At the ASPO conference in Denver, October 2009, I had the good fortune to meet Stoneleigh, former editor of The Oil Drum Canada, who left the The Oil Drum crew with colleague Ilargi to set up The Automatic Earth where they publish stories, news and analysis of the unfolding financial crisis. I spent a couple of days chatting with Stoneleigh where she recounted her rather gloomy prospects for the immediate future of the global economy. The following interview is a summary of her analysis of the unfolding situation. Note that in a departure from convention, my questions are set in "blockquotes" to distinguish these from Stoneleigh's responses.

Stoneleigh, the world economy seems to be suffering from two great structural woes at present, namely stubbornly high energy prices that are linked to demand that is persistently ahead of the supply curve, and a level of debt that has destabilized the global finance and banking systems. Can you explain for us the scale and structure of this debt and to what extent write-downs and quantitative easing (QE) have solved this problem?

There are a number of us who write about the situation in regard to the world supply of liquid fuels, and the future availability of those supplies. In general we began by gleaning our information from the internet, or each other, and from those relatively amateurish beginnings a community has developed to study the condition of “Peak Oil.” That community was immeasurably helped coalesce and grow by the conferences that began under the ASPO banner, with ASPO standing for the Association for the Study of Peak Oil. Kjell Aleklett began these conferences on the study of peak oil some years ago, and has watched the growth of the community (shepherding, as International President, where necessary) since then.

He has recently reviewed the papers given at the ASPO – USA conference in Denver, providing the type of coverage I would have liked to provide had circumstances been different.

Kjell is located outside Stockholm, in a University that I almost made it to earlier this year and has shown, through his graduate students' dissertations, that it is possible to acquire and publish a wealth of information about the condition of the various aspects of future energy supply that cast a relatively realistic view of what we might expect in the future. (And if I don’t always agree about some of the conclusions – that is, after all, the underlying basis of scientific discussion.)

I look at what he has been able to accomplish, and then I contrast this with the current U. S. Secretary of Energy, an individual who has the vast resources of one of the larger Departments in the United States Administration at his disposal.

We know oil prices peaked in the third quarter of 2008--in fact in July 2008. But what else peaked about the same time? It turns out when you look at the data, lots of things:

It seems to me that the current crisis is credit driven, which is why it is so widespread. I had expected a credit crisis to result from the rising price of oil, because the rising price of price would choke back growth, and this would likely lead to debt defaults. But as I look at the data, I discover other relationships I didn't really expect.