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Tipping Point: Near-Term Systemic Implications Of Peak Oil


wren
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We impose these restrictions on ourselves because we are in a time of plenty.

...

The transition would happen more rapidly than most think.

Plus there are things that are near instant and huge. For example a western nation like the UK uses about 30% of its energy for space heating. We could massively reduce that by simply not turning the central heating on in the winter. Sure it may be chilly but an extra jumper and your not going to be that bad off. With that much elastic demand it would give plenty of time to build new infrastructure.

Good points from cells. I feel the same points apply equally to the reconfiguration of the monetary system and economy for an epoch of lower growth, and to the preparations for demographic aging.

Some people have gotten so worked up they look for instant collapse everywhere. In reality these huge changes settle down on we the people like a soft fall of snow, a gradual chilling of economic activity.

It's gonna be a looonoooooog, boring wait for most doomers.

the same view may or may not apply to house prices.

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We impose these restrictions on ourselves because we are in a time of plenty.

If say by chance half the power stations in the country broke tomorrow do you think they would still mandate a three toe newt study and re-housing program before they gave the green light to begin work? No they would instantly give permission and screw anyone who is a NIMBY.

The same applies to many things, nuclear for example is expensive and takes 6-10 years to build because we have put regulations in place to force it to be costly and expensive. But in a world with a lack of energy (which won’t happen because coal/gas is going to expand lots) we would be knocking out a big nuke plant every 5 days (France built an average of one nuke every 3 months for 15 years and it didn’t bankrupt them strongly suggesting that a country who wants to can build them fast and cheap. The rich world scaled up today could probably do one nuke every other day).

The transition would happen more rapidly than most think.

Plus there are things that are near instant and huge. For example a western nation like the UK uses about 30% of its energy for space heating. We could massively reduce that by simply not turning the central heating on in the winter. Sure it may be chilly but an extra jumper and your not going to be that bad off. With that much elastic demand it would give plenty of time to build new infrastructure.

Old people need heating in the winter, come to think of it so do young people.

Of course, reductions can be made. But will it be enough, quick enough?

This will be in an environment of ongoing recession and ongoing decline in global oil production.

Exporters will supply their own populace first to maintain social stability. So importers will see a decline in oil more rapid than the global rate.

It won't even be possible for most to drive electric cars for many years because of the need for *extra* electricity plus the cars themselves plus many people poorer because of recession.

North Sea oil production is in decline and UK natural gas production will be if not yet. The UK is at the end of the line for Russian natural gas.

Mexico will cease to be an oil exporter in a couple of years. They had food demonstrations 2 years ago. The Mexican state could cease to function (parts are already controlled by local warlords, called drug dealers).

So whether they can do enough fast enough to maintain a decent standard of living remains to be seen. Time will tell.

If you flip the switch and there is no power, no amount of saying the French this, that and the other will make a difference. Except maybe make you hot under the collar.

It's a matter of time, scale and indeed quality (or as some say, energy density).

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This is an important, new, general article from The Oil Drum.

Some snippets about the financial side:

That article is a summary of a whole 55-page pdf linked at the top of the article.

http://www.theoildrum.com/node/6309

The author posted this graph in the comments.

Unconstrained%20demand.png

Personally I think this peak oil stuff is nonsense

1/ No one can tell you going forwards how much can be pumped at one time ( new technology/ new discoveries mean these figure continually change)

2/ No one can tell you what demand will be... look how silly that 2006 chart looked in light of a world recession ( which they didn't predict)

3/ No one can tell you what the advance of alternative fuels will do to demand ( the guys who wrote that chart wouldn;t for instance have known the pace of change in the car world.. theres an unstoppable wind blowing there now).

4/ Price plays a very large part in the demand equasion and these peak oilers never ever factor that in sufficiently as was shown the last time the price went very high.

the basic premise ( its a finite supply and therefore will run out) has to be right, but the scaremongers will have you believe there will be no transition which is just plain crazy.

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Personally I think this peak oil stuff is nonsense

1/ No one can tell you going forwards how much can be pumped at one time ( new technology/ new discoveries mean these figure continually change)

2/ No one can tell you what demand will be... look how silly that 2006 chart looked in light of a world recession ( which they didn't predict)

3/ No one can tell you what the advance of alternative fuels will do to demand ( the guys who wrote that chart wouldn;t for instance have known the pace of change in the car world.. theres an unstoppable wind blowing there now).

4/ Price plays a very large part in the demand equasion and these peak oilers never ever factor that in sufficiently as was shown the last time the price went very high.

the basic premise ( its a finite supply and therefore will run out) has to be right, but the scaremongers will have you believe there will be no transition which is just plain crazy.

Peak demand has already been declared in the American media.

I've said for years that peak oil will not be televised.

It will be recession, reduced demand, whatever.

ASPO has been publishing detailed projections every month for over 8 years. Of course, they cannot predict precisely as the data is incomplete. The first Ph.D. thesis on the subject of peak oil was published last year at the University of Uppsala, Sweden.

Since 2001 I have thought on the basis of various projections that the range 2006 to 2013 seemed most likely. That is a wide range, of course, reflecting the uncertainty. However, for me it is important to recognise that it is not 30 odd years away but less than 15, now much less than that.

Time is of the essence.

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Good points from cells. I feel the same points apply equally to the reconfiguration of the monetary system and economy for an epoch of lower growth, and to the preparations for demographic aging.

Some people have gotten so worked up they look for instant collapse everywhere. In reality these huge changes settle down on we the people like a soft fall of snow, a gradual chilling of economic activity.

It's gonna be a looonoooooog, boring wait for most doomers.

the same view may or may not apply to house prices.

Oh the shifts in the real economy will happen very slowly.

Financial obliterations happen in an instant though, days and weeks, if not in an afternoon.

The economy isn't the financial system.

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The UK government takes peak oil seriously.

According to a summary of proceedings, the secret meeting that took place Monday between the British energy minister and the business taskforce responsible for last month’s provocative peak oil report was indeed the beginning of an ongoing process to understand and prepare for the end of cheap oil.

“Although Chatham House rules prevent me from stating what the Minister said, there is clearly a desire to continue this dialogue on peak oil,” Rob Hopkins wrote on Wednesday on his blog Transition Culture. A prominent promoter of a movement that actively encourages and monitors societal structures based on a low-energy future, Hopkins joined colleague Peter Lipman as representatives of the Transition network at the closed-door meeting.

http://www.heatingoil.com/blog/leaders-at-closed-door-uk-meeting-on-“inevitable”-peak-oil-crisis-weigh-possible-solutions-to-energy-scarcity325/

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Fuel is a small part of the cost of shipping,

It may cost $50 to ship a tonne of goods half way around the world but most of that is other costs, capital, wages, insurance, pirates, profit etc. the cost of the fuel is sub $10 to move a tonne at $100 oil.

Steel is a bulk good and it doesn’t cost much to transport via ship.

Peak oil may encourage some more locally produced goods but we in the UK don’t really have the materials. So instead of expensive oil helping the UK steel industry it will mean more steel is shipped into the UK rather than made here because it is easier and cheaper to ship 1 tonne of steel slab than it is to ship 2 tonnes of iron ore plus coal to make 1 tonne of steel slab.

No. Read the link. From their figures fuel costs are approx. 25% of shipping a tonne of ore. The full cost would therefore be around Euro 200/tonne. This is for a small batch of 20 tonnes, so of course I would expect this figure to be greatly reduced for bigger batches.

This sort of thing doesn't dispel my suspicion that your figures come straight off the top of your head.

As for UK steel production, you have a point, but I think increasing fuel prices may see a regional localisation rather than a national one - i.e. we would source more steel from the Czech Republic etc.

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Imagine one lives in a residence perfectly equipped for telecommuting, in a community of say 10000 souls. What in actual fact are your energetic needs, in this environment, for the purposes of basic sustenance through to quality of life?

matrix_pods.jpg

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I just watched an interview over on Max Keiser's site- the guy was painting a vivid picture of out of work Americans effectively trapped in their homes, unable to afford the fuel to move around and slowly going crazy because they're living on cheap food from the food bank.

The US in particular seem to have built their entire civic infrastructure around the premise of cheap gas- they literally cannot function even on a day to day level without the ability to drive huge distances cheaply.

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Chatham House the epicentre of social engineering a very powerful and influential low profile organisation. They of course have been working on commonwealth affairs quietly and effectively since the war. I find that location very interesting and if they are even mentioning that Peak Oil is higher on their agenda then we will see some action although it will not be associated with Chatham House.

The British parliament has a multi-party working group on peak oil. I forget its official name. They know about peak oil, of course, they have known.

But they don't like to tell the public. They'd rather talk about green taxes.

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