Category Archives: crisis

Why so much about Peak Oil?

Posted on by

Teresa asked a question in the comments: “why so much on Peak Oil and not any other of the other world problems?” This is a good question, so I thought I’d give my answer to her in a post:

1. I’m currently interested in Peak Oil, and the blog is the place for my ‘thinking out loud’. Long time friends are aware that I take up an issue, study it intensely until I grok it, and then move on – at which point it has either been absorbed into my view of the world and effectively becomes unconscious, or else I reject it and have sound reasons for doing so.

2. More personally, Peak Oil seems to be something of a ‘seed crystal’ for me – as the ripples from understanding it spread out further in my psyche, it seems to be a focus for integrating lots of things which had previously been separate, in terms most of all of theology and politics, but also the daily patterns of my human life.

3. Peak Oil can’t be separated from all the other problems which afflict the world, most especially the nexus between the concentration of power in the hands of western governments and the immiseration of the majority of the world’s population. It is the access to (and reliance upon) abundant and easy energy that gave western governments (specifically the US) the ‘first mover’ advantage enabling them to assert their values (for better and for worse) within the world. In terms of shaping our lives so that we a) live more humanely ourselves, and b) allow other people to flourish, we cannot avoid the issue of our use of a valuable and rapidly diminishing resource. It’s a justice issue. This is something on which I expect to post more substantially in due course as I think it is at the heart of it for me.

4. Peak Oil is imminent and potentially catastrophic; even if our politicians act with wisdom it will necessitate a drastic change in our culture and lifestyle within the next fifteen years. Have a look at the powerpoint slides from my Learning Church presentation, where I indicate the sort of things that will happen in Mersea. The downside – if we don’t get our act together – is what initially terrified me (and provoked your ‘Chicken Little’ comment!). The potential downside is real, even if I don’t personally expect it to happen. I am by nature profoundly optimistic – and I do trust in God – but I think we shouldn’t be ‘naively optimistic’. Whilst I disagree with much of the die-off.org approach, I do think their motto is valid: “If a path to the better there be, it begins with a full look at the worst”. Acknowledging the fact that we are waltzing along a precipice is the first move in taking steps away from the edge.

5. I also now think that the link between oil supply and world affairs is more intimate than I had previously believed – and I expect that to be shown this year…

Thoughts on investment, January 2006

Posted on by

The impact of Peak Oil on the world economy has been on my mind for the last few months. I want in this post to look at the initial phase (say – five to ten years) and consider what it means as a context for investment. I also want to air some thoughts about specific investment strategies. I’m more confident of the first half of the analysis though – be warned!!

The context
The specific problem which the world economy faces is the constricted nature of the oil supply, ie there is now almost no ‘spare capacity’ within the system – and this is unprecedented. In previous decades the Saudi government in particular had the capacity to ‘turn on the taps’ to cope with short term fluctuations in supply, and thereby ‘smooth out’ any problems. They no longer have that ability. The Strategic Petroleum Reserves, especially of the US, has some ability to replace that spare capacity, but that is a ‘one shot gun’, and for the purposes of this analysis I consider it largely irrelevant.

Consider a piece of clingfilm placed across a bowl of food. If the clingfilm is loose then puncturing the clingfilm will simply produce a hole. If, however, the clingfilm is tight then a puncture will produce a significant tear. The same phenomenon can be seen in many other contexts: where a covering is taut and under strain, a small breach causes disproportionate adverse consequences. This is the situation that the world oil supply is now in.

Global production (extraction) of oil has not increased significantly for eighteen months, despite the high prices available for more production, and this has been the primary driver of the rapid increase in the oil price over the last few years. The impact of, eg, Katrina, Iraqi shortages, or lack of refining capacity, these are largely irrelevant.

The trigger
In this situation of unprecedented tightness, the question becomes: are there events which could act as the ‘puncture’, causing a disproportionate reaction within the system, causing an oil price shock and consequent recession? I think there are many possibilities; here are four:

1. Iran closes off the Straits of Hormuz in response to an attack by Israel;
2. Al-Qaeda succeed in an attack on Ras Tanura or equivalent facility;
3. There is civil war in Nigeria;
4. Saudi Arabia announces that the Ghawar oilfield has passed Peak production (compare with Kuwait).

I see the first of those as the ‘biggest’ puncture to the system, but any of them – and there are many other possibilities – could serve as the ‘trigger’ to a global recession. The pattern of that recession cannot be determined with precision, but is likely to have some of the following characteristics:

1. the rise in energy prices cause the closing of businesses and a rise in unemployment, thus reducing overall demand;
2. the rise in energy prices causes inflation in essential goods and services, thereby starving the market of purchasing power and reinforcing 1.;
3. the reduction in purchasing power and subsequent contraction of the economy trigger a collapse in the housing market, and that bubble deflates rapidly (esp US/UK);
4. those who have highly geared mortgages find themselves in negative equity; there is a major rise in house repossession; this induces a climate of greater fear and desire for saving – reinforcing 1.;
5. the cycle continues until a new point of equilibrium – probably temporary – is reached.

Investment directions
In this situation it is unclear whether deflation or inflation will be dominant – it is possible that there will be massive deflation in some areas (eg housing market) coupled with inflation in others (eg transport, food). In any case, these are my initial thoughts:

1. oil companies will make a lot of money; as their resource enjoys a relatively inelastic demand, especially as oil becomes scarcer, they will likely thrive in the initial stages (five to ten years) of the recession;
2. commodities, ie all those items which possess intrinsic value, will be ideal hedges against either inflation or deflation. Owning a home outright (ie no mortgage) will be a major determinant of financial health over the next ten years. Precious metals will also be prize investments, not least in the case of silver and platinum for their role in alternative energy systems;
3. some technological firms will be worth investing in: wind and solar, wind-up technology, probably coal also in the shorter term;
4. on the negative side, the housing market, especially new build, will contract hugely; retail will suffer terribly, the main supermarket chains may even fail; tourism and the airline industry will collapse;
5. in international terms, the US dollar is facing a ‘perfect storm’ in any case and will likely drop heavily in value, especially if oil sales become denominated in alternative currencies; consequently all US stocks are poor investments for non-US investors, at least until after the ‘correction’, by which time the opposite will probably apply, and they will be hugely cheaper;
6. alternatively, I see Japan – once the initial shock has passed – as being a better location for investment.

Clearly there are large uncertainties in the above. In particular it may well be the case that 2006 proceeds without interruption, and the ‘trigger’ event is deferred. However, I believe it inevitable that a trigger event will take place – perhaps many together in a short space of time – so these considerations are really directed towards those prepared to ‘buy and hold’, at least until some time has elapsed after the trigger event, and some of the dust has settled. I see no realistic alternative to a general economic contraction over the next ten to fifteen years. That does not, however, mean that all investment accounts have to contract. I do not believe that the economy as a whole will collapse – in that situation, the correct investment strategy would involve seeds and bullets rather than shares and bullion.

Prophecy and Peak Oil

Posted on by

One of the central strands of Christian thinking is that of the ‘Prophetic Imagination’ (see W Brueggemann, The Prophetic Imagination, Fortress Press 1978). The prophetic perspective centres on a distinction between the “Royal Consciousness” and the “alternative community”. Consider the experience of the Hebrew people in Egypt. The dominant classes established and promoted an ideology which allocated the Hebrews a particular role in that system – they were the slaves, and this denial of human freedom, this destruction of human nature, was a cause of tremendous pain and anguish – which the Lord hears. Brueggemann gives three elements of this Royal Consciousness, which he explicitly links to our modern life:

i) it is driven by an economics of affluence “in which we are so well off that pain is not noticed and we can eat our way around it” – we are fed sufficient soma to be tranquilised into acquiescence;
ii) the dominant politics are oppressive, “the cries of the marginal are not heard or are dismissed as the voices of kooks and traitors”; and
iii) the dominant religion is one of immanence – God made domestic and safe – “God is so present to us that his abrasiveness, his absence, his banishment are not noticed, and the problem is reduced to psychology”.

This is the situation in which Moses, the archetypal prophet, is called to serve the Hebrew people, and to lead them towards freedom in the promised land. This emphasis on freedom is crucial, as it is for a free life that the Hebrews have been released from Egypt. Brueggemann points out that at the centre of Moses’ ministry lies not a cry for social justice (criticism of the status quo – the ‘liberal’ idol) nor a reaffirmation of a familiar God (the idol of a comforting conservatism) but a radical call to become acquainted with the living God, who cannot be captured in our understandings but who is the only God who can set us free: “the point that prophetic imagination must ponder is that there is no freedom of God without the politics of justice and compassion, and there is no politics of justice and compassion without a religion of the freedom of God”.

Intimately woven in with this freedom of God is an acknowledgement of the pain of the oppressed, the pain which has been denied an outlet. Indeed, it is the explicit naming of this pain which generates the momentum for change, the avowal that something is wrong: “as long as the empire can keep the pretense alive that things are all right, there will be no real grieving and no serious criticism.”

So, rooted in this commitment of response to the living God, this acceptance of pain, the prophet Moses embarks upon the road of freedom, freedom for God’s people. This path begins with the imagination – setting the understanding of the people free so that they can discern that the Royal Consciousness, the status quo, is not permanent and given (is not God) and that it can be overthrown. Thus, as Brueggemann famously puts it, “The task of prophetic ministry is to nurture, nourish and evoke a consciousness and perception alternative to the consciousness and perception of the dominant culture”. This involves some element of prediction about the future, but those predictions have interest only in so far as they stand as criticisms over against the present; they do not stand independently of that context and are open to revision (eg Jonah’s message to Nineveh).

This alternative understanding first criticises the existing social arrangements, principally through attacking the ‘gods’ of the system, and then energises the alternative community through a promise of a different place, the promised land which is the living God’s intention for his people. In other words, through being rooted in a right understanding of God’s freedom, a new social community comes into being to properly reflect that sense.

It is in this context that the ten plagues must be understood, for the plagues represent the contest between the gods of the status quo, the gods of Egypt, and the living God working through Moses. To begin with, the powers that be are able to meet and match the actions which YHWH takes. Nothing changes and the power of Egypt remains intact – yet with the third plague the establishment fails: “The Gods of Egypt could not! The Scientists of the regime could not! The imperial religion was dead! The politics of oppression had failed! That is the ultimate criticism that the assured and alleged power of the dominant culture is now shown to be fraudulent.” The powers have been named, and in being named, they have been dethroned. Now that the dominant system has been unmasked as temporary, that its claims to divine eternity have been exposed, its foundations begin to crumble. “By the middle of the plague cycle Israel has disengaged from the empire, cries no more to it, expects nothing of it, acknowledges it in no way, knows it cannot keep its promises, and knows that nothing is either owed to it or expected of it. That is the ultimate criticism that leads to dismantling.”

Finally, once this has happened, the prophet comes into his own through the articulation of the new possibilities, which energises the new community. This is the exercise of the prophetic imagination – the conceiving of something new within the world. For it is this articulation that holds back despair as the old order breaks down. “It is the task of the prophet to bring to expression the new realities against the more visible ones of the old order. Energising is closely linked to hope. We are energised not by that which we already possess but by that which is promised and about to be given”. This articulation necessitates the development of new images and new metaphors with which to describe the Royal Consciousness, thus bringing it into open conflict with the claims of the living God. Ultimately, the alternative community is sustained by the highest form of language, doxology, the practice of its worship, for “Doxology is the ultimate challenge to the language of managed reality and it alone is the universe of discourse in which energy is possible.” Only worship sustains the hope which sustains the community, on its journey through the wilderness towards the promised land.

The analogies to our present situation, are, I trust, reasonably clear. We live within a Pharaonic system of oil based consumerism, and we are taught that it cannot be challenged, for to do so is to threaten the prosperity on which we all depend. It seems to me that the task of the Christian in this situation is to renew our prophetic imagination and to speak words of praise and hope which enable the development of a community which reflects the freedom of a loving God.

Specifically, I think we must:

i) identify the Royal Consciousness in all its aspects, not just Peak Oil, although that will inevitably be central;
ii) articulate the pain of the marginalised and oppressed who have no present voice or witness;
iii) challenge the claims to power made on behalf of the Royal Consciousness, with a view to demonstrating their emptiness;
iv) labour with confident expectation towards the dismantling of the present structures;
v) develop new communities which break away from obeisance to the Royal Consciousness, and which offer the opportunity of free life in the image of the free God;
vi) articulate a vision of hope, a promised land, on the other side of Peak Oil, which will sustain us through the transition period in the wilderness; and
vii) trust in God.

That is what I intend to spend the coming months working on.

Can you afford to keep warm in 2006?

Posted on by

Good article at the BBC: Can you afford to keep warm in 2006?

Even better article specifically on the Russia/Ukraine dispute here.

Jim Kunstler with characteristic acid describes the UK situation here: “England has managed to piss away all the former advantage of their North Sea oil bonanza and they now face a future of dependence on Russian gas plus the bankruptcy of their remaining industrial base.”

Indeed. Gloomy bugger.

RunningOnEmpty-Theology

Posted on by

I have found the Yahoo Group ‘RunningOnEmpty2’ rather useful over the last few weeks – seems to have an outstanding moderator in Robert Waldrop, whose motto I shamelessly cribbed for a recent post. But religion being the problematic topic that it is, there was a request for a separate Yahoo Group to look at religious aspects of Peak Oil. So I’ve set one up, described as follows:

“A group designed to look at theological aspects of Peak Oil, in particular insights that might be gleaned from the main Christian traditions.

Members should have a) some familiarity with what Peak Oil means, and b) some familiarity with the mainstream of Christian theological thinking. Devotees of fundamentalist ‘end-time’ theologies, eg the Left Behind series, are unlikely to find the discussion congenial.”

Described that way to try and inhibit the scary fringes of fundamentalism.

If you’re interested, click below to join, or sign up with your e-mail address on the sidebar of this blog.



Click here to join RunningOnEmpty-Theology
Click to join RunningOnEmpty-Theology

UK gas shortages

Posted on by

Excellent post of interest to UK residents at Vital Trivia here. The impact of North Sea gas supply dwindling will now start to be felt. Even if the author is wrong about this Friday, it’s only a matter of time, and given the Russian/Ukrainian dispute, the chances of the interconnector between Belgium and the UK working to ameliorate our position are pretty low.

Economics can’t trump the laws of thermodynamics

Posted on by

Or, in MoQ terms, the higher levels exist on the basis of the lower, and when the lower levels hit a boundary, so do the levels above.

The inorganic level is about physics and chemistry, geology – this is the realm of Peak Oil analysis.

The social level is the realm of human institutions – eg agricultural systems and most commercial activity.

The highest level would include the ‘laws’ of economics.

Now if Peak Oil establishes a boundary at the foundation, then it doesn’t matter what happens ‘in theory’ for the higher levels – they’re going to hit a wall.

A quote from M King Hubbert:

“The world’s present industrial civilization is handicapped by the coexistence of two universal, overlapping, and incompatible intellectual systems: the accumulated knowledge of the last four centuries of the properties and interrelationships of energy; and the associated monetary culture which has evolved from folkways of prehistoric origin”.

If you listen to the economists, there is no problem – an alternative to oil will be found once the price goes up.

The physicists and geologists say: there is no alternative.

Three men are shipwrecked and washed up on a desert island, a physicist, an engineer and an economist. Once they have dried out and come to their senses, rubbed the salty grime from their eyes and looked up at their surroundings, they see that there isn’t much on their island. Lots of rocks, the occasional palm tree, a passing bird, and – miracle of miracles – a crate of tinned food. But!.. no tin opener.

Each man comes up with a way of getting the food out of the tins, appropriate to their training.

The physicist says “I know from my study of the law of gravity that if I climb that tree and drop rocks onto the tin, that the force exerted will be sufficient to split the tins, and then we can eat the food.”

The engineer says, “No, no, I’ve got a much better idea. If we use the branches of the tree as a lever we can swing rocks against the tins, and that will make things much more accurate.”

Then the economist joins in: “Hold on a second. First, let’s assume that we have a tin opener…”

Innocence after Peak Oil

Posted on by

Some thoughts prompted by the readings today for the Feast of Holy Innocents (Mt 2 and 1 Cor 1)

A couple of years ago, Rowan Williams preached on these texts and made the point that sometimes our wisdom has perverse consequences – in this instance, the Three Wise Men have set off a chain of events leading to the slaughter of all the male infants in and around Bethlehem. For once, I’m not convinced that Rowan has the right interpretation, however right that specific point might otherwise be.

In Scripture, wisdom as such is not a problem – and for the three it is certainly not a problem as it is how they are enabled to follow God’s will – so long as it is made distinct from the wisdom of the world. This is what follows from Paul’s arguments in 1 Corinthians 1. God has taken what the world despises and used it to shame the the strong – the structures of what the world values have been overturned – and so the Christian follows the one executed in shame, for that symbolises the arrival of the Kingdom. Yet that Kingdom, whilst rejecting worldly wisdom, is itself the rule by Wisdom, Sophia, the one who plays at the feet of God when the world is created.

This is the Word through which all things are created, and as such the one whom we are to follow. Consequently, we are to be in this world as He was to the Father from the beginning – playing at his feet. Consider a child opening up carefully wrapped presents at Christmas time – no care for what is being torn – simply a joy in what is being discovered. This is how we are to be.

Yet how can we do that in the face of the reckless hate displayed by such as Herod? For his actions have hardly vanished from our world. We are still surrounded by tragedy – how can we retain our child-like joy when the child-like are abused all around us?

We are to be perfect as our father in heaven is perfect – which Christ teaches us in the context of saying that God sends rain upon the just and the unjust. In other words we are not to judge. We are to forgive our brother seven times seven times. We are not to be scandalised by the evil that we see – and it is only by avoiding scandal that we are enabled to retain our humanity. We are called to be wise as serpents and innocent as doves – in other words we are to look clearly at the nature of the world we live in, with all its horror and the slaughter of innocents – yet we are not to give in to a despair, a weary cynicism, a bitterness which poisons all life. We are to love the world as the Father loved it, and as his Son loved us.

For to let go of the innocence – to take offence at the evildoer, to not love them – this is the Sin against the Holy Spirit, this is the refusal of forgiveness which destroys human community.

The perspective which Peak Oil opens out for us offers a vision of tremendous human suffering – the consequences of accident and malice, human greed and need – and the pressure to lose our innocence, to give in to the fantasies of the ‘die-off’ crowd and prepare for the apocalypse with relish – it is in this situation that our innocence is most essential. It is the retention of our innocence – our refusal to be scandalised by human wickedness – this is the struggle for our faith in the coming years.

Heavenly Father,
whose children suffered at the hands of Herod,
though they had done no wrong:
by the suffering of your Son
and by the innocence of our lives
frustrate all evil designs
and establish your reign of justice and peace;
through Jesus Christ your Son our Lord.
Amen.
(the collect for the Feast of Holy Innocents)

Some grounds for post-Peak optimism

Posted on by

There are lots of depressing things to ponder. There are also some grounds for optimism about the long term future of our civilisation.

1. Food – you don’t need fertiliser to feed the present population (or something like it) – see the Cuba experience;
2. EROEI – we have established technologies that have significantly positive EROEI – notably wind and solar;
3. Waste – western society is profoundly wasteful, and there is a lot of fat that can be relatively painlessly trimmed away (have car pools for example; insulate our homes; switch lights off when we’re not in the room…);
4. Accumulated capital – the fossil fuels haven’t just been used for Christmas lights – we also have accumulated an awful lot of wealth (like electric trains, internet=telecommuting etc) and a lot of knowledge (like the importance of hygiene);
5. Finance and law – the doomer perspective that capitalism is a Ponzi scheme established by fiat money is profoundly mistaken;
6. State power – the UK has resources to significantly moderate the impact of an oil price shock, eg by lowering the very high taxes on petrol (which will minimise the immediate economic problem), and it is also financially solvent. There are also existing plans for rationing essential goods, and the experience of WW2 is a good folk memory for enabling that to happen effectively. Unfortunately these items don’t apply to the US;
7. War – the conflict over the resources will concentrate our minds very swiftly. It’ll be horrible, but working together – which the war will demand – will be the only way through. That will be a good thing;
8. God – come let us return to the Lord, for he has torn us and he will heal us.