Scenario Analyses of Peak Oil

A summary of a fella's book who analyzes various Peak Oil scenarios:

http://www.energybulletin.net/18729.html

The net-net of his book:

"After constructing several alternative scenarios, it became abundantly clear they all produced results that were strikingly similar. Every scenario produced higher rates of inflation and unemployment with declining GDP. The only real difference was in the timing and degree of severity."

Why Ethanol is worse than pointless - it's evil

boy do I feel dumb - Read this fella's post re: E85 - much of it was in my "the lie of ethanol" post, but this is much more detailed and has some other interesting points.

http://alt-e.blogspot.com/

My big take away is that of *course* politicians are pumping E85 - because their bosses (the lobbyists) are telling them to do so, and they and the american public are too stupid to understand why!

Here's why:
- When an automaker makes a vehicle that is "E85 compliant," they don't have to pay extra for CAFE standards.
- E85 compliant vehicles burn regular old gasoline fine and dandy, in case you didn't know that.
- The only way US automakers are making money any more is by selling cheap gas guzzlers.
- Thus, E85 is the way to make big gas-guzzling vehicles *even cheaper* relative to the competition (ie. fuel efficient vehicles).
- And like I mentioned, the american public and their politicians are too stupid to understand why E85 is a lie, so they're all hoping this E85 thing is going to save the day, when in reality E85 will make things worse.

Now, E85 is much worse than a red herring, it's a super smart way the evil automakers can make a little more profit before peak oil hits. Like GW, they must be evangelicals hoping the end comes soon.

'Getting' peak oil

Found the following quote in this article http://canadiandimension.com/articles/2006/07/07/555/
and it gave me pause:

'Those who “get” Peak Oil typically experience a profound paradigm shift — a reorientation of their thinking about the world. At the core of this shift is the recognition that humankind is entering a period of change unlike any in history.'

It causes lots of questions:
- What does it take for someone to "get" peak oil?
- How good is this definition of someone "getting" peak oil?
- Do I (you) get peak oil?
- Are the Amish the only ones who really get peak oil?
- What should one do if they get it?

I guess that last one is the point of this blog, isn't it?

Peak oil overview

My Mom and another friend said they wanted to learn more about Peak Oil, so here's a nice little overview that I think fairly and quite succinctly describes the situation.

http://www.energybulletin.net/18634.html

Investment ideas

I just received some tips from an anonymous source about investment ideas in an attempt to thrive in the upcoming economic downturn. Nothing too surprising but worth a read...

DECENT INVESTMENT CHOICES:
- TIPS bonds (Treasury Inflation-Protected Securities) These are bonds that are adjusted for the CPI. Thus, with massive infalation, these will rise accordingly (Todd's note - keep in mind that the CPI excludes energy and food, which are the things that will go up the most. Also, keep in mind that the government may default on its bond obligations, just as so many third world countries have done when their leaders did equivalently stupid things that ours are doing).

- Gold - hedge against inflation and major down turn. See prior post. Note that there are new ETFs who buy bullion.

- Oil - esp. oil services companies. Find the very best ones in their respective areas, such as offshore drilling, drilling technologies, discovery experts, etc.

- Alternative energy, esp. wind. (Todd's note - now is an excellent time to get into alt energy companies. They have not gone up as you think they might have. In fact, I think they may be doing worse than regular companies).

- Real estate (Kunstler says owning land will be the same as having wealth)

- China & India

- Zero coupon bonds to hedge against deflation (in case that happens instead of massive inflation)



THINGS TO AVOID:
- Being in cash
- Being in any bonds except TIPs bonds
- Most stocks, but esp cosmetics, foods, retail, airlines, autos, and chemicals (I could think of more:
a. insurance - no one will buy it since cash will be so tight
b. financial services - folks will have a lot less $$ to invest in 401ks et al. Same goes for institutional investment.
c. construction & building development - everything here relies on oil in one way or another )

Categories of preparedness

The other day a few of us discussed "how should one prepare" for peak oil & related catastrophes. I was asked my opinion, and in lieu of listing a hundred different things, tried to categorize various ways to prepare.

This was an interesting exercise, because the poser anthropologist in me wants to categorize everything to make it more digestible. I think it's important as well, because doing so makes it easier to act upon (small bites are easier to swallow than big ones). However, categorizing a somewhat broad topic is difficult (for a number of reasons, as any real anthropologist would tell you).

Here's where I'm at now - would love some feedback about it:

- Psychologically (see prior post). I might include spiritually here as well, because I think a healthy spiritualism may help one cope with an eroding civilization and continued degradation of mankinds' values that might very likely become a long-term effect of peak oil et al.

- Physically - without health care and all the physical labor that will need to happen, it's critical to keep yourself in good condition. Without this you can ruin not only your own well-being but also that of your family (who has to exert resources to sustain you rather than using you as a resource to support the family).

- Financially - This includes not only trying to preserve the value of your retirement and other investments, but also making sure your general financial house is in order, you've paid off your debt, downsized your home if necessary, etc. It may be possible that the financial institutions will rapidly collapse and none of it will matter, but in the (hopefully) more likely event they don't, being in bad financial condition (such as having a gigantic home loan with no job) could be devastating.

- Educational(ly) - We'll need to have skills that might be worth something down the road. And/or, we'll need to be self-sufficient. These sorts of things require education - and not the kind that most of us have.

- Stockpiling - I think this is everyone's favorite thing to think about (myself included) but is perhaps the most difficult do in practice. First of all, how many of us can store 1000 gallons of water and 500 MRE's (Meals Ready to Eat) in their basement? Or would even want to have a couple dozen various pieces of ammunition hanging around the house? And who the hell knows what's going to be in short supply, and what you'll be able to just pick up off the ground? It's a toughie.

Psychological preparedness

I joked a couple weeks ago about stages of grief. After hearing from a couple folks, I think I should expand on this, because I think dealing with the psychology surrounding peak oil is an essential first step in preparing yourself & your family for whatever the hell might happen.

First of all, what's commonly referred to as the five stages of grief (or the grief cycle) is actually "the five stages of receiving catastrophic news." That is, grief is a very complex subject - something as simple as "5 stages" probably couldn't do it justice. But since it's actually "only" about dealing with catastrophic news, I think it's right in line with learning about peak oil.

Here's a thing about it, and some tips for dealing with each stage positively:
http://www.brefigroup.co.uk/corporatecoachblog/2006/04/10/receiving-catastrophic-news/index.html

FYI - the five stages are Denial, Anger, Bargaining, Depression, Acceptance. FWIW, they say that you don't have to go in order.

DENIAL
95% of people who have ever heard of peak oil are probably in the denial phase. To assess this, I suggest you ask yourself: In your heart of hearts, would you say "there's no way there is going to be changes that are that drastic because of peak oil, global warming, major economic upheaval, etc. Life in 30 years is going to be more or less the same as it is now, if not better."

If you say, "yes, that's more or less what I think," I suggest you continue reading. Figure out how you think we're going to be saved, what the options are, etc. I think you'll find that we're sleepwalking into disaster, and the likelihood of a big fall is high enough to worry about.

ANGER
I actually think this may not be so much a phase that passes but rather a step, because I don't think it passes. Think about Kuntsler (the most widely-noted peak oil speaker/author - http://www.kunstler.com/) - he's still pissed off all the time. Maybe he's still in this phase, but maybe there are a lot of really good reasons to be angry.

BARGAINING
I think lot of folks are here as well, including many of you. You might be here or Denial if you're saying to yourself, "Oh E85 (ethanol) or one of the other bio-fuels will save us. Either that or coal, or hydrogen/fuel cells - or maybe even cold fusion!" If this is your perspective, again I suggest learning more and you'll probably see that there isn't an easy way out. Find your way out of this phase, because there are lots of marketing dollars as well as the government all trying to keep you here.

DEPRESSION
It's a pretty daunting idea, this whole global warming/peak oil business - to think that our own ignorance could lead to massive, terrible changes in civilization. Talk about a buzz-kill!

I hear there are peak oil support groups out there if you find yourself here. I tried to find one online, and I found one on Yahoo! but I don't think it's worthwhile - too many nut-jobs posting.

Not sure what I can tell you other than - try to look on the bright side! This will be a good thing in the end. Or perhaps try a Buddhist perspective - given enough time, it just won't mean a thing in the overall universe.

ACCEPTANCE
I'm not sure I'm here or not, but I'm fairly sure something major will happen (perhaps over a number of years, perhaps very quickly). I should also admit that I'm looking forward to it in many ways. I hope I'm prepared sufficiently in time, but there is a lot of good that will come out of this. Massive governments and corporations controlling our lives will be a distant memory. Life will be much harder, but *so* much simpler. No more worrying about getting fat & not keeping in shape - we'll have to work our butts off just to get by.

It's making me think I should get a jump-start on this whole self-sufficiency thing...

Survival 101

Lots of tips if things get really bad & you find yourself in the wilderness.

http://www.survivingpeakoil.com/article.php?id=matter_of_survival

I especially like the part about how to deal with an animal carcass. Fun and informative!

The rest of the site is pretty good wrt surviving peak oil in the most general sense. There are articles such as "educate yourself about peak oil," and "here's what you should do in your village post-peak." Good stuff.

What about Portland?

Have you ever thought about the best place to ride out the storm? That is, different cities & geography are going to fare better than others - which one will be best?

I'd like to offer Portland as an idea:
- The city has an office for sustainable development, including an official Peak Oil Task Force (http://www.portlandonline.com/osd/index.cfm?a=122243&c=41625)
- They'll likely never have an issue with lack of water (of course with global warming it's hard to say)
- The climate is mild enough not to require extra energy for heating/cooling (again, global warming caveat)
- The train system is as good or better than anywhere else in the US
- Food shouldn't be a problem, and if it is it, won't be nearly as bad as most places in the US

The only place that might be better is "any location in most other countries, esp. Europe."

On queers and global warming

OK this has nothing to do with preparation, but it riled me up so i figure i'd post it

http://www.latimes.com/news/opinion/commentary/la-op-gilbert2jul02,0,7539379.story?coll=la-news-comment-opinions

Why not stockpile?

As you would probably guess, I look pretty regularly for blogs and articles and such for ideas to prepare for peak oil, but they're few and far between. They are tons of folks talking about peak oil, but hardly any that say, "be sure to prepare/protect yourself by doing such and such." In fact, I see more folks trumpeting, "don't bother stockpiling" than I see saying, "here's some stuff you should do or get."

Well why the hell not stockpile? It's certain that lots of things that are currently plentiful are going to be in short supply at some point in our lifetimes (and possibly uncomfortably soon). So why wouldn't I take the precautionary measure of stockpiling goods that I think that are going to be few and far between?

I think peak oil authors aren't taking this angle for one of four reasons:
1. They're liberal hippies who foolishly think they can save the world from peak oil
2. They're doing it themselves and they don't want folks driving up demand until they're done stockpiling
3. They think people care enough about what they say that they might start a hysteria
4. They're afraid of sounding like some survivalist nut

Here's a fact that none of them are going to be able to change: There are 6 billion people in the world, and without fossil fuels the earth's carrying capacity is probably more like 1 billion. Of those 1 billion, maybe a few million will have a decent standard of living when it's all said and done. I'd like to be one of those few million, and I'm sure as hell not going to luck into it.