The Oil Drum: Australia/New Zealand | Part 2. The Future in Australia: The Next 13 years.

Part 2. The Future in Australia: The Next 13 years.

Posted by aeldric on November 3, 2007 - 11:00am in The Oil Drum: Australia/New Zealand

Introduction

So, is Mad Max a good how-to guide for the decades ahead - am I building a bunker and stocking up on shotgun shells? No. And here is why: If things get so bad that I need to shoot people as part of my day-to-day activities, then my son has no future. That is not a future, it is an end.

I don’t believe in ends, I believe in cycles.

It is fair to assume that things will change. It is fair to assume that there may be wars.... because somewhere in the world there is always a war. Resource depletion just exacerbates this situation.

Here in Australia, we may have some tough times, but our children and grandchildren will grow up and emerge from these trials knowing no other world - and full of the usual dreams and hopes of youth. The future that we hand on to our children and grandchildren depends on the changes and preparations that we make now.

The first and most important preparation has been mentioned in Part 1. We need to cut our consumption. Reduce. Reuse. Recycle. Grow food at home. Install water tanks. Attitudes to consumption need to change. We know what we need to do; we just need to do it.

The second part of preparation is personal preparation.

I need to prepare in such a way that I can get through a possible bad time, and then be in a position to help make things better. To do this I need to understand what I am preparing for. This means considering the various phases that each scenario might go through.

Here are some possible phases for some of the scenarios we might go through (world wide):

Phase 1. Business As Usual. I am employed and life is good.
Phase 2. Business Not-Quite-As Usual. Times are hard. A lot of people can’t find employment. Many people have been forced to turn to crime, just to get by. Food security is sometimes a problem. Personal security is a problem. Security for my family is a problem. Utilities sometimes don’t work. Unlicenced local markets are starting to appear to peddle food and other common commodities.
Phase 3. Partial Collapse. Times are very bad. Unemployment is widespread. Utilities frequently don’t work. Law and order is severely impacted. Almost the only place you can get goods and food is in “Grey Markets” – venues that operate with no official accreditation or sanction, questionable hygiene, and where security is provided by ugly-looking characters with baseball bats.
Phase 4. Collapse. The old system does not work at all. The “Grey Market” has expanded into almost every area. Organizing and providing security for the markets is virtually the only process left that works. These markets now deal with scavenging, reusing and recycling machinery and commodities of all sorts. Violence is widespread, with warlords and grey marketers being almost the only sources of security.
Phase 5. Rebuilding. Enlarging on the process of scavenging, an industry of rebuilding slowly emerges. This process, of course, can only occur if there are adequate resources for the population.

Those are countless scenarios, which range from the benign (consumption is curbed, population growth gradually comes under control and disaster is averted with only minor social dislocation) to the catastrophic (severe resource constraints cause massive difficulties in South East Asia, Indonesia invades Papua New Guinea in order to secure resources, Australia objects and becomes embroiled in a region-wide war).

The future is unclear, but business has long known how to deal with situations like this:

Generate scenarios to identify risks,
Use statistical tools to get a feel for the probabilities of the risks.
Examine impacts for each risk
Generate priorities, based on impact and probability for each risk.
Decide on strategies, based on the priorities identified above.

Risk management is very inexact, and extremely subject to personal bias, but I am going to try to put some numbers against the risks that I list below. In risk management, two numbers are important – likelihood and impact. How likely is each risk, and how close to complete disaster do we come if it occurs?

So here goes. I'm going to be lazy and look at Best Case and Worst Case scenarios in the hope that these stimulate thinking about preparations that can cover most things in between:

Best Case Scenario

Our way of life depends on oil, but it does not require the volume that we currently consume. Much of our consumption is devoted to activities that provide little or no real benefit - do I really need a Shrek doll with my MacDonald’s meal? Would I miss it, if it wasn't there?

The Hubbert curve suggests that initially we face a gradual decline in oil. Perhaps a decline of 25% across the next 20 years. If our oil supply was gradually cut by 25%, we would be forced to compromise in a lot of areas (more use of public transport, less air travel, less junk food, etc), but we would not starve. Of course, a sudden cut of 25% is a very different story. We are not set up for a sudden drop - but more on that later.

We can expect that two changes will occur as we gradually adapt to lower oil and resource supplies:

Substitution (e.g. a move from oil to other fuels)
Behavior modification (e.g. a move away from fossil-fueled individual transport to more efficient Mass Transport systems or to walking and biking).

We have some ability to replace oil with alternatives - electric vehicles, compressed natural gas, ethanol, algae biodiesel, etc. In the decades to come, I would expect to see some significant infrastructure projects undertaken in order to produce and distribute substitute fuels. It is easy to envisage some of the other infrastructure projects ahead:

Alternate power sources. We are likely to need them all. New Zealand has a bit of an advantage in geothermal, but here in Australia we should be able to utilize our solar power advantage, using both thermal and photovoltaic technologies. As well as natural gas, algae-to-biodiesel, ethanol, wind, wave, etc, etc.
Expansion of mass transport facilities.
Salvaging and recycling. Major projects are likely to be needed to demolish the unneeded infrastructures of the consumption-oriented society and recycle salvaged materials.
Water. God only knows what will be done about water, but we obviously need a new plan and the infrastructure to go with it.

The infrastructure projects may be complicated by resource shortages, but this is not a disaster – it simply means that choices will have to be made. Do we need a new shopping mall or a new energy generation facility? We may even need to demolish a shopping mall and mine it for resources to build the natural gas facility.

Clearly, there are a lot of jobs here for engineers and construction workers. Other areas are likely to be laying off workers, so retraining is likely to be a key role for TAFEs and other educational facilities.

What will cities look like in a resource-constrained scenario?

Obviously public transport (or more correctly Mass Transport) is more efficient than individual vehicles, so there will be a greater usage of Mass Transport facilities. Expect trains and buses to be overcrowded, as the pace of building new transport infrastructure may struggle to keep up with demand. We can expect this pattern to be repeated everywhere - infrastructure lags demand, causing shortages and overcrowding.

In a resource-constrained society public transport is likely to be used more than private vehicles, but public transport tends to focus on delivering people to the city, so large businesses in cities will have an advantage over large businesses in outer suburbs. Businesses in outer suburbs will need to concentrate mainly on local clientele.

Resource intense transport and consumption will be replaced by infrastructure projects that focus on supporting substitution and behavior change. These infrastructure changes will have massive manpower requirements and could even drive a boom in education and training (particularly in technical areas).

Food is more likely to be sourced locally. In areas without easy rail or water transport, goods are more likely to be fabricated and/or maintained locally. We are likely to re-learn the lessons our grandparents knew about thrifty living and making-do.

Risks in the Best Case Scenario

Our ability to substitute fuels makes the gradual decline scenario relatively benign, but we should not forget that infrastructure growth is unlikely to keep pace with demand. So the big risk here is that the creation of the necessary “Substitution” and “Behavior Change” infrastructure will not keep pace with the velocity of the decline in resources. As an example: We simply cannot build LNG Gas plants and distribution infrastructure in 5-10 years. Likewise we cannot (or perhaps I should say "will not") build new train lines and rolling stock in 5-10 years. The lead time on projects like this is around 5-7 years, just to get the necessary impact statements, designs, permits, etc done. In 10 years this process will probably be streamlined, but 10 years from now is too late.

Risk: Failure of infrastructure construction to keep pace with resource declines.

Likelihood of this risk occurring: Very High.

Impact: Moderate.

The outcome is likely to be: Crowded public transport, possibility of less reliable utilities, reduced productivity, shortages of some goods, etc.

Worst Case Scenario.

Homo Sapiens can adapt to change. It is what we are good at. But there are limits to our adaptability. The limit of our ability to adapt can be triggered by:

Sudden Change. If a significant negative change is too sudden, our ability to cope may be exceeded. For example: If, over a period of 10 years, there is a 300% increase in food prices, then people will find a way to adapt, but if this change occurs in 5 weeks we could expect problems.
Extreme Change. If negative changes go too deep, then our ability to cope may be exceeded, even if the change occurs slowly. For example: We can adapt to 10% less food, but 90% less food will cause society to break down. It does not matter if this change occurs slowly, eventually people will reach the point where they cannot continue to function within the framework of current society.
Multiple Changes. If multiple negative changes occur at once our ability to cope may be exceeded. Jared Diamond commented on this in his book “Collapse”. A combination of multiple factors (such as external threats, environmental damage, and climate stresses) can collapse a society, despite the fact that each individual factor is not lethal.

All of these collapse triggers are plausible in our current situation. Scenarios for each of the three triggers (sudden change, extreme change and multiple changes) are considered in more detail below.

Sudden Change

The Best Case Scenario suggests that the change in oil availability will be gradual, in line with the Hubbert curve. However, there are at least three plausible events that could produce a much faster decline in availability:

Invasion of supplier nations - "Resource Wars". If an importing nation perceives that it has no future unless it can guarantee future resource supplies, then war is on the cards. If multiple wars break out and many suppliers have supplies disrupted, then world supply would be severely disrupted.
Supplier lock in (Resource nationalism). If suppliers decide that their long-term welfare depends on limiting exports so that their own long-term supply is guaranteed, then supply could be drastically curtailed.
Large increases in demand. It has been observed many times that if China and India consumed resources at the same rate as the Western World, then world oil (and other resource) production capabilities would be immediately overwhelmed. Yet the Chinese and Indian people clearly have aspirations in this direction, and their economies are ramping up accordingly.

Each of these scenarios is plausible. Each might conceivably cause a significant shock, even in a well-off nation such as Australia.

Extreme Change

There is one obvious trigger for a deep change - The Hubbert curve may start off gradually, but in 20-30 years it gets precipitous. In 30 years we could find our oil supply cut dramatically. If we are still dependant on fossil fuels in 30 years, then we deserve the inevitable consequence.

Multiple Negative Changes

Based on the discussion above, there are many factors that could interact with oil depletion, or even with each other, to form a collapse trigger. Here is a brief discussion of some of them:

War
Australia could become drawn into regional wars, or our current involvement in Middle Eastern wars could drain us so severely that a crisis is precipitated. The worst-case scenario is that our endowment with resources, in combination with our low population and comparatively small military could make us a target for invasion, and we might be forced to fight a war on Australian soil. War has the capacity to be a sudden change, an extreme change and a change that interacts with others. As a result, war is a well known collapse trigger.
Climate change
Several prominent scientists have suggested that a “Tipping Point” is near, or has been reached. They further suggest that the Paleolithic evidence suggests that change is rapid once tipping points have been reached. If sea levels were forecast to rise (say) 3 meters in the next 5 decades we would be forced to relocate entire cities. Could we do this at a time of energy-scarcity? Other climate change impacts could further complicate things. Crop failures, water shortages, spreading diseases, and so on. Entire books have been written. There may also be less predictable outcomes. Imagine the impact of hundreds of thousands of climate-change refugees landing on our shores. How could such a thing occur? It is conceivable that a nation could decide that it cannot cope with climate change refugees, and could transfer its refugee problem to Australia. Any country that has the capacity to move troops could move refugees using the same mechanism. Climate Change has the capacity to be a sudden change, an extreme change and a change that interacts with others. Climate change is another well known collapse trigger.
Massive economic downturn (depression or a similar economic collapse).
In an environment where capital is not available and credit is not being extended, it would be hard to mount major risk-mitigation projects. Unfortunately, the economic “liquidity crisis” that is currently emerging in the US financial markets might have exactly this effect.
Disease.
At a time when resources are limited, combating disease stops being such a priority. Will hungry people in South-East Asian nations continue destroying all their poultry every time there is an avian flu outbreak? Will screening for multiple drug resistant strains of TB (MDR TB) continue even in a time of economic downturn? Will societies be able to cope with an epidemic of a lethal disease if they are also trying to build new infrastructure for energy substitution? The World Health Organisation advises us that the question of a lethal flu pandemic is "when" not "if".
The emergence of other resource constraints.
The Canadian Tar Sands are frequently cited as a potential solution to oil scarcity. But processing these sands depends on water and natural gas. Both resources are becoming constrained and severely limiting oil production. Uranium has been proposed as a potential replacement for Natural Gas, but the price of Uranium has skyrocketed recently. Another alternative is to burn some of the bitumen in the tar sand to provide the heat needed to extract the rest. This works, but has obvious CO2 problems. Other emerging resource constraints world-wide include depletion of platinum, water, copper, hafnium, indium, etc. It is proving difficult to build new energy-producing infrastructure as the price of the necessary resources skyrockets.

Risk

It would take a book to fully explore these risks - a book that I don't have time to write, and I'm sure you don't have time to read - but we have at least hit the high points. Now that we have identified some risk scenarios, we should start to assess them.

Below is a table in which I list the risk, the likelihood, the impact and then a “Notional Damage”. Notional Damage is calculated by multiplying the risk by the impact (note that I am only interested in the worst case - catastrophe - so my definition of impact differs from the usual definition, I am defining impact as "probability of the risk creating a major dislocation"). You can sum up the “Notional Damage” of all the risks to get a “Total Notional Damage” - representing the notional likelihood of complete failure of your project. Note that this is not statistically accurate. There exists a danger that related risks (which might occur at the same time) can sum to produce artificially large numbers.

As an example, if a risk is 50% likely to happen, and would cause 50% devastation, then the “Notional Damage” caused by this risk is .5 x .5 = 0.25, or 25% notional probability of complete devastation. Two risks of this type will obviously give you 0.50 - notionally (not statistically) a 50% chance of total devastation.

This is very inexact. Summed notional risks are unreliable. For this reason, very few risk managers are willing to sum risks, choosing instead to count types of risks. In addition to statistical flaws, the summing method does not take interactions into account, nor does it consider unexpected good luck that might cause outcomes that act against the risks listed below. However this kind of exercise can give you a gut-feel for the risk, and thus the viability of a project. For this reason, I am willing to do it, while treating the numbers generated with extreme caution.

The table below attempts to answer this question:

Assuming that Peak Oil is a fact (and there are now few people left who question the theory), then what risks could precipitate a collapse by impacting in one of
these ways:

Making Peak Oil more sudden (or)
Making Peak Oil more severe (or)
Introducing new factors that interact with Peak Oil to create more multiple negative changes than we can cope with

So here are my numbers (feel free to substitute your own best guesses)

Risk Description	Likelihood (Likelihood of this risk occurring before 2020 - Discussion, followed by numeric value)	Impact (Likelihood of this risk causing major dislocation before 2020 - Discussion, followed by numeric value)	Notional Damage
Resource Wars. Invasion of energy-supplier nations by resource-depleted aggressors	Although this seems to be occurring already, the Iraq experience is likely to discourage imitation for a while. (Ultimately, resource depletion is likely to lead to war, but probably not in the timeframe under consideration.) .06	Impact depends on the effectiveness of the invasion and the number of nations affected. It is unlikely that by 2020 a significant number of suppliers could be invaded so ineptly that oil supplies were cut off. 0.3	0.02
Supplier Lock-in (Resource nationalism)	Low. Suppliers would be aware that lock-in could lead to action against them. 0.2	Low. Impact would depend on the degree of lock-in and the number of suppliers who attempted it. 0.1	0.02
Large increases in demand	Medium. Occurring already in China and India, but moderated by the market. 0.5	Low. As long as Australia can outspend emerging nations, this will impact us, but not be a show-stopper. 0.1	0.05
Australian involvement in a major war (as an aggressor or as an invasion target)	Extremely Low. We are too smart to over-involve ourselves in a foreign war, and too far away to be a viable target at a time of limited logistics. 0.02	Severe. An invasion of Australia would be crippling, and a resource-draining military overextension would be almost as bad. 0.9	0.018
Abrupt Climate Change (rising sea levels, decades-long droughts, etc)	Low within the pre-2020 timeframe. The Paleolithic evidence supports the concept of abrupt climate change. But the probability that it will hit before 2020 seems low? 0.15.	High-Severe. Even a 0.2 meter increase in sea level by 2020 would be sufficient evidence to force us to commence relocating city functions and infrastructure. Venice adapted to rising seas – but it would be a hard thing to do in a time of resource constraints. 0.8	0.12
Massive economic downturn	Low-Medium. High oil prices combined with the sub-prime meltdown and “liquidity crisis” could plausibly have severe economic consequences. However it appears that the "Resource Boom" has largely insulated Australia from the worst effects. 0.3	Low-Medium. A bad economy could place severe constraints on any attempts at mitigating responses to resource constraints. 0.3	0.09
Pandemic Disease	Low-Medium. According to the World Health Organization, a lethal flu pandemic is a matter of “when” not “if”. New diseases and drug-resistant diseases are constantly emerging. Bird Flu and MDR TB are two examples. 0.3	Low-Medium, depending on severity and timing. The emergence of a pandemic disease at a time when society is resource-constrained and attempting to mount projects in response to these constraints could create severe problems as conflicting demands emerge. 0.3	0.09
Other Resource constraints cause a cascading problem	Low-Medium. Moderate constraints are already in evidence. 0.3	Low. Although constraints are in evidence, none have yet created a severe problem in Australia. Constraints will create significant problems, but there is no clear sign that a complete collapse could be triggered in Australia. 0.1	0.03

Total Notional Damage			0.44 (approx)

Low: 0.0 - 0.3
Medium: 0.3 - 0.6
High: 0.6 - 0.8
Severe: 0.8 - 1.0

Note that most of the factors listed here are external to Australia and out of our control. Our resource advantage offers us little protection from many of these risks - in fact it increases some of the risk factors.

Note also that I am not using the standard definition for "Impact".

This table indicates a notional (roughly) 50% chance of a severe setback before my son turns 16. How severe? Possibly not as severe as one might think. For example, one of the risks considered is a pandemic. If it occurred while we were trying to cope with Peak Oil and undertake a serious infrastructure project, then it could set us back. But here in Australia I think we could cope. In the closing phases of WWI, Europe was hit by the Spanish Flu pandemic. Tens of millions of people died, and the fabric of society was strained - but it held together, despite dealing with a war and a pandemic at the same time. I believe that the fabric of our society can survive two simultaneous hits, as long as they are not severe.

We might be set back by a few years, and certainly there would be suffering, but I believe that if Europe can do it, then Australia as a nation could rise to the challenge. This, obviously, depends on the nature of the crisis. I give "Invasion" an impact of 90%. If we get invaded, all bets are off! Likewise a pandemic that caused very high levels of fatalities could be a problem beyond our capacity to cope.

This kind of mathematical game-playing is only intended to provide a gut-level assessment of the magnitude of the accumulated risk. The number produced is usually artificially high. Suppose, for example, that China’s next moon probe finds a huge ocean of Helium-3 on the moon, and simultaneously scientists in Europe find a breakthrough technology that can immediately utilize Helium-3 to produce limitless, cheap power. An event like that would make many of the risks above irrelevant. But “positive risks” like these are not assessed in conventional Risk Analysis. Negative risks, on the other hand, can simply be added until you reach any Total Notional Risk number that you desire.

The three risks of particular interest are climate change, pandemic, and massive economic downturn. Although the Total Notional Damage number should be viewed with caution (since it has been generated using a flawed methodology), the Notional Damage numbers are calculated simply by multiplying risk x impact. These numbers have much more validity. I am looking at numbers like 0.12 for climate change, 0.09 for pandemic disease, and 0.09 for massive economic downturn. Numbers this high would normally cause me to either cancel the project or introduce massive risk mitigation. Many of the numbers on this table are so high that I am forced to question my objectivity.

I have been fairy conservative (I believe) with the estimates. When making estimates, I have tried to put the question into concrete terms. For example, in the question about a major war with Australian involvement, the concrete question to ask is “How often will Australia be invaded, or make an all-in commitment to a war that leads to major domestic dislocations?” My answer is “once ever 500+ years” (i.e. an invasion every thousand years and a stupidly aggressive war every thousand years), so the chance of this happening in the next 13 years is a bit over 2%.

The once-in-500 years number seems quite conservative. In fact there are no numbers on that list that I am really uncomfortable with. So there is a credible risk of a severe crisis by 2020. I clearly need to hope for the best, but prepare for the worst.

A Range of Cases and Timeframes.

A best case scenario might push Australian society through to Phase 2 (Business not-quite-as usual), while a worst case could push us to Phase 3 (partial collapse) or even, possibly, into Phase 4 (collapse). So any preparations being contemplated must enable us to move from one phase to the next

A worst case scenario would leave us with a devastated economy and could require years for recovery, so preparations need to provide support for a possible extended period and enable us to contribute to the recovery phase.

It is important to remember that during the recovery phase we would still face the massive task of building infrastructure for alternate fuels, mass transport systems, etc. However we would be starting from a lower industrial base and with a shattered education system (thus complicating the task of retraining people for the challenge).

The recovery process in the worst case scenario would not be pain-free.

At this point it is worth quoting from Dmitry Orlov, who experienced and wrote about the collapse in Russia after the demise of the Soviet Union (http://energybulletin.net/23259.html ). Dmitry said:

(The)“Soviet Collapse was absolutely horrible for most people. Many of them died.” .... “In spite of all this, I believe that in every age and circumstance, people can sometimes find not just a means and a reason to survive, but enlightenment, fulfillment, and freedom.”

My point is that hard times are not always unhappy times. With sufficient preparation we can improve the likelihood of happiness for ourselves and our loved ones even in the worst-case scenario.

Summary

In Part 2, I presented these arguments:

Australia will need significant infrastructure changes in the years to come.
A move to alternate fuels and mass transport systems will provide many work opportunities, particularly for engineers, artificers and construction workers.
There is a plausible risk of a serious dislocation that could set this necessary work back. If this occurs, we will need to spend a significant amount of time recovering before we could undertake the necessary infrastructure changes. A setback like this is likely to be accompanied by significant trauma.

We now have a picture of the stresses that Australia might face. Personal preparations will require looking at the scenarios, defining strategies to address the identified risks, then deciding what preparation is required now, so that we can carry out each strategy.

In Part 3, I will talk in more detail about personal strategies and preparations.

Part 2. The Future in Australia: The Next 13 years.

PDF version

67 comments

Richard on November 2, 2007 - 9:13am Permalink | Comments top

Aeldric,

Correct me if I am wrong, but you seem to believe we will have a crisis which will turn out very rotten.

How about the following scenario:
- I sell my cars and buy a small fuel efficient car
- I go to work on a bike
- I will eat more healthy stuff and less meat
- I will isolate my house and put on a sweater
- If I loose my job, I will find another job
- I will not go on holiday with an airplane or car
- I will consume much less
- When visiting relatives & far friends, I will go by train

Seems to me PO is solved by then. The point is: Whenoil prices rise, this is what will happen.

Last but not least, you quote that after the collapse of the SU, a lot of people died. Please note that the population of Russia is still shrinking. But the mayor cause is alcohol abuse. They didn't die because of hunger.

aeldric on November 2, 2007 - 10:11am Permalink | Parent | Comments top

Hi Richard,

My worst case scenario assumes that things will be "rotten" as you say, then get better. I give it a less than 50% chance of ever occuring.

My best case is pretty much the situation you describe, with one notable difference - regardless of which scenario plays out, at the end things will be different. We don't all just wear an extra jumper for a while, then go back to how things were. PO may get "solved", but that won't be enough. We need to learn that mindless consumption is not sustainable.

As for the quote that in Russia "a lot died", I had doubts about including that bit of the quote, as it jangled me too, but to stay true to Dmitri's message I needed to include it. You are right, hunger was not a major cause of death - I never suggested that it was, in fact I never discussed a drop in population in Russia at all. There was malnutrition, but not much starvation. The drop in population in Russia has other causes, including alcohol. Alcoholism is a problem in Russia - and always was. Dmitri feels that there was an increase in deaths due to alcoholism, crime and suicide and this increase can be blamed on the collapse. Is he right? I don't know. I wasn't there, but it seems plausible.

I will write part 3 with the Best Case last, so that I don't leave such a negative impression.

fleam on November 3, 2007 - 2:46pm Permalink | Parent | Comments top

La "mayor" problema es la Tequila!!! LOL no seriously....

I'd really like to see if people don't keep their numbers down voluntarily when they're no longer captives of the Constant Growth religion, I think from Tikopia to the US's Great Depression you'll find that as with hunter-gatherers, people do regulate their numbers. The dramatic cases of starvation cannibalism etc were during "cliffs". Good examples being Stalingrad, that famine in Egypt you can read about on the net, etc.

Richard on November 5, 2007 - 5:59am Permalink | Parent | Comments top

Aeldric,

I'm not from Australia, but from Holland. Gas is here US$ 8.10, because of tax. NG that most people use to heat their home is equally expensive.

The good part is: A lot of people adapt to the high prices of energy by basically using less. For example: In the morning, a lot of people commute to work by bike. There is an excellent bicycle infrastructure and people actually use it.

All I can say is that high prices will push people to change their ways and they will do so rather fast. We shouldn't be too negative about it.

aeldric on November 5, 2007 - 6:15am Permalink | Parent | Comments top

Hi Richard,

Yep. In Australia petrol prices bounce around a bit but it is around US$5 or US$6 per gallon (though of course we use litres not gallons), so I am not to worried that our US cousins will start to die if it hits US$4.

Richard on November 5, 2007 - 7:22am Permalink | Parent | Comments top

Aeldric,

Besides, some of them might benefit from the exercise ...

SamuM on November 4, 2007 - 5:35pm Permalink | Parent | Comments top

Peak can take many shapes. As such, so can the consequences that unravel after it.

In a really bad scenario one may run out of: locally produced food, imported food, potable water, transportation capacity, jobs, money, security & economic stability. In a situation like this, riding a train probably will not help much.

Of course, it probably will not come to that (personally I give such a scenario a very low probability, but I can't _prove it_, it is a belief).

A good transformative scenario analyst builds a robust decision making model out of several possible scenarios and compares strategies and preparedness capability against all of them.

Preparing for one specific future scenario just raises the statistical likelihood of catastrophic failure on the preparer's part.

From the point of view of mitigation, risk management and opportunity preparedness, resilience through variety is the key.

Of course, if one likes to gamble and aims for the highest returns with highest risk, then it naturally makes sense to place bets on one scenario alone. This is a choice based more on personal traits than anything else (like rational comparison analysis), I believe.

As for Russia, the major cause of epidemic premature deaths is not alcohol per se. It is merely the final weapon of choice in the prolonged suicide.

The real cause is poverty and utter lack of hope in any kind of personal future worth striving for.

Will Stewart on November 4, 2007 - 7:50am Permalink | Parent | Comments top

If we took 20 years to make this shift, then I would agree that it might work. Even 10 years in a crash program ala the Hirsch report. Let's examine these one by one;

- I sell my cars and buy a small fuel efficient car

Who will buy your car, and what would they do with it? How fast can the car making industry shift over to producing only fuel efficient cars? How much production per year after that will it take to replace the current fleet?

- I go to work on a bike

An excellent step. Can you convince several others to do the same?

- I will eat more healthy stuff and less meat

An excellent step. Can you convince several others to do the same?

- I will isolate my house and put on a sweater

Not sure what 'isolate' means. Sounds like an excellent step. Can you convince several others to do the same?

- If I loose my job, I will find another job

In times of high unemployment, such words are hollow.

- I will not go on holiday with an airplane or car

Good on ya. Can you convince everyone else to do so?

- I will consume much less

Of what items in particular? In times of high unemployment, this will not be a choice for the majority.

- When visiting relatives & far friends, I will go by train

What is the current carrying capacity of the train system now? If everyone wanted to do the same, how much more capacity would be required? How many years and how much money would be required to implement such a capacity change?

Now it is easy to say that you can make these lifestyle changes, but much harder to actually live them out. Can you make a pledge to live out these changes for 1 year? If so, could you keep us posted on your progress?

I've made similar lifestyle changes; passive solar house, powered by PV, vanpooling, conservation mindset with regards to energy and resource consumption, large vegetable garden, hybrid car used sparingly, biking used liberally. Bike touring vacations. Writing a book about the topics discussed in this article.

oilmanbob on November 4, 2007 - 8:19am Permalink | Parent | Comments top

Good Job, Will!

People respond to example a lot more readily than they do to exhortation. When it comes down to it we are all going to have to be responsible to ourselves first in order to change, and its going to be difficult and full of little slip-ups and digressios. But the world is a much better place than it was only 150 to 200 years ago, when slavery and genocide were the status quo. Bob Ebersole

Richard on November 5, 2007 - 7:31am Permalink | Parent | Comments top

Will,

You seem to be very angry.

To respond to your questions: I don't have to convince anybody. The price of gas will do that for me. For instance: People keep their car on average for 5 years, so next time they buy a new one, they can decide: A big one or a small one. I'm very sure they will choose a small one, when gas prices are high.

One small remark: Why is every PO'er convinced that when oil supplies dwindle, we will have mass unemployment? We didn't have mass unemployment in the middle ages. Wouldn't it be more logical that we will have less unemployment, because productivity gains will be smaller?

Big Gav on November 5, 2007 - 9:05am Permalink | Parent | Comments top

Why is every PO'er convinced that when oil supplies dwindle, we will have mass unemployment?

Not every PO'er is - I for one think there is a potential for a huge boom as we completely retrofit our transport systems and industrial civilisation generally to a completely different model...

Admittedly I'm a small (but vocal) minority.

Will Stewart on November 5, 2007 - 10:12am Permalink | Parent | Comments top

You seem to be very angry.

Certainly not angry; skeptical, but perhaps a bit too dismissive as you seem to be still in the early stages of denial. Let's just say your measures won't simply make impacts from PO disappear unless most do them. And a main point is that the infrastructure won't change overnight to enable a full shift away from air transport to rail, and we are stuck for at least two decades to come with the current new auto fleet's dismal fuel mileage.

To respond to your questions: I don't have to convince anybody. The price of gas will do that for me.

Note that even with gas prices high, demand keeps climbing. Don't underestimate lifestyle inertia. Too many people will cling to what they know and how they were raised, until the pain becomes too great. By that time, the economy will be in the tank.

For instance: People keep their car on average for 5 years, so next time they buy a new one, they can decide: A big one or a small one. I'm very sure they will choose a small one, when gas prices are high.

Car last on average 18 years now, so that means someone would buy your car (as you said you would sell it). Your 'old' car will be in use for another 13 years to come. If not, a new car would need to be purchased. If this were the trend for all of the SUVs, Pickups, and less than economical cars on the road, automobile production would need to ramp up more than double, which we all know is not going to happen.

Massive shifts in employment modes (i.e., back to the land), would mean a tremendous flight from the city and tremendous amounts of new homes close to the fields where people would be working. Knowing that PO will result in inflation, likely stagflation, with all of the inferred economic impacts, where will the money come from for all of this new investment in homes for newly converted farmers? Certainly not from selling the homes they had to practically abandon.

Everybody wants to believe that a shift over to non-petroleum based fuels will be a painless one, but we have to face the fact that PO won't allow us to live in a such a fantasy world. Can people take steps now to insulate themselves from the worst of it? Absolutely...

Richard on November 5, 2007 - 3:22pm Permalink | Parent | Comments top

Will,

as you seem to be still in the early stages of denial

Well, this weekend I bought one of these

My wife thinks I'm crazy, but my kids think I'm the coolest dad on the block! I rock!

;-)

The thing costs 2190 euro so I better be. Any idea how much beer I can get into this thing?

btw, why do you think PO will cause inflation? Milton Friedman said that inflation is always and everywhere a monetary phenomenon.

Same question: All PO'ers seem to be so sure that PO will cause inflation. Looks to me then to be the perfect time to buy a very large, very expensive house ...

Will Stewart on November 5, 2007 - 9:10pm Permalink | Parent | Comments top

My wife thinks I'm crazy, but my kids think I'm the coolest dad on the block!

I would agree!

btw, why do you think PO will cause inflation? Milton Friedman said that inflation is always and everywhere a monetary phenomenon.

Inflation is simply defined as the overall general upward price movement of goods and services in an economy, usually as measured by the Consumer Price Index and the Producer Price Index. When fuel costs rise, anything dependent on fuel costs will rise. As I believe you would agree, many, many items are affected in this manner, from the food we eat, to the price we pay at the pump, to goods delivered by truck, etc. The Netherlands are one of the least oil-addicted developed nations, so you may not see as much inflation as the US. $100 in 2000 dollars is $121 in 2007 dollars.

Many economists project oil price hikes to result in inflation, Stephen Leeb being one.

Buying a large house means you will need to buy lots of furniture to fill it up, but more importantly, it if is like most large homes, it will need much more fossil fuel to heat it.

Of course, if most developed nations lived like the Dutch, peak oil would have come 20 years later...

Richard on November 6, 2007 - 5:21am Permalink | Parent | Comments top

Will,

I know your explanation of inflation, it is the standard econ 101.

Milton Friedman, who won the Nobel price, argued differently:

Total amount of money
----------------------- = Average price
Total amount of goods

So if PO decreases the total amount of goods, that would cause inflation, right?

Well, only if the total amount of money stays the same. To reduce the total amount of money, the FED, ECB, BoJ, PBC, etc can sell state bonds and thus reducing the amount of money (and raising the interest rate in the process)

This is a very potent mechanism. We have been doing this the last 30 years or so and it works remarkably well.

Why should it suddenly not work?

Will Stewart on November 6, 2007 - 9:55am Permalink | Parent | Comments top

While you are free to embrace the economic model of your choice, I don't invariably accept Friedman's explanation.

There are so many factors in play, such as the prime interest rate, liquid cash holding, amount of debt (national and personal), GDP, etc, etc.

Offering state bonds also presumes that they would be sold easily. The money acquired through bonds usually goes into government spending of some sort (roads, buildings, education, etc), which enters right back into the economy.

I must note that I am a staunch admirer of the Dutch low-energy lifestyle, and the large number carfree areas in so many of your cities.

Richard on November 7, 2007 - 4:27pm Permalink | Parent | Comments top

I am a staunch admirer of the Dutch low-energy lifestyle

I think you give the Dutch too much credit. People look alike all over the world, the Dutch are no exeption.

FB on November 6, 2007 - 4:53pm Permalink | Parent | Comments top

Hello All,

2190 euros for that ? Sorry to criticize, but why not just by a mountain bike for 200 and a bike-trailer for 300?

But now to the point, i.e. PO causing inflation, Stoneleigh over on TOD Canada, the guy who puts out the excellent finance updates every week, thinks we will first go through deflation and he speaks of it lasting years. Followed by heavy inflation.

Check out his posts, they are very interesting.

Ciao,
FB

Richard on November 7, 2007 - 4:24pm Permalink | Parent | Comments top

I just saw myself as a true Grizzly Adams riding his cargo bike through town. Have to grow a beard though.

It's what people do when they are waiting for their midlife crisis.

I already have the porsche & the harley ...

homesteady on November 3, 2007 - 2:55am Permalink | Comments top

Nice to see a local analysis, and especially one that doesn't scream about stockpiling food and guns.
I'd be interested in hearing your take on how government will respond as energy constraints become clearer.
We are already seeing some cash for environmental ends (LPG rebates, water tanks, solar system subsidies) and in the ANZ environment government is much more likely to play a lead role even in a partial collapse, compared to our libertarian USian cousins.

SacredCowTipper on November 3, 2007 - 11:23am Permalink | Parent | Comments top

I think the best we can hope for over the long haul is catabolic deflation. We'll reduce, reuse, and salvage what we can. This seems to be the most hopeful outlook given the inputs to the scenario.

Humans can do well with dramatically less.

My children have air conditioning in the house and the car, they are perpetually entertained by electronic toys and exercise depends on their mother shuffling them from one preplanned activity to another.

My parents house got air conditioning after I graduated and the first car with it arrived about the time I got a driver's license. Three fuzzy TV channels, no internet, and no video games meant outside was our reality TV. My son is about to turn eleven ... and at that age I was starting to work in the fields here.

My mother recently told me a story from when she was that age - $0.25 got her a ticket to ride with her sister to the next town on a train that had breakfast service. They'd gather around and listen to the radio at night for entertainment. World war II was in full swing when she was a preteen and they had contests between the regional schools, collecting milk weed seed pods, which were apparently a component to flak jackets.

My grandparents are long gone but the picture of the log cabin where my father was born is in a small book published by a writer here in the county who chronicled the Great Depression. I recently learned that the long abandoned wreck of a house where my mother grew up was actually two smaller houses, one of which was moved and then grafted onto the side of the first as the family grew. One doesn't dare set foot in this any more, but I believe its about 1,400 square feet ... and there were ten children(!)

We've just passed the peak of power for our civilization - a magic time of freedom from disease and rapid travel. If we keep what we've learned we may rise to greater heights on solar and wind, but it will be generations off and on a much smaller scale than our current overshoot. The unwinding of this untenable position will ugly.

I did stockpile food and ammunition, but I gathered enough for a hard winter with empty store shelves, then I turned my attention to what I could do for the community ...

aeldric on November 4, 2007 - 12:46am Permalink | Parent | Comments top

My parents speak similarly of WWII. Even the depression had a few rosy moments. Not fun, and they would not be keen to do it again, but not all bad.

oilmanbob on November 4, 2007 - 8:52am Permalink | Parent | Comments top

homesteady,

The internet allows all kinds of factions to magnify their voices. In the US the libertarian/survivalist faction is only about 1 person in two hundred but you'd never know it by the noise. I live in Ron Paul's congressional district and haven;t seen but two bumper stickers on his presidential campaign and the only gun toters are the neighborhood crack peddlers. I'm going to cross over and vote for his opponent in the Republican primary in May 2008.

garyp on November 3, 2007 - 12:53pm Permalink | Comments top

The scenario outlined ignores the impact of the government, particularly with regard rationing and seizure. Australia is particularly susceptible due to its very urban layout.

Also I would suggest war/invasion of Australian soil is virtually a given. You've massively underestimated that number IMHO.

aeldric on November 4, 2007 - 12:52am Permalink | Parent | Comments top

I am not an expert on SE Asian Strategic affairs. My guess is based on the assumption that wars are hard to run if you are short on fuel, and struggling with logistics.

However, I am willing to stipulate that the defence of Australia would be equally hard to run, so an aggressor with a Strategic Reserve (something that we don't have) might be willing to give it a shot.

Feel free to substitute your own numbers in any of the boxes, I don't claim any special knowledge in any of the areas.

oilmanbob on November 4, 2007 - 9:06am Permalink | Parent | Comments top

along the gulf coast of florida there are boat loads of starving Haitains, Cubans and Dominicans floating across the Florida Straits. What are you going to do if the fishermen of Indonesia and the Phillipines become climatic refugees on your deserted northern coast? Just start floating over-if Captain Bligh and his men made it in a row boat/ships lifeboat it must be possible. Do you have the will to turn them away?Bob Ebersole

bados on November 5, 2007 - 7:16am Permalink | Parent | Comments top

My cousin (exColonel in the Aus SAS) always insists that the biggest threat of invasion to Australia is from the 300,000 or so ethnic chinese in Indonesia. He envisoned some internal crisis in Indonesia which would make it politically expedient for the politicans to scapegoat the mainly rich christian ethnic chinese. Eventually the situation gets out of hand and leads to them feeling so physically threatened that they get on boats and come to northern Australia. Apparently there is a lot of underlying tension regarding the chinese in Indonesia already (rich (or percieved to be anyway) minority with different religous persuasion to the masses, etc etc same old story).

He would say there was nothing we could do about it. Northern Australia is very underpopulated. If they were willing to do the spade work they could probably get a rice based agricultural economy going in the NT or northern WA. Hell just give them the Ord river valley. We never did anything with it.

Bados

Big Gav on November 5, 2007 - 9:16am Permalink | Parent | Comments top

The Indonesians have had anti-Chinese pogroms and massacres on numerous occasions.

On the other hand, the Chinese word for Indonesians and other Malays is basically equivalent to "n*gg*r", so the dislike goes both ways.

The Chinese niche in Indonesia isn't unlike that of Indians in Africa (or that of the Jews in Europe in past ages) - a mercantile / comprador class that runs most of the businesses - wealthy but politically weak and a frequent scapegoat.

If they do decamp en-masse to Oz they'll turn Darwin into Hong Kong, not go out and work in rice paddies.

But I think Singapore and China would ensure none of that sort of nastiness actually occurs.

nerd on November 3, 2007 - 12:55pm Permalink | Comments top

I guess like many others here, I have been following three strands for some time now - peak oil, global warming, and alternative energy. As far as I can see, there is a scenario which is emerging which has the following keyelements.

1. We will go through a period of significant, and continually worsening, oil shortage. In the developed world most of us will cope with this with pain but by and large without disastrous consequences in the real sense of the word. We have had oil shortages before and serious recession before, and they are not the end of the world. We will use our relatively high wealth to obtain a disproportionate share of the available oil supply.

2. There is a group of people for which the shortage will be disastrous - generally the weaker and poorer around the world. They will be the ones who give up essential activities because they cannot afford the oil. Thus they will contribute much more than their ‘fair share’ of demand destruction. They will also suffer most from the collateral damage - For example, under the more likely scenarios, biofuels cannot substantially reduce the size of the oil shortage for the next ten to twenty years. However, biofuels are already having a substantial effect on agriculture and the price and availability of basic foodstuffs, and this is likely to worsen dramatically when the oil price reflects actual shortages.

2. Energy for transport will substantially shift over to electricity. Under ‘weak’ pressures (just high oil price of about $60/barrel and a moderate response to the threats of global warming), we would be at about the foothills of this shift in say 2010, it would take a decade for capacity to really build, and another decade or so for half of the vehicle fleet to become electro-centric. With the oil shortage the pressures on making this shift will be orders of magnitude more intense, and the changes will occur somewhat faster. Again, the rate of change will be faster in some regions. In the developed world, it would be a dramatic change for something like a ‘ neighborouhood electric vehicle’ (NEV) with a relatively short battery life and limited miles per charge, to become a mainstream vehicle for urban transport. However, for cities in India and China, a NEV would not be that much different to vehicles already in mainstream use. (note that there were already 55,000 NEVs already in use in the USA in 2004 http://en.wikipedia.org/wiki/Battery_electric_vehicle ) .

3. Electricity production will shift largely to renewable sources of energy. For example: In countries and states with the right climate, for centralised generation, Concentrating Solar Thermal (CST) looks as if it could provide essentially unlimited amounts of 24/(nearly)7 electricity at prices not very different to the cost of conventional electricity today. Some key facts - Solel inc http://www.solel.com/ is building a 553 MW CST plant for PG&E in the Mojave desert; Ausra is building 1000MW of CST capacity for PG&E andFlorida light and power http://www.ausra.com/news/releases/070927.html . Wind power is clearly going to play a major role. In terms of decentralised electricity generation, the next generation of solar PV panels will go into volume manufacture in 2008, will cost less than $1/W to manufacture. These panlels are going to be produced by a roll to roll printing process and not a scaled up semiconductor wafer process (e.g. see Nanosolar http://www.nanosolar.com ). When the retail price of these panels becomes determined by their manufacturing cost, the panels will immediately be cost effective for daytime electricity production by consumers in sunny regions.

4. Once these transitions are over, probably in 20 years or less, energy will again become cheap. It will be available in an essentially unlimited supply, without damage to the environment.

5. This will set a maximum acceptable price for other sources of power - At current electricity prices, in the USA, the cost of using electricity in an electric car (putting aside the cost of battery wear) is about the equivalent of about 60 cents per US gallon. This means that, once we are in the electric vehicle age, OIL WOULD HAVE TO COST ABOUT $20 A BARREL OR LESS to be price competitive. Luckily for global warming and other aspects of the environment, this looks like ruling out a long term future for oil from oil sands, and for oil from coal-to-liquids, irrespective of restraints on carbon emissions.

6. Nth generation biofuels will only play a long term role in two scenarios. A) if they are price competitive with future electricity . Or B) at >$20 per barrel equivalent in some transportation niches, if battery technology has failed to become competitive with hydrocarbons in energy density.

7. In a sense the economists will have been proved right - market forces will have responded, but not by replacing cheap oil with expensive oil, but by replacing cheap oil with cheap electricity. I find it heartening to think that the only sources of energy than can respond indefinitely to market forces, are those that are renewable.

8. There is an interval of perhaps 20 years, where oil shortages will be acute, irrespective of market forces. There have been many previous examples of this sequence of events: unexpected excess of demand over supply - acute shortage with pain and sky high prices - replacement with some OTHER less supply limited and lower cost material.

We are only Homo Semi-Sapiens.

DaveR on November 3, 2007 - 1:32pm Permalink | Parent | Comments top

nerd,

Well put. Time to get to work.

Dave

Nissl on November 3, 2007 - 9:29pm Permalink | Parent | Comments top

Just some things to think about...

1. After following this debate for over 3 years, I've concluded that whether you're a doomer or just foresee major economic turmoil depends on how you think people will react. To be a doomer, you basically have to think that either a) the economic system will collapse as soon as people realize oil has peaked because they will grok that peak oil=peak energy=peak GDP, b) resource wars are in the future because Iraq taught the U.S. (and China!) something *other* than that unilaterally invading middle eastern countries is a bad idea, or c) that the "elites" (whoever they are) are planning to kill off the population so that they can keep all the oil/resources/whatever.

2a. What sort of social ramifications is this likely to have? How much political instability is present and how far will it spread? Will it create millions of refugees that are likely to swamp Australia?

2b. While a transition to electric vehicles is in the cards, we don't have any economic mass-produced models available. We *may* have 60000 chevy volts on the street in 2010, along with a few thousand EV's produced by companies like Tesla. That's out of a market of millions of vehicles a year. Hybrids of any sort are currently on track to be just 4% of the vehicles on the road by 2015. If, as Hirsch suggests, most of our mitigation will take place in the 60% use transport sector first, and net decline is ~3%/year, we need mitigation of at least ~5%/year. Everyone pretty much has to go straight to a hybrid car when they buy a new car every 10 years to do that, and that's not what our factories are set up to produce. Those numbers are already assuming we can also offset in heavy transport via rail construction, and that the ELM model *doesn't* have a significant impact that increases the rate of decline.

There is going to be a lot of telecommuting, carpooling, public transport use, moving back downtown, etc, to handle this.

If we do manage to pull off the first part of the transition, we still have to replace the oil put toward more critical uses - like plastics and pharmaceuticals and jet fuel. Those things *require* carbon sources. And our decline rates will probably be worse by that time. Cross your fingers that something like biobutanol, algal biodiesel, or thermal depolymerization will come through for us within 15 years.

oilmanbob on November 4, 2007 - 4:03am Permalink | Parent | Comments top

Kerosene, or jet fuel, is easily made from coal by heating it to a range of 250-550 degrees celcius it yeilds Kerosene, coal tar, methane and ash. It makes a lot of CO2, but since its at a coal chemical plant should be easy to capture and store. But, not as cheaply as oil. Since Australia has lots of sub-bituminous coal, jet fuel should not be a problem Source: Wikipedia article on coal gasification.

oilmanbob on November 4, 2007 - 4:04am Permalink | Parent | Comments top

oilmanbob on November 4, 2007 - 4:04am Permalink | Parent | Comments top

Big Gav on November 3, 2007 - 10:41pm Permalink | Parent | Comments top

Well said nerd - I'm firmly of the belief that the best case scenario is actually an improvement on the present day.

To a certain extent it depends on how rapid oil depletion is and how fast the uptake of alternatives is.

Efforts to model these are the exercises I find most interesting lately.

carbonsink on November 5, 2007 - 8:42am Permalink | Parent | Comments top

Nerd, that's a great vision. IMHO you have made all the right energy choices, but...

(now for some doomerism)

Currently most developed nations are struggling to reach renewable energy targets of ~5%, and most of that is hydro. I think the best performing country in the OECD is Sweden with ~25% of its energy from renewables, and that's pretty much all hydro.

Forty percent of the world's energy is currently supplied by oil, and most peak oilers agree that oil production will start declining by 2-5% p.a. from around 2010-2012.

It strikes me that most countries will be absolutely flat out just meeting their renewable energy targets for stationary electricity generation, let alone replacing the energy currently supplied by oil.

It will require massive, massive investment in renewable energy if we are to implement your vision, and if the peak oilers forecast of a 2010-2012 peak is anywhere near accurate, we have very little time. Instead of this massive investment I see our politicians launching inquiries into petrol pricing (fer chrissakes!) and squabbling about whether renewable energy targets should be 15% or 20% by 2020. We could be 10 years down the downslope by then and making do with three-quarters of the oil we have today.

LevinK on November 4, 2007 - 6:16pm Permalink | Parent | Comments top

Your unstated assumption is that a cheap high-density battery storage will be found both for use of electricity in transportation and to enable the wide spread use of renewables.

The only thing I've seen so far, that has the potential to do it are the ultra-capacitors like the ones developed by EEstor. Even the best of the current chemical batteries are too expensive, bulky, have a limited life and a bunch of other problems. Using them in BEVs and PHEVs has just become (almost) feasible; connecting them to the grid is still way off.

I don't necessarily disagree with you, I just object to taking some things for granted (the $1/watt PV also fits here). We might be unpleasantly surprised.

ruckrover on November 5, 2007 - 2:07am Permalink | Parent | Comments top

Nerd, you give me hope.

For over a year the scenario of CST solar providing baseload (every continent has more than sufficient desert), photovoltaics providing boosting day time peak, wind and tide etc helping out in less sunny climes, long distance DC power lines creating large continental grids etc - plus electrification of transport, cars with Li batteries etc - all been obvious as the solution to peak oil, but also would help deal with climate change.

My despair is why has no politician I know of anywhere ever ennunciated this, and nor the mainstream media. We are leaving it all awful late, and it behooves all of us reading this website to write to the newspapers, visit our local member of parliament to educate them etc.

There is the issue of power elites with oil and blood on their hands too...

Big Gav on November 5, 2007 - 6:00am Permalink | Parent | Comments top

Its amazing how old most of that vision is too - Buckminster Fuller basically described this decades ago - and there seems to be vast amounts of commentary on the web at least.

http://www.geni.org/

But little progress in the real world thus far.

MarkIX on November 5, 2007 - 6:55am Permalink | Parent | Comments top

What is the main factor in resistance to change, vested interest.

Henry on November 3, 2007 - 2:25pm Permalink | Comments top

I have questions about preparations for a post peak future.

If a post peak world is one of dire scarcity, then wouldn't domestic violence over scarce resources such as food, water, and shelter be a likely characteristic of life? Would not it be appropriate to make preparations for individual defense against domestic aggressors, just as nations make preparations against foreign aggressors nations?

You make the argument that there will be resource wars. If you are suggesting that we should be defenseless in our homes against those who might use force to take what we have, then to be consistent I suppose you should argue against your government spending anything on national defense.

I personally think that all preparations that make you self reliant are useful. Peak oil would not be a problem if it did not cause economic and political systems to strain and break, so I think that there is danger in relying upon the present systems including the government system of police protection, which system is only marginally effective even today.

I look at it from the point of view that we each own our lives, and suicide is perfectly within one's rights. However, we do not have the right to kill others, either by direct action or by willful neglect. To leave one's self without defense is a personal choice; to leave one's spouse, children, or grandchildren without defense is more in the category of willful neglect. To my mind it is a question of morality and responsibility. You don't need to have a bunker mentality to arm yourself against what will become an increasing danger.

aeldric on November 4, 2007 - 1:01am Permalink | Parent | Comments top

Hi Henry,

I agree with you. You call it violence. I call it crime. Collapses lead to an increase in crime. Even relatively mild dislocations lead to an increase in crime.

I'm not advocating disarming yourself and opening your doors. But I am advocating not cutting yourself off. If you want to protect yourself from crime you can't do it alone. Your first defence is the fact that you are part of a community that look out for each other. I suspect that we have more points of agreement than disagreement, and we could end up agreeing loudly, so I will leave it at that.

Henry on November 4, 2007 - 2:01am Permalink | Parent | Comments top

I think your presentation was quite good. I just think that in the priority of needs, after air, water, food, and shelter that security will also make significant demands upon us, and to my mind it is an issue that needs to be seriously
considered, even if someone find the idea of violence in self defense unpleasant, as most of us probably do.

The details of providing for our needs in a disintegrating economy can be argued, but I think that logically self reliance, individual initiative, voluntary cooperation among neighbors, small scale local economies, freedom, and luck will work better than taking a centralized one solution fits all approach.

MarkIX on November 4, 2007 - 6:53am Permalink | Parent | Comments top

to leave one's spouse, children, or grandchildren without defense is more in the category of willful neglect.

Except for;

To leave one's self without defense is a personal choice;

Unless you are under the impression that you own your spouse, children and grandchildren, what you said doesn't make a lot of sense.
It's like the argument for long term planning. Planning for your whole life is as long as it gets, anything longer is stealing choices from those who will be there to make them in a better informed environment.

Glenn on November 3, 2007 - 7:23pm Permalink | Comments top

One idea that I come back to quite often in my thoughts for personal preparation is to become a member of an institution that can provide for many of the various needs that we may have in the future that we take for granted. Institutions will have the ability to create a level of collective action in providing food, basic services, markets, social/entertainment, even security in a more efficient and consistent fashion than individuals in a disrupted society could do by themselves.

Some institutions can be all-inclusive - like universities that have dining facilities, security guards, stores, community gatherings & entertainment events. Others might provide a few distinct services like churches (spirituality/social/entertainment, markets), Community Supported Agriculture (local food), neighborhood associations (security, informal markets).

The main change will be that corporations and central government will probably be the least reliable institutions as lower profits/bankruptcy and political instability cause them to pull-back their provision of services.

Families will become more important, but we will need our neighbors and other like minded people to work together with more than we do now.

My best advice to people is to become a joiner in groups, organizations in your area. Become a "known quantity" to as many people as possible. Which institutions in your area would be best to be affiliated with? Start going to meetings.

aeldric on November 4, 2007 - 1:07am Permalink | Parent | Comments top

My Grandfather's last piece of advice was this:
In a time of crisis join the Armed Forces, but as a cook. Cooks almost never get shot at, they never go hungry, and they can usually find a way to feed their family.

He was absolutely dead earnest about this. He went hungry in the trenches of WWI, then his family went hungry during the depression. He figured out a solution. I've never forgotten this advise.

nicmac on November 3, 2007 - 7:47pm Permalink | Comments top

Thanks for this report. I find it a very useful way of thinking about the problems of peak oil, climate change etc. and one that encourages purposeful action. With two little children's futures to worry about, I find it easy to get bogged down in endless intellectualising on the 'very best plan of action'. Having a framework in which to place the issues keeps my thinking organised, something wine and biscuits couldn't!

SailDog on November 3, 2007 - 8:04pm Permalink | Comments top

Good post Aeldric

I think this post should be read in conjunction with Nate Hagens excellent post over on TOD "central".

If you want an excellent story on collapse, read Peter Godwin's When the crocodile eats the sun. It is the story about Zimbabwe from the late 1990's to 2005 and describes collapse in terrifyingly human terms. This is not some hypothetical gueswork about the future. It actually happened/is happening.

What it has made me realize is that collapse can occur for any number of reasons. Modern society is a house of cards with brittle supports. Some supports are more critical than others, but if you kick enough away you still get a collapse.

A number of observations:

1. The machinary of government has remained intact. Only the state has the physical resources (police, military, guns, ammo, helicopters, fuel etc) and organization to appropriate remaining physical resources (food, fuel spare parts). It is a self feeding system. It will feed itself first and it exacts loyalty because only it has the resources. Everyone else is on the outside.

2. It doesn't matter how much money you have. Hyperinflation will destroy it anyway.

3. It doesn't matter if you "own" your property. If the mob or someone in government wants it, they will take it.

4. Life becomes a daily lottery. If you are alive when you wake up you won the previous days round.

5. Human savagery is thinly concealed just below the surface. We are not "killer-apes" for nothing.

History repeatedly shows us that collapses occur rapidly. I agree with another post here, that things could depend on the rate of reduction in fuel and other supplies. If slow, we might adapt, at least for a while. But our society has virtually no resilience. Homer-Dixons excellent Upside of down illustrated that well. Katrina did also. Natural resilience (the wetlands) had been built over. Our modern society really is a just in time society with multiple single nodes any one of which can trigger cascading collapse. A single relay brought down the grid over the entire NE US a few years ago.

Although it would seem "easy" to revert to say a 1950's society, I do not think that is possible. A different path down will need to be found.

oilmanbob on November 4, 2007 - 3:43am Permalink | Parent | Comments top

Saildog,

History shows us that collapses occur slowly, too. The decent of the Roman Empire under civil wars and barbarian invasion into the dark ages on continent of Europe, or the 500 years or so of the Mayan city state collapse in Mesoamerica are both examples of long lasting slow collapses. The Khmer civilisation in Cambodia another.

The salt marshes that were destroyed in Southern Louisiana were destroeyed by dredgeing for the Intercoastal Canal and for building locations for oil and gas wells, combined with the natural compaction and subsidence of the sediments at the mouth of the Mississippi, plus a decrease in sediments as flood control dams were built across most of the Mississippi tributaries.

If you are going to make sweeping pronouncements at least get your facts straight. People on thi site can and do read
Bob Ebersole

SailDog on November 4, 2007 - 6:12am Permalink | Parent | Comments top

Sorry Oilmanbob. You are of course correct - and Rome didn't collapse in day. I was thinking more of modern age collapses - Russia, Germany, Angola and Cuba, to mention but a few and in no particular order. Plus Zim of course. These have all happened in a few years, whereas Rome took a couple of hundred years.

SamuM on November 4, 2007 - 7:35am Permalink | Parent | Comments top

Bob,

you make a good point and the same can be said of many other civilizations (Tainter's 'Collapse of complex societies' has a longer list).

However, we should not fall victims to the style of historicism that Popper criticized against. Namely, we should not blindly assume that we will repeat the patters of the previous collapses, if (when) the current system collapses.

I don't have an answer how things will develop, but modern failure theory suggests, that systems that are more deeply connected, more interlinked, more complex and more hard coupled, are more susceptible to a sudden catastrophic failure. This is also the kind of system that characterizes much of our society today (complexity, increasingly tight tolerances, hard coupling, inter-connectedness).

Personally I think biological system collapses are measured in longer time units (not quite geological time, but close), whereas technological/economical collapses are measured in very very short (physical) or relatively short (psychological) time.

As such, I personally understand people who are somewhat more interested in near term imminent collapse (even if smaller) than longer in the horizon slower collapse (even if catastrophic when taken to it's final conclusion).

I find it that people often tend not to make a clear and conscious distinction between the two, but just lump all catastrophes and collapses together (and usually compress the time span).

Merv_NZ on November 4, 2007 - 3:48am Permalink | Comments top

Aeldric

A great article, but I believe your probabilities in the table are wildly optimistic in several areas.

The 6% probability of resource wars seems to me to be incredibly low. Resource wars have been continuous since WW1, particularly in the ME where so much oil exists. My estimate would be a 50% probability of a major resource war/wars by 2020. This I feel would have a 50% impact, giving a 25% contribution to your total, not 2%.

Supplier lock-in is another area where I believe that there is a far greater probability of a high number. Just the westexas ELM will result in more than 20% by 2020, and if Daft Dubya and his sidekick Dick Head attack Iran, there is likely to be a major lockin by Venezuela, Russia, etc to deprive US forces of oil to continue the ME wars. My number would be at least 50% x 30% giving a minimum of 15% to the total.

Australian involvement in a major war seems unlikely (unless John Howard succeeds at the election), but there is a huge probability that there will be a vast invasion of boat-people out of Asia arriving on the Australian coasts as the combination of economic collapse and climate chaos makes life in many parts of Asia untenable. Nearly half the world's population lives not far to the north of Oz, and although WE know that Oz has many future resource problems for its population, to the slightly informed populace to the north, it may appear to be the garden of eden. Hence I would give "invasion", civilian rather than military, a high probability. Maybe another 50% x 50%, ie 25%. With several millions of refugees per year arriving all along the coastline from Geraldton via Darwin to Maryborough, Oz will have a major problem.

On the bright side, once the draft is instituted to repel these millions of boat-people, that million bloody Kiwis enjoying your current lifestyle will be on the first plane/boat heading East!!

Cheers

Merv

alanisthename on November 4, 2007 - 5:45am Permalink | Parent | Comments top

Australia has lots of resources but not the resource in short supply, namely oil. So I don't see and government/army led invasion being able to make any difference. Indonesia (actually the Javan Empire) would not benefit.

However, the risk of population shift is much higher. Just make sure you don't give them asylum or feed them. Indonesian agriculture (rice growing) is not suitable for northern Australia except in limited places because you need to flood the fields. They also can't make it to the temperate latitudes without crossing the desert heart so the it should be manageable.

When people are the surplus commodity then people do not live well. The rich and powerful will look after themselves and ignore the rest. When feeding 230 million Indonesians gets too hard then the people will be abandoned.

aeldric on November 4, 2007 - 6:29am Permalink | Parent | Comments top

Truthfully, the first time I did that table the numbers were a little higher. It depressed me, and I decided that I couldn't publish something so negative, so I revised them down slightly. Feel free to substitute your own numbers, crunch them and generate your top 3 risks. My numbers are guesses, not based on any special knowledge.

fungible on November 4, 2007 - 7:02am Permalink | Comments top

Derek

I think we might face a liquid fuels emergency sooner than we think.
If this is the case it will affect our ability to implement
mitigation strategies,affect business confidence and worsen our already poor current account and trade deficits.
Do I think this because I am an unstable doomer or because I have looked at the numbers and am concerned at what I see
when I link the numbers to known background factors?
Here are some facts which worry me - doomer or cautious realist? You folks can guide me.
In the 10 months from Dec 06 to Sept 07 we have spent $A18.75 billion (yes,with a b) on liquid fuels imports.
Sort of puts into perspective Howards euphoria over the $A1 billion per year LNG deal with China for 25yrs doesn't it. Our fearless leaders signed this deal to supply a set amount of LNG each year with no price ecalator. Thanks John.
O.K. so we currently spend about $A22.5 billion per year on fuel imports which is set to inflate.
We import liquid fuels from 45 nations plus two entities called international waters and no country details supplied.
Apparently we spent over $A455 million on liquid fuels in the 10 month period and we don't know where it came from.
Our largest invoice was from Singapore for $A4.566 billion nearly all refined product.
Our top 3 suppliers of crude were Vietnam $A2.603 billion,Malaysia $A2.278 billion and Indonesia $A1.763 billion.
The last two nations are definitely in decline and Vitnamese production has declined the last 4 years.Currently Vietnam is developing its first refinery due to come onstream early 2009 and has plans for another.
When you consider that all 3 countries have higher real GDP growth rates than us and increasing domestic consumption with falling production - supply could dry up fast.
Remember Australian production peaked in 2000 ,we have lost one refinery at Port Stanvac (which our US friends have still not cleaned up) and might lose another due to increased competition from Asian refineries.
Where do we go for replacement supply? Next largest supplier is UAE at SA1.422 billion for the 10 months.
UAE is a major supplier to Japan and South Korea - currently about 2.1 million bpd between them .Japan has a current account surplus of over $170 billion, South Korea over $6 billion. Australia has a current account deficit of over $41 billion - we would need a lot of luck in a bidding war with those two.
I am hard pressed to think of where our liquid fuels will be coming from in a peak oil world.
Next largest supplier of crude is Papua New Guinea at $A953.6 million for the 10 months.
What if their govt decides that this resource might be better used at home rather than in Australian jet skis,power boats and 4WD's.
Conservation as many of you rightly point out is key. Do we really see any convincing signs of it presently?
SUV sales set a record in June - the most popular passenger vehicle has a 3.6ltr engine and weighs at least 1700kgs.
Hopefully I am worrying unnecessarily but I experienced the 70's fuel rationing and the punch ups in the fuel lines. The current population is nowhere near as laid back as it was then.
Back in March there was an entry in the Govt notices section of The Australian which outlined an inquiry into liquid fuel emergency response arrangements .It was being conducted by the Senate Standing Committee on Economics and talked of providing the Government with powers to manage a prospective liquid fuels emergency. Anybody know any more about this?
Remember this is from a government that rarely takes the lead in anything. Maybe I do have something to worry about.
fungible

Tasman on November 4, 2007 - 7:17am Permalink | Parent | Comments top

The Senate Committee inquired into some changes to the Liquid Fuel Emergency Act 1984. Their report can be found at: http://www.aph.gov.au/Senate/committee/economics_ctte/liquid_fuel/report...

Matt on November 4, 2007 - 9:47am Permalink | Parent | Comments top

Has a list of "essential users" already been drawn up? Was there any public consultation done to identify these users? The Act provides I think only for temporary supply disruptiones. What we expect is indeed that we will first see some of these short term disruptions which will get more frequent and then morph into permanent shortages. How this Act will then operate is a mystery. How about quotas, rationing etc.?

jhm on November 4, 2007 - 7:57am Permalink | Comments top

You say "New Zealand has a bit of an advantage in geothermal," but I was thinking about hot rocks:

Look, it’s in the most dismal spot in Australia. It’s right in the dead center of our continent, near Lake Eyre, which is a huge salt pan, and it’s four kilometers down in the earth. And it was discovered by an oil and gas company, who had discovered a ring of oil-bearing rocks and then a ring of gas-bearing rocks and, in the middle of this, really hot rocks.

They spent hundreds of millions of dollars drilling. And being an oil and gas company, they thought, “We like the oil, we like the gas, but these hot rocks, we can just post that information publicly.” And, of course, someone else came up and said, well, the amount of energy in the hot rocks is actually probably a hundred times greater than the energy in the oil and gas they discovered, so this is the real gem. And so, they got a free ride. They got a couple hundred million dollars worth of free drilling, and now they're going out trying to exploit this resource.

Big Gav on November 5, 2007 - 4:07am Permalink | Parent | Comments top

I guess David's point was that NZ already has a well established egothermal power industry and their resources are easily exploitable.

HDR geothermal in Australia is still speculative but very promising.

That interview with Tim Flannery will be part of a longer post on the topic here this week...

Tasman on November 5, 2007 - 9:57am Permalink | Parent | Comments top

"I guess David's point was that NZ already has a well established egothermal power industry and their resources are easily exploit"

EGO-Thermal power!!! Wow! I know that Kiwis are superbly self-confident (even egotistical whenever they defeat Australia in any sport) but I did't realise that they were an easily exploitable source of power. Into which orifice, exactly, does one plug in the power cable?

Big Gav on November 5, 2007 - 5:18pm Permalink | Parent | Comments top

:-)

Ooops.

It mostly comes from the All Blacks - unfortunately when too many people plug in the kettle the team just wilts...

No cable required - you just put wind turbines in front of the most vocal supporters.

Will Stewart on November 4, 2007 - 8:04am Permalink | Comments top

An excellent article that can indeed by turned into a book. I agree with 98% of the article, so this comment will be a minor quibble.

I believe that drought in Australia has been recently predicted to be the norm now, with few 'normal' rainfall years (1 in 6 or so). So the impact from climate change to agriculture and fresh water in Australia could be said to be at least an 80% probability, with a possible impact of 50%.
http://www.theage.com.au/articles/2007/09/06/1188783415754.html

I would suggest that this needs to be incorporated into your Best Case Scenario.

Noizette on November 4, 2007 - 10:25am Permalink | Comments top

The US produces 30% of the world’s garbage. I have also read 25% .. alternet review of “the hidden life of garbage” by Rogers

Britain throws out one third of its food: Research by the government's waste reduction agency, Wrap, found that one third of all food bought in Britain is thrown away - of which half is edible.

That is from the guardian but see also the spin type slant of the bbc.

I guess that Australia (with its anglo culture and its US dependency under Howard) is rather similar. (?) High level risks (as in top post) are to be discussed, but the outputs, as opposed to the inputs and risks of catastrophes, are worthy of attention too - it is a whole system after all. (Full disclosure: I’m a garbage nut.)

This article, the only pertinent one I got from a quickie google, and I know nothing about this initiative, speaks of recycling grape skins, cow hides, and such like. Agri detri, but *not* what households throw out, which seems right in line. link

Then.. Food waste to power Australian homes. link

I suppose all here grasp the absurdity of producing food for humans to have them throw it out and then recycle it at great cost, eating (sic) up more fossil fuels...

tomahawk on November 4, 2007 - 8:09pm Permalink | Comments top

Suncatcher

This is a really great post and certainly not just about Australia. It clearly posits the options--make the adaptations that could result in the best case scenario happening or live with the worst case. I discovered "Limits to Growth" 30 years ago in grad school and have spent my life working on best case adaptation, along with a few fellow travelers, but not much has happened in the bigger picture. I do quite a bit of public speaking about this subject and think the perspective of this post will help me energize the others who need to be energized. I've been reading TOD since almost the beginning (every morning) and really would dispair if not for you. Thank you to all who contribute and for the comments as well.

Neven911 on November 4, 2007 - 8:57pm Permalink | Comments top

Obviously public transport (or more correctly Mass Transport) is more efficient than individual vehicles

I have yet to see conclusive evidence of this and if anyone can post links to prove this point I'd be grateful. If you consider a smart car (2 seater) is always 50% full but I cant see the public transport system attaining that sort of utilization. Here in Auckland NZ we have an awful politicalised public transport system which as far as I can see involves private companies getting there major revenues from subsidies, recently the patronage dropped but perversely their subsidies increased! not a model that I can see getting more efficient. IMHO if a city is designed for cars then no public transport system will cure its ills

New Zealand has a bit of an advantage in geothermal

Geothermal is minor in NZ but we have major Hydro (45%), so much in fact that we export electricity via the aluminium smelter in the south island, Australian bauxite is shipped here to be smelted and the resultant aluminium shipped straight out again. Our short sighted govt has just committed 30% of our hydro capacity to this activity for another 23 years whilst suggesting they outlaw large plasma TVs because they use to much power! I await with interest for part 3 from my aussie friend

Neven MacEwan B.E. E&E

ruckrover on November 5, 2007 - 1:50am Permalink | Comments top

Peak Oil will kick Australia's economy in the guts - mining, tourism and transport. We need to start investing in a Solar-Electric near future.

The fact SUV sales are high and we're about to start importing Hummers is utter utter madness!

Here we are in the midst of an election campaign and I've only heard Bob Brown (Greens leader and most sensible person in the parliament) mention the phrase "peak oil" once in the same sentence as a list of other concerns including climate change.

I read that if you search the Labor and Coalition websites for the term "peak oil" - it is nowhere to be found, it doesn't exist in any public documents or pronouncements by the major parties.

This is simply denial, operating as it does with incredible force on a large group scale. We have evolved to deny news that threatens the survival of the whole tribe, as maitaining group solidarity is more a survival strategy in most situations - but not all.

Quiggers on November 5, 2007 - 9:46pm Permalink | Comments top

It seems to me that a lot of thought is being put into infastructure, alternate transport, etc. The risks that are outlined while very serious pale in comparison to two items, water and food. Water was mentioned but only briefly, food not so. Water will likely be a serious issue in Australia, it is already, particularly if the changing weather patterns are permanent or worse, deteriorate even more. The situation with water not only impacts drinking and sanitation but also agriculture. If anything serious happens to the supply of pesticides and fertilizers, combined with little or no irrigation what is the carrying capacity of the land? In most of your senarios carrying capacity would translate into local carrying capcity. Long distance tranport and preservation of food stuffs would likely be hindered if not stopped altogether. Waht take splace inthe larger centers? Waht happens to the populations? Where are they relocated or are they just dislocated. Are there any figures of what the carrying capacity is at, for sake of example, the level fo 1900?
You mentioned an invasion from outside but no food no water no invasion, regardless of other resources. More problematic might be internal dislocation of population particularly in heavily populated areas that are not selfsufficient in food stuffs or water.

Part 2. The Future in Australia: The Next 13 years.

Introduction

Best Case Scenario

Worst Case Scenario.

A Range of Cases and Timeframes.

Summary

Part 2. The Future in Australia: The Next 13 years.

PDF version

67 comments

Part 2. The Future in Australia: The Next 13 years.

PDF version

67 comments

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