Crash Course – 17a – Peak Oil
Peak Oil, where are we at? (image courtesy BBC online)
Energy is the lifeblood of any economy. But when an economy is based on an exponential debt-based money system that is itself based on exponentially increasing energy supplies, the supply of that energy deserves our very highest attention.
Oil is a miracle, working tirelessly in the background to make our lives easy beyond historical measure. Oil represents over 50% of US total yearly energy use, while oil and natural gas together represent over 75%. How easily could we replace the role of oil in our style of consumer-led, growth based economy? Not very.
Peak Oil is simply a fact. Peak Oil is NOT synonymous with “running out of oil.” But the most urgent issue before us does not lie with identifying the precise moment of Peak Oil. What we need to be most concerned with is the day that world petroleum demand outstrips available supply. It is at that moment that the oil markets will change forever – and probably quite suddenly.
Crash Course – 17b – Peak Oil, Energy Budgeting
In the next section, we will discuss the intersection between Energy and the Economy, and I will make the point that it was no accident that our exponential, debt-based money system grew up at precisely the same moment that a new source of high quality energy was discovered that proved capable of increasing exponentially right alongside it.
Now we embark on the precise line of thinking that completely dominates my investing and purchasing habits. I call it energy economics.
With sufficient surplus energy, humans can construct remarkably complex creations in short order. Social complexity relies on surplus energy. Societies that unwillingly lose complexity are notoriously unpleasant places to live. Given this, shouldn’t we pay close attention to how much surplus energy we’ve got and where it comes from?
Crash Course – 17c – Peak Oil, Energy And Economy
In theory, there’s nothing problematic with living in a world full of exponential growth and depletion curves – as long as the world does not have any boundaries. However, exponential functions take on enormous importance when they approach a physical boundary, as seems to be the case for oil in the very near future. Both discoveries and production indicate that we could be at oil’s exponential boundary already.
We can make a very strong case that both population and our money system are utterly dependent on the continued expansion of oil energy. But what if our exponentially-based economic and monetary systems, rather than being the sophisticated culmination of human evolution, are really just an artifact of oil? What if all of our rich societal complexity and all of our trillions of dollars of wealth and debt simply are the human expression of surplus energy pumped from the ground?
What will happen to our exponential, debt-based money system? Is it even possible for it to function in a world without constant growth? These are important questions, and they deserve answers.
The other parts of The Crash Course can be accessed following the links below:
Crash Course Part 4, Everything starts, and stops, with energy: Peak Oil; Energy Budgeting; Energy and Economy.
Crash Course Bonus Audio: An Interview with Chris Martenson.
Tags: cosmic cost accounting, crisis, critical path, energy, energy accounting, Future Of Humanity, peak oil, sense of urgency
Subscribe via email or RSS