Eat The Suburbs" is promoting a new venture by the co-founder of the permaculture concept David Holmgren, who has launched a new global scenario planning website, www.FutureScenarios.org.

Holmgren says his future scenarios will help both policy makers and activists come to terms with the end of the era of growth.



While the end of growth is so unthinkable to many policy makers and economists that they use the term ‘negative-growth’, Holmgren says we are already entering a generations-long era of ‘energy descent.’ We now face less and less available energy each year, coupled with a destabilised climate.

“The simultaneous onset of climate change and the peaking of global oil supply represent unprecedented challenges for human civilisation. Each limits the effective options for responses to the other,” writes Holmgren on www.futurescenarios.org.

Holmgren uses a scenario planning framework to bring to life the likely cultural, political, agricultural and economic implications of peak oil and climate change.

“Scenario planning allows us to use stories about the future as a reference point for imagining how particular strategies and structures might thrive, fail or be transformed,” says Holmgren

Future Scenarios depicts four very different futures. Each is a permutation of mild or destructive climate change, combined with either slow or severe energy declines. Scenarios range from the relatively benign Green Tech to the near catastrophic Lifeboats scenario.



“Many futurists are looking at Facebook, robot pets and other i-fads, whereas David has been studying a much bigger picture. He works from the fundamental resource and environmental constraints, and I’m convinced that he’s got his assumptions right where others have them very wrong. He has followed through with unusual insight, drawing on 30 years of permaculture thinking, which I would say makes him the most important futurist in the world right now,” said Adam Grubb founder of Energy Bulletin (www.energybulletin.net with over 400,000 visitors a month.)



“These aren’t two dimensional nightmarish scenarios designed simply to scare people into environmental action. They are compellingly fleshed out visions of quite plausible alternative futures which delve into energy, politics, agriculture, cultural and even spiritual trends. They help us reconcile our own competing fears and hopes for the future, and to consider the best strategies for adapting to a changing world,” says Grubb.



Holmgren says “we will need resilience and adaptability in the face of radical change.”

Holmgren coined the term ‘energy descent’ in 2005 as a less negatively loaded way than ‘decline’ or ‘collapse’ for describing a future defined by constantly diminishing energy production.

“I chose the word ‘descent’ because it implies a long and sustained process through which it is possible to survive and even thrive. While energy descent does suggest the demise of globalised industrial civilisation, that process will play out over many decades, if not centuries. For individuals, households, organisations and communities focused on socially and ecologically adaptive design, energy descent is as much an opportunity as an obstacle. Realistic assessment of the larger forces at work in the world helps empower us to better refine our strategies.”

Jamais Cascio at Open The Future is enthused about the idea of a peak oil vs global warming smackdown

Could we avoid the worst ravages of global warming because we run out of oil?

Not since King Kong vs. Godzilla have we seen a monster fight of this magnitude. Disaster vs. Disaster! Things Fall Apart vs. The Center Cannot Hold! Category I Apocalypse vs. Category I Apocalypse! Best of all, NASA's James Hansen serves as referee.

In the first corner, we have Peak Oil, the premise that we'll soon (or perhaps already) have reached the maximum production of petroleum, and that remaining reserves are far lower than generally acknowledged. The result: ever-rising fuel prices, global conflict over dwindling resources, and possibly even social and economic collapse if peak oil hits faster and harder than expected. Even the moderate-case scenarios show declining petroleum access by the 2020s -- and all while China and India are ramping up a car economy.

In the second corner, we have Global Warming, the result of greenhouse gases -- particularly CO2 from human sources, such as burning petroleum -- trapping heat in the atmosphere. We're now at 385 parts-per-million and rising (up from 284ppm in the pre-industrial era). Climatologists generally consider 450ppm a tipping point into unrecoverable disaster, although there are now some signs that the already-past 350ppm would be a safer maximum. Among the actions required to avoid global warming disaster: a dramatic reduction in the consumption of fossil fuels.

In the latest Intergovernmental Panel on Climate Change (IPCC) report, the "business-as-usual" scenario, which posits that society keeps going as it has, and fossil fuel consumption continues to grow at its current pace, results in an atmospheric CO2 concentration of over 950ppm by the end of this century. That's not likely to happen, of course -- the effects of global warming (sea level rise, drought, pandemic disease, dogs and cats living together, etc.) would make such steady growth untenable. Technology change would play a role, too, as would shifts in population. But the biggest reason why it wouldn't happen is a simple one:

There isn't enough petroleum in the ground, in any form, to make it possible.

That's the argument that James Hansen and his colleague Pushker A. Kharecha make in a new article posted to the science website Arxiv.org. In "Implications of “peak oil” for atmospheric CO2 and climate" (PDF), Hansen and Kharecha assert that the effort to keep atmospheric carbon levels below 450ppm may be greatly helped by basic limits on the amount of available oil. Because of peak oil forcing limits on petroleum consumption, a reasonable phase-out of coal ("developed countries freeze their CO2 emissions from coal by 2012 and a decade later developing countries similarly halt increases in coal emissions. Between 2025 and 2050 it is assumed that both developed and developing countries will linearly phase out emissions of CO2 from coal usage"), active measures to reduce non-CO2 forcings (including methane and black soot), and draw-down of CO2 through reforestation, would limit CO2 to below 450ppm. This doesn't require the most aggressive peak oil scenarios, either -- simply using the US Energy Information Administration's estimates of oil reserves is enough. Using more aggressive numbers, atmospheric CO2 peaks at 422ppm.

Hansen and Kharecha present five scenarios, using a variety of estimates of peak oil timing and pace ...

The difference between Hansen & Kharecha's business-as-usual and the other scenarios points to the importance of limiting coal and other greenhouse gases. Peak oil isn't going to save us from global warming by itself. We'll still have to make major changes to how we live, how we build, how we generate energy, etc. -- all of the imperatives we've had to reckon with for awhile.

And peak oil itself, despite its global warming benefit, remains a real problem. While the "doomer" peak oil scenarios seem to me to be overwrought and simplistic, it's true that our society is thoroughly dependent upon fossil fuels, and an abrupt reduction in availability would be traumatic. As I noted in The Big Picture: Climate Chaos, the intersection of global warming and peak oil means that we have overwhelming reason to move away from fossil fuels as energy sources as rapidly as possible -- and that solutions in one arena can help in the other.

It will be interesting to me to see how both peak oil watchers and anti-global warming activists take this report. I suspect that some oilers will dismiss it as not big news, since they already knew that society is going to collapse before we reach the worst of global warming; others might take it as an indicator that trying to deal with peak oil by producing liquid coal fuels (or similar fossil substitutes) is a bad idea, as it would eliminate the one slight benefit of peak oil conditions. I hope that climate watchers might have a generally more positive response, relief that the worst-case scenarios are even less likely than before. Unfortunately, I have a feeling that more than a few global warming-focused activists will see this report -- despite coming from Hansen -- as an attempt to reduce the urgency of the need to deal with anthrogenic carbon emissions.

What this report tells us, however, is that we can't simply focus on one crisis -- no matter how large and looming -- without taking into consideration the other key drivers of change. The onset of peak oil will alter how we deal with climate disruption, rendering climate strategies that don't take peak oil into account of limited value. Similarly, the fact of global warming must shape how our economies deal with a permanent oil crunch.

For both issues, the kinds of strategies most likely to succeed are those based on the precepts of an open future: innovation and experimentation; transparency and shared knowledge; and collaboration and shared responsibility. It's a future worth fighting monsters for.

My comment at OTF (in summary - I think the BAU scenario is the most likely to occur unless there is a concerted effort to switch to clean energy sources) :

I know I'm somewhat atypical amongst peak oilers, but I've always thought peak oil is a bad thing (at least in the medium term) from a global warming point of view if we stick to BAU, as it will simply encourage those wedded to the current energy paradigm to turn to unconventional fossil fuels and (first generation) biofuels - both of which will rapidly increase our carbon emissions (along with numerous other unpleasant side effects).

You can already see this in action - deforestation in the pursuit of palm oil and soy, coal to liquids plants being investigated in numerous countries, efforts to accelerate tar sands developments in Canada (and interest in developing heavy oil deposits in places like Venezuela and Madagascar), renewed interest in shale oil, interest in gas to liquids (including using coal seam methane), keen interest in tapping methane hydrates / clathrates etc etc

Many peak oilers (1) underestimate conventional oil reserves - Iraq being the striking example, and (2) underestimate unconventional oil reserves and our ability to harness them if we choose to.

I think Hansen is being overly optimistic here (I may be the first person to accuse him of this, excepting maybe Lovelock, but he does so for different reasons).

Several ASPO people have argued this line for years, but I for one don't buy it.

Jamais also has a post on "Super-Empowered Hopeful Individuals".

A leading fear for those of us looking at the longer-term implications of molecular manufacturing is the technology's capacity to give small groups -- or even individuals -- enormous destructive capacity. This isn't unique to advanced nanotechnology; similar worries swirl around all manner of catalytic technologies. In fact, some analysts consider this a problem we currently face, and give it the forbidding label of "super-empowered angry individuals."

Thinking about it for a moment, the question arises: Where are the "super-empowered hopeful individuals?"

The core of the "super-empowered angry individual" (SEAI) argument is that some technologies may enable individuals or small groups to carry out attacks, on infrastructure or people, at a scale that would have required the resources of an army in decades past. This is not an outlandish concern by any means; many proponents of the SEAI concept cite the September 11 attacks as a crude example of how vulnerable modern society can be to these kinds of threats. It's not hard to imagine what a similar band of terrorists, or groups like Aum Shinrikyo, might try to do with access to molecular manufacturing or advanced bioengineering tools.

But angry people aren't the only ones who could be empowered by these technologies.

As a parallel, the core of the "super-empowered hopeful individual" (SEHI) argument is that these technologies may also enable individuals or small groups to carry out socially beneficial actions at a scale that would have required the resources of a large NGO or business in decades past. They would rebuild towns or villages after a natural disaster, or provide health care to refugees; they would clean up environmental toxins, or build renewable energy systems. The Millennium Development Goals would be their checklist. They would carry out the kinds of projects that humanitarian organizations do today, but be able to do so with smaller numbers, greater speed, and a far larger impact.

To an extent, these are tasks we might expect governments, NGOs or businesses would seek to accomplish, and they'd be welcome to do so. But catalytic technologies like molecular manufacturing could so enhance the capabilities of individuals that, just as we have to account for SEAIs in our nano-era policies and strategies, we should pay attention to the beneficial role SEHIs could play. They change the structure of the game.

In my work at Worldchanging, I became acquainted with numerous individuals and small organizations who would jump at the chance to become SEHIs. There's a tremendous desire out there for tools and ideas to build a better world. In addition, if molecular manufacturing proves as economically disruptive as some have argued, there may also be large numbers of people looking for something to do with their lives after their previous jobs disappear; it's in our collective interest to make sure that more of them become SEHIs than SEAIs.

Some readers may be wondering why we should care. It's obvious that we need to be concerned about SEAIs -- they can kill us -- but if SEHIs want to go out and make the world a better place, hooray for them (and the world). So why worry?

One answer is that there would be debate over just how beneficial some of the SEHI plans would actually be. Clean water, rebuilt homes? Fine. But what about building churches or mosques or other religious centers? Or think of the controversy surrounding the One Laptop per Child project; now picture thousands of One Laptop per Child-scale projects, run by passionate (but quirky) individuals. Worse yet, imagine the havoc that could ensue if well-intended but misguided SEHIs decide to solve global warming on their own and embark on massive geoengineering projects with disastrous side-effects.

Still, the outlook is not all bad. Far from it. The amount of good that can be done by future super-empowered hopeful individuals may prove to be far greater than the damage produced by their angry counterparts.

The lesson I took from Worldchanging was that it is precisely when the risks and challenges are greatest that we see just how many of us are willing to act to build a better world. There are millions of people out there right now, looking for ways to build a better world. Perhaps you’re one of them. As Pierre Teilhard de Chardin has said, "The future belongs to those who give the next generation reason for hope."

The New York Times has an article on the outcome of Shell's latest set of scenario modelling exercises, with their vision of the future focusing on 2 likely outcomes, which they call "Blueprints" and "The Scramble". The Scotsman has a similar story, talking about the new scenarios and emphasising that Shell isn't getting out of fossil fuels (in fact they think fossil fuel usage will increase), just that it sees where the wind is blowing.

All in all this is partially positive - they see that action is required on global warming, and that resource wars are best avoided - but they aren't yet wiling to grasp the nettle and admit that we need to switch over completely to renewables.

Energy demand is expected to grow in coming decades. Jeroen van der Veer, 60, Royal Dutch Shell’s chief executive, recently offered his views on the energy challenge facing the world and the challenge posed by global warming. He spoke of the need for governments to set limits on carbon emissions. He also lifted the veil on Shell’s latest long-term energy scenarios, titled Scramble and Blueprints, which he will make public next week at the World Economic Forum in Davos, Switzerland. Following are excerpts from the interview:

Q. What are the main findings of Shell’s two scenarios?

A. Scramble is where key actors, like governments, make it their primary focus to do a good job for their own country. So they look after their self-interest and try to optimize within their own boundaries what they try to do. Blueprints is basically all the international initiatives, like Kyoto, like Bali, or like a future Copenhagen. They start very slowly but before not too long they become relatively successful. This is a model of international cooperation.

Q. Your first scenario looks very similar to today’s world, with energy nationalism, competition for resources and little attention to consumption.

A. It depends where you live. I realize there are different opinions about Kyoto in the world. But if you think about Bali, Bali is a good outcome if people can agree how to have useful discussion in the coming two years and the United States, China and India are on board. The Blueprints world is maybe a world that starts slowly and is not that easily feasible, but you see some early indicators that it is a realistic possibility.

Q. The world seems to be at some form of inflection point with a big shift in demand.

A. The basic drivers are pretty easy and they are twofold. You go from six billion people to nine billion people basically in 2050. This combination of many more people climbing the energy ladder, which is basically welfare for a lot of people who live in poverty, creates that enormous demand for energy.

Q. How will the demand be fulfilled?

A. Many politicians think we have to make a choice between fossil fuels and renewables. We have to grow both fossil fuels and renewables. And that will be a huge effort for both.

Q. More energy means more carbon emissions. How do you deal with that?

A. That is absolutely the crux of the matter. The principal way we see is that in the very short term, man-made carbon emissions will increase. But over time people will figure out ways — and we work very hard on that — that while using fossil fuels you try to find carbon dioxide solutions. For instance, carbon sequestration. The problem is that many of the renewables, if you take the subsidies out, are still too expensive. That is the dilemma we face now.

Q. Fossil fuels are still going to represent the lion’s share of the energy mix in the next century?

A. First, there is no lack in itself of oil or gas, or coal for that matter. But the problem is that the easy-to-produce oil or easy-to-produce gas will be depleted or with difficult access. But if you look at difficult oil or difficult gas, which we in the industry call the unconventionals, such as oil sands or shales, they may be exploitable. But per barrel, you need a lot more technology and a lot more investments, and per barrel you need a lot more brain to produce it. It’s much more expensive.

Q. What kind of alternatives can compete?

A. The competition is partly true competition — markets, inventions — and part of it is governments. I think if you can price carbon dioxide, probably you can stimulate carbon capture and sequestration. If you tax a certain form of energy, over time it gets more expensive and you may use less of it.

Q. It still seems there is a gap that is hard to bridge.

A. If carbon is the real bottleneck, as a world it makes sense that we use our money where we get the biggest reduction for the lowest cost. You get more carbon reduction for less money by tackling the power sector and maybe the building sector.

Q. It is still hard to see that people are willing to pay more for greener energy.

A. I am a strong believer and strong advocate of free enterprise. If you would like to solve the carbon problem in the world, free enterprise has to work in close cooperation with governments to form the right framework. How you tackled the sulfur dioxide problem in the United States was the basic inspiration for the European trading system of carbon. So there are examples from the past we can apply to overcome that problem. But we can’t do it on our own as an industry. We need cooperation from governments.

Q. How close are we to an understanding globally that climate policy and energy policy are all interrelated issues?

A. Thanks to Al Gore, and many others, the awareness is there. There is a kind of sense of urgency. Secondly, there is a preparedness to do things. Thirdly, do we agree who has to take what action? I think that is still a huge problem.

Q. There was a lot of disagreement at the Bali climate conference.

A. That is correct. I realize that Bali is still very difficult. I am not a pessimist. I see it as a very difficult start-up. The crux of the matter is, if the people say, “Hang on, we are really concerned about the climate and we’d better do something on carbon emissions,” that is in the end the powerful force which politicians and companies cannot ignore. And I think we are past that point.

Rumour has it that yesterday, Shell's CEO sent out the email below to Shell employees, to explain the new direction to them. I'm assuming this is real and not a fake, but I don't really know one way or the other - but it matches what the press reports are saying above.

From: Jeroen van der Veer, Chief Executive
To: All Shell employees
Date: 22 January 2008

Subject: Shell Energy Scenarios

Dear Colleagues

In this letter, I'd like to share reflections about how we see the
energy future, and our preferred route to meeting the world's energy
needs. Industry, governments and energy users - that is, all of us -
will face the twin challenge of more energy and less CO2.

This letter is based on a text I've written for publication in several
newspapers in the coming weeks. You can use it in your communications
externally. There will be more information about energy scenarios in
the months ahead.

By the year 2100, the world's energy system will be radically
different from today's. Renewable energy like solar, wind,
hydroelectricity and biofuels will make up a large share of the energy
mix, and nuclear energy too will have a place.

Mankind will have found ways of dealing with air pollution and
greenhouse gas emissions. New technologies will have reduced the
amount of energy needed to power buildings and vehicles.

Indeed, the distant future looks bright, but getting there will be an
adventure. At Shell, we think the world will take one of two possible
routes. The first, a scenario we call Scramble, resembles a race
through a mountainous desert. Like an off-road rally, it promises
excitement and fierce competition. However, the unintended consequence
of "more haste" will often be "less speed" and many will crash along
the way.

The alternative scenario, called Blueprints, has some false starts and
develops like a cautious ride on a road that is still under
construction. Whether we arrive safely at our destination depends on
the discipline of the drivers and the ingenuity of all those involved
in the construction effort. Technical innovation provides for excitement.

Regardless of which route we choose, the world's current predicament
limits our maneuvering room. We are experiencing a step-change in the
growth rate of energy demand due to population growth and economic
development, and Shell estimates that after 2015 supplies of
easy-to-access oil and gas will no longer keep up with demand.

As a result, society has no choice but to add other sources of energy
- renewables , yes, but also more nuclear power and unconventional
fossil fuels such as oil sands. Using more energy inevitably means
emitting more CO2 at a time when climate change has become a critical
global issue.

In the Scramble scenario, nations rush to secure energy resources for
themselves, fearing that energy security is a zero-sum game, with
clear winners and losers. The use of local coal and homegrown biofuels
increases fast.

Taking the path of least resistance, policymakers pay little attention
to curbing energy consumption - until supplies run short. Likewise,
despite much rhetoric, greenhouse gas emissions are not seriously
addressed until major shocks trigger political reactions. Since these
responses are overdue, they are severe and lead to energy price spikes
and volatility.

The other route to the future is less painful, even if the start is
more disorderly. This Blueprints scenario sees numerous coalitions
emerging to take on the challenges of economic development, energy
security and environmental pollution through cross-border cooperation.

Much innovation occurs at the local level, as major cities develop
links with industry to reduce local emissions. National governments
introduce efficiency standards, taxes and other policy instruments to
improve the environmental performance of buildings, vehicles and
transport fuels.

As calls for harmonization increase, policies converge across the
globe. Cap-and-trade mechanisms that put a cost on industrial CO 2
emissions gain international acceptance. Rising CO2 prices accelerate
innovation, spawning breakthroughs. A growing number of cars are
powered by electricity and hydrogen, while industrial facilities are
fitted with technology to capture CO 2 and store it underground.

Against the backdrop of these two equally plausible scenarios, we will
only know in a few years whether December's Bali declaration on
climate change was just rhetoric or the beginning of a global effort
to counter it. Much will depend on how attitudes evolve in Beijing,
Brussels, New Delhi and Washington.

Shell traditionally uses its scenarios to prepare for the future
without expressing a preference for one over another. But, faced with
the need to manage climate risk for our investors and our
grandchildren, we believe the Blueprints outcomes provide the best
balance between economy, energy and environment.

For a second opinion, we appealed to climate change calculations made
at the Massachusetts Institute of Technology. These calculations
indicate that a Blueprints world with CO2 capture and storage results
in the least amount of climate change, provided emissions of other
major manmade greenhouse gases are similarly reduced.

The sobering reality is that the Blueprints scenario will only come to
pass if policymakers agree a global approach to emissions trading and
actively promote energy efficiency and new technology in four sectors:
heat and power generation, industry, mobility and buildings. It will
be hard work and there is little time.

For instance, Blueprints assumes CO2 is captured at 90% of all coal-
and gas-fired power plants in developed countries in 2050, plus at
least 50% of those in non-OECD countries. Today, there are none. Since
CO2 capture and storage adds cost and brings no revenues , government
support is needed to make it happen quickly on a scale large enough to
affect global emissions. At the very least, companies should earn
carbon credits for the CO2 they capture and store.

Blueprints will not be easy. But it offers the world the best chance
of reaching a sustainable energy future unscathed, so we should
explore this route with the same ingenuity and persistence that put
humans on the moon and created the digital age.

The world faces a long voyage before it reaches a low-carbon energy
system. Companies can suggest possible routes to get there, but
governments are in the driving seat. And governments will determine
whether we should prepare for a bitter competition or a true team effort.

That is the article, and how I see our challenges and opportunities. I
look forward to hearing how you see the situation (please be concise).

Regards
Jeroen van der Veer, Chief Executive

Past Peak points to an AP article predicting $100 Oil by End of '08.

The chief economist at the Canadian Imperial Bank of Commerce says we should expect $100 a barrel oil by the end of next year, and it's likely to be three-digit prices from then on out. AP (via John Robb):

Oil prices could top $100 a barrel by the end of next year and remain above that point for years to come, the chief economist of Canadian investment bank CIBC World Markets said Tuesday.

Jeffrey Rubin said rising demand within oil-rich nations such as Mexico, Venezuela and Saudi Arabia will put pressure on global oil prices in the coming years. That, combined with the increased cost of pulling petroleum from reserves deep under the sea or wringing it out of oil sands in Canada, will keep oil prices high even if demand in the Western world remains constant. "We're in a world of triple digit oil prices for the foreseeable future," Rubin said during a speech to investors here.

Rubin said oil exports from OPEC countries, Russia and Mexico will likely decline by about 3 million barrels per day over the next five years. The biggest drop, he expects, will come from Mexico, a key U.S. supplier. "Of the 3 million barrels, we're probably talking about 2 million barrels are going to come directly out of U.S. supplies," he said.

Rubin expects Mexican oil imports to the U.S. will dry up by about 2012. Some of that decline will be made up by imports from other parts of the world, but the lions' share — nearly a third of all U.S. oil imports — will come from Canadian oil sands, he predicted. But replacing relatively easy-to-refine liquid crude with petroleum from oil sands is certain to increase costs, he said. By the end of the decade, Canadian oil sands are likely to represent the world's largest source of new oil supplies, he said. "We're basically replacing low-cost oil with high-cost oil," he said.

Looking ahead, Rubin expects crude oil prices to average as much as $90 a barrel next year, rising to around $100 by the end of 2008. That would represent an increase of nearly 25 percent over Tuesday's settlement price of $80.05 a barrel for light, sweet crude on the New York Mercantile Exchange. "Triple digit prices is not a spike," he said. "Triple digit oil prices is what is going to be required to maintain, let alone grow, world oil supplies."

What does this mean? John Robb summarizes nicely:

Over the past one hundred years, we have been able to plow through obstacles and limits to growth by throwing cheap energy at them (which makes even inefficient increases in social/economic complexity viable). What happens when energy isn't cheap anymore, but rather moderately expensive? Do those past increases in complexity come back to haunt us? Yes.

It would be hard to overstate the extent to which life in the developed world is organized around the availability of cheap energy. Mega-cities, sprawling suburbs, globalization itself. Most of what we consume comes to us from hundreds or thousands of miles away. And it's not just a question of energy. Oil is the raw material from which plastics, fertilizers, and pharmaceuticals are manufactured.

We're like the dinosaurs, just before the asteroid hit. Not that we're doomed, but we're about to experience rapid, nonlinear changes in an environment we depend on for our very survival. Our adaptation to that environment has been cultural and technological rather than biological, a crucial advantage over the dinosaurs. But the challenge will be substantial, and we don't have a lot of time. Given the rate at which oil is consumed, most of us are going to be surprised by how quickly we burn through what's left.

Jeff Vail has returned after an extended blogging absence with some thoughts about the post peak economic future in terms of hedging against a range of scenarios - "Future Planning: Hedging the Solution Space" - looks like a bit of maybe logic is creeping in now...

I tend to think that we are on the verge of a global economic and societal collapse driven by diminishing marginal returns on civilization’s investment in complexity—especially by the declining availability of surplus energy. I don’t think that this will result in a single, catastrophic collapse event, but rather in a slow, grinding decline that is masked by epiphenomena and the confusion of symptoms and causes, effectively negating our ability, as a society, to muster the will to take effective mitigation measures. I also think that there is a reasonably high probability that I am dead wrong. I don’t have a crystal ball—all I can do is attempt to project trends into the future, and guess at the outcomes of our massively non-linear planetary-societal system. Humans tend to have a very poor track record at predicting the long-term future—why should I not be subject to the same limitations? After all, conventional wisdom says that things will keep on much as they always have, that we will find a way to overcome. Here’s the grand challenge: if individual or societal plans for the future focus only on collapse, or only on continuation of the status quo, then the high probability that the alternative occurs will be catastrophic. Further complicating matters, there are certainly more than two possible future scenarios. How does one hedge against the multi-dimensional future solution space?

I am beginning this discussion with the assumption that none of us know what the future holds. We can, however, identify possible future scenarios. Not all of them, of course. Rather, I am proposing a “future solution space” methodology that uses current trends or indicators as dimensions. Then, based on my belief that risk is mispriced (based largely on continued reliance on variations of the Gaussian-derived Sharpe Ratio for portfolio risk management and Black-Scholes method of option pricing) and that returns for options on extreme price movements are highly scalable, it should be possible to hedge against movement in any vector in the future solution space simultaneously. Let me offer a simplified illustration:

Oil/Dollar/Dow solution space:

Here is a solution space with three dimensions: dimension 1: NYMEX Crude Oil rise/fall, dimension 2: US Dollar rise/fall, dimension 3: Dow Jones Industrial Average rise/fall.

These three dimensions are an extreme simplification of the possible sets of future scenarios, but are useful as an example and because it is relatively simple to hedge against extreme movements in any direction from the status quo through out of the money options on established futures exchanges. In fact, I think that a multi-dimensional hedge can effectively address this solution space with only 3 options: crude oil call option (betting on extreme rise in price), dollar put option (betting on extreme loss of value), and DJIA put option (betting on extreme loss of value). As a hedge, this set seems to address most of the risk scenarios where a “conventional” investment in a career and home won’t pay off. Can you describe a scenario where one of these three options doesn’t pay, but the economic status quo doesn’t continue? This simplification isn’t meant to address sudden collapse scenarios where the markets simply cease functioning (an identified weakness, which we can also hedge against). But I have a difficult time explaining in advance how the economy could collapse while none of the following—spike in crude oil, drop in the dollar, OR drop in the Dow—occurs. Under most scenarios, at least one, probably two of the options pays off (e.g. Dollar drops causing a spike in the price of dollar-denominated oil but a rise in the numerical value of the Dow). ...

My intent here is not to slide into self-help or prophecy. Rather it is to suggest that, if you think you know exactly what the future holds, you are probably deluding yourself. If you are not preparing for multiple contradictory future scenarios, then you are not preparing but gambling. What is the optimal hedge—the simplest, cheapest, and most complete coverage against radical departures from the status quo? I’ve proposed the following set: crude call options, dollar put options, Dow put options, 30 days food and water and a shotgun. Call it a future first-aid kit. My proposal is only a starting point, and certainly imperfect. How can it be improved?

It is also worth pointing out that such a hedge is only viable if it helps to achieve a future end-game vision that functions under both the status quo and collapse. In some Mad Max future, 30 days of food and a shotgun is a start, a broad base of knowledge is even better, but the point of the hedge is to get ensure existing plans come to fruition. Taking out a loan now to create that end-game vision in the near future, and then hedging against scenarios that would make you unable to repay that loan over the long term might be (contrary to “conventional wisdom”) more prudent than saving to get there some day…

**This financial hedge is, unfortunately, a bit more complex than simply buying one of each of these three options. For now I’m not going to delve into the intricacies of coordinating the strike prices and expiration dates of multiple options necessary to create a smooth hedge against risk through time. The general advice, though trite, is that if you don’t understand how to invest in options, you shouldn’t invest in options.

Parting question: I think this is a viable methodology for creating an individual plan of action. Can it be extended to a broader, societal plan? Financial hedges tend to be zero-sum in nature, so can't serve as the basis for a societal hedge--would any societal hedges necessarily pay "fair value" for risk, and therefore make hedging against multiple, contradictory future scenarios impracticable??

Cleantech.com has a report on some Cool companies at Cleantech 2007.

So, herewith, we thought it would be fun to bring you three of the most interesting startup companies we talked to—three that we'll bet you've never heard of.

Aphios - Biomass pretreatment for cellulosic biofuels

Boston-based Aphios, a biopharmaceutical company, has come up with a way to possibly make the first stage of cellulosic biofuel easier, cheaper and less water-intensive.

In converting cellulosic mass to fuel, enzymes have to navigate the tightly woven fibers of cellulosic biomass to do their work. Today, cellulosic materials are typically pretreated by acid hydrolysis or "steam explosion." Both methods are energy-intensive, and require large amounts of water to flush the materials so that the enzymes aren't harmed by the pretreatment. (Interested in the details of how cellulosic ethanol is being made today? Download and listen to the archive of Cleantech.com's web seminar What's real and what's not in cellulosic biofuels.)

Aphios' "critical fluid combination", or CFC process, uses carbon dioxide produced from the ethanol fermentation step, as well as a small amount of ethanol itself, to expand the cellulosic fibers and make them accessible. "Plus, we get added benefit because the carbon dioxide dissolves in the water and causes massive amounts of carbonic acid," said Trevor P. Castor, president and CEO, to Cleantech.com.

Castor claims his process can get a 300% improvement in enzymatic conversion efficiency versus steam explosion, and 60% better than acid hydrolysis pretreatment. For less money than either. The company has a pilot project at a power plant in its hometown of Woburn, Mass., and says it has not yet been "shaking the tree" to find more customers.

Ah. Tree. Cellulosic. We get it.

Advanced Energy Products - Night Breeze

Davis, California-based Advanced Energy Products is using relatively low tech, at a relatively low cost, to lower new homes' heating and cooling bills. The company's Night Breeze system cools homes on hot summer nights by essentially venting the house to cooler outside air, if it indeed is cooler (the system is smart enough to know.) It heats homes, when needed, using heat from the water heater, or conventional gas furnace.

By analyzing the last few days of data, the controller is smart enough to predict the next day's temperatures, and passively heat or cool the house overnight to maximize the home's ability to cope with the next day's temperature using a minimum of power, explained Don Logsdon, VP of sales and marketing.

The system involves software and simple ducting and fan hardware. It is only available at this time to new home builders, but retrofit kits for existing homes will be available soon, said company president Mark Berman. Night Breeze only costs "a few thousand dollars", and pays for itself within a few years, the company said.

Innovative Thin Films - a self-cleaning coating for solar panels

Dirty solar panels are more than just an eyesore. They're less effective, with power loss ranging between 5-20 percent. Knowing this, solar installers often factor in 5-20 percent more panels than an installation should take, just so the customer gets the rated value of the system they're buying, according to Innovative Thin Films of Toledo, Ohio.

The company, co-founded by chemistry professor Dean Giolando of the University of Toledo, has developed a nanotechnology-based thin film that, when applied to the surface of a solar module, "turns conventional grime into CO2 and water, using a small amount of UV light," according to professor Giolando.

The result? For an added cost of an estimated $2.10 per square meter, and no loss in light to the panel, solar modules can stay clean perpetually, in theory. And solar installers can, in theory, sell smaller, "right-sized" systems, for lower cost (or not). Giolando is quick to point out that testing is not complete. The durability of the material is unknown, he admits. But the company's initial prototype equipment is at least able to apply the film to solar modules at assembly line speeds.

If it works, and lasts in the harsh environment of real world roofs, it could be an exciting product. Not to mention help put the clean in cleantech.

The Guardian reports the melting ice cap brings diamond hunters and hopes of independence to Greenland.

Helicopters have been hard to hire in Greenland this summer. In most countries that would not be a big problem, but for the locals on the world's biggest island - where there are no road networks and sparse settlements are often 100 miles apart - it can make life tricky.

The scarcity has been caused by a diamond rush with prospectors, mostly from North America, believing they can strike it rich. As the ice cap recedes due to rising temperatures, rock covered for centuries could produce spectacular finds. The interest in the Greenland tundra was sparked partly by the announcement this year of the discovery of a 2.4-carat diamond at Garnet lake in west Greenland, the largest of 236 diamonds found in a trial dig in the area by Hudson Resources of Vancouver.

While the Hudson company was willing to announce its find, presumably to encourage its investors, most prospectors are less keen to discuss their activities in this vast mineral rich wilderness.

The belief in Greenland's potential riches stems from the fact that the geology is identical to that found across the now ice-free north-west passage in Canada, which has led to large opencast mining in the Arctic region.

But Greenland has other potential riches too. Gold has been discovered and is already being mined, although so far at a loss, and there are deposits of other minerals such as zinc, that could be exploited. Oil giants are negotiating licences to explore blocks of the coastline covering thousands of square miles.

The dash for minerals is fuelling another debate in Greenland: whether the country should go for independence from Denmark. With its 56,000 population scattered over an area almost the size of Europe, Greenland is heavily dependent on a subsidy from Denmark for survival. The island has internal self-government but Denmark is responsible for foreign policy.

Aleqa Hammond, the foreign minister in Greenland's home-rule government, hopes that the oil and mineral companies moving in will create sufficient wealth for her country to break from colonial rule. "It is natural for a country to want to be independent. We do not feel ourselves part of Europe - we are an Arctic people - but our way of life is changing and we have to change with it. My mother's generation fought for Greenland homeland government and achieved it in 1979, leaving only foreign affairs and defence in the hands of Denmark.

"Then, we could not strike out alone because we were so heavily dependent on Danish money, and we still are, but we can change that by exploiting our natural resources to achieve financial and political independence."

But some argue that independence has dangers. Greenland is the land mass closest to the North Pole and has rapidly assumed greater strategic importance as its much more powerful and populous neighbours vie for a slice of the Arctic's supposed mineral wealth. The United States is strengthening its air base at Thule on the extreme north of the island and the Russians have already planted flags on the sea bed.

But rather than putting her faith in mineral wealth, Mrs Hammond believes that her country's best prospect of buying its independence lies in hydro-electricity. The vast lakes and melting ice cap provide enormous potential for electricity free from fossil fuel and the Greenland government is negotiating with Alcoa, an aluminium company, to built the world's second largest smelter.

The Energy Blog reports that Florida power company TECO has cancelled an IGCC Power Plant. The number of "clean coal" plants (of varying degrees) being constructed remains very samll.

This is but one of the many coal fired power plants that have been either canceled or put on hold - but this is the first IGCC plant I have heard of that has been canceled. Power companies are coming under more pressure to put in environmentally friendly power plants, but the government has not moved on any regulations that require any restriction on CO2 emissions. Several power companies have said they would back carbon capture and sequestration requirements, but they do not want to put in such plants unless their is an even playing field regarding such requirements.

Perhaps the recent development of technologies that can be applied to conventional coal fired power plants is one consideration affecting their decision. Nuclear power is probably the safest route to go as far as not having to worry about CO2 emissions, but its capital expense is still very high and even though the approval process has been simplified, that is yet to be demonstrated in the real world. Natural gas is also a fairly safe route, but future costs of natural gas are quite uncertain.

Renewable energy, especially for large base load plants is not generally accepted as the answer. I would think with TECO's load growing at 150 megawatts per year it might be possible to establish a policy of installing renewable energy incrementally to meet its needs. Florida is situated where solar power, offshore wind and someday wave power might be considered. By installing a mix of renewable energy technologies which have different time periods of peak output, the resulting power production is considerably leveled out to provide a more continuous flow of power. Solar, with about four hours of storage, matches the peak load for most areas. The large load for air conditioning and a fairly small industrial load would seem to me to make a good case for solar power in Florida. Florida Power and Light recently made a commitment to solar power, so at least one utility thinks Florida is a suitable location for solar power.

After Gutenberg has some further comments about this and options for harnessing solar power in Florida.

In a recent post Jim Fraser suggests that TECO (Tampa Electric) establish a policy of installing renewable energy incrementally to meet a load growing at 150 megawatts per year. Energy Blog commentator Kit P disagrees with such an assertion, “Florida does not have a good solar resources for making electricity.” Well, yes and no. According to Solar Millennium, Florida is only a good location, rather than a very good or excellent location for solar power. Property value makes solar farms less practical. Yet there could be novel ways to install solar.

Florida benefits from an electric infrastructure that potentially could incorporate such an increase in a renewable energy portfolio. Energy Blog commentator Andre Angelantoni counters the objection to solar in Florida, asserting that solar is becoming economic without government subsidy2.

Jim Fraser makes a passing reference to recent development of Renewable Energy Sources in Florida, and, this blog, relays some additional detail about two examples, one solar thermal and one biomass.

The choice of these two examples is intentional since they also demonstrate the potential for greater development of ISCC (Integrated Solar Combined Cycle). Wherebiomass is used to generate power, It would seem especially to make sense to use a combined system since gasification of bio-solids lacks any diurnal, seasonal or climatic (i.e., cloudy days) restrictions. A thermal energy system could operate day and night.

Still there are GHG emissions from the gasification of biomass, much less when coal is the primary feedstock augmented with biomass. Before the arguments over the pros and cons of any reliance by Florida utilities upon utility-scale solar power, Fraser notes that several power companies “have said they would back carbon capture and sequestration requirements.”

Yet he perceives a reluctance to invest in such technology until such time that there are requirements. (It would seem that the health of the populace subjected to the most polluting plants or a global catastrophe in the making is insufficient incentive.)

Newsweek has a look at the Burmese rebellion and some of the underlying causes - "Burma: It's the Oil and Gas, Stupid" (there are more stories rounded up by Energy Bulletin at the link).

World leaders may be condemning the junta's crackdown, but foreign businesses don't want to lose their pieces of Burma's energy pie. Why the latest sanctions are unlikely to work.
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Analysts describe it as the Burmese paradox: How can the rulers of a country so rich in energy, teak, minerals and gems be in such financial trouble? Even as it sits on top of 19 trillion cubic feet of natural gas and billions of barrels of crude oil reserves, the junta had to abruptly hike fuel prices so high in August that it triggered the popular uprising led by Buddhist monks.

Part of the explanation is simply bad governance. The Burmese regime is so arrogant-and inept-that it doesn’t expect citizens to rebel even when they watch their hard-won savings disappear overnight. That’s what happened in the summer of 1988, when the regime's surprise demonetization of the local currency, the kyat, meant a lot of money was suddenly not worth the paper it was printed on.

...today, the country’s infrastructure is so decrepit that the regime cannot adequately exploit its own resources without outside help. Despite the country's lucrative oil and gas sectors, the domestic refining industry is a mess due to half a century of mismanagement, lack of investment and neglect. Local refineries aren’t suited to processing the high sulfur content in Burmese oil. As a result, the government has to import nearly all of its diesel, to the tune of nearly 20,000 barrels daily by 2004.

Combine that hunger with today’s high prices, and you can easily see how the need to import diesel could help prompt a price rise. This wasn’t the first time the regime imposed such a hike, either; two years ago fuel prices shot up ninefold. You don’t have to be a rocket scientist-actually Burma’s junta supremo Than Shwe is a former postal clerk-to know people might be mad about the abrupt Aug. 15 doubling of diesel prices and fivefold increase in the cost of compressed natural gas, a hike passed on to passengers using public transport.

...Burma’s economic picture would be depressing enough without the involvement of Big Oil. One of the key reasons why sanctions against the regime are unlikely to work is because the junta's foreign partners hope to maintain business as usual. Foreign firms have been scrambling for a piece of Burma's oil and gas industry since the regime liberalized investment rules in 1988.

These are not obscure players or small-time plays. Burmese natural gas, worth $2.8 billion, generates one fifth of Thailand’s electricity. China wants to build pipelines and roads through Burma that would allow its oil imports to bypass vulnerable chokepoints in the Malacca Straits, which could be blocked by the U.S. Navy in the event of Sino-U.S. tensions.

State-run Chinese firms are also bidding for contracts in Burmese gas fields, as are South Korean and Indian competitors. India’s oil minister, Murli Deora, was present in Rangoon for energy cooperation talks with junta leaders when antigovernment protests broke out last month. Burma’s partners aren’t all Asian either. When earlier European Union and U.S. economic sanctions were levied against Burma, Total of France and Chevron remained involved in the Yadana gasfield. (At the time, existing investments were exempt; Chevron has a 28 percent stake because of its takeover of Unocal, Total’s original partner.)

Now we hear that the EU has just toughened its sanctions against Burma, expanding the visa bans for junta leaders and suspension of some imports such as timber and gems. But such measures-similar to those announced last week by the United States-will be toothless unless key oil and gas firms climb onboard. Today French Foreign Minister Bernard Kouchner hinted that Total-which extracts more than 17 million cubic meters of natural gas daily from its Burmese fields, according to its corporate Web site-“will not be exonerated” from post-crackdown sanctions. Total officials have argued that the firm has made no new capital expenditures in Burma since 1998 and that any “forced withdrawal” by Total would simply pave the way for rivals to take its place. Which is why China, Thailand, India and Russia have been muted in their condemnation of Burma’s recent bloodletting. They may hate the junta’s repression, but they love the thought of biting off a bigger piece of Burma’s energy pie.

Grist has an interview with Nobel Peace Prize winner (and Club Of Rome member) Wangari Maathai. On a related note, Reuters reports that Climate activists Al Gore and Sheila Watt-Cloutier are tipped for this years Nobel peace prize.

question Tell us about the origins of the Green Belt Movement and why you decided to center your activism around tree planting.

answer We started in 1977 to mobilize ordinary women in communities to provide themselves with their basic needs for living, much of which are derived from trees -- firewood for energy, building materials and fencing materials, drinking water, rich soil for planting, fodder for their animals. They learned how to separate the soil for crops and protect areas where their waters come from. Much of the drought in Africa is a result of deforestation, which leaches the soil of minerals and moisture. ...

question Can you do as much for the cause from the inside as you did from the outside?

answer There is a certain constraint in government -- you can't get away with everything because there are other interests that must be taken care of. But I have tried to give myself freedom to disagree and am quite happy now to serve in the government where I can make real changes. I have complained enough, and that's all you can do when you are outside.

question Can you give some examples of some of the changes you've made?

answer For example, the government wanted to take out green spaces in the city and put up buildings in them; people wanted to privatize forests, or own parts of the public land, and there were no policies to stop this. We argued that it is our business to have open spaces and a clean and healthy environment, but the law said no, it's none of your business -- you have to own it to show you have an interest. We have changed that law to say yes, you can have an interest in protecting the commons.

question In your Nobel Prize acceptance speech, you talked about the environment as a path to peace: "A degraded environment leads to a scramble for scarce resources and may culminate in poverty and even conflict."

answer Yes, and I think this is a reality in the whole world, not only in Africa, but perhaps more so in Africa. We have not enjoyed peace or enjoyed good government or enjoyed good management of our natural resources, and therefore have had massive poverty and a lot of conflict.

The connection between peace and the environment can be explained using the [analogy of] the traditional African stool, which has three legs that support the base on which we sit. I believe these three legs are symbolic. One represents good management of our natural resources, equitable distribution of the same, and a sense of accountability. Another represents good government -- a democratic state that respects humankind so that we can have dignity as human beings. The third represents peace. The base on which we sit is development. If you try to do the development where you have no legs, or where you have two legs or one leg, the base is out of balance. It is unsustainable.

The drums of war are still beating erratically regarding Iran, though its hard to see how anyone (even a lunatic like Cheney) could foresee this as ending in anything other than disaster. The Atlantic Free Press considers the question, Are En route to a military confrontation with Iran ?

'I cannot understand why we don't name what is evident and indeed a wholly defensible pre-emptive position' says Alan Greenspan, former chairman of the private bank known as the Federal Reserve, speaking to The Guardian. He describes in his new book the public secret that the motive for the war against Iraq was rooted in oil: 'I'm saddened that it is politically inconvenient to acknowledge what everyone knows: The Iraq war is largely about oil'. Greenspan describes what I wrote starting in November of 2001 in my seven part series on oil - that it was one of the major reasons to attack Iraq. Without much ado, USCentcom - the American command center that carries out attack plans - writes: 'The national interests outlined in the National Security Strategy and the objectives articulated in our National Military Strategy form the bases for the Central Command's objectives and supporting strategy. Primary among U.S. interests in the USCENTCOM AOR [Area of Responsibility] is uninterrupted secure access to Arabian Gulf oil.' This by the way is a strategy developed by National Security Advisor Zbigniew Brzezinski for the Democratic President Jimmy Carter and which was named the Carter Doctrine.

The original designation [video] for the attack on Iraq in 2003 was Operation Iraqi Liberation (OIL), before being renamed Operation Iraqi Freedom (OIF). Henry Kissinger, a man of equal stature to Greenspan, actually writes the same thing as the former Fed chair in relation to oil, but this time on Iran: '[...] an Iran that practices subversion and seeks hegemony in the region - which appears to be the current trend - must be faced with red lines it will not be permitted to cross. The industrial nations cannot accept radical forces dominating a region on which their economies depend, and the acquisition of nuclear weapons by Iran is incompatible with international security.' Speaking about those same weapons of mass destruction, but this time in reference to the war against Iraq, Greenspan says: 'I thought the issue of weapons of mass destruction as the excuse was utterly beside the point'. It remains to be seen to what extent history will repeat itself now that it's not oil-rich Iraq - but its oil-rich neighbor Iran - that is being accused of possessing or producing weapons of mass destruction by the same people that invaded Iraq on the basis of arguments and accusations which, as I described afterwards as well as during that period, appeared to be false.

Investigative reporter John Pilger writes: 'The main reason was oil. [Former US treasury secretary Paul] O'Neill was shown a Pentagon document entitled Foreign Suitors for Iraqi Oilfield Contracts, which outlined the carve-up of Iraq's oilfields among the major Anglo-American companies. Under a law written by American and British officials, the Iraqi puppet regime is about to hand over the extraction of the largest concentration of oil on earth to Anglo-American companies.' Meanwhile criticism is being heard (1, 2, 3) of the plans on how Iraqi oil will have to leave Iraq. Pilger: 'Nothing like this piracy has happened before in the modern Middle East. Across the Shatt al-Arab waterway the other prize: Iran's vast oilfields. Just as non-existent weapons of mass destruction or facile concerns for democracy had nothing to do with the invasion of Iraq, so non-existent nuclear weapons have nothing to do with an American onslaught on Iran.'

Links:

* TreeHugger - Oil Execs to World - We Must Cut Consumption
* The Rude Awakening - The End of Las Vegas. Some retro peak oil doomerism.
* Peak Oil Passnotes - Where Peak Oil Is Wrong
* Jeff Vail - Visions of a Biofuel Future
* The Guardian - World's largest offshore wind farm is given government approval for Kent
* Cleantech.com - PPL going green with methane. Landfill gas power in Pennsylvania.
* ZDNet - Radioactive laptops? Perhaps not...
* Transition Culture - Australia’s First Transition Town. On the Sunshine Coast, surprisingly (to me anyway). More commentary at TreeHugger.
* The Australian - Algae to flourish in parched Murray River
* Clean Break - Don't rely on CEOs to save the planet
* The Oil Drum - Poverty of Vision
* National Review - Strength Needs Energy. This is actually a sensible article from the CEO of Dow Chemical - how did it get published in the NRO ?
* Past Peak - Heart Of Darkness. No sense coming out of the Pod itself of course. He is one creepy guy.
* Eureka Street - Australia needs distance from US Iran attack planning
* Jerome a Paris - An insight on US strategic thinking - why so much cowering fear ?. Deconstructing some securocrat's fantasy of the Long Great War Game.
* Stratfor - Geopolitical Diary: The Kurdish Oil Reality. Looks like the fallback strategy is to just do localised deals and put more pressure on the Iraqi government that way.
* JUST - Blackwater, Oil and the Colonial Enterprise
* The Age - Did Republican ties turn a Prince into Iraq's security king ?
* SMH - Government secrecy is eroding public's right to know
* Cryptogon - Burma: Thousands of Executed Protesters Dumped in Jungle. Hard to tell how true this is at the moment.