The Economy’s Oily Warning System

Tuesday, October 18th, 2011

111018_martenson_200.jpgChris Martenson, author of The Crash Course: The Unsustainable Future of Our Energy, Economy and the Environment book and video course, just gave two engaging presentations to our community. I wanted an update from our Peak Moment Conversation in early 2010 The Crash Course - Exponential Growth Meets Reality (episode 166), so we taped a conversation, “Oil Puts the Squeeze on the Economy” (episode 204).Chris said that what he predicted back then is exactly what we’re seeing now: slowing economy, high unemployment, debts teetering, possible sovereign debt defaults across Europe, record people on food stamps.You have to include energy in the economy story, Chris said. “The economy only functions if and only if you have energy.” And not just energy, but liquid fuels. Not only are oil supplies getting tighter, but it’s costing more energy to get energy (deepwater drilling, tar sands, etc.). An economy dependent on growth is getting squeezed by energy constraints.Chris’s first presentation “Our Predicament” is a capsule version of his “Crash Course” (videos free at chrismartenson.com). Chris is a genius at drawing connections between the three E’s of Energy, Economy and the Environment, showing why the next twenty years will be utterly unlike the last twenty. Bottom line: we’re at the end of growth. Basically, just as population and consumption are exploding exponentially, we’re seeing constraints in oil production and natural resources like minerals, water and topsoil. He calls for a vision of a world worth inheriting, noting the vacuum at the national level, but being tried out in various flavors in communities like ours.Chris’s second presentation “Investing in the Future” offers his beliefs about what’s ahead of us. Here are some highlights:

  • The rules will be changed.
  • The markets are rigged.
  • Events will unfold very rapidly. Black Swans (the impossible) will become the rule (like the Fukushima nuclear and Deepwater Horizon catastrophes)
  • Energy will consume a growing proportion of our disposable income, with food prices mirroring oil prices. Peak oil will stifle growth and starve the economy slowly but surely.
  • Simplicity is coming. Complex systems like our civilization require more energy, and energy is declining.
  • Things will happen from the outside in. Want to see what’s coming? Look at the margins, like marginalized populations or countries at the periphery (like Greece right now).
  • There’s nearly universal insolvency, and he predicts debts will not be paid back.
  • Anything that is unsustainable will someday stop… like the fiscal situation in our country — a U.S. fiscal crisis is highly likely.

Chris calls himself a “thrivalist.” He encouraged us to get our own house in order well before the cultural tipping point, advising people to invest in energy efficiency in their homes, long-term food storage, buying items your family will need over the next few years. Personally, he’s holding physical gold and silver as alternate currencies.Chris’s website offers a wealth of resources [http://www.chrismartenson.com]. (Photo thanks to Jason Wiskerchen).

Better than Nukes: Plug the Leaks

Friday, March 25th, 2011

110325_airleak_500x50.jpg

The Japanese nuclear plant crises of 3/11/11, by no means over, invite plenty of discussion about not building more nuclear plants.

John Michael Greer (”The Twilight of an Age” episode 138) provides a sane, simple, common-sense alternative to building more nuclear plants in a recent blog on The Archdruid Report:

It’s worth noting, for example, that for the amount of money it would take to replace the 23 US nuclear reactors that have the same flawed design as the ones at the Fukushima Daiichi plant – $276 billion, at an estimated average total cost of $12 billion per reactor – we could give every one of the 130 million homes, apartments, and condominiums in the United States a $2000 conservation retrofit, including caulking, weatherstripping, insulation, and the like, with room in the budget to spare. That would save more power than those nukes would generate, and do it with no fuel costs, no security threats, no radioactive waste, no risk of catastrophic meltdowns, and an annual maintenance budget per home equal to a couple of takeout pizzas.

A comparable option, a little more costly per housing unit but with similar paybacks, would involve getting solar water heaters on the roofs of America’s houses, apartments and condominiums, and commercial and industrial facilities. I’ve discussed solar water heating in these essays several times already. It’s arguably the most thoroughly developed renewable technology we’ve got; a century ago, solar water heaters were standard in American housing across the Sun Belt, and only the brief heyday of cheap fossil fuel energy squeezed them out of the market. It’s high time we put them back to work….

Sign me up, Scotty. We witnessed an impressive reduction in heating costs when we installed warm window curtains on our dual-pane windows and skylights. Our firewood usage dropped to about one third.

Multiply those energy savings across the country, across the world. And save all the increasingly-scarce petroleum and water for better uses while precluding the toxic pollution and horrendous storage problems.

Who benefits? People and the planet. Instead of paying taxpayer subsidies to nuclear, we get insulated homes (and probably more jobs, too). The health of people and ecosystems doesn’t get trashed.

Who wouldn’t benefit? Those making big bucks from it, and their political buddies pushing for it.

Wouldn’t that be the perfect turnabout?

Applying the “Peak Oil Filter”

Monday, November 29th, 2010

101127_jimhansenj_250.jpgNovember 27, 2010. When financial consultant Jim Hansen talks about putting every investment choice through a “peak oil filter,” he means investments not just of money. He advises first investing in yourself and your lifestyle, while thinking about how constrained oil supplies will affect your shelter, your transportation, your work. If you have money to invest, what industries will do better or worse in that scenario?

We taped Jim in his home north of Seattle. He pointed out the big gas-guzzling SUV parked in the driveway — surely not smart choice for when gasoline supplies are constrained! But, he pointed out, it’s only on its fourth tank of gas for the entire year. It is 15 years old and has over 100,000 miles on it: replacing it would mean adding 6 tons of carbon into the atmosphere (carbon embedded in building a new vehicle). The choice he made using his “peak oil filter” is to keep it and use it sparingly (he bikes, uses transit, and has a home office).

I had great fun taping with Jim. He has the kind of big-picture perspective that looks at the bottom line and all the interconnections, with the eye-opening numbers to demonstrate it.

He noted we’re primarily facing a liquid fuels problem, since 80% of transportation uses oil (and mostly for diesel, the industrial fuel). As oil supplies get increasingly constrained, he sees airlines, hotels and other tourist industries shrinking. Conversely, we need to invest in infrastructures like run-of-river hydroelectric power that doesn’t require building dams, and rail which is far more efficient for long-distance transport than trucks.

He’s optimistic that we’ll adapt as we need to. But he’s a realist too, worrying that centralized healthcare centers won’t make much sense when it gets too expensive for people to drive to them.

Look forward to a fast-paced, fascinating conversation with a personable guy whose “peak oil filter” is worth adding to your own life choices. (www.ravennacapitalmanagement.com)

One day, two tapings: Keith Farnish (UK) and Sean Brodrick (Florida)

Monday, April 12th, 2010

For months now, I’ve wanted to videotape a conversation with Keith Farnish, British author of Time’s Up: An Uncivilized Solution to a Global Crisis, and this week showed up as the right time. In the meantime, Sean Brodrick, Florida author of The Ultimate Suburban Survivalist Guide, became available, too. So we had a two-fer videotaping day using a friend’s DSL line and Skype internet video.

100408_farnish_300.jpgKeith spoke to us from Essex, U.K. He and his family are packing to move to a small town in southern Scotland for a simpler life. The packing boxes in his video “set” weren’t visible onscreen, but held up his notes!

I asked Keith what he meant by his book title “Time’s Up.” Time is up for industrial civilization, he replied. It’s rapidly destroying the planet with the economy’s incessant drive for infinite growth.

What we need is to reconnect with the natural world and with ourselves, he said, but the whole system is designed to keep us disconnected. Keith has identified ten tools of disconnection. He gave an example of selected freedom with the upcoming elections in Britain, where people are “free” to vote, but there’s really not much choice, because the two major party candidates are essentially the same.

We only dipped a toe into the water of his “Hundred Ways to Undermine the Industrial Machine” from Keith’s Earth Blog: Giving the Earth a Future. Sounds scary and maybe dangerous, but many of his suggestions are practiced by Peak Moment viewers, like reducing your personal impact on the planet. Keith’s book is available free online at www.timesupbook.com.

He touched us both with his closing words: “The day we lost our connection with the rest of the natural world was the day we started killing our life-support system…” (excerpt).

100408_jr-at-mns_300.jpgSean Brodrick spoke to us from Jupiter, Florida. He’s a natural resource analyst for Weiss Research, Inc. and a contributor to Uncommon Wisdom Daily.com.

Robyn and I have heard Sean in a number of online programs. Besides being really enjoyable to listen to, we feel that Sean has his finger right on the pulse of the economy, the money system, natural resources, and what’s happening both on Wall Street and Main Street.

Sean seems to be one of the few in the financial industry that we’ve come across who acknowledges that climate change and peak oil are real (although he thinks the latter may be a ways off). He’s refreshingly candid about the theft and lies coming from Wall Street, the precarious nature of the American economy and  the high levels of debt (echoes of Chris Martenson’s “Crash Course” conversation, right?).

Sean said he was compelled to write The Ultimate Suburban Survivalist Guide because he lives in Florida, big time hurricane country. He saw many Floridians go through a hurricane and learn nothing from it — like being prepared for the next one! He expanded this book to include emergency preparedness for everything from natural disasters to human-caused emergencies, like economic depression or hyperinflation.

He talked about several preparedness topics. About home security, he noted that the best defense is knowing your neighbors. Sean’s family held a few neighborhood barbecues — and found real riches among the people there.

I had a lot of fun in this fast-paced conversation with Sean — his breadth of knowledge and colorful expressiveness makes for a lively and interesting conversation.

Sean’s content may stretch the envelope of what we’ve generally done on Peak Moment conversations, but then, we like being somewhat out-of-the-box on Peak Moment TV. Even in his own field, Sean Brodrick is refreshingly and certainly that!

Watch Sean’s program “Preparing for Disasters and Hard Times” (episode 170).

Will the real inflation figure please stand up?

Friday, May 30th, 2008

As I waited in the grocery store line, the customer ahead of me departed with a sardonic comment to the checker about higher food prices, citing last-month’s consumer price index (CPI) percentage for inflation.

“Did he say 2.1% last month?” I asked the checker as I moved up.

“More like 2% PER DAY,” he replied with a wry grin.

I grinned. His impertinent reply hit the mark: it feels closer to reality than the official CPI. People know through their guts and their wallets that the government figures don’t match reality. The sharp reduction in auto sales and other discretionary spending tells us otherwise.

That’s because the inflation figures have been manipulated. In 1983 they downgraded what’s in the basket of goods they’re checking — like exchanging steak for hamburger. Don’t increase the index, cut the lifestyle!

And since 1998 they removed energy and food costs from the consumer price index.

Helloooo?! What universe are they living in? Can you exclude gas, electricity and food in your life?? So that 4% CPI they report for March is actually 7.3% when you add food and energy back in, and 11.8% if based on the original basket of goods from before 1983. You can see it in a graph by Shadow Government Statistics in “Seeking Alpha: The White Elephant That Could Destroy Your Portfolio, part I.” They’re not dumb. Lower inflation figures means less paid out for services like social security.

You may not know the exact numbers for inflation or a lot of other things in the official reports, but like the grocery checker, you know in your gut the stories we’re being handed from many governmental and mainstream media sources are not the whole picture. To paraphrase a Teacher, “Trust your gut, Luke.”