 | The Bullroarer - Tuesday 30th September 2008 | The Oil Drum: Australia/New Zealand | Queensland Blazing a Trail Towards Oil Resilience |  |
27 comments on Letter to Garnaut: Implications of Oil Production Decline
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27 comments on Letter to Garnaut: Implications of Oil Production Decline
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Garnaut is an economist (unreconstructed price theory utopian), he was appointed by Labour when still in opposition; and he is towing the KRudd line (growth forever and nothing must come between him and winning the next election). He can hardly open the can of worms that is Peak Oil in this context.
That does not mean that his report is intellectually honest, or an accurate forecast of what may happen. Its aims are surprisingly short term - they are only to provide the context for the introduction of the ETS.
Just had a reply from a well-known Aussie MS finance commentator (I'm delighted he replied at all!) - to Chris Martensen's "Crash Course" series; in particular the chapters on economic growth...
"In brief Matthew, he may be right ... but I have always noted that those who preach either a new paradigm (where we go into a never ending boom) or armageddon never get it right. That's because people and governments might be slow-moving, but they do move. The current problems in the US will cause enormous volatility - and probably its cycles between boom and bust will be shorter - but remember that 94 per cent of its working age population are employed and most are repaying their mortgages on time. Many will have cash and if the assets get cheap enough they will buy them and profit as the economy reflates. China and India emerging (China has $2.1 trillion in reserves) create big opportunities here in the next 20 years. And you forget that the world has to find (and will find, its only a matter of cost) an answer to the oil shortage in the next 30 years. The commercialisation of that will produce enormous amounts of economic pain, but also benefit. Exponential growth is always unsustainable. But so too is abject failure. If you can double long term inflation rates after tax in your portfolio (and that's only 6-8 per cent average) over the long term, you will lead a happy life. Try averaging 12-15% a year after tax and life will become significantly more stressful. Cheers".
Any thoughts (from anyone)? Will "an answer to the oil shortage" arrive in time?
Regards, Matt B
Matt, here's my two cents worth and i wouldn't even pay that much. It seems many pundits here at TOD are forecasting the peak between 2005 and 2013 so there is very little time for "an answer" to arrive in time to prevent huge changes.
I see very little action by our "leaders" to take action, after all how difficult is it to say no more gas guzzlers starting from next month? It doesn't need any breakthrough technological changes or huge amounts of capital. In the UK our main opposition party who will probably win the next election have just said no third runway at Heathrow (the main London airport) but high speed rail and as a result have been condemned by business. Similar snail like progress in the EU. Politicians don't really lead but follow public opinion since democracy allows people to think they can just vote for more and more.
We are at the complacency stage and i guess we will have to wait for the panic stage when it becomes apparent to all that there is a problem with peak oil or climate catastrophe.
Thanks, Tony. I reluctantly agree with all you've said (averting Climate Change has fallen to number five on the to-do list over here). Oh well, BAU for a while then.
Regards, Matt B...
...still in the "bargaining (for more time)" stage
Matt,
I think that the above poster is right: We are most likely out of time.
There is a silver lining, however.
We've made massive progress on solutions technically in the last ten years.
We have (costly) high EROEI solutions, but they have to be built.
We ARE building them, though it's likely we're going to suffer a large shortfall and a concurrent crash in our standard of living, but I personally doubt (big wars and fast collapses notwithstanding) that we will see a complete crash down to mad max or even kunstler levels.
What that means for most of us is getting used to a 1970s European style standard of living. (e.g. take the bus, take-out food instead of restaurants, apartments instead of suburbia, high unemployment, high inflation etc etc). It will only be the upper middle class who will still be able to afford to drive.
In the meantime, more renewal, nuclear and coal fired electrical capacity will continue to be built.
IF and I will repeat IF the upper middle class go for electric cars in a big way then the manufacturers of those vehicles will eventually be able to ramp up production and (electric) car ownership will eventually come back to the masses and we then may be faced with (was it Stuart Staniford?) the 4 billion car scenario.
This is a big if, however. We could just as easily do *everything* wrong and end up with the majority of the 1st world as 3rd world hell holes with no hope of recovery.
Here's hoping for good choices and lots of good luck.
Dan,
You are expressing an opinion that we can have a dramatic reduction in oil use and still have a reasonable standard of living. This seems to make sense if you look at your own and your neighbors life-style and options to change.
Almost all of us could cut back on vehicle use and in time manage with a vehicle getting twice the fuel economy, we could either take public transport more or at least drive to the nearest bus or rail line, or at a pinch car pool.
I don't see how we have to economize on restaurant meals, as most of their cost is labor, or give up vehicle ownership, as long as we drastically reduce VMT. Our economy has become very service based, and there is no reason why energy intensity will not continue to decline.
I am not sure what we would have to do wrong to end up as a 3rd world hell hole ? Australia had a fairly low standard of living in 1950's , imported all their oil, and most people didn't have cars and yet we were definitely not a 3rd world country.
Thanks, Dan. Certainly it's hard to remain optimistic these days, with all that's going on... And all that's not! Having said that (and perhaps because I work from home) I've always liked the idea of solar-charged golf carts and 40km/hr speed limits - cheap and enviro-friendly batteries are the first obstacle though, right?
Regards, Matt B
Perhaps Generation-Y may save the day? :)
"I have always noted that those who preach either a new paradigm (where we go into a never ending boom) or armageddon never get it right. That's because people and governments might be slow-moving, but they do move."
He's right, but... sometimes events move faster than governments. Thus massive defeats in war, collapsed economies, natural disasters killing thousands, and so on. Civilisations do collapse entirely - it's just that it takes a couple of centuries to happen.