NATE HAGENS

At the intersection of global energy depletion and concerns about human impact on the environment lie some serious and oft overlooked issues. Largely gone from our public discourse is the idea that oil is infinite. It is now accepted, even to previous staunch cornucopians, that increasing, or even maintaining oil production will come only at higher costs. The new response to the energy/environmental crisis is to transition to a green economy, replacing our declining stocks of fossil sunlight with new technologies able to harness our current sunlight in its various forms. That these renewable technologies are available, viable and becoming more popular is not in question - however, whether these low carbon strategies can combine with now more expensive fossil fuels to maintain a growth trajectory for both the developed and developing worlds is another question entirely.

Humans have an innate need for status and for novelty in their lives. Unfortunately, the modern world has adopted very energy- and resource-intensive ways of meeting those needs. Other ways are going to have to be found as part of the move to a more sustainable world.

I am not an oil industry apologist, but recognize that I live in an oil-centric world, own a car, enjoy air travel and partake in the daily smorgasbord of food, services, and novelty made possible in the cheap energy age. To me, given the problems our country and government face, blaming Exxon for high gasoline prices and excessive tax subsidies is akin to complaining about a mosquito bite on your arm when a crocodile has your leg in its mouth.

Is a BTU today worth more or less than a BTU ten years from now? It's seemingly an easy question. A BTU will heat one pound of water one degree whether its 2010, 2020, or 2100. And, in a world of entropy where the easiest and best quality energy sources (generally) get used up first, one unit of energy should increase in value over time, as its ability to accomplish work becomes more valuable to society as time progresses. However this is solely a physical perspective, one that ignores biology of time preference. Once humans with finite lifespans and cultures with sunk costs enter the picture, a BTU today, behaviorally, becomes worth more than one in the future.

For the past 5 years, The Oil Drum has been a home base for many high level discussions about the details and implications surrounding an early peak in global crude oil production as well as topics on society and energy in general. The entire site was started, and continued, by volunteers, in what might be described as a loose anarchy glued by social capital... In many ways our initial mission is over. The fact that oil depletion is real and urgent is no longer a 3+ standard deviation viewpoint (see recent IEA World Energy Outlook). However, thorough understanding of the nuances and importance of energy in our lives is still not widespread. [This article describes] our plans on how best TOD can play a role in the ongoing energy debate

If I were a billionaire, I wouldn’t believe what I’m about to write. Firstly, because my training, and especially my experience of getting richer in a growth based economy would have taught me that these ‘perfect storms’ when resource/financial bottlenecks supposedly loomed, historically worked out to be opportunities that spiked my digital wealth and incremental social power. Secondly, if I were a billionaire I wouldn’t believe what I'm about to write because all my peers, advisors and friends would tell me that it's caca. And lastly I wouldn’t believe what I'm about to write as the implications would be too threatening, at least on the surface, to comprehend let alone integrate into my world view. All the same, if I were a billionaire, based on my understanding of our particular juncture of history, likely on the verge of transitioning away from marker claims back to real capital, here is what I would do....

Given the prevalence of high quality content and thought of a few years ago, the blending and parroting of the major themes that a casual perusal of the resource/energy/finance blogosphere reveals today reminds one of the time shift in the movie Idiocracy. A psychiatrist might label this phenomenon ‘information anhedonia’. An economist would say we’ve reached ‘decreasing informational returns from the marginal blog entry'. I'll just call it 'clown-fest'.

To me, one of the most surreal phenomena one encounters these days is that no country, no established economic research institute (that I'm aware of), and no international organization (such as the IMF) publicly discusses scenarios that don't plan for a return to stable economic (GDP) growth. Even Greece's government, after 2012, expects growth, which would allow the country to slowly reduce its monster debt load. Similarly, the U.S. government forecasts annual average (real) growth rates of 4.4% for the years 2012-2014, and 2.4% thereafter until 2020. This theme is globally ubiquitous.

Our energy subsidy from the stored sunlight in fossil fuels is gigantic. The chemical and kinetic energy embodied in the thick gooey condensed organic matter from past eons is, for all human intents and purposes, indistinguishable from magic. Once in a while, like now, we see the downsides to our dependency on this elixir, in this case the ecological degradation of increasing areas of the Gulf of Mexico ecosystems, and collateral damage to other species.

I used to deal with billionaires, managing their money, and some of them had $100,000,000, and all they wanted to do was to get to $200,000,000, and then quit. And then they got to $200,000,000, and they got to $500,000,000, et cetera, and I noticed at the same time that the clerks who were making $25,000 a year were just as happy as these billionaires. (YouTube and transcript from former editor of The Oil Drum)