I think this might Imply that we can either try to devise techno-fixes aimed as business as usual or we can move to a more survivalist post-corporate mode of social organization dealing with an abrupt reduction in the average living standard, as implied by peak oil. There is going to have to be a right and left wing of the peak oil believers, probably represented by a political movement of sorts,
Roger Baker / The Rag Blog
A leading ‘peak oil’ theorist
ponders movement’s direction
By Nathanial Gronewold / June 16, 2008
NEW YORK — Record oil prices, which have more than doubled in a year and have already jumped nearly 40 percent in the last six months, have some “peak oil” theorists gloating a bit.
But Nathan Hagens, a prominent peak oil scholar, isn’t in the mood to celebrate. He is worrying that the community of economists and analysts who say global oil consumption will outstrip daily production is headed for a schism.
“We’re going to start to decouple in the peak oil community,” said Hagens, a student of energy and ecology and co-editor of “The Oil Drum” blog.
Once dismissed as alarmists and doomsayers, proponents of peak oil are now enjoying the spotlight at center stage of a global energy debate. More mainstream energy analysts, including Platts’ senior oil economist and even some heads of major oil companies, are increasingly giving credence to their arguments. The International Energy Agency is also concerned that the world might soon reach maximum output, spurring a major reassessment of the agency’s supply forecasts.
But there is growing disagreement about what peak oil means. Some factor tar sands, oil shale and other unconventional sources into the equation, suggesting production can continue to increase for quite some time. Others count only free-flowing crude and say the world has already reached peak output, pointing to the popularity of unconventional extraction as a sign of a desperate society exerting more and more energy for less and less oil.
Nevertheless, there is broad consensus within the peak-oil community over the fundamental thesis. But Hagens says the increased attention they are getting and the heightened public anxiety over high fuel prices is splitting the community “between people focusing on supply-side answers, technology … and others that say the problem is much, much bigger than that and we need to change the whole economic system that underpins society.”
Hagens places himself in the more pessimistic camp, arguing that a 1,300 percent increase in oil prices over the past decade will accelerate in coming years, with devastating consequences for the poor and middle class.
And if his central argument is correct — that market economics are inherently irrational and that mankind was driven to this point by forces of human nature that most are incapable of resisting — then it may be too late to reverse the world’s long-standing complacency over energy security and effectively address the problem.
“I think we’ve peaked in net energy production already,” he said.
“There’s an energy-to-profit ratio on coal, and nuclear, on hydro, on oil, on natural gas, and they’re all declining.”
‘Depletion is beating technology’
Hagens was not born a skeptic of market forces. In an interview, he described the path he took from managing investment portfolios of wealthy clients at Salomon Brothers and Lehman Brothers to running his own hedge fund, then to quitting Wall Street altogether in 2003 to sound the alarm over peak oil.
“I decided to go back and get my Ph.D. and study the environment,” Hagens said. “The impetus for that was I saw that the market was not including negative externalities, and that we were kind of running out of resources, of the high-quality, low-cost resources.”
Hagens currently pursues the problem at the University of Vermont. His unique approach to the topic — which mixes economics, psychology and evolutionary biology — has won praise from and notoriety among his peers and has helped solidify peak-oil theory.
Hagens now divides his time between his research, giving lectures at energy conferences, and explaining his findings and concerns to lawmakers and industry insiders who seek him out.
“Global warming and everything else had me upset that people were just focused on making money,” he said, “but subsequently I learned about peak oil and the evolutionary side of our behavior, and I thought those two issues trumped global warming and the other environmental things.”
Studying the peak-oil conundrum from the perspective of human evolution, the world Hagens describes is one where human society is driven to compete and grow. This growth, in the form of economic and population expansion, can only continue as long as we are able to extract much more energy than we exert trying to get it, an equation more popularly known as net energy return on energy invested.
The signs that we are reaching “peak oil” are not coming from the depletion of reserves — most proponents of the theory accept that there is plenty of oil left in the world and will be for a long time. Rather, the run-up in oil prices, and indeed in the price of all energy, is a sign that we are fast approaching, or have already hit, a net energy peak. Whereas in the past it took perhaps the equivalent of one drum of oil’s worth of energy to gain 100 drums of oil, Hagens argues that the world is fast approaching a 1-to-1 ratio.
“Depletion is beating technology, and in the end it always will,” he said. “We’ve gone from 100-to-1, to 30-to-1, to 10-to-1, and at some point you could spend as much energy as you get out, and that would only make sense if you had an unlimited amount of lower-quality energy.”
Hagens and others do not believe the world has an unlimited supply of oil shale, deep water reserves, coal to liquid and other schemes companies and governments everywhere are busily pursuing.
And Hagens said his research shows that the market forces most economists are relying on to save the day do a terrible job of pricing resources trapped underground, resulting in an over-reliance on gasoline, which, even at $4 a gallon, is still cheaper than Gatorade.
The marketplace is adjusting to higher prices. Consumers are driving less and turning to more fuel-efficient vehicles. Energy consumption as a whole is growing less or becoming more efficient in the face of higher prices. People are beginning to move their residences closer to their places of work, or working from home. Business travel is also way down.
But proponents of peak oil theory say that none of that will be enough to offset the loss in terms of energy gain that declining production will bring. Experts believe that it takes at least 17 years for the United States to roughly overturn its entire vehicle fleet — and changing jobs and houses to shorten commutes is not something that is accomplished quickly, either.
“As our energy-to-profit ratio declines, we can’t grow, we can’t grow the economy unless that is offset by efficiency and conservation, but the magnitude of gain that we have right now can’t possibly be offset by efficiency and conservation,” Hagens said.
‘Lifeblood of civilization’
In the end, those on the more pessimistic side of the peak-oil argument — those who see a global economic crash coming — say we risk becoming victims of our own nature.
Hagens, for one, says numerous studies of evolutionary behavior and the workings of the mind show that humans value the present far more than the future, and that we are driven by a powerful assumption that what is true today will continue to be true tomorrow.
This fundamental aspect of how the mind operates, he said, explains why the peak oil argument has been dismissed by mainstream society for so long. It also explains why even the brightest minds in the industry, notably expert analysts at the consulting firm Cambridge Energy Research Associates routinely fail to accurately predict future oil prices. Today, the cost of a barrel of crude oil is hovering at around $135, not the $85 level that many experts assumed it would beat.
“The root causes are at the psychological side of human behavior,” said Hagens. “Individuals being rational is the exception, not the rule.”
The point is to not only become more energy efficient, diversify energy supplies or develop ever greater technological fixes, he said, but to change human behavior so success will be measured in consuming less instead of more. That, he added, is a tall order.
And the peak-oil crowd itself, now increasingly divided between those who fear the worst and those who believe in market forces and are even exploring ways to profit from the fallout, needs to find a consensus on how serious the problem is and on ways to influence economic and political changes, Hagens said.
“What people don’t understand,” he said, “is that this is the lifeblood of civilization, and once people realize that it’s scarce, you’re going to see individual behaviors revert to ‘I’m looking out for number one,’ and things can flip pretty quickly.”
Source. / Greenwire (limited access)
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