I’ve been on a global crisis kick lately. It’s been fed a little by what I think is a huge real estate problem in the US that is going to come unraveled. But lately, I’ve been reading up on the global energy situation and getting a little freaked out – we are facing a serious problem in the coming decade or two. I’m not saying the world ends, but there does seem to be a big shock awaiting us.
Today I came across a quote from Matthew Simmons, who advised the White House on energy policy and is now a highly respected energy analyst. He was asked if there is a solution to the impending energy crisis. He said,
“I don’t think there is one. The solution is to pray. Under the best of circumstances, if all prayers are answered, there will be no crisis for maybe two years. After that, it’s a certainty.”
This is not some nutjob collecting soup in Idaho, kids. Even the IEA is getting freaky about it. Anyway, Simmons authored the recent Twilight in the Desert, and I just ordered it, along with Kunstler’s Long Emergency.
The US Energy Department issued a report in March of this year entitled “The Mitigation of the Peaking of World Oil Production”. Here’s a light-hearted nugget from the report:
“Without timely mitigation, world supply/demand balance will be achieved through massive demand destruction (shortages), accompanied by huge oil price increases, both of which would create a long period of significant economic hardship worldwide … the problems associated with world oil production peaking will not be temporary, and past ‘energy crisis’ experience will provide relatively little guidance. The challenge of oil peaking deserves immediate, serious attention, if risks are to be fully understood and mitigation begun on a timely basis… the world has never faced a problem like this. Without massive mitigation more than a decade before the fact, the problem will be pervasive and will not be temporary. Previous energy transitions were gradual and evolutionary; oil peaking will be abrupt and revolutionary.”
I think where the disconnect is in middle America is that people don’t quite realize the deep connection between energy and wealth. And I mean wealth in even the most fundamental way – to a great number of people on this planet, being able to take a shit in a separate room from where you eat your dinner is an affluent way of life. On a very basic level, it is our 70 years of (effectively) unlimited access to energy that has enabled the western world to flourish as it has. And this energy has almost exclusively come from petroleum sources. From the energy required to build and maintain a home to the energy it takes to go to work, fuel an economy, deliver electricity, support and trade currencies, travel, or just produce a box of Corn Flakes, every developed civilization on earth is neck-deep in an addiction of inconceivable consequence. What freaks me out about it is that, despite no shortage of bright minds, there is a shortage of people saying, “hey, here’s how we get out of this.”
I also think it’s important to note that a key stated goal for many radicalized Islamists – Al Qaeda, etc. – is $200 per barrel oil. They know this will do more damage to westernized societies than they ever could directly. This is why I sometimes wonder: if bin Laden has already infiltrated Saudi Intelligence and the Royal Family – and I think there’s little doubt of this – how long will he wait to knock over that domino?
Sleep well, my loves.