The End of Fossil Energy and Per Capita Oil by John G Howe (5th Ed)covers updates to the book as well as other related material regarding the imminent global energy crisis.
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The work of the systems-ecologist Howard Odum presages the vicious circle principle (VCP) presented in Too Smart for Our Own Good(2009).[*] As presented in Too Smart, the VCP is as follows:
Humankind’s development consists in an accelerating movement from situations of scarcity/need, to technological innovation, to increased resource availability, to increased consumption, to population growth, to resource depletion, to scarcity once again, and so on. (p. 110)
Applying Odum’s thinking to the VCP’s interpretation of changes in the actual development/evolution of humankind suggests that with each technological revolution there has resulted an increase in the usable energy available to our species, which has in turn resulted in population growth and a subsequent demand for increasing quantities of energy. On the VCP this demand has to date generally been met (particularly since the industrial revolution and the near-exponential increase in our burning of fossil fuels), with the result that the vicious circle of humankind’s development has grown in both size and environmental impact.
A second point of contact between Odum and the VCP – related to the first – is Odum’s emphasis on system-development’s involving pulses. He applies this notion to both living and non-living systems. Among the living are ecosystems, individual human civilizations, and human civilization as a whole. In Too Smart pulsing is emphasized with regard to the human species as a whole, each turn of the circle constituting a pulse.
The pulses of the populations of non-human species tend to fluctuate about a mean (cf. Too Smart, pp. 21–22), in the case of K-selected species their growth or shrinking depending on both internal and external population checks. But, according to the VCP, in the case of the total human population these pulses have taken the form of the constantly increasing growth of the human enterprize. In each instance of humankind’s developing technology, which has taken us through the javelin, bow-and-arrow, hoe, plow, coal, and oil and natural gas phases, the problems (scarcities) have as a matter of fact in each case led to a of technological development capable of harnessing ever-greateramounts of energy from the environment, and a consequent weakening of human population checks and a growth in the human population. Here we might also note, in keeping with Tainter, that part of the vicious circle consists in the diminishing returns that eventually hit any new technology, leading to the need for its replacement.
Today we are republishing a commentary that was posted back in January 2013. The post is even more relevant today, as the critical issues we face as a species are escalating almost it seems beyond control. Reports are also being made by various LEGITIMATE groups includingNASA,UN bodies and the White House and Pentagon. These reports are posted through-out our affiliated blogs and may be searched by keyword . Moreover, let's not forget too, that Stephen Hawkings sits on a committee that is actually planning "end of world events", whileThe Bank of England is calling for a wholesale change in the dogmas of classical economics - as the stresses of infinite growth are self-evident in so many countries around the world. As a further result, the possibility that the EU, Japan,China and other third world nations could financially collapse is a very real danger that could be sparked by an abrupt climb in global interest rates. Many events at any moment could spark this rapid rise, that would cause the greatest and most unprecedented collapse in asset values around the world where credit and banking bubbles in real estate and market investments, exist almost everywhere - another dark age looms large on the horizon. Economics is not the only cancer that has terminal implications. Overpopulation and unbridled industrial destruction of the biosphere are crossing over to the exponential phase. Should the average global temperature rise just a mere 2 degrees C., some experts say we risk triggering a methane bomb that yields the same consequences of the Permian Extinction's climate conditions - over 95% of life on the planet was wiped out in short order.
5 years after Exxon Valdez, we still haven’t learned to limit oil drilling
By Frances Beinecke
Frances Beinecke is president of the Natural Resources Defense Council. She was a member of the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling.
(Washington Post) – Twenty-five years ago this month, the Exxon Valdez struck a reef in Alaska’s Prince William Sound and dumped 11 million gallons of crude oil into the water. The public was shocked by photos of oil-soaked otters and reports that coastal residents had lost their livelihoods. The cleanup effort was so vast it required 11,000 people, some of whom scooped up oil with buckets. People were outraged. Two decades later, the Macondo well beneath the Deepwater Horizon blew out, killing 11 and sending 170 million gallons of oil into the Gulf of Mexico. I served on the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling, and I saw firsthand the oil-drenched beaches and the anxiety of coastal residents. It was hauntingly familiar. Many lessons from the Exxon Valdez spill had not been applied, and the country was once again struggling with an industry ill-prepared to respond. Flash forward four years, and oil spills continue to endanger our waters. A week ago , a barge and ship collided and spilled about 168,000 gallons of thick, viscous oil into Galveston Bay near a vibrant bird sanctuary. An even greater potential disaster looms. Shell Oil plans to drill in Alaska’s next frontier — the Arctic Ocean, a region even more pristine and remote than Prince William Sound. The company’s initial attempts were plagued by failed emergency equipment, a 32-mile-long ice floe and a grounded drill rig. If this last unspoiled ocean isn’t put off-limits in a hurry, we could witness a spill of far greater proportions. Our country can learn from experience. Preserving marine riches for generations to come makes more sense than trying to bring...
Read More Do you think we face a massive complex conundrum? Let's see no oil means no energy, means no economy, means no food, means starvation, means no social order, means...? What a picture! On the other hand, more oil means more energy, more economic activity, more food, more people, more CO2, more climate chaos, more...? Wait a second! More climate chaos, means no energy, means no economy, means no food, means starvation, means... Cripes! OK so how the frack can we win?
Why EIA, IEA and Randers' 2052 Energy Forecasts are Wrong
By Gail Tverberg
What is the correct way to model the future course of energy and the economy? There are clearly huge amounts of oil, coal, and natural gas in the ground. With different approaches, researchers can obtain vastly different indications. I will show that the real issue is most researchers are modeling the wrong limit.
Most researchers assume that the limit that they should be concerned with is the amount of oil, coal, and natural gas in the ground. This is the wrong limit. While in theory we will eventually hit this limit, because of the way fossil fuels are integrated into the rest of the economy, we hit financial limits much earlier. These financial limits include lack of investment capital, inability of governments to collect enough taxes to fund their programs, and widespread debt defaults.
One of the things I show in this post is that Economic Growth is a positive feedback loop that is enabled by cheap energy sources. (Economists have postulated that Economic Growth is permanent, and has no connection to energy sources.) Economic Growth turns to economic contraction as the cost of energy extraction (broadly defined) rises. It is the change in this feedback loop that leads to the financial problems mentioned above. These effects tend to lead to collapse over a period of years (perhaps 10 or 20, we really don’t know), rather than a slow decline which is easily mitigated.
If, indeed, most analysts are concerned about the wrong limit, this has huge implications for energy policy: Read More
**Also watch the most IMPORTANT video you'll ever see below** *Over THREE Million Views World Wide*
"Yes Mr Smith, the Invisible Hand lead us to our final destiny"
The Most IMPORTANT ECONOMIC Blog Ever
THE WEALTHOF PLANETS
Introduction and Purpose
Humanity’s course is clearly in the grips of a fate that is accelerating it to a final destiny. We are at a crossroad. Our choices at this crossroad are defined by two paths, either to slow the pace of our journey to extinction or to carry on as before with exponential speed. Preference is sensibly given to the former, as it provides some time for a possibility to put the proverbial house back in order, thereby extending the fate of our species. Central to achieving this order of utilities are global economic frameworks and beliefs aimed at prolonging human activity and resource supplies.
Currency constructs play a major role in how we go about organizing our economic activities and conceptions. In turn their implementation affects whether we venture towards a more sustainable path of existence or move in rapid concert towards our final demise. Thus, this abstract briefly examines and illustrates the nature of currency and surrogates. It provides a possible redefinition of the conceptual process leading to the creation of currency and management of economies. A process that is aimed at more directly managing object concrete constructs – more particularly, non-renewable resources.
In short, “it plants the seed” for arevised view related to the printing of money (currency) that embeds a concurrent goal of sustaining and allocating resources of the planet for aslong as possible… “Thus, deferring our final curtain”.
Paper Currency or Gold?
The view that gold and similar assets will act as alternate currencies in the immediate term is apparent and unfolding. Gold, in particular is still a feel good visible abstract and not a concrete construct with diverse utility. Gold has operated with this unique psychological characteristic through-out civilized history, a perceived store of magical invisible value. In the last analysis however, the trading of this abstract (gold) for another abstract (paper currency) as a last store of value is redundant unless it is also tied to usable concrete constructs with utility.
The Wizard of Oz, parody, sheds historic light on the on-going forces within societies that debated for decades the contrasting values of paper currency and surrogate constructs, such as gold. An impossible debate to conclude. There is no form of object reasoning or algebra that may be applied to analyze “two visible abstracts” to form an absolute utilitarian answer. Add into the mix the perception or notion of magical powers … the social conversation then shifts from the parody of Oz to the fairytale of Alice in Wonderland. A collective insanity of sorts.
This redundancy issue and lack of magic that these constructs hold will become increasing apparent as the human race runs quickly towards resource exhaustion and a resultant extinction. Ultimately extinction is a mathematical reality. The course of any wasting finite constructs plotted against the infinity of time (abstract), intersects at a point where a final state occurs. In stages before the intersection, both currency and surrogates move to a point of becoming worthless. Simply because these visible abstracts can no longer be exchanged for concrete constructs with utility. There are too few left.
Easter Island and more recently the country of Nauru have provided examples of what happens when resources are depleted. Those who argue that these defacto extinctions occurred because these were small and isolated geographies on the planet need a dose of quantum perspective. Earth is a small and isolated place in the context of a vast unimaginable universe. We would be wise to heed this quiet warning. Very wise indeed.
What are the Choices?
What to do? What concepts of currency align best with sustaining human survival for a longer period? Existential economics suggests that the currency construct and creation should centre more on a balance sheet approach as opposed to the income statement approach commonly used. a.k.a., GDP. There are important simple distinctions between the two. One favours the past, the other the future. One favours consumption, the other savings.
The income statement approach - GDP is a measure or report on the history of what aggregate economic activity occurred over a period. When currency is created based on a nation’s GDP it assumes an on-going relationship between past and possible future activities. The currency created takes no measure of a nation’s ability to continue to produce such goods and services in the future. For instance, in the extreme case when all of a nation’s
resources were consumed in the past GDP period, then all of its currency has no future value. No store of value whatsoever and it can no longer be exchanged for concrete objects with utility.
Income Statement Shortcomings
Flaws with this approach are clear. First, there is no firm relationship between the currency created based on past GDP and the future utility it purports to convey for exchange. In fact it is created simply by extending the past goods and services mix produced. The likely future production mix based on productive capacity and resources is largely discounted in its creation. Any budgetary deficit further fuels the unsound relationship and the use of resources currently
In light of this, it seems to make more sense to print and distribute currency tied to only current concrete resources and capacities of a nation and their abilities to create future utility… its balance sheet. These concrete constructs of the balance sheet may be broken into five elements: renewable and non-renewable resources; physical and conceptual infrastructures; plus human capital. These are the five key concrete constructs of a nation’s balance sheet. (Conceptual and human capital are concrete constructs for purposes of this discussion).It is then important to rank their value, so as to properly focus on their management and long-term use.
The ranking of balance sheet constructs places non-renewable resources at the top of the list of elements for reasons of need and limits. In metaphorical terms they may be viewed as the lifeblood, insulin or oxygen that all the other economic elements require in order to exist and function. They are extremely precious and important because they cannot be renewed. Ever. (Assuming we never learn all the laws of the universe in order to create matter and energy at will?). This leads to an illustration using oil to show how such elements determine the viability of a nation.
Planet OIL a Case Study
For illustration purposes, assume oil is theonlynon-renewable resource that exists on this case planet - Planet OIL. There are no other resources. And no replacements. It is finite. It is the lifeblood of economic activity and its species concerns. Therefore it is also the true currency for the economy of Planet OIL as all other elements are derived and exist because of it.
Planet Oil’s circumstances raise many interesting observations and questions. But first let us divide the planet into two nations where each owns a 100 year supply of oil. No population growth. No pollution. No weapons. Two very nice places. One nation is called the Rapidusers and the other is called the Slowusers.
The Rapidusers consume twice as much oil (a two year supply yearly) as the Slowusers. Relatively their economy is booming twice as fast as the Slowusers. Their GDP is twice as big and its currency is valued at twice the value of the poor ole Slowusers. What currency really has greater value? What nation would you prefer to live in for the next 75 years?The answers with a little math should be self-evident
Now in 40 years their currencies are still valued at a two to one ratio in favour of the Rapidusers based on GDP. However their oil reserves are only good for another 10 years while the Slowusers have a supply good to last 60 years. Dr. New Economist comes along and says the GDP approach (income statement) for your currencies is wrong and they should be based on the respective nations’ balance sheets …their likely future utilities.
Overnight currency markets panic and are engulfed in historic sensational trading volumes. The next morning the currencies are realigned. Slowusers currency is now valued at six times the value of Rapidusers…a 1200% increase. The Rapidusers nation falls into chaos with financial meltdowns, business closures, massive unemployment, political upheaval and social unrest. It was heart-breaking. The party is over
While this story hints of today’s realities, what is clear is that creating currencies, managing resources, economies and lives of nations based solely on a GDP approach may lead to disastrous outcomes. The value of a nation and its currency is better based on a balance sheet approach tied to concrete constructs to assure its longer-term stability and sustainability
Real Life Application?
What if real currencies are valued and tied to the productive capacity and resources of a nation – its balance sheet? Will it change present currency values? Yes, it may. Compare Canada and the US resource reserves on a "per capita basis" and an answer is somewhat evident. It may be asserted that the US dollar is worth .15 in Canadian dollars terms based on resource reserves divided by population (balance sheet per capita) Compare this figure to the parity ascribed by current markets. The difference relates to perhaps the GDP bias, historical perceptions and sadly the US military/industrial complex.
The balance sheet approach conveys a different story of value and sustainability. No approach is perfect. A mixture of the two approaches in the end should serve to provide a better way to manage and sustain longer-term economic activities. But, to ignore a bias of emphasis towards the balance sheet approach places our travels on this planet in great peril.
A very special thanks to a dear late friend, Dr. Albert A Bartlett, Professor Emeritus of Nuclear Physics, University of Colorado at Boulder, for his ongoing work and passion in this area of grave human concern, as well as his inspiration and permission to use the video included in this blog. His unyielding efforts pass on a great heroic legacy to many coming generations; that so few bravely achieve, for so many. Thank you.
The conceptual duality that creates a wall between the theories of economics and the principles of both science and mathematics cannot persist should we desire to move
the human condition forward. Today, we tear down that wall. Today, we build the bridge. Today, we light the candles of possibilities...
In Kurt Dahl's science-based thriller The Eden Proposition, the reader is faced with an enigma at first interesting, then improbable, and finally, terrifyingly real. Duval Dixon, a septuagenarian of immense wealth who is committed to solving what he thinks is the primary scourge dragging the world down an apocalyptic path-unsustainable consumption due to overpopulation-believes he has the solution. Atrocious as it may seem, he becomes an impassioned proponent of MPR - Massive Population Reduction. Over a decade, Dixon spends billions creating the ultimate biological agent that could reduce the world's population down to a handful. Then, he must answer a final question - should he do it? Unsure, Dixon calls together eleven great minds and then cuts them off from all contact with the outside world. What happens next will change the course of history. Called riveting, thought provoking, and unique, The Eden Proposition will stay with you, in a troubling way, for months to come.
Good Afternoon Friends:
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As of yesterday, The Eden Proposition is in an Amazon promotion for three days - the download of ebook version is offered for FREE for two more days.
I think several of you have read the book - it's a good fast paced read that is set in the near future and examines the concept of MPR in a thoughtful manner. It is a a thinking person's Inferno (written and published well before Dan Brown's version!) . The purpose of the free offer is simply to make it available to more people, and to get more people to read it and hopefully begin thinking about our future - and then perhaps it can help ignite some important conversations among those who have not yet studied the issue as we have. As all of you know, awareness is the most important first step.
For the first 24 hours almost 1500 copies have been downloaded, a big number for this kind of promotion. But if it can get another push right now it will make it on to Amazon's lists of top sellers, and then it can do an order of magnitude more downloads - into the tens of thousands. This would be a good thing.
So, if you could, please download a copy, and more importantly, pass this information on to other people, lists, etc., that you are a part of - go viral!
This book has been a perfect catalyst for initiating the essential conversation with dozens of my friends - I know it can be an effective first intro into the topic - just read the reviews on Amazon to see what I mean.