"The way out if you will is to recognize the danger and aggressively decentralize and decouple and example would be some monster corporation recognizing that it would collapse under its own weight and aggressively spinning off business units while retaining most of the depth. The hope is that the new smaller specialize companies can grow not only enough to pay off previous debts but eventually to provide greater revenue as they in total grow larger then the single entity ever could."

Catch 22...ironic!

Theoretically a large company or government can accomplish more than a small one for the following reasons.
1. A large entity can invest $100 million on a risky potential market or product. A small entity might never have gross revenue of $100 million so it can only invest proportionately MUCH less.
2. Economies of scale.
3. A large company can have MANY specialists... a small company will have proportionally more generalists. Specialists are probably 3 times as efficient IN THEIR SPECIALTY. The large company will have the efficiency of specialists.

The other part of the catch 22 is; to survive Peak Oil society needs to become LESS efficient and have more redundancy IE small companies with local shops instead of Wallmart.

I don't see any good solution to this catch 22. Darnit! I know what I mean, but I am not eloquent enough to explain explicitly.

The problem in a nutshell is the inability to solve new problems. Peak oil is a new problem. In Predator prey terms the predator only knows how to capture prey any thing he does to do a better job at capturing prey simply makes the problem worse not better.

What I think your missing is the loss in flexibility. Most 100 million dollar problems are 10 10 million dollar problems and these 10 million dollar problems are actually 1 million dollar problems. 1 million dollar problems are solved by small groups.

Efficiency of scale only works with very well known problems that are reasonably well understood or can be better understood via specialization. When the problem is ambiguous and much less the solution economies of scale fail. This crystallization the support economies of scale also seem to be exactly the wrong way to solve new problems.

The problem is that efficiency only makes sense with well understood problems and solutions inefficiency is absolutely required to solve new problems with novel solutions. This of course implies excess energy/money largssee whatever to persue these new problems however the original system is efficient and leaves no excess.
Therefore if your resource constrained you have no choice but to dismantle the orginal system to cause and excess to allow the overall system to adapt. You have to generate a surplus. When this need is not recognized then the system will suffer catastrophic failure to free up resources.

Its like a law of thermodynamics efficiency and specialization is always exchanged for adaptability. Its a real force in complex systems just like any other law of nature.

These effectively physical forces cannot be ignored. Predator prey cycles and other models of complex systems are simply examples of the effective forces created in complex systems that behave identically to natural forces. Its absolutely no different from the concept of hole or phonon's in semiconductors.

For and example consider simple majority voting. Voting creates a effective force that causes a new condition to result i.e you choose a winner. Voting is just as real and powerful in a complex system as is the real force of gravity. For some reason only a handful of people seem to really understand that these effective forces are just as real as natural forces and have as big of and impact.

The "American lifestyle" can be identified as the effective force that got us into the peak oil mess. Underneath the complex or group forces is plain old greed and willingness to kill. This has lead us to wreck our ecosystem and will eventually result in the death of billions. Indeed the virtual forces of our complex society actually rival anything nature could do in destructive power.

I think if you can see what I'm saying and visualize the "real" complex forces in our society then its trivial to recognize that it absolutely must collapse. Our only choice is how we collapse the system. The current worlds population must be reduced significantly below its current level it can be done with dignity or with violence thats the only choice we can make and the chances of a dignified ending are sadly probably already in the past. Everyday we deny the truth about our situation simply ensures the violent death of a few more million people. Probably every year we do nothing about peak oil ensures that at least 100 million people will die and early violent death. On a individual level what this would mean is say for every person that manages to concentrate resources to maintain a high level lifestyle ten people die.
I'm not all that much better then anyone else and its hard for me to accept this.
I've already started to take steps in hopes that one day I can give more than I take but this does not absolve me of my role in todays society and the damage I inadvertently caused in the past because I was ignorant. Its hard to not just run off into the woods and start growing my own food etc and stop contributing to the madness but I think or more hope that I might be able to help by staying connected.

All a world leader has to do is stand up and explain to the pigs in America what they are really doing I'm sure if they understood the real truth of the situation that they would be willing the change.

Memmel,

It looks like you hold a similar position to Jared Diamond and The Club of Rome?

I think that it is fair to say that some areas are moving towards solving peak oil and others are already fairly well buttressed against the effects.

The slow moving elephants in the Room are China, Europe and the United States.

I still believe that we can have a partial collapse and a reconfiguration after a period of pain round a more sustainbale solution.

I base this on the assumption that problems become evident over the next five years and some countries (such as Israel, Denmark (perhaps Japan)) show what the solution is and the slow movers subsequently get on the bandwagon.

On the other hand if we get large scale fighting over oil instead I think it might well be game over for the big players along with a catastrophic Alec Scarrow style population collapse.

Dan, I'm intrigued by the notion that "some areas are moving towards solving peak oil and others are already fairly well buttressed against the effects."

Could you (or anyone) specify what areas you have in mind, and what evidence of resilience.

I'd have thought that Pakistan, Haitii, Indonesia and much of Africa (etc?) are already very much suffering the effects. Just because they are poor countries doesn't mean they are not dependent on globalised high-tech and aid from G7 countries.

Memmel: "Peak everything". No. just looking at merely my piano, peak ivory, peak ebony, and peak soundboard pine were all long ago, not to mention peak craftsmanship. Quality buckskin for the keys action has also become scarce. Probably other woods such as pear too. Whale-oil? Furniture used to be rountinely made from solid oak and elm (the latter now extinct in uk). Hopefully peak japanese knotweed but I wouldnt count on it.

Re predictions of civil war - I think many people here continue to severely underestimate just how low-technologically-crippled everyone has become. In aftermath of any breakdown of globalisation, people will be desperately struggling to merely survive (ie find food) to such an extent that they'll have no time or energy for warmongering even on a local scale.

There'll be a huge die-off from starvation/stress/disease. And soon the population will be so much lower that the survivors will have more need to cooperate than conflict.

PS to memm- you do post some(times) interesting ideas but if you could make your posts a bit briefer they might fit better in the limited reading time of myself and many others! (Though I appreciate this can be difficult.)

The current worlds population must be reduced significantly below its current level it can be done with dignity or with violence...

I have trouble envisioning any dignified way in which the human population can be significantly reduced "with dignity." Do you have some such imaginary scenario in mind (even if unlikely)?

Food, Clothing, Shelter, Basic Medical Care, Education, Pension.

The first three are well known but the last three are just as true and just as critical if you wish to control population. Large families are formed to ensure pensions in your old age and to potentially cover medical costs and finally as a collective to potentially allow one of the members to be educated.

I could write forever about how to solve these problems but I'll try and give a brief review of each.

Food intensive agricultural methods coupled with drip irrigation can provide enough food
in addition land is often poorly distributed. I'm not saying you should bust up the larger farms by force but you can support smaller farmers in buying more land potentially via collectives. If you think about it for a bit formation of collectives of various sorts makes many of these problems solvable.

Clothing is not a real issue these days.

Shelter can be greatly improved with some engineering work and small factories to convert scrap materials to decent building materials. Probably one of the biggest gains would be to open up small brick factories that use solar kilns for the bricks.
So the idea is that with some light localized manufacturing we can develop ways to create good housing from local materials and scrap.

Basic Medical Care:

The easiest way to start solving this problem is to take in some of the poorest members of the society and train them as Doctors and Nurses if they agree to help their communities in exchange for their education. Over this Doctors and Nurses who receive a subsidized education could pay it back in the form of a tax either money or working in the poor areas. I know from first hand experience that the medical industry is not designed for the needs of the poor regions a move back to renewable supplies robust equipment etc can greatly increase the quality of medical care in the poor regions we have gone to disposable supplies because its easier then using autoclaves.
I could rant forever on this but the bottom line is with some thought medical care can be vastly improved and equipment and supply costs can be minimized. Local manufacturing of medical equipment could play a large role in this. Next of course decent synthetic labs could produce most of the needed drugs. Lab testing can be reviewed and optimized. I'll stop but the medical profession is so far from whats needed by the worlds poor its in my opinion one of our worst sins. Finally of course birth control and sex education come into play.

Education: Like with Doctors but more tractable its a matter of education of people within the community to be teachers and sending them back to their local communities.
Communal communications with new wireless technologies opens up the chance for almost every part of the world to have equal access to mankinds knowledge. This extends into adult education and practical education. The key point and where I differ from most efforts today is that the educators must come from the community.

Pensions:

This is probably the biggest issue and primary reasons for large families. The first and foremost issue is dealing with single people and widowers. I feel that communal monastic like living arrangements open the doors for people to live a single life for as long as they choose. In the past in most cultures these sorts of communal living arrangements where common often tied to the local religions but the point is that we have removed them in all our cultures with our focus on family living. A family is not the only solution and if we can bring back these alternative ways of life then we can create a population of people that choose to have no children or join the communes with just a few. The problem is of course money and a small global pension would go a long way to helping these types of living arrangements. Pensions can be scaled on the number of children you have with zero receiving a healthy pension. You can argue this for a long time but the key for me at least seems to be communal living arrangements that lessen the need for large families. If enough people choose to have zero children it makes a really big difference. Two people choosing to not have children allows a fairly large family of four to exist without causing population growth. So you can see how its in my opinion what makes the difference not just small families.
Certainly with a social safety net in place and education you can then have smaller families. Finally of course with modern birth control methods being single does not mean you have to risk having a child so it all ties together.

You can break these problems down a number of different ways but the core idea is reintroduction of communal living/collective living for people that are not interested or able to form the traditional family. These same communes could readily be the source for doctors, teachers etc and also be the provider of the pension plan. Done correctly it need not even be a cash issue simply a matter of setting aside sufficient land to allow the commune to support itself.

We should have never ripped these out of our societies I think modern manufacturing and economies of scale is what did them in since light manufacturing was often one of the primary ways these communes continued.

Dignified death? A lot of people are going to be driven crazy with negative life-events, especially those who currently have "wealth" and "status". A lot of them are going to be suicidal.

Another high proportion are more likely to die of hunger, shock, and fatal diseases than by violence.

What I think your missing is the loss in flexibility. Most 100 million dollar problems are 10 10 million dollar problems and these 10 million dollar problems are actually 1 million dollar problems. 1 million dollar problems are solved by small groups.

At Global Guerrillas, Robb argues that big companies have to break up and downsize for very related reasons. That the companies that do not will not survive. [The on-topic post was in July 2008 I think. Something is wrong with the site right now - only showing one post per month.]

Another point I think Jeff is skipping is the issue of limits. We're bouncing around between demand constraints and supply constraints and will shortly move into an environment nearly always supply limited. Like an audio amplifier, when the signal starts clipping, all sorts of nasty harmonics appear. That's the noise.

I don't think he is skipping the issue of limits like you saying. The problem is that as you try to come up with any sort of model for the entire system it gets complex quickly and is in general chaotic. Chaotic models while they look cool are for all practical purposes worthless as predictive tools since by definition they are sensitive to the initial conditions. A small change leads to a major divergence in outcome.

You can look at parts of the problem geopolitical feedback, predator/prey, export land etc and show fairly convincingly that almost all the influences are negative and worse capable of fairly rapid large magnitude changes generally for the worse. The predator/prey model is important since it shows that short term price drops from demand destruction don't help even in the medium much less long run.

We have had numerous posts looking at the wedge effect of conversion our economies and all of them point to a 10-20 year time period at most to change with a fairly concerted effort. Add in the required political consensus and you get the 20-30 time for change common. Look at pollution issues and global warming as examples of the timescales for group change.

I think the intrinsic problem and it seems prevalent even on the oildrum with fairly enlightened readership is that people have a real problem with this sort of meta-analysis that cannot be easily reduced to some predictable simple graphics. But the whole point is thats the problem we actually face once you put everything together your looking at a highly unstable and unpredictable situation with the vast majority of potential outcomes being bad. Although we don't know the real outcome for sure without action its pretty obvious that its certain to be bad. Conveying this message to the public seems to be a hopeless task. The problem is that if you drill in on one detail lets say shale NG production then you can have a difference of opinion since it boils down to if we can drill enough wells. However if you put shale NG production into the global problems we face its obvious that we probably won't keep production up. For example consider a Gulf coast hurricane having a big impact on GOM NG production. Lets say a lot of production goes offline for 1 year. This will put tremendous pressure on shale NG plays and they will be extracted at the maximum rate and probably our ability to create new drilling rigs will be impacted by problems in the gulf. The point is one reasonably probably secondary event coupled with the rapid decline nature of shale NG production is sufficient to ensure that future production will always be less than todays. A fall in prices below the economic level that slows the drilling rate is another case. You can do this for a while and the consensus outcome is that we probably will see high NG prices in a few years as external and even internal factors result in overall declines in NG production. You can do this across the entire energy industry include EROEI etc etc.

So what you see time and time again is that as you try and understand even the simple complex cases the result is always worse then would be predicted by not including them. In fact it becomes obvious that in the case of Shale NG plays the ability to make up for conventional declines is a one time event early in the extraction effort that cannot be repeated.

We face thousands of export land like scenarios and as you dig you find more and more cases.

I found a big one just the other day for example. I was puzzeling over tanker traffic this year and thinking about WT saying that with declining VenMex production more traffic would have to come out of the ME to compensate. But one thing I came up with was that the density of crude varies by 40% so if your shipping more heavy crude oil you literally cannot ship as much by volume as you can light sweet crudes. So paradoxically you can see higher traffic with less total volume if the mix of crude being shipped has moved significantly to heavier crudes. This ties into my NG/Heavy problem.

What this would probably mean for the ME is that if you consider my NG/Heavy coupling and the price and the fact that tanker traffic is close to 2006 levels that Ghawar production probably started into rapid decline this year.

This highly probable solution requires a complex analysis approach since you have to put together a lot of events. For me the last piece of the puzzle was recognizing that less heavy oil can be shipped by volume leading to higher tanker traffic and less real oil.

But try explaining all this to people esp since these complex interaction models would require extensive correct data to refine and prove which we simply don't have. If anything transparency has declined dramatically along with data quality the last few years.
Anyone thats willing to spend some time understanding the problem using the approach of full systems analysis and considering some basic models most from the life-sciences can comprehend the whats happening. Taking a message to the masses that requires them to educate themselves to understand the problem is a hopeless task.

Silver bullets simply don't work when your playing a game of whack-a-mole.

almost all the influences are negative and worse capable of fairly rapid large magnitude changes generally for the worse

I'm forcing myself to read the 2005 Millenium Assessment. The message is the same, though the UN typically won't use the same language you do. I'm not so sure that people cannot come to understand the situation. If the horizons are brought closer - and they will be - and if people are able to live the solution like they currenly live the problem, they could learn it. I don't expect that to happen.

cfm in Gray, ME

Not only will the failure mode probably not be consistent across classes it also will not be consistent across regions. This is why I'm predicting the formation of enclaves scattered throughout the world. The key issue is if these enclaves will simply use force to retain control of oil and food or if they will work aggressively to rebuild a new low energy intensity economy. Outside of the enclaves of course the overwhelming issue is if sufficient food and medical care exists to prevent serious problems.

I'm of the opinion that we will actually be able to retain a substantial amount of our manufacturing base even if it means continuing with coal fired electric plants for longer. The big question is are they going to be building electric powered SUV's for the enclaves or building wheelbarrows and windmills for the newly impoverished.

Comments made on this board tend to make me suspect that most will focus on electric powered SUV's.

Eventually of course the less fortunate people outside the enclaves that choose the SUV route will become sufficiently well armed by other enclaves and sufficiently desperate to take over the the enclaves that choose the SUV route. One thing that I can't see us having a shortage of is guns and bullets.

It seems the US has fired 6 billion bullets in Iraq as of a year ago and yes this is straining our bullet supply but its not even a fraction of all the bullets made in the world. We probably have enough bullets right now to give 5-6 to every single person on the planet. Peak bullets is a ways off.

http://www.independent.co.uk/news/world/americas/us-forced-to-import-bul...

http://www.marinecorpstimes.com/news/2008/04/marine_recycle_042808w/

And it seems the Iraqi's have no problem selling brass for new bullets.

http://www.navy.mil/search/display.asp?story_id=9696

“A big problem we found was locals going into the weapons caches and removing brass casings from the rounds,” Richardson said. “The brass was something they found that could be sold in town. Almost everywhere we went, we found piles of rounds but no casings.”