Colin's Cornucopia

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Why the oil will never run out

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There is much talk of peak oil and a looming energy crisis. The Jeremiahs tell us that we are using oil so fast that it cannot last much longer while the price, which suffered a blip last year, has stabilised at $50 a barrel. We have been pumping oil for 100 years and the amount in reserve is sufficient for less than another 50 years at this rate.

The optimists tell us that we can always turn to other forms of energy and quote the research into wave, wind, hydro and sun capture devices. There is still plenty of coal that we have hardly been using for fifty years. Then there is Natural Gas and Tar Sands and we haven’t even started searching the really deep ocean yet. We can still turn to nuclear power and, anyway, Nuclear Fusion will be cracked soon and will provide enough power for everybody forever. Electric cars will solve the transportation problem and what about Hydrogen? This is the stuff of the universe. Surely we can find some somewhere? The scientists and engineers have made us a paradise based on energy usage and they are not going to dump us now, right?

Of course not. They are going to continue searching for oil in ever more difficult places from which the cost of recovery is going to continue to rise spectacularly. They will get more oil if you can afford to pay for it. It is reckoned the Athabasca Tar Sands have more oil than Saudi Arabia but it costs two barrels of oil for heating and crushing and preparation of the ores to produce three barrels of oil. In short, there is one third as much available oil as in Saudi Arabia and it will cost at least three times as much to obtain in both money and carbon dioxide. If you want it you will have to pay the price.

They are going to build windmills in ever more outlandish places at ever increasing cost to provide power at a price several times what we pay for electricity made from oil. They will build enormous and expensive energy storage dams to store the electricity that will be needed to keep the grid going when the wind does not blow. They will create expensive sea monsters that will provide very expensive electricity from wave power and will be totally destroyed at enormous cost when a freak storm hits.

They will build barrages across some of our estuaries that will provide some power but at high cost and with enormous damage to the nature of the estuaries. They will build coal power stations that will import coal from other countries at whatever price they demand or will pay our own miners a high price to dig it for us. They will build nuclear power plants that are expensive to build and run and even more expensive to de-commission. They will have to compete with every other country on earth for the uranium to power their new nuclear plants.

They will dig coal at great expense and cause much worse pollution problems because coal is simply much dirtier than oil. They will squander huge amounts of both brainpower and oil attempting to bury carbon dioxide. They might be able to do it but you will pay the very high cost.

They will plant crops to grow fuel and this will be very successful as the motorists and Electric Power Stations will pay whatever price is necessary. The true cost will be that the land growing fuel will no longer be able to grow food and millions will starve. Huge areas of Indonesia have already been converted in this way and have destroyed its primeval jungle. The attack on the Brazillian and African rain forests have only just got under way.

But when those forests disappear the climate will change because the trees create the climate. The water will dry up and the land will be turned to at dust bowl – just like Oklahoma was a hundred years ago. The native populations will be destroyed and the climate of the whole planet affected.

The super technologists just might make that fusion breakthrough that creates a controlled artificial sun and give us unlimited energy for free forever. But you had better pray that they do not. With such energy freely available the world’s population explosion would be almost unbounded. Then we really would kill the planet. It would take only about 200 years to cover the whole of the planet with muck. Please do not tell me that the politicians would control the population. They could do nothing. They would do nothing.

For the last fifty years we have had about 500 million people competing for the earth’s resources. Now virtually everybody has joined the game. We now have about seven billion competitors and within ten years (2020) that will be nine billion at least. And most of them are now more wealthy than us because we have abandoned our ability to create wealth – industry - and given it to them. Our rationale for this that it did not make sense for us to make widgets when we could buy them much more cheaply from China or India. This was fine as long as they were low-technology captive suppliers. But they are people and people learn and now they know more than us and we are a third world country and we do not have the ability to earn our living because their technology is now ahead of ours. This was always plainly obvious to some of us but nobody listened because there was a short term financial advantage to be gained – bottom line pragmatism – the scourge of mankind.

We have destroyed much of our ability to grow food by importing cheap stuff from abroad. We buy exotic food throughout the year brought to us on jet planes. Our ability to survive without this cornucopia of trading is slim indeed. But all of it is based very firmly on oil and energy and we have, quite suddenly, created several billion competitors for those resources.

Without oil there is enough energy on earth to keep about one billion people at a standard of living which most of us would now consider to be a peasant’s. We could probably have electric light in one room for a couple of hours a night. You might even be able to run a TV occasionally but there would not be much on it. You might have an old computer that you could run occasionally but there would be no profits to be made from an Internet so there would be no Internet.

Believe it or not, this quite accurately describes the life of many people in Britain as late as 1960. That is the best state that we can look forward to returning to when the oil runs out. But then we had a stable state with two generations of war-hardened and disciplined soldiers running the country and the factories and mines. Tough times were normal. Expectations were modest. People worked very hard as a matter of course. There was a brighter future to work for.

Now our population is overweight – fat – and lazy. It has pretensions that manual work is demeaning and expectations that we will have a jet-set lifestyle from birth to the grave. We are rude and demanding and often bullying. We are utterly contemptuous of the opposite sex and meet only to cause pregnancy. Our philosophy is Hedonism and any sort of bad behaviour is considered normal. Our religion is Self. We expect instant miracles and these are provided daily in a cornucopia of lifestyle products that are mostly meaningless rubbish. No one knows or asks the source of these miracles. No one asks their purpose or the consequences of the explicit dependency. We have drugged our whole society on the by-products of oil.

Oil finds peaked around 1965. Oil searching probably peaked around 1990: there simply isn’t anywhere else worth looking. Peak oil production in most fields has already occurred by 2009 and world production is probably peaking now. There might be quite a lot under the Antarctic Ice Cap but how much do you think it is going to cost to get to it? Oil production has to start running down quite soon. This is coincident with demand from China and India starting to climb to consumption levels that will easily pass ours and soon rival those of the US. There is very clearly soon to be an acute shortage of oil. My best guess is that the crunch will come in 2015.

The US has, through a whole series of negotiations, threats, bribes and patronage, invasion and war exercised hegemony over Saudi Arabia, Kuwait and Iraq since 1945. That was when it became clear to the US that their own resources were finite and they would soon need other sources. Even the large finds in the North Slope have hardly dented their demands. The Chinese have made a trade pact with Iran to secure access to oil and there can be little doubt that it would make sense to them for Russia and China to have a similar agreement. China has also built up a massive presence of personnel of various types across Africa. There probably isn’t much undiscovered oil in Africa but it is one of the richest continents on earth for most other minerals. In short, China is carefully preparing the ground for a major effort to secure riches to itself. My guess, again is that China will feel confident of its strength by 2015.

Exactly what will happen is difficult to predict. It could be any one of many potential flash points. One thing you can be certain of is that the US is not going to let go of Iraq, Kuwait or Saudi Arabia. When China agrees to pay $200 a barrel for oil and is joined by India and Pakistan trading with Iran and Russia, then Europe and Britain will have no choice but to agree the price. America will likely reinforce its military presence in Saudi Arabia, Iraq and Kuwait and take its oil at a price acceptable to Uncle Sam. There would then be a serious schism between Europe and America and support for NATO would immediately come under threat. Operations in Afghanistan would then become a massive embarrassment and force an effective withdrawal by non-American troops. Such a state of affairs might render the Gulf region and Pakistan unstable.

America will decide that it cannot allow China free access to Middle East Oil. Russia will almost certainly prefer trade with China and India. Europe cannot survive without Russian gas. The North Atlantic Treaty will become a North Atlantic Schism. Free trade will suddenly become a memory.

An interesting speculation concerns Iran and Afghanistan. Will the American presence in Afghanistan complete the encirclement of Iran or will the potential Chinese presence in Iran complete the encirclement of Afghanistan? Now there’s a conundrum.

An interesting footnote to this is what will happen to Venezuela? What do you think might happen to any other country that is unfortunate enough to find some oil?

America will have no option but to increase its military powers enormously to maintain its new burdens and its already excessive oil use will be multiplied rapidly my military demands. The Middle East reservoirs will still deplete much faster than anyone is prepared at present to admit. America will maintain the military guard for a very long time or suffer the consequences. It will, in any case, suffer the consequences of continuous depletion of a finite resource and ever increasing military spending.

Britain will be reduced to buying oil on the spot market at whatever price it can – usually very high. The first effect will be to double the price of petrol and Diesel fuel. If Russia agrees to keep supplying gas its price will double or triple as will the price of electricity and the cost of heating and cooking. If Russia refuses you had better get an axe and a wood-burning stove and find a forest without a gamekeeper. And they will be few and far between. If you own trees you had better get a shotgun to protect both them and you.

If you live within five miles of work you had better get a bike. If more than five miles you had best look for a new job near to home. You had better find some land you can use to plant vegetables. You will need them. If you have an allotment where you can also live, then prepare to do it. Your vegetables will become very valuable targets for desperately hungry thieves. The prices in the supermarkets will double or triple in line with the price of oil. Everything they sell depends directly on the price of oil. They ship everything by air and truck. They store everything in freezer stores that eat energy. The intensive farming methods their suppliers use are oil intensive. Their fertilisers are often oil based. The supermarkets will quite soon shut down. No one will be able to afford their prices. Oil keeps them in business. Oil will put them out of business.

Your employer will not be able to afford to pay for heating oil or to pay the electricity bill. Manufacturing companies will simply not be able to pay their bills at all. Their energy costs will rise so rapidly that they will never be able to balance their cash flow. Most will go bankrupt. That is inevitable. Most will leave no money to pay redundancy. That is inevitable. Most people on the dole – and there will be millions – will have no redundancy money. That probably means you. The government will not be able to afford to pay it to you – especially now that we have a one hundred year debt to repay.

The utility companies will suffer in a similar manner because no one will be able to pay the bills. They will be nationalised and will operate as and when they can. Don’t expect too much electricity or gas in your property. You had better stock up with candles and a hurricane lamp and plenty of paraffin – if you can get it. And don’t forget candleholders.

If you work for the civil service or local government be prepared for drastic changes. Control will at last desert London (Hurrah!) and revert to local councils. The downside is that fifty percent of all staff will be redundant. Government finances will be in at least as bad a condition as private companies and there will be no pensions left. School finances will implode as will the NHS.

The raging inflation stoked by zooming energy prices will render savings worthless. It has happened often before. There will be nothing to stop it happening here. We will have few products in the shops because no one will be able to afford the Chinese prices. Poverty will become the norm. A display of wealth will be cause for anger and violence.

If your property has a chimney get yourself an old fashioned range with a built in oven and hob. You will need them. We spent fifty years getting rid of them. It might well take you fifty years to restore them. But you will need them. If you do not have a chimney you will have to find a suitable external pipe. If you live in a flat buy a very thick coat and some long johns and a paraffin stove.

This is how we lived in 1945. This is the future you and your children face. You are free to ignore my words if you choose but you will not be free to escape the consequences of your ignorance. Returning to this world is not a matter of if but when. My guess is not very long.

How on earth are we going to get there and what will it be like?

When we last had a very low oil economy the world had about a billion people on board and that is probably how many the post-oil world will support. Soon we shall have nine billion people. If we assume the normal death rate will balance the normal birth rate then over a period of around fifty years we shall have to lose about eight billion people – or nine out of ten people you now know. This means getting rid of about 160 million people every year. It is impossible to imagine how this can happen. That is a hell of a lot of corpses. Genghis Khan, The Black Death, Hitler, Stalin, Pol Pot and Spanish Flu rolled together could hardly do ten percent of this. But that is the reality we face. Is it any wonder your politicians dare not tell you about this. They cannot face it either.

I refrain from telling most people of my calculations and predictions because their eyes glaze over and they refuse to listen. Perhaps I should not blame them for that. It is pretty horrible. But I am afraid it is also highly probable. Some would claim absolutely certain.

So how the hell did we get into this position?

It all started with the Reformation and the explosion in knowledge that accompanied it. Much of the knowledge had been around for millennia but had been carefully controlled by various religious organisations. It was never allowed to flower. I do not believe this was a deliberate policy – it just happened that way. Then a few things like printing and the telescope and Galileo and Newton came together and the knowledge base exploded. It did not take long to understand and exploit electricity and the electromagnetic spectrum. At that point Einstein and an understanding of the atom and its exploitation became inevitable. The chance success of the Industrial Revolution, at first not more than a fortunate meeting of materials and keen minds, gave man an apparent mastery of the planet. For a hundred years anything seemed possible. The oil and the chemical industry magnified the process beyond belief.

The population zoomed as described above and has not stopped since, despite sometimes draconian birth control measures in both India and China. The rest of us have not even tried to restrain ourselves. Now we have reached the point at which the oil will soon be all used up. Do not gasp, sigh, snarl, shout, rave or look the other way. This is your reality. Accept it or die.

So why cannot we just go gently back to the way we were?

This seems an highly improbable scenario. Firstly it would require a concerted plan and the agreement of every individual on earth. Every government would need to agree and sign up and ensure that all its citizens did so also. Do you think it likely that all these people will accept a cut of about 80 percent in their standard of living and legalised death squads on every street? Silly question, Eh?

So what are we going to do?

The answer to this is, I am afraid, nothing. Things will unfold the way they always have – by chance and fortune – either good or bad. As individuals you can do as I have described above and prepare to defend our own life and property. If that sounds harsh – it is – and it will be.

Do you remember the James Bond movies? The bad guy always had a fantastic massive underground cavern full of highly competent operators busily stealing satellites, missiles or hydrogen bombs to hold the world to ransom. If the man had enough money to build such an operation he would not need to hold the world to ransom. But it made good movies.

Now let your focus turn across a similar room full of grey suited operatives with coats hung over the backs of their chairs and sat before computer screens busily talking with lots of similar grey suited men in other places. Instead of missiles and guns and bombs their screens are full of figures that represent money and gold and copper and oil and steel and companies and mines and machines and the infinite variety of goods required by our technological world. They control the whole damned shebang. They don’t have to fight over it. It belongs to them – and so do we. We call it The Market. Goldfinger and a few thousand more like him already control it very effectively. Most of them are very rich and a few of them are rich enough to make Goldfinger look like a pauper.

So why don’t they do something?

Why should they? Their fundamental position is that the market will take care of everything. And they are right – it will. And if you are under 25 and live to be my age you will then be paying £500 per gallon for petrol – if you can get any at all – and if you have any use for it. But the market will be correct. And the market makers will still be getting very rich and you will still be getting very poor. That is why they do nothing. They will sit at their desks until the market liquefies and they have drained every last penny into their own pockets. Then they will be just as much in the muck as us. But it will be too late. Recognise the James Bond final scene? That is why they won’t do anything. They will hold onto their power until the bitter end – Just like Goldfinger. That is why the oil will not run out.

Post Script.

So who are you to believe? Is my awful scenario anywhere near right or are your politicians playing their cards close to their chests and holding a Royal Flush? You should know the world does not work that way. This superb banquet which started around 1840 and got into top gear around 1940 will have long since hit the buffers by 2040.

If you prepare for the inevitable and it gets delayed you will have lost little. If you do not prepare and it gets brought forward you will die. Your choice.

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