Wednesday, August 8, 2012

Italy (and Europe/Japan) Revisited

I never miss a post by Stuart Staniford. I have the good fortune to speak with Stuart once in a while to pick his singularly excellent brain - and those conversations do not disappoint. One post, in particular, stands out in my memory.

Stuart points out that "Peak Oil Consumption" hit Italy in 1995 and Germany and Japan sometime after, and that these were still pleasant and civilized places to live. His post was dated June 28, 2011 - several months after the Fukushima disaster.

It has been over 1 year now since Fukushima, and Japan, despite "peak oil consumption" and Fukushima, is still a civilized and pleasant place to live (for the survivors... there will always be survivor bias).

It seems to me that the rate of change has been slow enough as to be handleable - even for Europe. Yes, Europe is an economic basket case... but that is the cure. It also seems to me that Europeans are making rational adjustments - not that they might prefer this, but it is happening. And that's a good thing. Of course, they still have a ways to go.

(I wrote this article about the rate of decline/change for Oil imports on November 20, 2009. Please note this passage:

I bring this up because IF Oil imports decline at the pace of the past 3 years, 2010 imports will be 9,157,500 barrels per day ("bpd"), 2011 imports will be 8,333,405 bpd, 2012 will come in at 7,583,398 bpd, 2013 - 6,900,892 bpd, and 2014 - 6,279,812 bpd.
So far, so good, though I am sure that the rate of change will not remain so consistent.)

It might seem that too many people are still focused on the "wants based" former economy rather than on the "needs based" economy that is taking hold. Not to worry. That issue will settle itself, mayhap with fits and starts - but it will happen. Survivor bias is very instructive here - its best not to be part of the fits and starts if you can help it, and I really, really think you, the individual, can help it.

Liquid fossil fuels are going the way of the dinosaurs. They are not going there so quickly that the world will end (depending on how you define that. The world will certainly end for the more unfortunate at the end of the food/healthcare/money/oil supply line. Its just that the end of that line does not lie in the U.S., Europe, or Japan). It then comes back to: how does the individual & family thrive during this evolution?

I read with interest articles by futurists in a number of quality periodicals that the answer to our energy dilemma will lie in cities (here is a link to "The City Solution" at NatGeo. I read the article in their journal, and did not read this web version so I don't know if it is complete) - that is, if everyone will move to the city our energy and environmental problems will be solved.

Perhaps (though I doubt it). What has been a "city" for millennia has morphed into something very different in the latter half of the 20th century. These futurists seem to think that the answer is jamming 20 million people into a soot covered, diesel clouded, odiferous, obnoxious landscape were they can all take the bus or tram to work moving bites around a screen. Other futurists see no need for the bus or tram as robots and computers will be doing most of the work leaving the 20 million denizens of these megalopolises to lounge around eating corn derived foods in their miniature man caves and powder rooms.

Somehow, this defies my sense of logic (says the guy that moved from the city to live on a self-reliant farm) though given the number of people living in cities doing absolutely nothing productive might indicate a flaw in my reasoning (I have traveled extensively in South and Central Americas, and not to and from a beach resort, and have seen the innards of the U.S.'s largest cities up close - there is no doubt that there is an element of mankind that is unable or unwilling to strive for anything. It is my sense that this element was created by government policy, therefore it is quite possible that government could expand this population).

It seems to me that to thrive in an environment of technological expansion of renewable energy for electricity generation but declining liquid transportation fuels one would either have to have the technical skills required of this new industry or own the land and means of production to support those bizzilions of lemmings/city dwellers. Being one of those lemmings may or may not bring comfort - but it won't put the juke & jive in thrive, either. That comes from owning productive land and productive capital - fisheries, forests, ranching, agriculture, mines, manufacturing, etc and the capital equipment to "exploit" these... the stuff of individual "thriving" (with the exception of manufacturing) are not found in these future megalopolises, me thinks. The imbalances in distribution of wealth and income found in professions such as Medicine and Law during the 20th century are likely to be corrected. Cui Bono? Will the new developments in technology from renewable energy expand or shrink government and/or the corporations? Good question. Get that right and you might get to score big.

Does the technological development of renewable energy production systems come fast enough to make up for declining Oil availability? I don't know (though I am very interested to see how that plays out in Europe). I do know that mankind can get very creative and motivated when he needs to be. I am just thinking out loud. Thinking of what opportunities might abound for my children. We will have to wait for more data to come in.

One thing for sure, Peak Oil Imports and consumption has hit the U.S., Europe, and Japan. As Stuart said in his post: "Peak Oil is not Synchronous". The Great Unknown is the impact on Credit, Politics, Money Supply, Productivity, etc... in these large, industrialized economies of declining oil consumption before the period in which renewable energy technology (allegedly) takes over. And if it doesn't take over? Az nischt is nischt (unsure of spelling using yiddish version not german).

"If not, then not".

Now back to Italy.

Italy experienced Peak Oil Consumption back in 1995, but was able to take in increased imports of Nat Gas. Too, the world had not experienced "Peak Exports" until at least 2005. So we don't know how much the world "subsidized" Italy's industrial needs, if you will, among other things.

To my mind, that would make Italy (and Greece and Spain) excellent petri dishes for declining availability of oil - far better than the U.S. Given that, at the moment, the respective economies of these countries are coming off of the rails a close monitoring of the situation is highly warranted. Particularly since Peak Oil Consumption appears to have hit Germany, Germany's industrial production appears to be contracting, and it was Germany that the world was depending on to act as patron-state to the Club-Med basket cases of Italy, Spain, and Greece (and Portugal).



PioneerPreppy said...

Test subjects to an extend but no other country that I know of has ever relied as much on liquid fuels as the U.S.

Peak oil will hit us much harder than Europeans or Japanese. Also the world as a whole relies more on the U.S.'s fuel consumption than any other single nation. So there will be far more of a ripple effect.

Anonymous said...

Sprawl is what will hurt the United States. As fuel prices spike we will adapt. But our sprawled out infrastructure will weigh heavily on us and will cost many a great deal as their investments (homes, roads, schools, power lines, communication towers, etc) continue to lose value.

Our public transportation is a joke. We will have much more to build to transform our infrastructure.

carbon credits investments said...

Liquid fossil fuels come from dinosaurs, and one hopes that their use will gradually go the way of the dinosaurs1

tweell said...

Our host believes that our best way to adapt to peak oil is to spread out more, and to become more self-sufficient. My belief is that we will have more rural farming communities and more urban concentration, the suburbs will shrink.

Corporate farming depends on petroleum, unless a viable alternative is found the huge farms will be broken up into sections small enough for families to work. At the same time, public transportation and other city amenities are economically viable only with a high population density.

If we use petroleum only to move goods, our stocks will go much further. This will give more time to come up with fusion or other possible power sources.