Sunday, February 13, 2011

An Export Land Model Analysis for the USA-Part 4

In the fourth and final part of the series, I summarize the results of my analysis from the first three parts, explore the economic implications, consider the likely government response leading up to net zero exports and give you some advice on individual preparation.

I started this analysis because I wanted to examine how Brown and Faucher's seminal concept of the export land model pertains to US imports.  Brown and Faucher predicted a composite export decline rate be -6.2%/yr for Saudi Arabia, Russia, Norway, Iran and UAE.  However, only two of these countries are substantial suppliers of oil to the USA.  Brown and Faucher used a linearized version of the Hubbert equation, which has been criticized, to predict future production rates and, a Monte Carlo analysis to predict future consumption, which was not described in enough detail for me to verify or reproduce. 

Hey, {dancing with the stars/the big game} is coming on in
three minutes—so just give me the bottom line, and make it fast!

Summary of Parts 1, 2 and 3
I used a non-linear least squares analysis with the Hubbert equation, and a modified Hubbert equation, to analyze production and consumption rates for the US and its top ten export countries.  For the past 30 years, the sum of petroleum imports from the top ten, plus US production, is highly correlated with the US consumption rate.  I used this observation, plus predictions of future rates of the top ten's petroleum production, consumption and exports, to predict the US’s petroleum consumption rate over the next 20 years.  My best estimate is that US consumption rates will decline on average by -3 to -4%/yr until the earlier 2020s and then plateau or decline at a slower rate thereafter. 

More pessimistic assumptions about production, consumption and exports all suggest a steeper decline in the consumption rate of -4 to -5%/yr in the 2010s and beyond.  More optimistic assumptions suggest a shallower decline rate untill the mid-2020s and then a steeper decline rate thereafter. 

Only if I assume a very optimistic simultaneous set of circumstances, such as Saudi Arabia and several other of the top ten, all maintaining their current production for 20 years, and Iraq, within the next six years, producing more oil than Saudi Arabia, do I see another decade of an increasing rate of consumption, after which the consumption rate still declines anyway.

The key point here is declining consumption rates, sooner (within 10 years) or later (within 20-30 years), no matter which scenario is considered. 

My predicted mid-2020s plateau in the declining consumption rate turns into a shallow decline if I assume that the ex-exporting countries will get a “fungible proportion” of their oil imports from the remaining top ten, or, if I assume that the average ERoEI for the production rate reaches 2:1 by 2030. 

Considering declining export rates, a la the export land model, is a game changer compared to just focusing on oil production rates alone.  Considering a declining ERoEI, on top of declining export rates, plus fungible sharing of the remaining exportable oil between the top ten, would be a game ender.  

For instance, an ERoEI assumed to decline linearly from 20:1 to 2:1 from 2010 to 2030 would drive net exports to zero well before 2030 and would also cut into useful domestic production.   Under this assumption of declining ERoEI by 2030, the US’s consumption rate would only be about 14% of its 2009 value and the rate of decline up to that point is roughly linear at -4.2%/yr.  Assuming a global average ERoEI of 2:1 by 2030 might be extreme.  But, this does help to illustrate the point that if (or when) ERoEI decreases to the 2:1 to 3:1 range, oil exports would rapidly decline to zero.

Okay, okay, for those in a hurry, the bottom line—the implications of my analysis are that your standard of living is going steadily down over the next 20 years, probably by at least about 50%, and, there’s not a whole lot your government, or you, can do about it. 

Come back after your show is over, and I’ll explain my reasoning. 

The Tight Relationship between GDP, Standard of Living and Oil use
Once again, Charles Hall and colleagues should get credit for recognizing, over 25 years ago, the tight long-term relationship between economic growth and fuel use:

(full paper available at Energy and the US economy: a biophysical perspective)

Cleveland et al. were careful to point out that correlation doesn't prove causation, in one direction or the other.  However, as GNP and fuel use are so tightly correlated for such a long period, it is hard to imagine how a decline in fuel use would not be contemporaneous with a decline in GNP. 

In Cleveland et al., fossil fuels was just one of three energy parameters (electricity and nuclear were the other two) making up the term “fuel use.”  So, it is unclear to me from the paper how fossil fuel use alone correlated with GNP.

Fortunately, Adam Sieminski, chief energy economist for Deutsche Bank, has recently pointed out a nearly one-to-one relationship between the percent change in global oil consumption and the percent change in global GDP:

(full presentation at: Energy and the Economy. US EIA & JHU SAIS 2010 Energy Conference April 6, 2010)

Robert Hirsh also arrived at this same approximate one-to-one relationship when considering the percentage declines in the USA’s GDP and in the oil supply during the two oil shocks of the 1970s:

(full presentation available at: How Oil Will Invigorate Coal)

A common method to quantify and compare the standard of living between different countries is to calculate GDP per capita (see e.g., Standard of living).  Another graph from Sieminski’s presentation shows how oil consumption per capita linearly correlates with GDP per capita from several countries: 
The Economic Implications of Declining Petroleum Consumption in the USA
Based on these reports, I assume that if US petroleum consumption rates go down, due to declining imports, then US GDP will go down, more or less contemporaneously.  And, to the extent that GDP per capita is a measure of standard of living, the standard of living will go down proportionally and contemporaneously with a decline in consumption rate per capita. 

Perhaps these assumptions will fly in the face of some pundits who try to analyze and predict economic trends without regard to the energy supply—kind of like Dogbert assuming that there is a limitless fungible pool of oil to tap, if only the consumptive demand is there.  I don’t believe that this type of compartmental thinking in very effective if you want to understand long term economic trends in a world of finite oil.  I admit my bias here: real economic growth (i.e., not some bs financial bubble) is driven by cheap sources of energy, and for the last century, the primary cheap energy source has been oil. 

The work of Hall, Sieminski and Hirsh all suggest that in the past, changes in the economy and changes in energy consumption, specifically petroleum consumption, are so highly interlinked that there can’t be too much of a hysteresis between the two for too long.  Certainly, there can be some hysteresis, and that is the place where short-term investors and speculators can try and eke out a profit margin.  But over a longer term (maybe several months or a few years, but not decades), relative changes in petroleum consumption and GDP will normalize.  I view all of the machinations and fluctuations in financial markets over the past few years as reflecting an ongoing normalization in the face of a static or declining cheap petroleum supply. 

Therefore, if my estimate is correct that petroleum consumption rates will decline by -3 to -4%/yr until the earlier 2020s and plateau or decline at a slower rate thereafter, then GDP should change by about the same relative amount over this period. 

What about standard of living? 
As shown above in Sieminski’s slide 7, oil consumption per capita is linearly related to GDP per capita for a broad range of countries.  Based on this, I hypothesize that my best estimate of declining consumption rate per capita will be representative of the decline in the standard of living going forward.  Therefore, my estimated changes in petroleum consumption rate, expressed per capita, should reflect how the standard of living will change.  

Figure 16 recasts the same data from earlier parts of this series: reported USA consumption rates, and my best estimate of future consumption rates, in terms of per capita consumption:

The petroleum consumption rate per capita in the figure is expressed in units of barrels per year-person (bs/yr•p). The pre-1949 data added to this plot is from appendix E of the AER 2009 (after converting quadrillion btu units to bbs/yr and assuming 0.173 bbs/qd btu see EIA Energy Calculator).  I got the historic US population data from the US census bureau.  I assumed that the US population would continue its long term growth trend of about 1% per year (I calculated an average annual percentage change of 1±0.5 over the last 30 years).   Also shown for comparison, are consumption rates per capita for selected countries, as reported in the Wikipedia article, Petroleum.

I find it interesting that the peak in the USA’s petroleum consumption rate per capita (31 bs/yr•p) occurred 23 years ago, in 1978.  After a sharp decline in the early 1980s, a massive increase in oil imports from 1982 to 2007 managed to keep the per capita consumption rate fairly constant at about 25 bs/yr•p.  In effect, the imports covered the decline in the domestic production rate, plus the population increase (231 million in 1982 to 307 million in 2009) to provide 25 years of stable consumption per capita.

My assumption, that the US population will continue to increase at 1%, might not seem like much.  However, in 20 years, this will take the US population up to about 378 million—a 23% increase above 2009 levels.   Population growth is yet another exponentially increasing factor that causes the consumption rate, when expressed per capita, to decline at a slightly steeper rate than I summarized above. 

My best estimate of the consumption rate per capita predicts a -38% decline by 2020, compared to 2009 levels.  I assume that this will correspond to a -38% decrease in standard of living.  A consumption rate per capita of 14 bs/yr•p in 2020 would put the US at about the same level it was at in 1949, or, about the level of Japan in 2008.   By 2030, the consumption rate per capita has further declined -51% compared to 2009 levels.   That is about the same consumption rate per capita as the USA in the early 1940s, or, France and Germany in 2008.  These percentage levels of declining consumption over 20 years would not be the “end of the world”—but it would take a good deal of adjustments in the American lifestyle. 

If I also assume a proportional sharing of the remaining exportable oil (fungibility) then my best estimate of the per capita consumption rate predicts a -45% decrease by 2020—that’s down to European  consumption levels, circa 2008, in ten years instead of twenty years.  By 2030, consumption per capita is down by -66% —roughly the same as the USA in the 1930s, or, Russia in 2008.

If I further add my declining ERoEI assumption, then the decline in the per capita consumption rate by 2020 is -54%.  This would be the same rate the USA had in 1940, or, in the UK had in 2008.  By 2030, however, the per capita consumption rate would have further declined by -89% compared to 2009 levels.  That's about the same as the USA’s per capita consumption rate in 1915, or, China’s in 2008.  This would be a major adjustment in standard of living—although still not impossible.

In my opinion, an -89% decline in the per capita consumption rate to 2.5 bs/yr•p would likely mean a substantial de-urbanization of the American population.  How much?  Well, as a guide, between 1910 and 1920, the percentage of Americans living in rural versus urban communities was about 50:50 (see Selected Historical Decennial Census Population and Housing Counts; Urban and Rural Populations).  This is about the same as the number of Chinese living in rural versus urban communities today (53:47 Rural:Urban; Urbanization in the People's Republic of China). 

Oh yes, don’t for a minute think that I am saying that I expect the European countries, Japan, South Korea, or even China to stay at their 2008 levels of consumption rate per capita, or, standard of living.  To the extent that these countries depend on foreign petroleum imports, their GDP and standard of living will also proportionally decline if the imports decline. 

I predict that the standard of living decline would be worst for countries like Japan and South Korea who are heavily dependent on imports and have no domestic production to speak of.  For instance, in 2009, Japan imported 4.3 mbd of the 4.4 mbd of the petroleum it consumed (Energy Profile Japan), and 80 percent of those imports came from the Middle East (Country Analysis Brief Japan).  In 2009, South Korea imported all of the 2.1 mbd of petroleum that it consumed (Energy Profile South Korea), 75 % of which came from the Middle East (Country Analysis Brief, South Korea).  I predict that Japan’s and Korea’s economies will be devastated when global net exports hit zero because their relative decline in the petroleum consumption rate will be even greater than the USA’s, which will still at least have some domestic petroleum production. 

It is difficult to judge what effects a global decline in the standard of living among the net importing countries will have on the exporting countries, and in particular, on their petroleum export rates.  On one hand, these countries, seeing the predicament ahead, may want to cut exports in order to conserve their oil for themselves.  On the other hand, and more likely in my opinion, the exporters will still need to export oil in order to earn income to import other things, like food, even if this means that their own domestic consumption rate has to be decreased.  This is an excellent formula for civil unrest and regime change in my opinion.

... a problem calls for a solution; the only question is whether a solution can be found and made to work and once this is done, the problem is solved. A predicament by contrast, has no solution. Faced with a predicament, people come up with responses; Those responses may succeed, they may fail or they may fall somewhere in between, but none of them “solves” the predicament, in the sense that none of them makes it go away.

For human beings, at least, the archetypal predicament is the imminence of death. Facing it, we come up with responses that range from evasion and denial to some of the greatest creations of the human mind. Since it’s a predicament not a problem, the responses don’t make it go away; they don’t “solve” it, they simply deal with the reality of it.  
The Long Descent: A User's Guide to the End of the Industrial Age, 2008 John Michael Greer, p. 22 see also Problems and Predicaments, The Archdruid Report, August 31, 2006

What will we do?
If by “we,” you mean the government, or, the US population in general—I expect that nothing useful will be done until there are multiple repeated system failures in society and the predicament becomes obvious to the majority of the population.  Politicians will not react until their constituents demand action.  And the constituents do not want to hear about this—not yet anyway.   Think about it: is there 1 person in a 100, or a 1000, in your neighborhood that is aware of peak oil, let alone peak exports?  And even if they are aware, how many of those believe that this is simply a conspiracy of big government, big oil, or, some other all powerful group?

If you are in the “conspiracy group,” I can’t blame you—I really can’t.  There are many problems that government’s hide or soft peddle, and of course, corporations exist to make a profit for their shareholders (and for the executives too, of course).  There is much to be skeptical about when it comes to politics and big business.  I even hope that you are right, because a conspiracy among human beings is much easier to overcome than a physical reality of declining oil production and exports.  In my opinion, however, by choosing to reject the possible realities of peak oil production and exports,going to zero even faster, as explained in this series, you are not making a good life strategy.  Good luck, though.

There is plenty of evidence to indicate that US government officials, at very high levels, are aware of peak oil and looming export declines.  I presented some examples of this evidence in the context of an article I wrote discussing a Robert Hirsch interview.  Hirsch, by the way, was lead author of the “Hirsch report,” Peaking of World Oil Production: Impacts, Mitigation, and Risk Management, which was commissioned by the US Department of Energy, and published in 2005. 

But, here are a few more “Presidential” examples:

To the best of my knowledge I never had a security briefing which said what some of these very serious but conservative petroleum geologists say, which is they think that either now or before the decade is out that we'll reach peak oil production globally and with the rise of China and India and others coming along unless we can dramatically reduce our oil usage we will run out of recoverable oil within 35 to 50 years.

Keeping America competitive requires affordable energy. And here we have a serious problem: America is addicted to oil, which is often imported from unstable parts of the world. The best way to break this addiction is through technology. Since 2001, we have spent nearly $10 billion to develop cleaner, cheaper and more reliable alternative energy sources. And we are on the threshold of incredible advances. So tonight I announce the Advanced Energy Initiative -- a 22 percent increase in clean-energy research at the Department of Energy to push for breakthroughs in two vital areas. To change how we power our homes and offices, we will invest more in zero-emission coal-fired plants; revolutionary solar and wind technologies; and clean, safe nuclear energy.

After all, oil is a finite resource. We consume more than 20 per cent of the world's oil, but have less than 2 per cent of the world's oil reserves. And that's part of the reason oil companies are drilling a mile beneath the surface of the ocean because we're running out of places to drill on land and in shallow water.

For decades, we have known the days of cheap and easily accessible oil were numbered. For decades, we have talked and talked about the need to end America's century-long addiction to fossil fuels. And for decades, we have failed to act with the sense of urgency that this challenge requires. Time and again, the path forward has been blocked not only by oil industry lobbyists, but also by a lack of political courage and candor.

Well, of course Clinton was very busy with other important matters, so he might have missed such a briefing—but even if President Clinton didn’t know it when he was office, then he sure did at the time of this 2006 interview.  Bush and Obama didn’t lose their briefs—so at least the last two administrations are well aware of the predicament ahead, even if they do not understand the full implications.

So why don’t we hear more about this in the main-stream media, and, at least in the USA, why is this fringe news?  Why does it take someone with a pot of coffee, publically available data, and EXCEL SOLVER to do the export land model analysis and show you the nitty-gritty details of the predicament that the USA and many other countries are in?

I my opinion, the present (and past) administrations simply will not voluntarily be the harbingers of such “bad news.”  If peak oil and declining imports were publically accepted as a fact by the government, and they announced tomorrow, tough austerity measures in an attempt to mitigate its effects, this would panic the general population, cause financial markets to crash, and, the generate the wrath of the voting public in the next election.  As Hirsch pointed out, in a recent interview with Jim Puplava on FSN (starting at 21 min), the government organization or person who stands up and announces the problem is going to initiate the chaos that is associated with the public realization of the problem.  Who wants to cause that chaos?

If you want to call that a “conspiracy,” then I agree—but it’s a conspiracy of fear and silence.

Drill baby drill is too little too late.
Even if the government could find the political mandate and unity of opinion to promote a ramp up of domestic production, I do not believe that substantial new production would come online soon enough, and in large enough quantities, to mitigate collapsing imports in the 2010s.  Here are two examples of why I believe this:

Example 1: Frackin the Bakken?

The Bakken and the Eagle Ford are each expected to ultimately produce 4 billion barrels of oil. That would make them the fifth- and sixth-biggest oil fields ever discovered in the United States. The top four are Prudhoe Bay in Alaska, Spraberry Trend in West Texas, the East Texas Oilfield and the Kuparuk Field in Alaska.
...
Within five years, analysts and executives predict, the newly unlocked fields are expected to produce 1 million to 2 million barrels of oil per day, enough to boost U.S. production 20 percent to 40 percent. The U.S. Energy Information Administration estimates production will grow a more modest 500,000 barrels per day.

Okay, a production rate of 0.5 mbd, or about 0.18 bbs/yr, would only offset the -0.2 bbs/yr domestic production rate decline that I am predicting by 2015 (see Figure 2 here).  On the other hand, 2 mbd  (0.73 bbs/yr), after mitigating the expected domestic production decline, would add an additional 0.5 bbs/yr to production.  That would pretty well cover the end of net exports from Mexico by 2015 (see Figure 4 here), which would be significant. It still doesn't mitigate the overall decline in exports, however.

Also, I have three issues with this scenario.  First, at a production rate of 0.73 bbs/yr and an ultimate recoverable reserve of only 4 bbs, we would only get about 5.5 years of production—so this would be a short lasting effect.  Of course, these effects would drag out over a longer period if we assume that the production rate follows a typical Hubbert curve—but that would also mean lower production rates than 0.73 bbs/yr on either side of the peak in production.

Second, the ERoEI of the oil extracted from Bakken Shale and Eagle Ford is likely a lot lower than tradition oil reserves (less than 2:1 according to Cleveland, in Oil Shale's Energy Return on Energy Investment or An Assessment of the Energy Return on Investment (EROI) of Oil Shale). 

Third, there is the real threat of ground water pollution with the waste products of the hydro-fracturing process.  If nothing else, EPA compliance will create delays and increase the costs (the “energy in”) of the production process.

Example 2: Drilling off the coast of California?

The federal government estimates the nation's outer continental shelf might hold 85.9 billion barrels of crude, including 10.13 billion barrels off California. For comparison, the United States consumes about 7.56 billion barrels of oil per year. The nation's sea floor also could hold 419.9 trillion cubic feet of natural gas, equal to U.S. consumption for 14 1/2 years. But the federal estimates are just that - estimates.

"You don't really know what's there until you go out and drill a well," said Ken Medlock, an energy research fellow at Rice University's James A. Baker III Institute for Public Policy. "And even then, you're not 100 percent sure of what you're going to get."

In addition, offshore oil exploration is slow and costly.

If the federal government opened California's coast to drilling tomorrow, the first exploratory wells probably wouldn't be drilled for at least six years, Medlock said. Bringing newly discovered oil fields into full production would take longer.

That means any new oil wouldn't arrive on the market until midway through the next decade, at the earliest. The process is slow enough that the Energy Information Administration, the statistics branch of the U.S. Department of Energy, estimated last year that opening the coasts to offshore drilling would have no significant impact on oil prices before 2030

California has about 23 percent of the country's estimated offshore reserves, with 10.13 billion barrels in federal waters that begin 3 miles off the state's coast. An additional 1 billion barrels may lie closer to shore, in waters controlled by the state government.

California witnessed the world's first offshore oil well, drilled in 1897 at the end of a pier near Summerland (Santa Barbara County). But a 1969 accident at a well farther west in the Santa Barbara Channel, which spewed crude oil into the water and coated beaches, turned public opinion against offshore drilling.

In theory, the estimated 10-11 bbs of oil off the coast of California would help mitigate the coming import shortfall in the 2010s—although this would only provide less than 2 years worth of the USA’s present total consumption rate.  And look at the time scale mentioned in the article.  Six years for the first exploratory wells, and even longer before full production.  This means that the US will be well into its economic decline before serious production could start.  By the mid 2010s, where will the investments come from to further develop the fields?  The lack of financing would probably delay these projects even farther.   

My hunch is that about the same kind of scenario would apply to any new oil production in the Gulf of Mexico or ANWR in Alaska. 

On the bright side, these sources of oil might help sustain a basal level of oil production in the USA through the 2030s and 2040s when there will be little to no imports and conventional domestic production is in decline.  I have little doubt that all of these sources will be taped eventualy, but not enough in the next ten years.

What should I do?
Several months ago, I wrote a series of articles pondering the prospects of transport fuel rationing in the USA, based on a hypothetical scenario where there was a sudden 35% drop in imports to the USA, e.g., due to disruptions in the Middle East. 

When I wrote Transport Fuel Rationing in the USA the going concern then was the possibility of war with Iran.  Currently, it is the civil unrest and regime change in Tunisia and Egypt that causes fears of a disruption in the transport of oil by tankers through one of many transportation choke points in the Middle East, or, though damaged export pipelines.  Perhaps in the coming months or years it will be civil unrest and regime change in Algeria, Saudi Arabia or other countries in the Middle East.  I expect that this will be one of the societal “system failures” that will eventually wakes up the American public.  Another likely “system failure” will be the federal, state and local government’s declining ability to respond to any number of natural disasters (hurricanes, fires, snow storms, etc...) that will disrupt fuel supplies, and, which are bound to occur and reoccur over the next 20 years.  This all translates into a lower standard of living, on average.

The imminent death of exportable oil, like death, is a reality that nations and individuals will simply have to deal with. Similar to peak oil, declining exportable oil is a predicament, not a problem that can be solved.  Moreover, net exports will hit zero long before production does, so if you are concerned about peak oil, then net zero exports should concern you even more.   Don’t expect much help or understanding from the government or your neighbors in the mean time.  Just get on with preparing the best you can, as soon as you can, with the resources that you have.

The suggestions I gave in the final part of Transport Fuel Rationing in the USA and here, were intended to help you prepare for a sudden disruption in the availability of oil.  These same measures, however, should put you in good stead to tolerate a steady decline stretched out over several years, with intermittent “system failures” along the way. 

A standard of living that is about the same as your grandparents or great grandparents is not the end of the world, but it will be a hard transition to make over a 20 year period.

Take advantage of the time that you have now to prepare the best you can.  


--In this series I considered the sum of exports from the USA’s top ten suppliers, which accounts for 57% of the global pool of petroleum exports.  In a future series, I plan to explore all regional sectors of production and consumption with the goal of quantifying the entire global pool of exports and to better predict its change over time.  I hope that you will join me then.--    

7 comments:

  1. Very nice work, it all makes sense. I like the way you didn't just pick one scenario, but presented them all and gave the reader the results of each what-if situation.

    One suggestion for mitigation; for those not in the arctic circle, consider buying a 110 cc scooter for your "rationing" scenario. Asian countries like Vietnam and Thailand use 110 cc scooters as primary transportation for entire families (I've personally seen five people on a scooter - 3 kids, mom & dad), as well as light duty cargo transporters, and short-range taxis. If your in-town miles could be traveled on a scooter, your range in a rationing scenario would probably quadruple. I wouldn't want to travel during ice or snow, but most everything else is doable. Buy good rain gear.

    As an example of technology, one new bike - the honda twister 110 cc - is rated at 160 mpg, and sells for $900. Most motorcycle taxis in thailand are 110 cc, and they seem to have enough power for 2.

    For a single-person commute, it just makes sense, as long as they aren't freeway miles. And I dare say, if the other option is simply not being able to get to all the places you need to go, the scooter will look pretty darned good by comparison.

    Honestly, based on my experience in asia, this is how the US will likely handle the trip downhill. The scooter has a low cap cost, a low mileage cost, and it requires absolutely no new technology to get 100+ MPG. Its all very doable.

    Probably best to buy your scooter now, and beat the rush. :)

    ReplyDelete
  2. Anonymous: Americans transitioning from SUVs to 110 cc Honda twisters is a nice example of adapting to a lower standard of living at a level commensurate with Thailand, which I estimate has a per capita petroleum consumption rate equal to 5 bs/yr•p and a GDP per capita of $4k/p (2009 data). Thanks

    ReplyDelete
  3. I guess my central point is, even US society can rapidly adapt to a substantially lower level of production without any magical new technology, at a low cap cost, without any loss of mobility - or even any loss of "GDP" (in terms of "stuff"). I guess I'm taking your point further that there is a LOT of slop in the transportation system. Not 20% slop, maybe more like 70-80%.

    It will look a little odd to have the freeways full of scooters, but our ways of doing business will simply have to change to cope. And it reinforces your point that preparing ahead of time for this future will likely save you some angst and dislocation.

    Good news is, this should kick the "Mad Max" scenario down the road 20 years buying us time to implement Hirsch report mitigation recommendations.

    ReplyDelete
  4. I have being saying this for years. It’s quite obvious when you compare Iranian immigrants who are middle aged or above.

    ReplyDelete
  5. "there is a LOT of slop in the transportation system"

    I agree with this. But the way I think about it is that the coping mechanisms (driving less, fewer and smaller cars, scooters, bikes, trains etc...) will translate into a lower GDP/person, or, lower standard of living. Lower standard of living, as I've defined here, for quantitative purposes, does not have to mean lower quality of life. But it will feel like that to many people who are caught off guard. Humans are very adaptable though, and what seems like a hardship now will eventually seem like normal in a decade.

    "this should kick the "Mad Max" scenario down the road 20 years"

    I doubt that we will ever see "Mad Max" on a global permanent basis, but we might have isolated pockets of it (I called it "system failures") for periods of time over the next twenty year. There are some pockets of the world that approach Mad Max now, but it eventually normalizes, sometimes with external intervention, sometimes internally. With less resources available going forward, I expect that there will be less external intervention, and that, in turn, could result in deeper and prolonged pockets of instability.

    ReplyDelete
  6. Great article and comments, thanks!
    FWIW: a bit of quotation and discussion
    of your piece is here:
    http://www.hubberts-arms.org/index.php/topic,6401.135.html

    ReplyDelete
  7. It’s arduous to seek out knowledgeable people on this matter, but you sound like you already know what you’re talking about! Thanks
    motorcycle parts in California

    ReplyDelete

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