Too Much News  

EnergyBulletin is moving towards providing a more concise daily news update to handle the growing volume of news - and who can blame them - there's a torrent of articles appearing.

Recent items of note include Marshall Auerbach declaring "High Energy Prices Are Here To Stay", a new interview with Republican Congressman "Roscoe Bartlett", more dire economic prognostications from Morgan Stanley's Steven Roach (""Tilt !"), dependency metaphors from Berkeley Daily Planet "Confronting America's Oil Addiction", a good presentation from Matt Simmons to the Boston Committee On Foreign Relations "The Coming Saudi Oil Shock And The World Economy" and James Kunstler saying that we're heading into "1914" again.

With the warnings about large economic readjustments becoming more frequent, and yesterdays note on the monetary system fresh in my mind, I was reminded of Richard Heinberg's "Meditations on Collapse".

The global economic system and the world's monetary system are becoming increasingly dysfunctional. Currently, the US dollar functions as the global reserve currency, and the dollar (like most other currencies) is loaned into existence at interest. This means that continual economic growth is structurally required in order to stave off a currency crash. Yet infinite growth within a closed system (e.g., the Earth) is impossible. So how long can growth continue? There are strong signs that the American economy, and hence that of the entire world, is headed soon toward a "correction" of unprecedented proportions. US debt (in the forms of consumer debt, government debt, and trade deficits) is at truly frightening levels and the American mortgage and real estate bubbles appear ready to burst at any moment. If one looks deeper, there are still other reasons to conclude that the global economy has nearly reached fundamental and non-negotiable restrictions on expansion. In his book The Limits of Business Development and Economic Growth (Palgrave Macmillan, 2005), business strategist Mats Larsson makes the point that most of technology and business development in the past has had as its goal the reduction of time and cost in manufacturing. But nothing can be done at less than no time or at less than no cost. He cites the example of the printing and distribution of books and other written media: with these, Gutenberg famously reduced time and cost. Now, the Internet enables the electronic reproduction and distribution of books, films, and music at almost no cost and in almost no time. Similarly, labor cost in China is probably now at close to the absolute theoretical minimum. Larsson's conclusion is that economic growth is perilously close to its ultimate bounds, even when resource constraints are not factored into the calculation.

Averting collapse would require changes that must be championed and partly implemented by political leaders: unprecedented levels of national and international cooperation would be needed in order to allocate essential resources in order to avert deadly competition for them as they become scarce, and our economic and monetary systems would have to be reformed despite pressure from the entrenched interests of wealthy elites. Yet the American political regime - the most important in the world, given US military supremacy and economic clout - has evidently become terminally dysfunctional, and is now the province of a group of extremist ideologues who apparently have virtually no interest in international cooperation or economic reform. This is a fact widely recognized outside the US, and by many sober observers within the country. The problem is not merely that politicians are being bought and sold by corporations (this has been going on for decades), but that the entire system has been hijacked by partisans who pride themselves on making decisions solely on the basis of ideology and in supreme disdain for "reality." At the same time, the US electoral system has been eviscerated and commandeered by a single party (using various forms of systematic fraud that have now become endemic), so that a peaceful rectification of the situation by a vote of the people has become virtually impossible. Moreover, the American media have been so cowed and co-opted by the dominant party that most oft he citizenry is blissfully unaware of its plight and is thus extremely unlikely to vigorously oppose the current trends. Diamond shows some limited awareness of this truly horrifying state of affairs, and he realizes that wise political leadership would be essential to the avoidance of collapse. Yet he refuses to draw the obvious conclusion: the most powerful of the world's current leaders are every bit as irrational as the befuddled kings and chiefs who brought the Maya and Easter Islanders to their ruin.

In local news, Brisbane's Courier Mail has an article predicting that major road infrastructure projects will become a thing of the past as peak oil bites and personal motor vehicle usage declines. Quite an optimistic reading of the tea leaves compared to the predictions of doom above I guess.

At an estimated cost of $4 billion, and scheduled to take 20 years to build, the proposed TransApex tunnel network is arguably the most ambitious construction project in Brisbane's history. But chances are the project probably will be discontinued after the tunnel to the airport is completed in 2013.

The reason – what is known as "peak oil" will have solved Brisbane's traffic congestion by making motoring far too expensive. "Peak oil" is the theory that the world will face a sudden and disastrous decline in oil supplies after global production peaks in the next 14 years.

Queensland MLA Andrew McNamara believes peak oil will come sooner rather than later and the impact on our lives will be greater than terrorism, global warming, nuclear war or bird flu. "The challenges we face after peak oil will require localised food production and industry in a way not seen for 100 years," he told Parliament in February. "Local rail lines and fishing fleets will be vital to regional communities. Self-contained communities living close to work, farms, services and schools will not be merely desirable; they will be essential."

One thing most analysts and observers appear to agree on is that the world won't realise that it's reached peak oil until after the phenomenon has been and gone. Predictions put its date at somewhere between 2004 and 2020.

As the world's oil reserves are expected to be totally depleted by about 2040, according to BP, we're left with about a decade at best to effect a century's worth of changes to the way we live. It won't be easy, as it's a change for which we're not prepared. If we're lucky, peak oil will arrive soon and give us more time to adjust to the shock. If we're intelligent, we'll get to work to adapt our cities and lifestyles to something approximating McNamara's vision. But we're not likely to be that lucky.

And – with governments that flog off our remaining oil, gas and coal reserves overseas to help build up US and Chinese energy stockpiles while spending billions of dollars on subterranean freeways that will probably be obsolete long before they're finished – it doesn't look as if we're all that intelligent, either.

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