Bernards weekend homework task.

I took to commenting on some time ago. The reason was simple. Having observed Peak Oil coming and wenting, I assumed the media would note, address and contemplate the implications.

Nothing. Nada. Zilch. No comprende.   

So I hassled them – ditto the result. In my local case, omission (sometimes I reckon it’s obfuscation) continues. Second layers of the cake may well include belief in mythical deities, the holding of which automatically deny the need to shoulder responsibility.

Whatever, I thought Bernard Hickey – who had the balls to set up the site, see things in a different light – was the most likely of all the ‘respected’ commentators, to ‘get’ the correlation between energy, and wealth. Between peak energy flows, and peak economic activity possible.

So far, he appears not to be convinced, so here’s his weekend homework:Take a piece of paper, and a pen or pencil. draw a bell-curve, or if you’re old enough to remember Bonanza on the ‘telly, draw Hoss’s hat. Now, draw a horizontal dotted line across the hat, so that the top curve is above it – rather like taking the top off a hard-boiled egg in an egg-cup.

Now – observe the curve below the dotted line, on the left-hand side. (If you need to see things clearly, trace this piece onto a fresh piece of paper.What you have, is a curve which could be constructed alone, using y=x2.

See:        (figure 1).

That’s an exponential curve, the classic one because it expresses ‘doubling-time’ – the way we document all exponential growth. The curve of ‘doubling time’ always follows that y=x2 curve, faster growth just ‘doubles’ faster up it, slower growth ‘doubles’ slower.

Note that the curve, continued upward, trends ever-closer to the vertical. If you have based the aspirations and expectations of a society on that kind of graph, and if the graph is based on physical consumption. then at some point they’re going to be sorely disappointed.

Not only that, but given that the y=x2 curve trends to the vertical, they’re going to run into the disappointment at unprecedented speed, with unprecedented inertia. By unprecedented, I mean: we’ve never been here before, and by a goodly margin.

What happens in the physical world, is what you drew with Hoss’s hat. If you start into a physical resource – it could be ‘land adjacent to an isthmus-located city’, or it could be ‘oil’; the graph of your accelerated use resembles the left-hand side of the hat. The bit below that dotted line. At some other point – regardless of where and when, there will be a point on the right, labelled ‘the end’. It is the right-hand edge of the hat-brim. In the middle, inevitably, the graph must change direction from ‘up’ to ‘down’ – it has no choice in this matter, there are no other options.

So we can anticipate a ‘peak’. A point at which extraction  has never been more/faster, and never will be again. In reality, of course, the peak may be a bumpy plateau – particularly if the item in question drives the demand for itself – as does oil.

After the peak, comes the curve you drew, the part on the right hand side, below your dotted horizontal line. It should look like this:                  (figure 2)

At this point, have a wee think about that first graph. Imagine you set up a financial system to fit the upward (figure 1) curve. It would be happy with exponential growth, it would take ‘doubling’ in it’s stride. Onward and upward would be a fitting catch-cry, and until you hit the peak (actually, until you hit the dotted line if you were perceptive enough) you regime would work.

It’ would start to have trouble, though, as the graphs diverge, above the dotted line. It would be in big doo-doo, across the top of the hat. And it would be absolutely inapplicable on the way down (figure 2).

Question :  If your media – the discipline set up under the upward curve – is your source of information (particularly your grasp of future trends) and it in turn relies on that upwardness to fund itself (advertising revenue, readers discretionary income) ……… is it likely to tell you about the pending change of direction?

So who will?

A little extra homework:


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