingly impoverished and hard-pressed to pay for ever more pricey oil. The Russians may be hopeful that climate change will boost their crop yields and make their portion of the earth comparatively more habitable -- but it's more likely that thawing permafrost will prang the entire human experiment.

There are fewer cheerleaders for China and its economic fortunes than a year or so ago, as deep problems in banking and politics reveal themselves, along with the troubles plainly visible in their slumping export markets. If people in the USA and Europe don't buy all the flat screen TVs and plastic stuff then China is going to choke on industrial overcapacity. (It already is.)

They have accomplished some marvelous things recently, especially compared to the cretinous lethargy of the USA -- for instance, building a great continental high speed railroad line and a huge solar energy industry -- but they face the same fundamental quandary as all the other industrial nations: declining fossil fuel resources with no comparable replacement on the horizon. Their positioning for the coming great contraction vis-à-vis the aforementioned advantages in solar and rail transport must be offset by an opaque, corrupt, and despotic political regime, a huge and potentially restive population of laid-off urban factory workers, and a chaotic banking system.

They have laid in a lot of "reserves" in the way of US treasury paper and stockpiled much valuable construction material (steel, copper, cement, etc), but what does that really mean? If they dumped the treasuries, or even systematically divested, they could trash the bond market and the dollar. And what might they do with all the construction material in an economy with sinking demand for new buildings? Will they need more super-highways as the price of gasoline makes car ownership less affordable?

China appears to be accumulating big supplies of gold bullion -- they have also become the world's number one producer of mined gold, eclipsing played-out South Africa. That could give them a lot more room to maneuver in a world of vanishing resources and collapsing economies, at least in terms of being able to swap for food and fuel. They may be attempting to establish a gold-backed currency to replace the dollar for international trade settlements.

Doings at the ASEAN Summit in November suggests they are engineering just such a new reserve currency for the world to run shrieking to when America's foolishness and cowboy swagger becomes too much to take -- though US dollar dominance was based as much on America's (now bygone) rule of law in money matters as America's sheer economic power, and China remains Dodge City where the rule of law is concerned. The world might not be so eager to be pushed around by the Yuan. But it may be accomplished by financial coup d'état whether the world likes it or not.

My forecast for China in 2013 is a widening crack in the political façade of the formerly omnipotent ruling party, organized agitation by unemployed factory workers (with government blowback), bullying of their senile neighbor (and historical enemy) Japan, and sullen, peevish behavior toward their ailing trade partners, Europe and especially the USA. Worldwide economic entropy cancels out China's putative advantages in cash reserves, stockpiles of "stuff," and government that can do what it pleases without a loyal opposition tossing sand in its gears.

Contrary to the wishful thinking of Tom Friedman, globalism is winding down. The great contraction leads back to a regional and local reorganization of activity in all nations. The world becomes a bigger place again with more space between the players and a larger array of players as big nations break up into autonomous states. This is really a new phase of history, though it is only just beginning in 2013.

Outlying Territories

Literally anything can happen in the Middle East, up to the initiation of an event that resembles a world war. As a general proposition, there are just too many people inhabiting this region of the world and the political tensions among them reached critical mass in 2013. The meltdown will continue with enough critical frailty to prang the region's oil exporting capacity, it's main source of wealth and power. It just wouldn't take much.

King Abdullah of Saudi Arabia is pushing 90. His subjects are getting more numerous, collectively poorer, and more anxious about their future. The country is surrounded by failing regimes. I forecast overthrow of the Saud family's long grip on power this year, with a struggle among other entitled families there and finally an Islamic revolution adding spice to the political upheaval.

I doubt that Israel will try to attack Iran's nuclear factories without overt consent from the US government, which will be withheld from Israel, on account of the difficulties ongoing in the US economy.

Overall I expect gross deterioration of civil order, living standards, and oil export markets in the Middle East. The US will be foolish to intervene.

South America gets a little poorer, Argentina defaults again, but this continent remains a sleeping backwater in the world -- perhaps proof that the hedge funders fleeing to sanctuaries in backwaters like Uruguay may have made a great call.

Mexico is the exception. Whatever economic and political sickness the US suffers will infect our neighbor to the south. Too many people there competing for not enough stuff. There will be blood (as the old movie title goes).

Turning 9,000 miles to the east, can Pakistan become a worse basket-case of a nation. I suppose they could, if taken over by their homegrown Islamic maniacs. India next door will be rocked by the great global economic contraction. The two countries, well armed with atomic bombs are a bad combo. Unfortunately, a distracted world cannot pay much attention.

Woe to Markets

Between government and central bank interventions, accounting fraud, control fraud, the computer hugger-mugger of algorithmic trading, and AWOL rule of law, the financial markets have practically destroyed themselves. They can't be depended on to express the real value of things and capital formation struggles against the headwinds of peak cheap energy on top of massive fraud and swindling. The markets can only blow up.

When the wreckage clears and new, smaller markets form, as they will, they must operate differently, with new rules and restraints, because the blow up of today's markets will be such a trauma that nobody will venture to engage with them if they don't. A world without simplified and honest capital, commodity, and equity markets would beat a quick path back to a dark age, and in the process a lot of people will die of cold and starvation.

The full workout of all that may be some years further out, but the blowout will commence in 2013. The glue that held these markets together was faith that they meant something -- and that faith has been pissed away by fools in high places who drained all the honesty out of them. It was a classic case out of the Joseph Tainter playbook: diminishing returns of ever-increasing complexity addressed with ever-more layers of complexity, larded with systematic lying based on mystifying, opaque jargon, sanctioned statistical misreporting, felonious cronyism, and scuttling of the rule of law.

In short, the markets have been taken over in effect by a criminal racketeering syndicate. In doing this, so much resilience has been removed from these market structures that they are riddled with rot, like a mansion infested with carpenter ants. In other words, borrowing a term from Taleb, they are hopelessly fragile. Any little vibration could reduce the whole creaking arrangement into a heap of rubble and ashes. There's plenty of vibration available out there. Events are humming.

The debt mountains in the USA and elsewhere far overshadow the equity and commodity market molehills, and unpaid debt will eventually overcome all the forces of untruth. Debt is a subsidiary of the force known as reality. Its will cannot be denied, even by Goldman Sachs, JP Morgan, the US Treasury, and the Federal Open Markets Committee. And the unwinding of unpaid debt, honestly acknowledged or not, will thunder through the system sucking wealth out of advanced societies so efficiently that it will make the Seven Plagues of the Bible look like a flat tire on a sunny day.

So, finally my picks for 2013:

• Dow 4000 (What!? Did he say that!? Again!?). Even the algos will run squealing into the underbrush this time.
  
  
• Gold $2500 by 12/31/2013 (and headed higher) after a Q-1 deleveraging swoon. Silver $125. Uncertainty trumps greed and fear.
  
  
•  Two-way Stagflation -- massive asset deflation combined with high energy and food costs. Americans go broke fast, go hungry, go nowhere.
  
  
• California, Illinois, and New Jersey ask broke the federal government for bailouts. The federal government pretends to bail them out. Austerity has a field day.
  
  
• Despite willingness to do so, the Federal Reserve can no longer "print" money to overcome the deflationary contraction of wealth. They are finally "out of ammunition." They will try nonetheless. Consequently some nations will stop accepting dollars for trade, possibly the Middle Eastern oil exporters. That would be very bad news.

• Shale oil and gas production stop increasing, possibly turns around to decline. The event hugely demoralizes "energy independence" cornucopians.
  
  
• Gasoline shortages return to the USA on a scale last seen in the 1970s. Cause: broken oil market allocation system. Some regions suffer more than others.
  
  
• Drought continues in the US heartland. The grain belt withers in 2013. Dixieland cooks like a chicken-fried steak. Food costs go crazy. The American public finally begins to freak out when confronted with $9 boxes of Cheerios.

• A major earthquake hits the West Coast.

Have a nice year everybody.

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Energy surprises for 2013

SUBHEAD: These developments would be surprises because so few people believe they are even within the realm of possibility.

By Kurt Cobb on 30 December 2012 for Resource Insight -
(http://www.resourceinsights.blogspot.com/2012/12/five-possible-energy-surprises-for-2013.html)


Image above: Ouija Board by Parker Brothers. From (http://ouijaboard4sale.blogspot.com/2012/06/ouija-board-in-south-africa-buy.html).

Many people trot out their predictions for the coming year right about now. I'm generally allergic to predictions and think rather in terms of probabilities. Naturally, the world we live in is far too complicated to yield anything approaching certainty concerning such matters as the future price and supply of energy, future economic conditions, and future political developments. In the end, the future is simply unknowable. So, I've tried to think of some developments which conventional wisdom has judged rather unlikely and which would therefore significantly alter our lives and perceptions should they occur--precisely because we are not prepared for them.

I don't think any of the following is likely to happen in 2013. But, any one of them would certainly surprise most people and most experts and upset the plans and expectations of many governments, businesses, investors and consumers. Here are my five possible energy surprises for 2013:

1. U.S. natural gas production falls.
   There has been so much talk of the vast resource of natural gas now available to America in the form of shale deposits that it is practically unthinkable that U.S. natural gas production would actually fall. Of course, very low natural gas prices have led drillers to cut way back on drilling until the current glut is worked off and prices rise. What most people don't know is that U.S natural gas production has essentially been flat so far in 2012.
   
   One person I know who is tracking natural gas production closely believes that drillers will wait too long to ramp up drilling again leading to a plunge in supply--and here's the real kicker--one from which we cannot recover. The annual production decline rate for U.S. natural gas wells taken as a whole has reached 32 percent. That means that if we were to forgo drilling any new natural gas wells in the coming year, production would fall by one-third. The production decline rate for shale gas wells is considerably higher than that of the average natural gas well--above 50 percent in the first year with many shale gas wells declining by more than 60 percent from initial flow rates. By the end of the second year, shale gas wells are often down 85 percent from initial flow rates. This means that by the end of the second year of operation, 85 percent of the production from any given set of shale gas wells must be replaced just to keep shale gas production level.
   
   The logistical challenges of shale gas are daunting, i.e., getting enough rigs and workers quickly enough in the field along with the necessary millions of gallons of fracking fluid needed for each well. But perhaps even more important, investors who took a shellacking in the previous drilling boom may be reluctant to part with more capital to drill wells until they are absolutely certain that prices will stay high enough long enough to reward them. That will mean further delays in reviving drilling once it becomes apparent that supply is shrinking in earnest.
   
   All this adds up to not enough rigs, not enough personnel, and not enough capital to keep up with the ferocious production declines in shale gas and even conventional fields. It will nevertheless be a surprise to most people if U.S. natural gas production actually falls in 2013. But, it'll be an even bigger surprise if production then fails to rise or recovers only marginally once prices get high.
   
   
2. Oil production from the America's most prolific tight oil region, North Dakota, falls.
   Tight oil (often mistakenly referred to as shale oil) is typically extracted using the same method as shale gas. But, as a result, tight oil wells experience the same types of declines. Wells drilled into the Bakken formation in North Dakota show an annual production decline rate of around 40 percent. As the rate of production grows from this deposit, more and more effort will have to be devoted to simply replacing production from wells that are swiftly declining. Already production increases are slowing. But almost no one expects oil production in North Dakota to decline in 2013 which is why it will be a surprise if it does.
   
   
3. Oil prices plunge to $30 a barrel and stay there.
   This is really a macroeconomic scenario based on plunging oil demand. And, the reason for plunging demand might be that Europe finally implodes under the pressure of its slow-motion financial crisis; the United States goes into a recession, perhaps because Congress fails to agree on reducing hefty tax hikes now scheduled to go into effect automatically; and China has a hard economic landing and stays economically moribund. All these events coming together imply essentially a deflationary depression. In such circumstances, commodity prices in general would decline because of both excess capacity and falling demand. Oil won't be the only commodity whose price plunges under this scenario.
   
   
4. Oil prices go to $200.
   This scenario is based on the idea that the civil war in Syria spills out into other Middle Eastern countries and becomes a general conflagration that hampers oil exports throughout the Middle East. Of all the scenarios I'm mentioning here, this one seems the least likely. But, if it does happen, look for scenario 3 above to take hold within a few months as the world economy, shocked by extremely high oil prices, goes into a profound economic contraction. If the fighting continues to rage throughout the Middle East for the entire year, we may get the economic contraction, but prices won't come down nearly as far as in scenario 3.
   
   
5. The U.S. Congress forbids additional natural gas exports. Even though the United States remains a net importer of natural gas--imports constituted 12.7 percent of consumption in 2012--the country currently exports small amounts of natural gas to Canada and Mexico. This is because the North American gas pipeline system connecting all three countries makes it economically sensible to do so in a few instances. If it becomes clear that America's natural gas endowment is actually quite limited, Congress may be keen to keep natural gas produced in the United States at home in order to keep prices low.
   
   If Congress doesn't act, the Federal Energy Regulatory Commission may simply continue to grant permits for more liquefied natural gas (LNG) export terminals from which special refrigerated tankers will carry natural gas overseas to importing nations. With LNG prices in Europe and Asia three to four times pipeline prices in the United States, there is no doubt that natural gas drillers will spend prodigious amounts of time and money trying to prevent any export restrictions. If such a measure is introduced in Congress, it will result in a battle of corporate titans as the natural gas producers come up against large, well-funded users of natural gas such as utilities, chemical companies and fertilizer manufacturers. And, if such a fight does arise, it's not at all certain who will win.
   
   My money, however, would be on the users of natural gas including the 50 percent of those who heat their homes with natural gas. These consumers represent an enormous number of votes, perhaps enough to overcome the lobbying acumen of the country's powerful natural gas producers.

As I said, all these developments would be surprises because so few people believe they are even within the realm of possibility. I will, however, not be surprised if we get through all of 2013 without any one of them coming to pass.

• Kurt Cobb is an author, speaker, and columnist focusing on energy and the environment. He is a regular contributor to the Energy Voices section of The Christian Science Monitor and author of the peak-oil-themed novel Prelude. In addition, he writes columns for the Paris-based science news site Scitizen, and his work has been featured on Energy Bulletin, The Oil Drum, OilPrice.com, Econ Matters, Peak Oil Review, 321energy, Common Dreams, Le Monde Diplomatique and many other sites. He maintains a blog called Resource Insights and can be contacted at kurtcobb2001@yahoo.com.

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The Beginning of the World

SUBHEAD: The deindustrial world of the future is poised to begin, but someone has to begin it. Shall we?

By John Michael Greer on 26 December 2012 for Archdruid Report -
(http://thearchdruidreport.blogspot.com/2012/12/the-beginning-of-world.html)


Image above: Still frame from the movie "The New World". From (http://www.rottentomatoes.com/m/1152954-new_world/pictures/#6).

Last Friday was, as I’m sure most of my readers noticed, an ordinary day. Here in the north central Appalachians, it was chilly but not unseasonably so, with high gray clouds overhead and a lively wind setting the dead leaves aswirl; wrens and sparrows hopped here and there in my garden, poking among the recently turned soil of the beds.

No cataclysmic earth changes, alien landings, returning messiahs, or vast leaps of consciousness disturbed their foraging. They neither knew nor cared that one of the great apocalyptic delusions of modern times was reaching its inevitable end around them.

The inimitable Dr. Rita Louise, on whose radio talk show I spent a couple of hours on Friday, may have summed it up best when she wished her listeners a happy Mayan Fools Day. Not that the ancient Mayans themselves were fools, far from it, but then they had precisely nothing to do with the competing fantasies of doom and universal enlightenment that spent the last decade and more buzzing like flies around last Friday’s date.

It’s worth taking a look back over the genesis of the 2012 hysteria, if only because we’re certain to see plenty of reruns in the years ahead. In the first half of the 20th century, as archeologists learned to read dates in the Mayan Long Count calendar, it became clear that one of the major cycles of the old Mayan timekeeping system would roll over on that day. By the 1970s, that detail found its way into alternative culture in the United States, setting off the first tentative speculations about a 2012 apocalypse, notably drug guru Terence McKenna’s quirky "Timewave Zero" theory.

It was the late New Age promoter Jose Arguelles, though, who launched the 2012 fad on its way with his 1984 book The Mayan Factor and a series of sequels, proclaiming that the rollover of the Mayan calendar in 2012 marked the imminent transformation of human consciousness that the New Age movement was predicting so enthusiastically back then.

The exactness of the date made an intriguing contrast with the vagueness of Arguelles’ predictions about it, and this contrast left ample room for other authors in the same field to jump on the bandwagon and redefine the prophecy to fit whatever their own eschatological preferences happened to be. This they promptly did.

Early on, 2012 faced plenty of competition from alternative dates for the great transformation. The year 2000 had been a great favorite for a century, and became 2012’s most important rival, but it came and went without bringing anything more interesting than another round of sordid business as usual. Thereafter, 2012 reigned supreme, and became the center of a frenzy of anticipation that was at least as much about marketing as anything else. I can testify from my own experience that for a while there, late in the last decade, if you wanted to write a book about anything even vaguely tangential to New Age subjects and couldn’t give it a 2012 spin, many publishers simply weren’t interested.

So the predictions piled up. The fact that no two of them predicted the same thing did nothing to weaken the mass appeal of the date. Neither did the fact, which became increasingly clear as the last months of 2012 approached, that a great many people who talked endlessly about the wonderful or terrible things that were about to happen weren’t acting as though they believed a word of it.

That was by and large as true of the New Age writers and pundits who fed the hysteria as it was of their readers and audiences; I long ago lost track of the number of 2012 prophets who, aside from scheduling a holiday trip to the Yucatan or some other fashionable spot for the big day, acted in all respects as though they expected the world to keep going in its current manner straight into 2013 and beyond.

That came as a surprise to me. Regular readers may recall my earlier speculation that 2012 would see scenes reminiscent of the "Great Disappointment" of 1844, with crowds of true believers standing on hilltops waiting for their first glimpse of alien spacecraft descending from heaven or what have you. Instead, in the last months of this year, some of the writers and pundits most deeply involved in the 2012 hysteria started claiming that, well, actually, December 21st wasn’t going to be the day everything changed; it would, ahem, usher in a period of transition of undefined length during which everything would sooner or later get around to changing.

The closer last Friday came, the more evasive the predictions became, and Mayan Fools Day and its aftermath were notable for the near-total silence that spread across the apocalyptic end of the blogosphere. Say what you will about Harold Camping, at least he had the courage to go on the air after his May prophecy flopped and admit that he must have gotten his math wrong somewhere.

Now of course Camping went on at once to propose a new date for the Rapture, which flopped with equal inevitability a few months later. It’s a foregone conclusion that some of the 2012 prophets will do the same thing shortly, if only to kick the apocalypse marketing machine back into gear. It’s entirely possible that they’ll succeed in setting off a new frenzy for some other date, because the social forces that make apocalyptic fantasies so tempting to believe just now have not lost any of their potency.

The most important of those forces, as I’ve argued in previous posts, is the widening mismatch between the fantasy of entitlement that has metastasized through contemporary American society, on the one hand, and the ending of an age of fossil-fueled imperial extravagance on the other.

As the United States goes bankrupt trying to maintain its global empire, and industrial civilization as a whole slides down the far side of a dizzying range of depletion curves, it’s becoming harder by the day for Americans to make believe that the old saws of upward mobility and an ever brighter future have any relevance to their own lives—and yet those beliefs are central to the psychology, the self-image, and the worldview of most Americans.

The resulting cognitive dissonance is hard to bear, and apocalyptic fantasies offer a convenient way out. They promise that the world will change, so that the believers don’t have to.

That same frantic desire to ignore the arrival of inescapable change pervades today’s cultural scene, even in those subcultures that insist most loudly that change is what they want. In recent months, to cite only one example, nearly every person who’s mentioned to me the claim that climate change could make the Earth uninhabitable has gone on to ask, often in so many words, "So why should I consume less now?"

The overt logic here is usually that individual action can’t possibly be enough. Whether or not that’s true is anyone’s guess, but cutting your own carbon footprint actually does something, which is more than can be said for sitting around enjoying a standard industrial world lifestyle while waiting for that imaginary Kum Ba Ya moment when everyone else in the world will embrace limits not even the most ardent climate change activists are willing to accept themselves.

Another example? Consider the rhetoric of elite privilege that clusters around the otherwise inoffensive label "1%." That rhetoric plays plenty of roles in today’s society, but one of them pops up reliably any time I talk about using less. Why, people ask me in angry tones, should they give up their cars when the absurdly rich are enjoying gigantic luxury yachts?

Now of course we could have a conversation about the total contribution to global warming of cars owned by people who aren’t rich, compared to that of the fairly small number of top-end luxury yachts that usually figure in such arguments, but there’s another point that needs to be raised.

None of the people who make this argument to me have any control over whether rich people have luxury yachts. All of them have a great deal of control over whether and how often they themselves use cars. Blaming the global ecological crisis on the very rich thus functions, in practice, as one more way to evade the necessity of unwelcome change.

Along these same lines, dear reader, as you surf the peak oil and climate change blogosphere and read the various opinions on display there, I’d encourage you to ask yourself what those opinions amount to in actual practice. A remarkably large fraction of them, straight across the political landscape from furthest left to furthest right and including all stops in between, add up to demands that somebody else, somewhere else, do something.

Since the people making such demands rarely do anything to pressure, or even to encourage, those other people elsewhere to do whatever it is they’re supposed to do, it’s not exactly hard to do the math and recognize that here again, these opinions amount to so many ways of insisting that the people holding them don’t have to give up the extravagant and unsustainable lifestyles most people in the industrial world think of as normal and justifiable.

There’s another way to make the same point, which is that most of what you’ll see being proposed in the peak oil and climate change blogosphere has been proposed over and over and over again already, without the least impact on our predicament.

From the protest marches and the petitions, through the latest round of grand plans for energy futures destined to sit on the shelves cheek by jowl with the last round, right up to this week’s flurry of buoyantly optimistic blog posts lauding any technofix you care to name from cold fusion and algal biodiesel to shale gas and drill-baby-drill: been there, done that, used the T-shirt to wipe another dozen endangered species off the face of the planet, and we’re still stuck in the same place.

The one thing next to nobody wants to talk about is the one thing that distinguished the largely successful environmental movement of the 1960s and 1970s from the largely futile environmental movement since that time, which is that activists in the earlier movement were willing to start the ball rolling by making the necessary changes in their own lives first.

The difficulty, of course, is that making these changes is precisely what many of today’s green activists are desperately trying to avoid. That’s understandable, since transitioning to a lifestyle that’s actually sustainable involves giving up many of the comforts, perks, and privileges central to the psychology and identity of people in modern industrial societies. In today’s world of accelerating downward mobility, especially, the thought of taking any action that might result in being mistaken for the poor is something most Americans in particular can’t bear to contemplate—even when those same Americans recognize on some level that sooner or later, like it or not, they’re going to end up poor anyway.

Those of my readers who would like to see this last bit of irony focused to incandescence need only get some comfortably middle class eco-liberal to start waxing lyrical about life in the sustainable world of the future, when we’ll all have to get by on a small fraction of our current resource base. This is rarely difficult; I field such comments quite often, sketching out a rose-colored contrast between today’s comfortable but unsatisfying lifestyles and the more meaningful and fulfilling existence that will be ours in a future of honest hard work in harmony with nature.

Wait until your target is in full spate, and then point out that he could embrace that more meaningful and fulfilling lifestyle right now by the simple expedient of discarding the comforts and privileges that stand in the way. You’ll get to watch backpedaling on a heroic scale, accompanied by a flurry of excuses meant to justify your target’s continued dependence on the very comforts and privileges he was belittling a few moments before.

What makes the irony perfect is that, by and large, the people whom you’ll hear criticizing the modern lifestyles they themselves aren’t willing to renounce aren’t just mouthing verbal noises. They realize, many of them, that the lifestyles that industrial societies provide even to their more privileged inmates are barren of meaning and value, that the pursuit and consumption of an endless series of increasingly shoddy manufactured products is a very poor substitute for a life well lived, and that stepping outside the narrowing walls of a world defined by the perks of the consumer economy is the first step toward a more meaningful existence.

They know this; what they lack, by and large, is the courage to act on that knowledge, and so they wander the beach like J. Alfred Prufrock in Eliot’s poem, letting the very last inch or so of the waves splash over their feet—the bottoms of their trousers rolled up carefully, to be sure, to keep them from getting wet—when they know that a running leap into the green and foaming water is the one thing that can save them. Thus it’s not surprising that their daydreams cluster around imaginary tidal waves that will come rolling in from the deep ocean to sweep them away and make the whole question moot.

This is why it’s as certain as anything can be that within a year or so at most, a good many of the people who spent the last decade or so talking endlessly about last Friday will have some other date lined up for the end of the world, and will talk about it just as incessantly. It’s that or face up to the fact that the only way to live up to the ideals they think they espouse is to walk straight toward the thing they most fear, which is the loss of the perks and privileges and comforts that define their identity—an identity many of them hate, but still can’t imagine doing without.

Meanwhile, of course, the economy, the infrastructure, and the resource flows that make those perks and privileges and comforts possible are coming apart around them. There’s a great deal of wry amusement to be gained from watching one imaginary cataclysm after another seize the imagination of the peak oil scene or society as a whole, while the thing people think they’re talking about—the collapse of industrial civilization—has been unfolding all around them for several years now, in exactly the way that real collapses of real civilizations happen in the real world.

Look around you, dear reader, as the economy stumbles through another round of contraction papered over with increasingly desperate fiscal gimmicks, the political system of your country moves ever deeper into dysfunction, jobs and livelihoods go away forever, whatever social safety net you’re used to having comes apart, towns and neighborhoods devastated by natural disasters are abandoned rather than being rebuilt, and the basic services that once defined a modern society stop being available to a larger and larger fraction of the people of the industrial world. This is what collapse looks like. This is what people in the crumbling Roman Empire and all those other extinct civilizations saw when they looked out the window.

To those in the middle of the process, as I’ve discussed in previous posts, it seems slow, but future generations with the benefit of hindsight will shake their heads in wonder at how fast industrial civilization went to pieces.

I commented in a post at the start of this year that the then-current round of fast-collapse predictions—the same predictions, mind you, that had been retailed at the start of the year before, the year before that, and so on—were not only wrong, as of course they turned out to be, but missed the collapse that was already under way.

The same point holds good for the identical predictions that will no doubt be retailed over the next few weeks, insisting that this is the year when the stock market will plunge to zero, the dollar and/or the Euro will lose all their value, the economy will seize up completely and leave the grocery shelves bare, and so on endlessly; or, for that matter, that this is the year when cold fusion or algal biodiesel or some other vaporware technology will save us, or the climate change Kum Ba Ya moment I mentioned earlier will get around to happening, or what have you.

It’s as safe as a bet can be that none of these things will happen in 2013, either. Here again, though, the prophecies in question are not so much wrong as irrelevant. If you’re on a sinking ocean liner and the water’s rising fast belowdecks, it’s not exactly useful to get into heated debates with your fellow passengers about whether the ship is most likely to be vaporized by aliens or eaten by Godzilla. In the same way, it’s a bit late to speculate about how industrial civilization will collapse, or how to prevent it from collapsing, when the collapse is already well under way.

What matters at that stage in the game is getting some sense of how the process will unfold, not in some abstract sense but in the uncomfortably specific sense of where you are, with what you have, in the days and weeks and months and years immediately ahead of you; that, and then deciding what you are going to do about it.

With that in mind, dear reader, I’d like to ask you to do something right now, before going on to the paragraph after this one. If you’re in the temperate or subarctic regions of the northern hemisphere, and you’re someplace where you can adjust the temperature, get up and go turn the thermostat down three degrees; if that makes the place too chilly for your tastes, take another moment or two to put on a sweater. If you’re in a different place or a different situation, do something else simple to decrease the amount of energy you’re using at this moment. Go ahead, do it now; I’ll wait for you here.

Have you done it?

If so, you’ve just accomplished something that all the apocalyptic fantasies, internet debates, and protest marches of the last two decades haven’t: you’ve decreased, by however little, the amount of carbon dioxide going into the atmosphere. That sweater, or rather the act of putting it on instead of turning up the heat, has also made you just a little less dependent on fossil fuels. In both cases, to be sure, the change you’ve made is very small, but a small change is better than no change at all—and a small change that can be repeated, expanded, and turned into a stepping stone on the way to bigger changes, is infinitely better than any amount of grand plans and words and handwaving that never quite manage to accomplish anything in the real world.

Turning down your thermostat, it’s been said repeatedly, isn’t going to save the world. That’s quite true, though it’s equally true that the actions that have been pursued by climate change and peak oil activists to date don’t look particularly likely to save the world, either, and let’s not even talk about what wasn’t accomplished by all the wasted breath over last Friday’s nonevent.

That being the case, taking even the smallest practical steps in your own life and then proceeding from there will take you a good deal further than waiting for the mass movements that never happen, the new technologies that never pan out, or for that matter the next deus ex machina some canny marketer happens to pin onto another arbitrary date in the future, as a launching pad for the next round of apocalyptic hysteria.

Meanwhile, a world is ending. The promoters of the 2012 industry got that right, though they missed just about everything else; the process has been under way for some years now, and it won’t reach its conclusion in our lifetimes, but what we may as well call the modern world is coming to an end around us. The ancient Mayans knew, however, that the end of one world is always the beginning of another, and it’s an interesting detail of all the old Mesoamerican cosmological myths that the replacement for the old world doesn’t just pop into being. Somebody has to take action to make the world begin.

It’s a valid point, and one that can be applied to our present situation, when so many people are sitting around waiting for the end and so few seem to be willing to kickstart the beginning in the only way that matters—that is, by making actual changes in their own lives. The deindustrial world of the future is poised to begin, but someone has to begin it. Shall we?

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New Mexico & GMO labeling

SUBHEAD: After defeat of Prop 37 in California, New Mexico Takes on Monsanto and GMO producers over labeling.

By Staff on 22 December 2012 for Liberty Beacon -
(http://www.thelibertybeacon.com/2012/12/22/after-defeat-in-california-new-mexico-takes-on-monsanto-and-gmo-producers/)


Image above: Poster featuring facts about labeling GMo foods.  From second article below.

A lawmaker in New Mexico wants to make it mandatory for genetically modified foods to be properly labeled in supermarkets across the state. Given the last attempt, though, it’s likely to be an uphill battle.

State Senator Peter Wirth (D-Santa Fe) has proposed an amendment that won’t be brought into debate until next year, but he hopes it will be approved so shoppers can be sure of what they’re putting into their bodies. If Sen. Wirth’s amendment is approved, it will make it mandatory that genetically engineered food and items containing GMOs are adequately labeled.

“The premise of this amendment is simple – New Mexicans deserve the right to know what’s in the food they are eating and feeding to their families,” Wirth says of his proposal. “Labeling GE foods and feed will empower consumers with basic information to help them decide for themselves the types of food they want to buy.”

While Wirth’s legislation seems logical enough to be approved, precedent actually puts his amendment at risk. Just weeks earlier, residents of California shot down a bill that would have brought mandatory GMO labeling to the West Coast. In that instance, Proposition 37 was expected to be approved by voters, but on Election Day it was rejected by a margin of 53 to 47 percent. Proponents say the last-minute defeat was the result of a multi-million dollar campaign against the item that was waged by the biggest GMO companies in the country.

“Genetically engineered foods found on market shelves have most commonly been altered in a lab to either be resistant to being sprayed by large amounts of toxic herbicides, or to produce, internally, their own insecticide,” Mark Kastel of The Cornucopia Institute said in a statement last month. “Corporations that produce both the genetically engineered crops and their designer pesticides, in concert with the multi-billion-dollar food manufacturers that use these ingredients, fought this measure tooth and nail, throwing $46 million at the effort that would have required food manufacturers to include informational labeling on GMO content on their packaging,”

In New Mexico, Sen. Wirth is already seeing an influx of support. If biotech giants Monsanto and Dow dump millions into efforts to discredit his amendment though, there could be some serious challenges. Meanwhile, he’s making headway in terms of getting people to talk about his plan.

“Giving foods with GE ingredients a label will only improve and expand independent health and scientific knowledge about genetic engineering,” Food & Water Watch’s New Mexico Organizer Eleanor Bravo says of his amendment. “We need the research of genetic engineering to be expanded beyond the companies who own the seeds and stand to profit and labeling will allow this to happen.”

Shortly before the defeat of Prop 37 in California, Lundberg Family Farms CEO Grant Lundberg said, "No matter what happens, we've raised awareness of a very important issue.”

Under Sen. Wirth’s proposal, companies that don’t properly label GMO items will be subject to penalties under current rules pertaining to “misbranding.”

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FDA Disappears "Label GMO" Signatures 

 SUBHEAD: FDA deletes one-million signatures for GMO labeling campaign.

By Truthert on 31 May 2012 for Pak Alert Press - 

(http://www.pakalertpress.com/2012/03/31/fda-deletes-1-million-signatures-for-gmo-labeling-campaign/)

While the Food and Drug Administration has seemingly reached the limit for unbelievable behavior, the company’s decisions continue to astound and appall consumers and health activists alike. In the agency’s latest decision, undoubtedly amazing thousands of individuals yet again, the FDA virtually erased 1 million signatures and comments on the ‘Just Label It’ campaign calling for the labeling of genetically modified foods.

The ‘Just Label It” campaign has gotten more signatures than any campaign in history for the labeling of genetically modified foods. Since October of 2011, the campaign has received over 900,000 signatures, with 55 politicians joining in on the movement. So what’s the problem here?

Evidently, the FDA counts the amount of signatures not by how many people signed, but how many different individual letters are brought to it. To the FDA, even tens of thousands of signatures presented on a single petition are counted as – you guessed it – a single comment. This is how, despite over a million supporters being gathered by the petition, the FDA concluded a count of only 394.

“This is an election year and there are more than a million people who say this is important to them. This is petition has nothing to do with whether or genetically modified foods are dangerous. We don’t label dangerous foods, we take them off the shelves. This petition is about a the citizens’ right to know what they are eating and whether or not these foods represent a novel change.” said Andrew Kimbrell an attorney for the Center for Food Safety, one of the partner groups on the Just Label It campaign.

The argument as to whether genetically modified foods are dangerous is a whole discussion on its own, but for the FDA to completely sidestep away from the labeling of GM foods is completely and utterly irresponsible. Consumers have every right to know what they are consuming. Needless to say, biotechology giant Monsanto is against GMO labeling, claiming that it would mislead consumers since GMOs are ‘perfectly safe’.

Of course there is plenty of evidence proving that GMOs are not completely safe, and how they affect life in the long-term is questionable to say the least. Either way, there is enough controversy surrounding the issue which is cause for alarm for millions of people, and Monsanto’s opinion on GMOs safety is a sorry excuse for not labeling foods as GM. Is the FDA avoiding such an issue because so many ties exist between genetically modified makers like Monsanto and the agency?

The bottom line is that you have the right to know what is in your food, and what your food IS. Denying that right, whether it be by the essential deletion of millions of signatures on a petition, or by ignoring the voices of thousands of people on the street, is taking power away from the people.

http://www.pakalertpress.com/2012/03/31/fda-deletes-1-million-signatures-for-gmo-labeling-campaign/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+pakalert+%28Pak+Alert+Press%29
 

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EU labeling GM, Nano & Cloned Food

SUBHEAD: UK and other member states expected to fight proposals to bring in compulsory labelling for consumers on novel foods.

By Staff on 5 May 2010 for The Ecologist - 
(http://www.theecologist.org/News/news_round_up/478435/eu_votes_for_labels_on_nano_cloned_and_gm_food.html)


The Ministers of Environmental Protection (MEPs) have voted almost unanimously in favor of introducing compulsory labeling on food containing nanoparticles, meat from cloned animals and animals fed on genetically modified (GM) feed.

Nanotechnology
The politicians voted in favour of all nano ingredients in food to be suffixed with the word 'nano' in brackets.

In January this year, the House of Lords Science and Technology Committee criticised the food industry for failing to be transparent about its use of nanotechnologies and nanomaterials.

GM
Friends of the Earth's food campaigner Kirtana Chandrasekaran said consumers were largely unaware of the extent of both GM and nano in food.

'It is a big hole in the labelling legislation, and in the case of GM most of what currently comes into the EU is animal feed. Consumers should be given the freedom of choice,' she said.

Both decisions will now need to be approved by the European Council, which has previously rejected the proposals on GM labelling. However, with MEPs voting a second time in favour of tougher rules on GM and nano, observers say the Council is likely to face pressure to reach a compromise.

Cloning
The Council will also have to decide on further regulations after MEPs voted in favour of measures to ban food derived from cloned animals.

A report published this week by the campaign group Testbiotech highlighted the lack of regulations governing cloned animals, their offspring or breeding material being imported into the EU.

'There is a high likelihood that consumers will be served products from cloned animals or their offspring without their knowledge,' said report author Christoph Then. 'There is no transparency for consumers and farmers.'

The Council is expected to decide on whether to accept the EU Parliament's decision by July.


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