Continuing my theme [thought for the day] on oil and energy a little longer.
Here are a couple more pieces on the subject from The Oil Drum
2010: The Year For Making Contact ~ by Nate Hagens January 3, 2010
“… Though it may not feel like it, 2010 puts us 5 years beyond the annual peak in world oil production.
Just behind oil’s apex was credit’s peak, and as energy and debt have been the two primary drivers of economic growth, GDP won’t be far behind in declining from all time highs, though it has been temporarily supported by sovereign debt infusions masking public/private credit decline. Though I suspect 2010 will be a watershed year for many in dealing with reality, a new year also allows for some self-reflection, and perhaps a reassessment of purpose and tactics, both as individuals and as a culture. The below essay is a short summary on where we are, what brought us here,
Fossil fuels allow us to run myriad processes at 2-3 cents per kWh input (w/oil at $75) whereas human labor globally costs over $10 per kWh (and considerably higher in USA). Without this immense stable labor subsidy everything changes, from our international trade system to our local food, water, heat and medicine delivery systems and most of the in between components.
Everything did in fact start to change in the 1970s, as US energy per capita consumption peaked, real wages peaked, US oil production peaked, and we started to use debt (spatial and temporal reallocation of real wealth) to increasingly supplement energy’s role in current growth. Urged on by socially acceptable excess consumption via advertising, borrowing from the future also became socially acceptable, and the linkages between real capital (natural, built, human and social) and financial markers for this real wealth became blurred.
We are roughly where I thought we’d be 5 years past peak (technically just 1 year off the plateau) – still trying to maintain the façade that everything is normal, shorter attention spans, shorter interest in things academic and more interest in things practical. And a concerted effort among the icons of society to borrow and legislate our way back to just before the social precipice. I, like many people, misjudged government and central bank efforts to keep things afloat in the near term, and this could well continue for a while. Ignorance is bliss and all that… “
Dennis Meadows – Economics and Limits to Growth: What’s Sustainable?
Posted by Gail the Actuary, January 4, 2010.
Dr. Dennis Meadows is one of the authors of the well-known 1972 book “Limits to Growth,”
Dr. Meadows recently gave a talk for the Population Institute. Both the presentation and a podcast of Dr. Meadows giving his talk can be downloaded from the Population Institute site. In this post, I summarize what I understand Dr. Meadows to be saying in that talk.
The number one take-away for me from this talk is The end of growth does not come from depletion, but from rising capital costs. In some ways, this is intuitive. When you put this statement together with the work I have been doing that shows that debt cannot continue rising in the face of peak oil, it makes this issue even more important.
A second major take-away for me (besides the importance of population in the equation) is Changes in technology may delay the end of growth by a few years, but they do not avoid it, and do not avoid the decline. A third observation I found interesting is that the biggest stresses are likely to occur at the time when growth ceases–that is now–not, as is popularly believed, as the result of the decline itself. [full article]
Dennis Meadows ~ “In 1972, we expected another 40 to 80 years of growth in the various scenarios. While some of the scenarios we looked at ended in orderly decline, most of the scenarios we modeled ended in collapse. This likely outcome was later confirmed by William Catton in his book Overshoot.
You will note I say that technology may delay the end of growth a few years, but it does not avoid the end of growth or the decline. I have worked in science and technology, and I have a scientific degree, so I am not saying this because I am unaware of what technology can do. When we put together models using phenomenally optimistic assumptions, it just moved the decline date back a few years.”
(And an interesting chart on EROI)
” What you can do with 100:1 payback is enormously different than what you can do with a system that is generating only 2:1 or 3:1 payback. You can see the trends are moving in a way which mean that well before the middle of the century, we will be dealing with energy resources that hardly break even. “