There is a great deal of national and global turmoil at this time. The U.S. adventure in Iraq grinds on, South Ossetia flares, the Niger River delta simmers, Bolivia may boil over into civil war, and Mexico slides slowly and relentlessly towards the abyss. Our marvelous deregulated banking system is behaving like a 'deregulated' semi on an icy interstate and the results will be consistent with this; a traffic stopping jackknife in short order. What do all of these things have in common?
A subset of Christians in the United States believe these and other 'signs' are all indications of their end of days myth coming to pass, but there is a simpler, geological explanation: the end of the oil epoch. All of those problem areas are places where oil or gas are either produced or, in the case of South Ossetia, transported. The U.S. economy is highly dependent on cheap oil and those days are over as of May, 2005.
The end of the oil epoch, or more correctly the plentiful, cheap oil epoch will bring ... wait for it ... epochal changes.
This summer we had oil prices bouncing around $140/bbl and there were constant outcries about speculation. Supposedly something was done, then the price dropped ... but the speculation meme was thoroughly debunked. The system was top stopped by production and prices get funny when you go from taking 99.99% of production and want 100.01% instead.
Our economy is going to crash. Bernanke and Paulson can dance as fast as they are now and keep it together just a little bit longer, but unless they bust out some Neo in the Matrix type financial bullet dodging we're losing a quarter of our banks, a third of our housing goes empty as prices drop 60% - 80%, and true unemployment will double or triple to 26% - 39%.
We will never recover from this. NEVER.
Our last Depression in the 1930s occurred at a time when we had tremendous local energy resources. We'd only begun to take the sea of oil beneath Texas and production here would not peak for another four decades. We'd not yet begun heating homes with natural gas, nor making ammonia fertilizer and other industrial chemical with it. As soon as we took the steps, as a nation, to get folks back to work things began to improve.
This time it's going to be different. Our far flung suburbs are ghost towns waiting to happen when gasoline doubles ... and then doubles again in price. The dollar will collapse if we engage in a de facto default on our debt and I hardly see how we can avoid that. $4/gallon becomes $8/gallon in pretty short order even without supply concerns; this is one of the drivers that'll empty out a third of housing inventory forever.
There are six billion people living on this planet. Do you know the source of the protein in their daily diets? A good portion of it comes from the sea, where we're wrecking the foundation of the food chain by carbon dioxide driven acidification, and fully 50% of the rest comes, when traced back to the source, from ammonia based fertilizers, almost all of which are produced with natural gas at this time.
Like oil natural gas is in decline. Unlike oil you can't carry natural gas in a bucket; fields must be dense enough to support the construction of a pipeline network or they remain in place; stranded gas, and now you have a hint as to how the Stranded Wind Initiative got its name. The more fungible but more fragment natural gas sources will exhaust piecemeal and this process has already begun. Tar sands production in Canada consume massive amounts of gas, analysis indicates that Canadian gas will be EROI negative in six short years, and the plan to pipe Alaska's North Slope gas to the region will run aground on the shoals of our disintegrating banking system. It's not just ethanol that cuts into our food supply ... I don't think people get that yet, but they will.
The solar maximum for human population on this planet would seem to be around two billion. We won't have a tidy, attrition based climbdown from our population overshoot so we may end up with only a billion or so after war, pestilence, and agriculture/fishing wrecking environmental changes thin the herd. Please notice what I said in the lede – I have a bible with Revelation parked on a shelf next to a copy of the Koran and I believe in neither. What I describe here is simple cause/effect based on the depletion of fossil oil and fossil methane.
So, I don't subscribe to any supernatural explanation for what can simply be tied to geology and biology. Too many humans, very shortly we'll have not enough food, and I don't think any policy change could avert this outcome.
North America is in a relatively special place globally. We have no long history of ethnic and religious conflict, we have no significant conflict with our northern neighbor, and we have marvelous tank obstacles to our east and west. Mexico's slide into chaos is a concern, especially with a significant fraction of the Mexican nation already dwelling inside the United States rather than the Mexican state. How that plays out gives me chills when I speculate, but I'll not record them here; no matter what we're in better shape than the rest of the globe, given that we have only two languages and one shared religion between the two regions.
The United States could survive one of climate change, economic collapse, or energy depletion. I don't think it remains a single entity in the face of all three. I'm in my early forties and I'm not suggesting this will come to pass next Thursday afternoon, but I believe declining energy and rising climate issues are going to put humans back in their place; dwellers upon this planet rather than masters of all they survey. I expect to live to see it. Do you see the Gulf Coast, not reconstructed three years after Katrina? Now look at Galveston and start checking back periodically. We don't have the dollars to rebuild it even if it made sense to reconstruct a city on a barrier island. This theme of things being uneconomical to repair is going to be repeated over and over in coming years.
For instance, did you know that a major storm like Gustav gets 5% of our remaining gas production and it never gets put back online. Much like an old car that is running well low production gas wells are left on the pipeline network, but as soon as they have troubles it's off to the junkyard. Low volume gas production facilities that are too fragile to stand the giant storm surge from this new type of hurricane are simply sealed up and left. We keep coming back to natural gas ... which leads to ammonia production ... which leads to human protein sources.
Have you suffered through a major change in life? I can think of three that have affected me. My father was disabled when I was thirteen and at the same time the packing plant in our area closed – economic disaster touched us. He and my mother were depression babies so they knew what to do; I am grateful for my rural upbringing and grow more so every day. When I was twenty six I was in a bad car crash and things changed for me overnight. Constant pain became my companion and I learned well that I was not immortal, nor was I indestructible. This event colors my daily existence even now. Fast forward to thirty nine – a tick I never saw had a taste of me in the spring of last year and the Lyme it carried took nearly every material thing I had and ate away at my physical and mental being in the process. I don't say this to complain, but rather to explain – I've been knocked down hard a couple of times and I have some idea of what before and after are like.
What will after be like for you? I can point to some macro trends to help get the discussion rolling. You're probably going to end up back with mom and dad ... or kids are coming home/never leaving ... or you'll otherwise adjust your living arrangements. You're going to be walking, biking, or ride sharing like you never imagined. If you don't garden now you're likely about to start. You're going to be able to easily determine the difference between needs and wants. Jobs will be fewer, credit nonexistent, and opportunities will be seized when they present themselves.
My champagne wishes and caviar dreams have gone through dramatic revision in the last fifteen months. That sturdy prairie foursquare where I grew up, a little scooter like the one I road before I qualified for the automobile license, and maybe a bit of teaching up the road at Iowa Lakes Community College's wind energy program. A huge garden out back like we had when I was a kid, fresh paint on all the buildings, and if the post collapse economic gods smile a ground loop heating/cooling system. Oh, and I want to save a large slice of the human race from starvation with wind driven ammonia production, but I've already talked a good bit about that ...
So ... do you agree or disagree with my assessment? If you're in agreement (or disagreement) why don't you talk a bit about what you think things will be like and how you plan on coping with the changes coming at us.