peak oil

In years to come, Richard Heinberg suggests, we may mark July 11, 2008, as the day peak oil passed from future possibility to present reality. Welcome to peak oil, one year in. Is it as you expected?

Peak Oil Day

MuseLetter 207 / July 2009 by Richard Heinberg

[...] Maybe it’s a stretch to say that the production peak occurred at one identifiable moment, but attributing it to the day oil prices reached their high-water mark may be a useful way of fixing the event in our minds. So I suggest that we remember July 11, 2008 as Peak Oil Day.

We are now approaching the first-year anniversary of Peak Oil Day. Where are we now? The global economy is in tatters, yet oil prices have recovered somewhat (they’re now about half what they were in July 2008). World energy consumption is down, world trade is down, the airline industry is shrinking, and most of the world’s automakers are on life support.

It is too late to prepare for Peak Oil–a year too late, in fact. Now the name of the game is adaptation. We are in an entirely new economic environment, in which old assumptions about the inevitability of perpetual growth, and the usefulness of leveraging investments based on expectations of future growth, are crashing in flames. Even if economic activity picks up somewhat, this will occur in the context of an economy significantly smaller than the one that existed in July 2008, and energy scarcity will quickly cause most green shoots to wither. [...]

Continue reading.

1) Hold no debt (for most people this means renting)

2) Hold cash and cash equivalents (short term treasuries) under your own control

3) Don’t trust the banking system, deposit insurance or no deposit insurance

4) Sell equities, real estate, most bonds, commodities, collectibles (or short if you can afford to gamble)

5) Gain some control over the necessities of your own existence if you can afford it

6) Be prepared to work with others as that will give you far greater scope for resilience and security

7) If you have done all that and still have spare resources, consider precious metals as an insurance policy
Be worth more to your employer than he is paying you

9) Look after your health!

(For further explanation, check out The Automatic Earth, “How to build a lifeboat.”)

This is the logical outcome of using fossil fuel inputs to grow food, and then turning that food into fuel.

As Evans-Pritchard points out, “energy and food have ‘converged’ in price and can increasingly be switched from one use to another,” which is just a polite way of saying that, in a time of scarcity, rich people’s ability to pay for fuel will quickly outstrip poor people’s ability to pay for food.

Why the price of ‘peak oil’ is famine

By Ambrose Evans-Pritchard, International Business Editor
The London Telegraph
February 9, 2008

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The B-List is your monthly media supplement of 7 recommended readings from beyond the Briarpatch.

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Many readers will already be familiar with the concept of peak oil — the observation that, over time, oil-producing regions reach a maximum rate of extraction, after which oil production begins to enter a terminal decline. North American oil production peaked in 1985; British oil production peaked in 1999. The question of when global oil production will peak is a subject of fierce debate.

But according to a study just released by the German-based Energy Watch Group, world oil production already reached its peak in 2006, and is projected to decline at an alarming rate of about 7% in the years to come. They predict that global oil production will have fallen by half as soon as 2030.

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