June 3, 2009


Filed under: Peak Oil, Relocalization — Tags: , — Russ @ 6:42 am
In a report written for the edification of the recent G8 Energy Ministers’ summit, the IEA warned of “major cutbacks” in every sort of energy investment as a result of the credit crunch and depressed energy prices, from conventional crude to unconventional to renewables. Over twenty major projects, projected to replace upwards of 2 million barrels per day of depleting production, have been delayed or cancelled. At the same time a new McKinsey report warned of an inevitable energy price spike once the universally expected recovery comes and resurgent demand slams its head on the lower supply ceiling which will be the result of depressed investment and new production not keeping up with decline from existing projects.
The McKinsey timetable, which concurs with the general expectation Peak Oilers have had throughout this crisis as investment collapsed, is that if this turns out to be a moderate downturn with a quick recovery, the oil price superspike could come as early as 2010. If the downturn is “very severe” (the report’s term), it may be delayed until as late as 2013.
So there’s our window. Between 2010 and 2013. This will be the true “Peak Oil” event. What Peak Oil was always really about was when demand tried to exceed supply, and supply was definitively unable to meet it. We had assumed this would coincide with the all-time nominal supply Peak. Now it looks like, thanks to the supervening bubble crash (that is, the intrinsic unsustainability of exponential debt based on hallucinations, not even taking into account energy fundamentals, turned out to anticipate the fundamentals crunch), true Peak Oil will transpire at a lower absolute supply level, some years after the absolute peak. But the effect will in the end be the same. All the indications, long foreseen by Peak Oilers, and now little by little by mainstreamers like the IEA, is that “recovery” will quickly bang its head into the new Peak Oil supply ceiling.
Of course, the mainstream cadres at the G8 took no notice of any of this, but indulged themselves in the regular assurances. This downturn is an epiphenomenon and temporary, and while the lull in energy investment is an issue, it’s still just a temporary glitch which the market will eventually resolve, and infinite growth will soon be restored…..
Sometimes it seems difficult to make simple rational and moral assertions, compared to the usual numbers rigamarole meant to obscure the fact that the emperor has no clothes, that the system cannot be sustained. It seems we have to keep saying that growth or new debt must exceed debt service, forever, and that this in turn depends upon an exponentially growing supply of cheap oil. Since oil supply can no longer grow at all, except for a few zombie increments of unconventional oil and “alternatives” like aggrofuels, which can be purchased only with ever increasing money, resource, and blood investments, it follows that this form of civilization must collapse. It is both physically (energy inputs required; the car-based infrastructure) and economically (growth and debt service) unsustainable.
[Not to mention the fact that thanks to the last four decades’ orgy of financialization and globalization, and the bonfire of labor protections and the safety net, America’s “economy” has been completely hollowed out, completely stripped of all real assets, completely leached of all real productive capacity. America simply no longer has much of a real economic basis.]
The proper response to the growth and recovery boosters is, even if you can cobble together a zombie “recovery” for a little while, what will you do in five years or less when you bang your head on the terminal oil supply ceiling? You think $147 per barrel was high? That’s nothing compared to what you’ll see then. $200 and up, and not as a “spike” but as the new norm. How sustainable will your globalized “growth” be then?
What we should be doing is putting all our effort, all our intelligence and imagination, all our rump wealth and the little time we have left, into (1) an Energy Transformation from extreme consumption of centralized fossil fuels and nukes to much lower consumption of decentralized renewables; and (2) a general and thoroughgoing desizing, deglobalization, deconcentration, deconsumption, relocalization, and the restoration of the human imperatives of mind and spirit over totalitarian materialism and the brutal domination which goes hand in hand with it. (Resource domination is always the stalking horse for political and social domination, and material greed always exists in an inextricable dialectic with power and domination greed.)
Instead the order of the day is, Prop up zombie GM. Let’s recall, back in the 90s GM was in a good position to transition to a more sustainable model. The economy was booming, providing lots of slack for real innovation, and thanks to a partnership with the Department of Energy American automakers had the world lead in hybrid and efficiency technology (just as America led the world in solar and wind tech, both R&D and deployment). The path was wide open for the kind of true capitalist “voluntary” innovation always mythologized by market fundamentalists.
GM, like so many others, instead chose the path of investiture, rent-seeking, obstruction, obscurantism; the standard route by now is to bribe politicians, lobby from K Street, demand subsidies and deregulation, fight fuel efficiency, kill the electric car, deny climate change, entrench on SUVs.
And now they’re enfolded in the general top-down effort to prop up the top-down imposed social engineering of cars and sprawl. It stands to reason: this government itself is predicated on propping up the growth/debt/car/sprawl model of civilization. So GM was never so much a capitalist corporation as a necessary component of the corporatist structure. (Of course by now GM is not a capitalist entity by any measure, but a permanent invalid hooked up to the government welfare ICU.)
(And of course, even beyond Obama’s ideological preferences it’s politically necessary for him to try to prop up the ramshackle pile of rotting wood at least through 2010. These days it’s always a matter of playing for time and praying for a miracle.)
GM is therefore one of the intentional villains in this farce. (I won’t call it a “tragedy”, since classical tragedy implies some level of depth and dignity in your hero or antihero. But this so-called civilization, a cesspool of greed, gluttony, and willful, aggressive ignorance and stupidity, has neither.)
But hopefully we won’t have to endure the farce and the terror of the farce much longer. In fin de siecle Europe the watchword was “better a terrible end than terror without end”. And perhaps we can even avoid the terrible end, if we act on our knowledge and use the precious time we have remaining? 2013 is our deadline. This is our challenge and our hope. All our philosophical and moral ideas, to the extent they are circumstantial, must adapt to this reality. So must our political goals. Most of all, our personal preparations, and our nightmares and dreams, fears and hopes, are humming in harmony with this tick tock, awaiting the bell’s toll.
Never send to know for whom the bell tolls; it tolls for thee.
Whether this is a benediction or a curse is up to us. We are soon to resume the freedom we always claim to cherish.


  1. Wow! I’ve been struggling to say something similar on various blogs for weeks, but you’ve put it all together a lot better than I did.

    The developed world now needs to learn frugality to allow both the rest of the world to catch-up a little and what I call “technoilogy” to develop far enough so that any long-term natural global economic progression is not totally shafted by peak oil.

    Comment by Stevie b. — June 5, 2009 @ 5:15 pm

  2. Hi Stevie b. The natural economic progression is going to be (is already) away from globalism and oil and toward relocalization.

    I suppose it’s still theoretically possible to use the fossil fuel platform to technologically develop, through a renewable energy transformation, a level of world civilization which was still somewhat interlinked, and at a quantitative level not too far “below” this one. But that would require a level of foresight, rational allocation toward a goal, and a consensus “common ground” which simply does not exist, because we are actually in a zero sum class war.

    So in practice this energy transformation, the green civilization scenario often touted in prognostications, will never happen. Even if it is physically possible (which is debatable), it’s not politically possible.

    We’re simply going to have devolution, which will be more or less stormy depending on how fast it occurs, how violent the status quo can be in trying to prop itself up, and how organized and resolute relocalization activists become.

    Comment by Russ — June 6, 2009 @ 4:09 am

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