Today's quote:
"Anyone may arrange his affairs so that his taxes shall be as low as possible; he is not bound to choose that pattern which best pays the treasury. There is not even a patriotic duty to increase one's taxes. Over and over again the Courts have said that there is nothing sinister in so arranging affairs as to keep taxes as low as possible. Everyone does it, rich and poor alike and all do right, for nobody owes any public duty to pay more than the law demands." - Judge Learned Hand
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In turn, our candidates plug into this silly belief by making promises and pledges during campaigns that defy credulity - yet their constituents actually believe these obfuscations and untruths (lies).
Think back to the 2008 campaign: "You can't tell me we can put a man on the moon but we can't solve America's energy crisis." - then candidate Obama speaking to the uninformed... and taking advantage of their ignorance.
Dear Mr. President: "Can you hear me know?" Obama (and McCain) knew full well that there is no comparison in American History for what we are confronted with.
The political will necessary to put a man on the moon is chump change next to the coming Oil shortage - not least of which is that our political leaders view this as a "problem" to be "solved" when it is more likely a "condition" that needs to be managed gracefully - its kind of like getting older... in that this "condition" is inevitable.
Getting back to why politics will fail us, and why this is entirely a "self rescue event"... nobody in Washington is concerned with anything other than the mid-term elections. The Republicans smell blood, and will likely take at least one house back and end the Democratic dominance in Senate. The Dems? Their leaders want to hold on to their chairman posts. In a political environment like that who is looking out to 2020 to figure out the best policy responses?
Answer: No One In Politics.
So, its up to you to take care of you and yours - just as it has been since man emerged from caves and dug his plow into the dirt. For a little over 50 years we have had a "safety net". Did it help? Perhaps on the individual level, certainly not on the macro level, and in the final analysis the safety net that was the family became eviscerated by the government run safety net(s) that were funded by cheap Oil... talk about your unintended consequences.
Now, the doomers will tell you that this means we are all going to starve to death, society is going to break down, yada, yada, yada. Of course there will be protests and unrest and maybe a riot or 2. Big deal. Life will go on (with some casualties along the way. After all, life is a contact sport), and because people have to eat they are going to be too busy trying to scratch out a living to be protesting too much. The big question is: How fun/secure/satisfying is your life? Most of that is up to your own ideas and your own enlightened self interest, and some of it will be decided by the political outcomes that arise AFTER Oil shortages decimate our economy - because during that time we will be far more interested in affixing blame.
OK, so we have established that "its all up to you". What is all up to you? That, is for you to decide. For me, it means establishing myself and my family in small city, with agreeable weather, in a home that we can afford to live in come hell or high water, in an area with rainfall, rail service, a hospital, a university, etc... in a state that has low property and income taxes. To engage in commerce (I have a wife and family to provide for), as well as my hobbies, and stay the heck out of politics.
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.
Said another way: From 2006 to 2014 total petroleum products available to the U.S. will have declined a little over 30%, and if it were not for ethanol being included in that number, 35%+.
No rational person can believe that the outcome for the economy will not be earth shaking if the above mentioned rate of change remains constant. (Actually, Jeffrey Brown's models show that the rate of change would dramatically accelerate in the 2011-2016 period, if memory serves.)
Its all about Oil available for import. There is no "alternative" in the time frame discussed that is going to add a single NET kilo/cal to equation. There is NO WAY TO KNOW if this is it - as far as the rate of change in the volume of imported Oil. If I were sure of anything, I would not need my day job. Still, given the data, the most probable outcome is that over the next 5 years the U.S. is going to experience a significant decrease in the supply of petroleum... not that it will end in 5 years... its just that that should be the most profound adjustment period. Of course, given the time frame, being off by 5 years wouldn't be that hard, either. But there are only 60 months in a 5 year time frame. As each month ticks off the data should make the outcome more and more clear.
13 comments:
I'd expect that level of imports would put the price of gasoline at over $10/gallon, or cause an unemployment rate of 30%. The industrial/commercial users can't use much less without much larger economic shrinkage than has already occurred. Either a large chunk of the population must not be able to put gas in their cars at $3 per gallon or gas must become very expensive. This predicts some monetary event or a bigger economic collapse. Is there any other way to look at it?
Regards,
Coal Guy
Have a Happy Thanksgiving!
Regards,
Coal Guy
I've been in the Texas oil business 30 years. Only in the last year that peak oil is happening now has become common within the industry. Many engineers believe natural gas will make up for the shortfall.
Greg, you like to tweak the "doomers", I notice. Keep in mind that very few people call themselves doomers, but it is used as a pejorative term against people who have revised the view of reality, their world, to take into account the data. There is a range of views of the results of peak oil on future society and social stability. You would be considered a doomer by some.
So, not all of us predict a Mad Max scenario is likely, but many of think it's possible, in a limited sense, as an outlier possibility. And it is. It always it. Think of all the societies that HAVE collapsed! Aztec, Mayan, Inca, Roman, Easter Island...
The belief that we are immune to radical and catastrophic breakdown is a faith. It's a fine and comforting faith to have, and like all faiths, it has its theologians who cast out those who spout heresy: like so-called "doomerism."
I would like to suggest that our system is far more vulnerable to catastrophic breakdown than is commonly assumed. Just as the Titanic's design made it more resistant to small hull breaches, these same features made it sink faster and more catastrophically when it hit an iceberg that put a long gash in the hull.
Our politicians, Federal Reserve officials, Treasury, etc., are taking huge risks and steps to avoid any gradual adaptation to peak oil, because that adaptation would be seen as capitulation to a new Great Depression, or defeatism, or run counter to Keynesian orthodoxy, etc.
These steps ARE mitigating the immediate effects of the fact of peak oil, but they are going to undermine the foundations upon which our economic and political systems are founded. They also undermine the trust of the people: I doubt it will be politically possible to institute another bank bailout or large stimulus package. To me, that is good, because it will force the coming changes to happen sooner, when they can still do some good. If I am wrong, then they will successfully delay the day of reckoning, which will therefore become more grave.
Finally, I firmly believe that smaller political units will be able to make smart adaptations to a re-localized future.
But not all regions will be smart. The citizens of those regions will suffer. The extent of the suffering is unknown, but the most extreme would be refugee status, or starvation and death.
NOTE: again, these last scenarios are what I see as the low-probability, but significant probability, events. One must still plan for low-probability, high-impact events.
If you don't believe climate change induced by CO2 is hoax, then the potential for extreme outcomes is significantly enhanced. Possible pandemics or food shortages can be thrown in for fun.
Proud but not paranoid doomer
Jesus Christ ...
1) To all doomers .. the world isn't coming to an end. In the 1970s, with high inflation, where nothing worked, where we had to endure disco, where everyone had bad haircuts, we made it thru.
2) The oil for gasoline isn't going to exceed $80 for very long. We now have evidence from last year that whenever the oil goes over $80ish, economic demand slows to such a degree that the demand for oil products drops, which is followed by gasoline and diesel price drops. I'm not saying this is a good thing -- just that no economy that is oil-based and "credit"-driven will allow the price of gasoline and diesel to launch into the stratosphere. Price rises -> demand drops -> prices drop. The solution to high prices is high prices.
3) Does anyone ever consider the true amount of WASTED oil/gasoline/diesel we deal with every day? How much oil was never really needed in the first place?!?!! My damn friend is idling his car in my rear parking place for 20 minutes "staying warm" in 50 degree weather. My aunt offers to come to the train station and pick me up -=- it's a 5 minute walk! Every truck involved in the "stimulus" is running all the time in Chicago for "electrical" reasons. We could lose 50% of our oil tomorrow and handle it with ease. Stop making worthless plastic baubles tomorrow and we'd save 60% of the oil!! :)
4) It might be that the oil imports into America are going down because the suppliers realize they can't sell anymore than they are sending. We have DOZENS of FULL 2 million barrel oil tankers hanging out off the coats of UK and Singapore waiting to be offloaded. We have oil coming out of our ears! The U.S. oil in storage has been at 300 million barrels since WW2!!!
There is no immediate problem here!!! And what problem there is could be handled with a little common sense!
(P.S. Mad Scientist is getting wiggy over there -- you might want to have a talk with him. He deleted one of my posts and a similar post from another guy. All we said was he needs to explain his views better.:))
b,
Just great!
I tried he deleted my post to!
Coal guy,
Just wondering what made you stop at 30% non-working. If we got that far, I would think SHTF, and the numbers swould be greater.
B,
Oh, as soon as Greg confirms THE decline your butt will be at Cosco's stocking up and over at the Bison.
Peace
1) To all doomers .. the world isn't coming to an end. In the 1970s, with high inflation, where nothing worked, where we had to endure disco, where everyone had bad haircuts, we made it thru.
Bureaucrat: thanks for demonstrating the kind of "faith-based" thinking that I was talking about. Furthermore, the fact that something has worked in the past, or that we've "made it through" before doesn't prove, logically, that it will work in the future.
Your car starts every day from the day you buy it until one day, the starter just doesn't work. According to your logic, it is impossible for your car to never start.
Global peak oil was not a problem in the 1970's. It is now. The global population is much much higher, and the percentage of that higher population competing for oil is greater and rising.
This is not a temporary thing. This is a permanent problem getting worse.
Also, do you deny that previous civilizations have collapsed? If so, can you explain why ours is unique and immune?
Finally, I'm not a doomer. I only thing there is a small, finite chance of what would be called a collapse, but to those that survive will be called a transition. Finally, almost all scientists, especially climate scientists, say that there is a finite and real chance of various civilization-ending events. This is science, not doomer fantasy.
Please understand that when people say something has a statistical chance of happening, they are not saying that it will happen.
The blogosphere is demonstrating the same phenomenon that is occurring in the "real world": people seem to talk past each other. It's entertaining, but what is really being accomplished?
If the world does end tomorrow, you will be able to shake your fist in the air and yell to the masses "See, I told you I was right!"
Then what?
Pub:
I did not mean to offend "doomers". I only meant to say that much of what they fear is normal, natural, though highly unpleasant phenomena that we can do little about.
I think doomers are essentially correct... but I think the "rate of change" they anticipate will not occur. It then follows that if the rate of change is slow enough things won't appear doomed.
HOWEVER - the rate of change in the Oil import data would suggest that if it continues the economic impacts WOULD be Armageddonish... and in the end I bet it works out that while the doomers thought the end would come by "fire", it will come by "ice".
Forecasting is just SOOOOOOO failure prone.
bur-"There is no immediate problem here!!! And what problem there is could be handled with a little common sense!"
Wow! Thanks!
I was starting to think we might have a real problem here. It's good to know that all this worrying stuff is just a bunch of nonsense. And it makes me glad that we can solve all our problems with just a little common sense and elbow grease.
But what happens when our foreign creditors demand double digit interest rates on 60 trillion worth of US debt?
People were all full of angst with the Y2K thing as well. But we had lots of time to address it, and the world did. And when the moment came, the world continued to turn. Human life has always been about just getting thru the day, and we will get thru lots of days ahead. Long term, we know the oil is gonna contract, and it will consume more of our income. But I also know that someday you'll all be dead. :) Live for today. A Y2K-like solution could come along.
B,
Sorry the last I checked the Y2K was a big let down for most,luckly. Imagine if the computers actually did what was projected. I know you know the implications of oil depletion, you just seem to down play a bit much.
The truth will be heard soon. If the decline is in full swing and it becomes clearer my money is we will be seeing the forecasting done here, which ever way that is.
Remember, those who hoard will set things off nicely. Infact I would say that is the number one reason the system fails.
Peace
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