Pike River

Well, here goes.

A tragedy?  Yes. And, as so often, ordinary folk shoulder the tragedy, while the boardroomers carry on.

This is indicative of more than that, though. And no inquiry will have the terms of reference needed. Even if one did, nothing would be learned from it. I learned that lesson from Aramoana, 20 years ago. “you have no standing’, said the Police Complaints Authority. (that’s the County Councillor for the area for the prior three years, one who was a friend of the Holdens, and had just driven away from the village hours earlier…..)

Nor can it be proved, that which I think this tragedy indicates. There have always be coal-mine explosions, and there have always been oil-rig accidents. What there WILL be, from here on, is more of them per kilojoule of energy delivered. We have simply cherry-picked the best, shallowest, most pressurized, easiest-accessed sources first (human nature – read: greed – being what it is).

Which leaves the progressively deeper, harder to access, less pressurized, etc, to go after. Not only that, but a society which was built to run on a full supply of the easy stuff as if it were business as usual, will be under stress as it attempts to keep going in a reducing regime. More corners will be cut, risks taken, dollars offered.

On average.

The BP explosion in the Gulf of Mexico, and Pike River, are to me, the same thing.

I know what the mining lobby will attempt to spin – that open-cast is safer, and that it should be the norm everywhere. That won’t run in Schedule 4, but it may be a persuading argument with other areas.

There are the other ironies, too. The methane, for instance, and its eventual destination. The award given to the locomotive drivers, who found a more efficient (carbon-saving) way of dragging the coal over the Alps, so it could be delivered by ship, to be burnt overseas……..

So yes, this is a tragedy. To the lost people, and those around them. But it’s also indicative of the greater tragedy playing out as we speak. That one won’t get an inquiry.

You can bet on it.


rainy day thoughts – and cognitive dissonance

It’s raining gently on the trees, the veggies, and the chooks. The goat is peering out from his shed, the border collie is curled up wasting the morning. I’ve got a tandem bike to finish assembling, an article to write, and some wiring I’d like to do if it stops raining.

It’s interesting to note two types of reaction to the IEA’s “world Energy Outlook 2010′. In the one corner, folk like me look on in incredulity. As Stuart Staniford (Early Warning blog) says, google-search the 2005 IEA report for Peak Oil, and you get ‘doomsayers’. Google 2007/8/9, not a mention.

But then – drumroll – 2010 has Peak Oil in 2006, in the rearview mirror!

Prof Kenneth Deffeyes had it pretty right, writing in 1998 – he predicted it for Thanksgiving Day (Nov 22) 2005, give or take 3 months. There goes an impressive and brave man.

Luckily, that was what I put my time-line against, when moving from the old house onto the forest block. Luckily, I realised enough to understand that the ‘property boom’ was unsustainable – even to work out that it was in overshoot, and to track the overshoot.

Three years ago, I walked into Dene McKenzie’s ‘office’ in the ODT, and gave him the Deffeyes book, which I’d gotten out of the Library specially for him. Mine being out on (permanent?) loan. I said “this is the end of growth”.

So far, after some ‘chivvying’, we’ve had one article about the IEA outlook, not from McKenzie, but his offsider Simon Hartley. Both, I believe, are ‘growth/free-market-can-do-no-wrong believers (and I use the word ‘believers’ carefully – it requires a faith, does an artificial construct) so it will be interesting to see if anything goes any further.

I suspect some more prodding will be needed.

On the good side, we have a Peak Oil aware Mayor, and I suspect, a majority of Council – not that reporter David Loughrey will tell us so (or is there a gatekeeper? Senior reporter?). They understand the danger of debt, and so will probably do as well as anyone could, if all they do is address it.

Although a cycle-way through the Cavvy tunnel would be cool.

I notice on Interest.co.nz, that the bulk of commenters are ‘getting Peak Oil’, as is Bernard Hickey. I started commenting there a while back, because I reckoned he was the most likely to ‘get it’ first, of all the fiscal types, and therefore the best place to nudge.

It’s been fun, but I do find that ducking back in to see what has been said, and answer it, takes me from real work in the garden or the trees. Maybe I need a Blackberry (heaven knows I’ve got enough) and satellite link.

Or maybe the world has to change and I can retire like Scott McKenzie.


I just looked him up – looks like he didn’t retire, but then, I guess none of us really do!

this does it well too…..

The Status Quo’s Fundamental Paradigms Are Broken
(November 15, 2010)

The paradigms which undergird the global status quo are broken; doing more of the same (the current strategy) will not fix them. Reading the Mainstream Media, you almost forget that the Status Quo’s fundamental paradigms are completely broken. The Status Quo’s essential paradigms are as follows:

1. “Growth” is the essential lifeblood of the global economy.

2. “Growth” means higher GDP and economic activity. Thus new luxury condos and Starbucks cafes on the coast of Peru boost Peru’s GDP, and thus Peru is experiencing “growth” which is not just intrinsically “good” but essential.

3. “Growth” requires consuming more resources.

4. There will always be more resources into the foreseeable future. For instance, here is the Status Quo’s depiction of fossil fuels supplies:

5. The transition from fossil fuels to alternatives will be slow and seamless because there is still plenty of cheap oil and gas.

6. The dominant paradigms of the global economy are the State Corporation (China) and the Corporate State (U.S.A.). Both are permanent because they are highly efficient.

7. Restrictions on trade and capital flows are “bad.” They cause depressions.

8. The nation-state is a durable social structure which will never be seriously threatened with dissolution.

9. As long as the global “pie” of wealth keeps expanding, everyone can grow wealthier together.

10. Low interest rates and expansion of money supply and credit are the three essential financial fuels for “growth.”

I think a strong case can be made that each of these paradigms is either already broken or in danger of breaking. Studies have shown that when presented with factual evidence that their core beliefs are wrong, humans respond by clinging even more tightly to their fallacious beliefs.

I think that is precisely the reaction of the global Status Quo.

Here is a typical presentation of the Status Quo’s faith in the “China Story” that China’s growth can and will continue unimpeded for decades to come:

The Game Changer (China).

Elizabeth C. Economy is a well-informed, insightful analyst. Yet she presumes that China can grow like a tree to the sky and that its consumption of oil and other resources can likewise double every few years forever.

There is not one word in this long essay which even hints at the possibility that constraints in the real world might hinder China’s vast ambitions and appetites for “the good life” of middle-class consumption for its 1.2 billion citizens.

Though China runs a good PR game about building a “green economy,” we should note that its energy consumption equaled the U.S. this year and its production of vehicles far surpassed the U.S. this year.

Like every other industrialized nation, China’s alternative energy sector supplies at best a sliver of the nation’s energy. This is a global chart from the IEA which includes nations like Brazil which have vast biofuel industries using sugar cane.

While subsidizing state-owned plants to manufacture solar panels is certainly a forward-thinking strategy, in the meantime building tens of millions of vehicles every year which require gasoline is pursuing an entirely different set of “growth” and dependency priorities.

Even in the U.S., electricity consumption has risen 25% since 1990, outstripping population growth.

Let’s look at some facts before we buy into the paradigm that China (or any other nation) can grow to the sky.

I was accused of saber-rattling after I pointed out in The Great Game: Geopolitics and Oil (October 19, 2010) that the U.S. has a “hard power” presence in the heart of the Mideast while China has a presence in Sudan and other African nations. Let’s look at which presence controls more oil:

Now let’s look at the reality rather than the fantasy of future oil production:

That sets up an inevitable grab for the resources needed for “growth.” The timeframes on this chart are of course approximations; no one knows exactly when oil demand will rise above maximum oil production, but the status quo paradigm that China can double its consumption of oil every few years is clearly wrong.

China is culturally predisposed to feeling that the last few hundred years of weakness was an anomaly and that China is once again the center of the world. (The Chinese character for “center” has been read as “middle,” i.e. the Middle Kingdom, but this misses the crucial self-awareness of China as the center of the world).

The future course of China’s rising confidence in its heft can be seen everywhere: in its hardening claims for islands in the South China Sea, in its plans to divert rivers originating on the Tibetan plain away from other nations to benefit its own consumption, and in its recent export restrictions of rare industrial metals.

Anyone believing China will remain content with making solar panels while its supplies of essential resources dwindle is misreading China’s larger plans.

Another paradigm which is already broken is the trade-capital flow fantasy of mercantilist nations funding consumer nation’s consumption. China’s dissatisfaction with the end-game of this dynamic is already apparent, and a similar breakdown is occurring in Europe as the mercantilist machine that is Germany must bail out one consumer nation after another.

That dynamic is already doomed, and incantations to the contrary are simply beliefs which are unsupported by fact.

The other core paradigm of the Status Quo is a massive Central State–what I call The Savior State in the Survival+ critique.

In the U.S., personal income is around $9 trillion, and the Federal budget is around $3.6 trillion and state/local governments and agencies consume about $1.5 trillion. So government is about 36% of the nation’s GDP.

Recently, the Federal government has been borrowing $1.5 trillion a year to maintain the status quo (representing about 11% of GDP). While the Status Quo presents a happy PR picture of an economy rebuilding its decaying infrastructure, the reality is the Federal borrowing is merely propping up personal income. “Transfers” are funds delivered by the government to individuals:

Lastly, the entire fantasy that exponentially rising debt/credit can fuel an asset bubble that then fuels a “virtuous cycle” of rising net worth and more borrowing and spending is also irrevocably broken. Let’s start with the trajectory of mortgage delinquencies:

Any questions about the trend here?

As asset bubbles pop, the “wealth effect” reverses:

No matter how much uncollectible debt is written down, assets are falling faster: the debtor, the bank and the debtor nation all lose “The Red Queen’s Race”:

Ultimately, the implosion of the Savior State’s finances mean the paradigm of a vast Central State is also threatened. We can understand this another way by considering the Central State as an energy consumer. As long as the Central State provides more benefits that it consumes, then the organism it lives off of (the economy) will support it.

But when the benefits dwindle and the carrying costs of the Central State continue rising, than at some point the economy can long longer support the consumption costs of the Central State.

At that point the Central State collapses or shrinks down to a sustainable size.

Anyone who believes the Savior State will endure without any adjustment in the coming decade is simply ignoring the facts and hardening their faulty beliefs. That refusal to learn from facts is not a successful survival strategy.

I don’t have “all the answers” or a crystal ball, but it seems clear that “more of the same” is not a sustainable option. New applications of technology and new social/economic models (both localized and international) will have to be developed, tested and adapted which require less energy and resources.

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todays read


Here’s a wee snippet from the ‘comments’………..enjoy.


jeppen on November 15, 2010 – 2:18pm Permalink | Subthread | Parent | Parent subthread | Comments top

What’s not to like?

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[-] ozzy43 on November 15, 2010 – 2:45pm Permalink | Subthread | Parent | Parent subthread | Comments top

The things that go hand in hand with BAU? Off the top of my head, climate change, species and ecosystem loss, desertification, oceanic dead zones and acidification, fisheries collapse, topsoil loss, aquifer depletion, and the increasing toxicity of our environment, for starters?

Lots not to like in this partial list, methinks. And that’s only the environmental piece of it – plenty more not to like on the societal front.

my latest op/ed



IEA – as good a comment as any (from the oil drum)

This person is quite right – the graph is a disingenuous nonsense, and NZ (along with 27 other countries) uses it to plan ahead from.
HAcland on November 11, 2010 – 10:58am Permalink | Subthread | Comments top

The most glaring omission in the WEO report is where they expect to find all that lovely crude which has yet to be found, but that is absolutely central to their thesis. That is the light blue chunk of the above chart. Frankly, it is laughable. Anything else wrong with the report must take a backseat in terms of importance.

Just eyeballing it reveals that the world needs to find – and bring online – at least 10M bbl of new crude production in just 4 years!! That is FIND it first, then develop it and get it to market.

Time to wake up and smell the Peak Oil coffee. The debate is over. And this is from the most ‘bullish’, ‘cornucopian’ institution going.

todays read – from The Energy Bulletin


An excerpt:

In forecasting the timing, therefore, the operative question is, How likely is it that the economy will stay healthy? And the answer is, Not very. This is because fuel prices and the economy have become deeply interdependent. Just as a bad economy causes fuel prices to fall (as we saw in 2008), so high fuel prices cause the economy to fall. An often cited threshold is $85 per barrel, above which the price of fuel has a damaging effect on the economy. Our current economic downturn was about bad credit and a real estate bubble, but some analysts suspect that the first card to be pulled out of the house of cards was the spike in oil prices that briefly drove crude to $145 a barrel.

Instead of the steady decline shown in the EIA graph, we may see a period of boom-and-bust cycles where a rising economy causes a rise in fuel prices followed by an economic downturn and falling fuel prices. If this happens, the point at which global demand permanently exceeds global supply may, contrary to all the estimates quoted above, be pushed clear into the next decade. But this does not affect the basic finding that, as a society, we will soon use much less liquid fuel, for several reasons.

It’s worth taking the time. An intelligent appraisal.