What happens when?

[PAdam...@aol.com]

In a message dated 02/01/2012 13:34:30 GMT Standard Time, roger....@gmail.com writes:

Patrick - here's a dumb question.  What happens when energy costs triple? 

When food goes back to costing 18% of the family's annual income?  When fuel rises from $1.20/l (in Canada) to $3.60?  When the individual's ability to produce "surplus" from an 8 hour day is removed?

I think, Roger, this has mostly already happened. The result is recession. Mass unemployment and widespread poverty. Yes the recession was triggered by a collapse of confidence in the banking world, but has gone on far longer than anyone predicted, and nobody knows what will happen next or what to do. Energy costs have rocketed, driving up commodity prices. Governments have spent heavily to save the banking system, and are now having to cut spending on social welfare

Somehow I think the "economic system which is driven by consumption" may have to be the model that has to change, when economic growth and consumption are no longer possible.

What is changing is the ability of Governments to intervene and redistribute wealth. With perpetual growth, it was relatively easy to spend some of the proceeds on social measures. Without growth, that cannot be done without big tax increases on the wealthy. As the wealthy pull the strings, it aint gonna happen. Riots, civil disorder etc are already happening. What happens next is the army on the streets and an even more repressive system, gated communities, despotism and so on.

 

We live in interesting times. The old order is not going to roll over and die just because the truth about unsustainable growth is out.

 

Lots of wishful thinking going on - theres hope in this, that or whatever. In medieavel times, the power of fuedal barons was broken not by revolution but by labour shortages due to the plague. IMO that history is likely to repeat. After it does we may get a more sustainable and stable system. Frivolous consumption will no longer be an option, and the majority will no longer live just to sustain the status of a small controlling minority.

 

Patrick

 

[Roger Priddle]

Patrick - While I agree with most of what you say, I have to challenge your statements about energy costs.  At least, here in Canada.

Oil is still sitting about $100/barrel US and gas is about $1.20.  This is almost unchanged in the last bunch of years.  Consensus appears to be that "Peak Oil" happened in the last few years. As demand increases and supply decreases, the price will rise - slowly at first, then accelerating. 

North America is completely dependent upon oil.  The "Green Revolution" depends on petroleum-based pesticides and fertilizers, global food "systems" use huge amounts of fuel for transport, urban centres are designed around ready access to cheap transportation, most housing is huge and inefficient, etc. etc.

There's no question that the venality of the banking system (especially in the US) triggered the recession, but that (IMO) has caused only a fiscal crisis.  ("Only" - yes, I understand how little that word means...)

Most people can still buy food, drive cars and heat houses.  There's no real shortage of resources.  But (unlike the money supply) oil is finite.  And I believe that the next hint of problems with oil production (whether natural catastrophe, terrorism, whatever) will see a huge spike in the "cost" of all goods to everyone.  As we can't or won't pay the prices, demand will fall a bit until the next winter's demand for heat, at which time oil will spike again (but higher), and so on.

Apparently, Great Britain produced about 40% of it's food from "Victory Gardens" - I think I heard someone say it now produces about 2%.  I'm sure the same is true in North America.  When oil spikes, I expect the conversion from lawn to veggie patch to be immense - what will be the implication when home grown food becomes the norm?

Same for Transportation (cars, trains, trucks, etc) and Housing (especially heating).  In previous recessions, incomes rose with the Consumer Price Index (mostly) and the standard of living remained constant.  I don't expect the same in the next (oil-fired) recession.

Heck, I'm getting depressed.  Time for bed!

Roger.

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[TIMC...@aol.com]

 

 

In a message dated 06/01/2012 03:54:11 GMT Standard Time, roger....@gmail.com writes:

Heck, I'm getting depressed

Hi Roger,

the price of oil is artificially low today; without the depression we're in i'm sure normal demand would have pushed us $50 higher.

As you say it's on a ratchet and long term only going one way.

Just been buying fertiliser and over the last ten years that's gone from £70 to £280 per Tonne.

Similarly diesel has gone from 15p to 68p per Litre.

 

Food prices in a $300 per barrel world will be horrific.

 

As it is we're quite cheerful today as i've got a tax refund on the way!

Problem is it's due to costs rising and output prices still failing to keep up.

 

Tim

[Roger Priddle]

Hi Tim:

Interesting.  In following up on your comment about the cost of fertilizer, I decided to look up the price of crude.

Weird.  I think I'm paying attention and that, while I may not really remember the prices back in 1973, in recent years I've watched it most nights.  So I should have a pretty good memory of where it's gone, lets say, for the last 4 years.

Well, we know there was a spike - let's guess to about $130 - and that MIGHT be in the 4 year window but mostly it's hung around the $100 mark...

So (according to published weekly price lists), in beginning 2006 the price was just over $60 - 2.5 years later its at $145 (July '08),  six months later down to around $40 then a long slow rise from $40 to $100 in the last 2.5 years.

Turns out my memory sucks!

Interestingly, if you were to plot my highs/lows, it would appear that the long term trend is downward.  Somehow, I don't think so...  ("Lies, Damned Lies, and Statistics!")

Here's a question for the economists out there - while a drop in demand (given constant supply) should result in a fall in price.  (This works commodity by commodity)  But how does this work across the broader economy?

IOW, if oil becomes expensive enough that I invest in real insulation, weather stripping etc, my demand for oil is reduced permanently.  Same idea if I convert my lawn to garden.

Insulating the house requires some materials but not much - growing my own vegetables, the same.

Ok, we all do that and the price of crude falls.  And stays down for a few years.  Maybe below the cost of production from Tar Sands, Deep Sea rigs, "fracking".   So those projects get put on hold resulting in greater dependence on "conventional" oil sources.

Then what?

Any natural/political disaster that suddenly boots the price of oil means that, while the alternatives have become financially "interesting" again, the lead time is too great to respond.  They're not "agile" enough.  Oil gets too high, economic activity falls, price falls, major projects are cancelled as unprofitable and the whole cycle starts again?

Meanwhile, the remaining pool of a finite resource keeps shrinking....?

Oops - getting depressed again.  L8R

Roger.

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[PAdam...@aol.com]

Hi Roger,

 

Road fuel was around 80p a litre in the UK for several years, then the spike of 2008 saw it rise to over £1.30, then it dropped back rapidly to under 90p, since then it has steadily climbed to nearly £1.40. Our Government has rtied to mitigate it by cancelling and defering a few planned tax increases, but there is no doubt high transport fuel cost is depressing the economy. Heating oil has also become cripplingly expensive. Solid fuel and gas have risen proportionately.

 

Read Heisenberg "the Party is over" for a good idea as to what happens with peak oil. We get the see-saw effect - economy grows, oil prices rocket, economy stalls, they fall. Stability and confidence has gone. The price crashes deter investment, making the next spike even higher.

 

I have had to adapt. My old Land Rover is gone. Now I use an old mail van, with towbar fitted. I only do the small local market, and do all my shopping while I am there. I have downsized the business, but am looking at developing new products to match a customer base with reduced spending power. Nearly every material posession I have is either inherited or was obtained through freecycle. Most newspaper and magazine subs have been cancelled. Leisure spending, which was always low, has almost disappeared. As for food, I only buy bread (or flour), tea, coffee, spices, oil and lentils. Rice and pasta are luxuries, as are fish and olives. But I have an abundance of meat, milk, veg, fruit and eggs. Wild foods - edible plants, rabbits, pigeons, squirrels etc are also collected. I wish I could grow my own tobacco, like my grandfather did - but he lived with a better climate for it!

 

My new solar PV system generated 2.8 units today - not bad for a mostly overcast early January day. So far this winter I have only used home grown firewood for heating. I am investigating the feasibility of a micro-hydro, which would complement the solar PV nicely, as I have a tumbling stream running through the land.  I have had solar thermal for hot water since 2004.

 

What more can I do? Moreover, what relevance do I have, on a small farm, with a very small turnover? The world outside seems feckless, profligate and totally unprepared for the storm that is beginning.

 

Patrick

[tmgraphics]

Your lifestyle sounds realistic, Patrick, somewhat similar in many respects (probably mainly attitude) to ours; it can be fun but is always challenging.

We don't bother with magazines, newspapers etc and subscribe to very little of that sort of thing. We make our own music. We have no need for tv or radio, we lead too busy a life for that nonsense.

Still a long way to go in the energy stakes and we're fighting a battle against fracking this county, so trying hard not to be hypocritical.

More power to you, pun intended.

David

[Lila Smith]

we have just purchased our first tobacco plants, have not put them in this year but will next year, great climate, just need to perfect the operation.

Now we are perfecting our compost so we can start growing our own mushrooms.

 

Sounds like everyone is going in the right direction.  Once upon a time I would not even bother to grow tobacco or mushrooms, however these methods have to be started again from home.

 

Lila Smith
www.windwand.co.nz
Taranaki Tourism Website
www.windwand.co.nz/organickitchengarden.htm
Organic Kitchen Gardening
Mob 021230 7962
06 7512942
201 Omata Road
New Plymouth
New Zealand

[PAdam...@aol.com]

In a message dated 07/01/2012 15:53:02 GMT Standard Time, grap...@tmprinting.ie writes:

Your lifestyle sounds realistic, Patrick, somewhat similar in many respects (probably mainly attitude) to ours; it can be fun but is always challenging.

We don't bother with magazines, newspapers etc and subscribe to very little of that sort of thing. We make our own music. We have no need for tv or radio, we lead too busy a life for that nonsense.

Have you read Lark Rise to Candelford, David?

 

The author wites about her early life in rural England, 1880s. She asserts that folk, although very poor and overworked, would make do with simple pleasures and a simple home grown diet. She says they were more content and healthier than today. Today being the mid 20th century, when she wrote it.

 

Lots of self-sufficiency tips in it too. Better than Seymour in some respects.

 

Patrick

[tmgraphics]

On 8 Jan 2012, at 20:54, PAdam...@aol.com wrote:

Have you read Lark Rise to Candelford, David?

 

The author wites about her early life in rural England, 1880s. She asserts that folk, although very poor and overworked, would make do with simple pleasures and a simple home grown diet. She says they were more content and healthier than today. Today being the mid 20th century, when she wrote it.

 

Lots of self-sufficiency tips in it too. Better than Seymour in some respects.

I have; in fact, we did the play once, many moons ago. Flora Thompson? Excellent story. Must re-read it. Notwithstanding high child mortality, endemic diseases and ignorance about sanitation, I'd say she was right!

David

[PAdam...@aol.com]

In a message dated 08/01/2012 21:17:26 GMT Standard Time, grap...@tmprinting.ie writes:

I have; in fact, we did the play once, many moons ago. Flora Thompson? Excellent story. Must re-read it. Notwithstanding high child mortality, endemic diseases and ignorance about sanitation, I'd say she was right!

Human health is the other ticking time bomb, along with the energy hiatus and climate change. The combination of obesity, boredom, stress, antibiotic resistant bacteria, and potential virus epidemics along with the economic colllapse which will undermine universal health care, will probably strike much sooner and much deeper than the others.

 

This is 2012, the end of time, according to Mayan theories. Modern science perhaps concurs, in that Stephen Hawking suggests we need to get off this planet soon.

 

I am all for staying on this planet, but making 2012 the end of rushing to disaster. My glass is half full.

 

Patrick

[Roger Priddle]

Patrick, I'm with you.  We don't have to keep screwing things up - we could change.

And I hope that there are enough people in favour of change to explain the need and lead the way to the kids, the teens.  If we can get them on board and combine their energy with knowledge and "wisdom of elders" (don't really know what that means...) we can fix things.  Heck, we have to.

Here's to "half full glasses".

Roger.

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[Roger Priddle]

And then I just saw a report from the "North American Auto Show" and some of the vehicles they're "highlighting".  They remind me of the days of the big Mustangs, the Charger's, the Cameros.  Remember the days when 8mpg was "good"?

And as I type this, there's a major part of the evening news about the "Northern Gateway Pipeline".  This is the project that a minister in our federal government was talking about when he referred to "environmentalists and other radicals."

("It's half full, it's really half FULL...")

roger.