You won’t believe how angry this will make you…

2 Fundamental issues we face:
– The private creation of money as debt – have you heard..? ‘Money is just an IOU, and the banks are rolling in it.’

– Energy profit reduction (cost of production for fracking, tar sands, heavy oil is higher, so profits are less) is driving global economic woes, as we have less affordable energy available. The video below succinctly explains this in 2.5 minutes.

The 2005 Hirsch Report (NEARLY 10 YEARS AGO!!!) in the USA examined several scenarios relating to oil supply:

Mitigation Study
Scenario I – No action until peaking occurs – EXTREMELY BAD
Scenario II – Mitigation starts 10 years before peaking – SERIOUS TROUBLE
Scenario III – Mitigation starts 20 years before peaking – NO PROBLEM?

Note that the Hirsch Report was written pre 2008. The International Energy Agency’s Chief Economist Fatih Birol now states that Peak Oil occured in 2006:

Did you get that? We are around 10 years after the global peak in conventional oil production, and we’re really still not taking the need for mitigation, and now adaptation, seriously enough. Not by a long way!

If you feel you’re still not getting why this is so urgent now (we’ve heard about this as a future issue for a long time now), then this 15 minute lecture by Canterbury University’s Associate Professor Susan Krumdieck is a helpful look at the risks from the ‘forward operating environment’ that we face:

Feeling angry? Time for some radical ideas about a positive response!

Implications for Southland, and some more on suggested course of action:

We desperately need a crash course of adaptation, focusing on meeting our basic needs – access to water, food, transport, etc, that can be sustained WITHOUT a reliable supply of affordable liquid fuel for transport. Here’s a few promising ideas:

Water: The need for water is fundamental.

Supply: More rainwater collection, particularly in the urban areas that depend on the reticulated water supply is the basic strategy in a region like Southland that has sufficient rainfall. Note that this can be as simple as a downpipe diverter and a 200l food grade barrel that provides water for the garden (for now) but is in line with emergency management advice (and action in other parts of the country – Greater Wellington has a bulk arrangement with an NZ manufacturer for supply of these systems:

Demand: We need to get away from the use of drinkable water for flushing toilets in particular. Human waste is a nutrient rich commodity that has been highly valued in historic civilisations in Europe and Asia. Looking to the ‘forward operating environment’ that we face (see the earlier linked lecture by Susan Krumdieck), the use of oil based chemical fertilisers will be far less, and so the use of animal and ‘humanure’ for fertiliser will be economic and desirable to maintain soil productivity. Current concerns regarding hormones in the human waste that goes through the sewage treatment plant will be gone, as these are unlikely to be used as widely due to affordability issues. The simple requirement is to ensure it’s composted sufficently to ensure biological safety, a system that the Chinese practised successfully for 4000 years (reference: ‘Recycling animal and human dung is the key to sustainable farming’

Food: Partly, alongside access to affordable fresh fruit and veg, this is what Love Local is focused towards. We want to engage local people to grow food for the local community. We need people willing to have a go at growing for us, particularly out of season (currently this means ‘if you’ve got under-utilised tunnel houses’). Contact us here:

Transport: With geographically dispersed population reliant on liquid fuel for transportation, Southland rural communities had better have alternatives ready to go soon. I mentioned in my verbal submission to Venture Southland (somewhat flippantly) on their draft annual plan that breeding horses is a good idea, to supplement the transportation options we are currently dependent on. It’s really an option we should be considering. Think about this:

“Replacing tractors with real horse power could be [part of] the revolution that agriculture needs.

Horses and other draft and pack animals revolutionized transportation, war, hunting, manufacturing and agriculture. Work horses formed the backbone of industrial society until the first decennia of the 20th century, mining coal, ploughing fields and transporting goods and people in fast growing cities.

Reintroducing horses in city traffic would be a bad idea – cars might be noisy, dangerous and polluting, but mounts are even worse. In agriculture, however, animal power would bring surprisingly large environmental profits.” (reference: ‘Bring back the horses’

Also, within cities, alternative modes of electric transport are desirable, with new innovations coming into the market regularly as innovation picks up pace. A recent entrant that captured my imagination in the electric personal transport category is the electric unicycle:

  • Air Wheel – about $900 –
  • Not quite a unicycle…
  • Electric Bikes and conversion kits: for South Island Dealers.

Do you have other suggestions? Comments please!!

More from the Hirsch Report:

Mitigation Options Considered:
– Vehicle Fuel Efficiency
– Heavy oil / oil sands
– Coal Liquefaction
– Gas-To-Liquids (GTL)
– Enhanced Oil Recovery (EOR)
Why these? There’re liquid fuels & ready for Implementation
Electric power of little help in the short term

It concluded that:
People are strongly influenced by current oil prices & fluctuations, which are short term.
Peaking is unlikely to influence the short term market until after there are obvious, continuing shortages.

What Impact Might World Oil Peaking Have on World GDP?
Over the last 30 years:
– World GDP grew @ 3% / Year
– Oil demand grew @ 1.5% / Year
After peaking, oil production will decline, dragging world GDP with it.
At what rate?

How Will Post-Peak Oil Shortages Impact?
The 1973 & 1979 BRIEF oil interruptions caused:
+ Inflation
+ Recession
+ Unemployment
+ High interest rates
• World oil peaking impacts could last for DECADES.
• Without more than a decade of vigorous worldwide mitigation…
The year of world conventional oil peaking will likely mark the start of world recession.

We are now faced with –
1. Serious concerns from many competent, unbiased professionals
2. Optimism from many of high repute
3. The option of trusting the marketplace

• Premature mitigation might misuse some resources.
• Delayed mitigation almost certainly means huge worldwide suffering for a long time.

In Conclusion
• Oil production is very complex / intuition fails.
• Oil peaking will happen; the timing is uncertain.
• It’s liquid fuels, not energy.
• “Simple” theory fits the data; Implications are unpleasant.
• The risks are very large.
• Mitigation technologies are available: Implementation & timing are critical.”


Footnote on oil and conflict:

Has this influenced US foreign policy? Almost certainly. Follow the oil to the conflicts:

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Filed under How, What, When, Why

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