Peak Resources and the Preservation of Knowledge

Peak Resources and the Preservation of Knowledge

By Alice Friedemann    January 6, 2006

“Peak oil will affect more people, in more places, in more ways, than anything else in the history of the world”. Walter Youngquist, author of Geodestinies

Summary

After worldwide oil production peaks, there are no substitutes ready to make up the energy shortfall.  The immediate problem will be a need for liquid transportation fuels.

Liquid, renewable fuels, such as ethanol and hydrogen, do not have a high enough Energy Returned on Energy Invested (EROI) to run civilization, let alone maintain the existing infrastructure, the majority of which was built when oil had an EROI of 40 to 100.[1]

Liquid, non-renewable fossil fuels that could be used to replace oil, such as liquefied coal, require a tremendous amount of expensive infrastructure that needs to be built at least ten years before the world peak production of oil, according to Robert Hirsch.[2]  We haven’t done that, nor is it likely we ever will, because after peak, fossil fuels will be rationed and apportioned to agriculture and other critical agencies.[3]

We’re likely to lose many of the books printed on acidic paper between 1850 and most of the 20th century within decades. For the last twenty years, many books and journals have been printed on non-acidic paper and put on microfiche.  Both can last for centuries if kept at an ideal temperature and humidity.  But that isn’t permanent enough.   Librarians are aware of this, and have turned to computers as a way to preserve knowledge.  Some libraries are stopping the delivery of many printed journals and have them online only.

But computers are the top card in the house-of-cards complex civilization we built with coal and oil, and computers will be the first to go when supply chains fail as global trade diminishes.

Declining energy supplies are likely to trigger a global depression, resulting in political instability, which may trigger resource wars.

Preservation of knowledge needs to start immediately, while nations are still stable and wealthy.  Now is the time to consider how to preserve knowledge with a material that won’t decay, rust, mold, or shatter easily.  We should leave our descendents knowledge they can use and be amazed by, information to fuel the next Renaissance.

Introduction

Since there are no alternative energy sources, except for fusion, which could possibly replace fossil fuels,[4] a priority should be the preservation of knowledge.  Fusion is unlikely to ever be harnessed as a source of energy, and certainly won’t be ready in time to save us from the impact fossil fuel decline will have upon civilization.

Fossil fuels enabled the human population to grow at a rate 133 times higher than all of human history before then.[5]   Fusion would allow exponential growth to continue until we used up all of the other resources on the planet (e.g. water, topsoil), and lead to an even greater loss of human life and biodiversity.

There aren’t any alternative energy sources that can replace fossil fuels in the window of time left.  If only we’d listened to Jimmy Carter, while there was still a chance of reducing the inevitable tragedy relying on non-renewable energy sources would bring.[6]

We are about to enter a time of social, political, and economic hardship and instability, and these human factors will exacerbate the problem of declining energy.

Our lives depend on oil, natural gas, and coal for our food, clean water, sanitation, transportation, electricity, cooling and heating, cooking, and health.   These fossil fuels are composed of complex hydro-carbon chains that provide the feedstock for over half a million products, including plastics, medicine, paint, chemicals, etc.   We are utterly dependent upon the fossil fuels entwined in all aspects of our lives.  They have enabled our population to grow from one billion before coal to six and a half billion now.[7]

The biggest mistake people make about the seriousness of “Peak Oil” is assuming there is a technical fix.  This is understandable, given how virtually all articles in the press and scientific journals are about advances and breakthroughs.

Plan B

There is a “Plan B”.  Hirsch’s stopgap measure, Peaking of World Oil Production: Impacts, Mitigation, & Risk Management,is the most likely plan to be attempted as the energy crisis worsens.  The solutions are heavy oil, gas-to-liquids & liquefied natural gas, enhanced oil recovery, efficient vehicles, and coal liquids.  Notice that nearly all depend on using low quality liquid fossil fuels (which would increase global warming).  Some highlights:

  • The peaking of world oil production presents the U.S. and the world with an unprecedented risk management problem. As peaking is approached, liquid fuel prices and price volatility will increase dramatically, and, without timely mitigation, the economic, social, and political costs will be unprecedented. Viable mitigation options exist on both the supply and demand sides, but to have substantial impact, they must be initiated more than a decade in advance of peaking.
  • The problem of the peaking of world conventional oil production is unlike any yet faced by modern industrial society.
  • Oil is the lifeblood of modern civilization. It fuels the vast majority of the world’s mechanized transportation equipment – automobiles, trucks, airplanes, trains, ships, farm equipment, the military, etc. Oil is also the primary feedstock for many of the chemicals that are essential to modern life. This study deals with the upcoming physical shortage of world conventional oil–an event that has the potential to inflict disruptions and hardships on the economies of every country.
  • Use of petroleum is pervasive throughout the U.S. economy. It is directly linked to all market sectors because all depend on oil-consuming capital stock.
  • 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 (wood to coal and coal to oil) were gradual and evolutionary; oil peaking will be abrupt and revolutionary.
  • Even if efficient vehicles were mandated or a technology breakthrough occurred, it would take 10-15 years to replace the existing vehicle fleet. In 2004, …U.S. oil consumption was 20 MM barrels per day, two-thirds of which was in the transportation sector.
  • The implications for U.S. … mitigation of world oil peaking are troubling. To replace dwindling supplies of conventional oil, large numbers of expensive and environmentally intrusive substitute fuel production facilities will be required. Under current conditions, it could easily require more than a decade to construct a large coal liquefaction plant in the U.S. The prospects for constructing 25-50, with the first ones coming into operation within a three year time window are essentially nil.

Congressman Roscoe Bartlett (R-MD), a co-founder of the House of Representatives Peak Oil Caucus, said that we should not try to fill in the gap between supply and demand with the Hirsch plan, because after these measures run out, civilization will crash even harder, and these measures will damage the environment.

Another Plan B would be to build new nuclear power plants.   Since the issue that needs to be solved is liquid transportation fuel, nuclear power is irrelevant.  So are solar, tidal, and wind power.

Currently there is only enough uranium left to power existing plants for about fifty years.  If Generation IV nuclear power plants can be made to work, they could stretch U235 fuel for several millennia, as well as reduce nuclear waste considerably.

Per Peterson, chairman of the nuclear engineering department at the University of California, Berkeley, said that Gen IV might start being built around 2025-2030. These plants generate tremendously high heat, which could contribute to solving the liquid fuel problem by splitting hydrogen from water to convert low-grade heavy oils into high-energy fuel.   We’ve known since 1969 that we needed to build these types of reactors to stretch out nuclear fuel, but still haven’t figured out how to do this safely[8].

Saudi Arabian oil reserves

So here we are close to Peak Oil,[9] and we haven’t started on any Plan B.   We‘ll know we’re at Peak Oil production when Saudi Arabian oil extraction declines, because they have such a huge portion of the world’s remaining oil, nearly a quarter of it.  But Matt Simmons believes that they may have exaggerated their reserves and have other problems:[10]

1)      There’s a 35-40% probability that Saudi Arabian oil fields “could fall over a 30 month period of time by 50-70%”.   Fields that are produced too quickly, (which has happened in the past and may be happening now as well), can drop off suddenly and quite sharply, leaving oil behind that may never be recovered.

2)      Saudi Arabia claims to have 260 billion barrels of reserves, but the real number is probably less than half of that.

3)      The Saudis damaged their oil fields by over-producing in the early 1970s and again after Iraq invaded Kuwait in 1990. That changed the subsurface pressure, creating huge water problems that will make it harder to recover oil.

4)      Congress had evidence in the 1970s that the Saudi oil fields had only about 30 years of sustained production left but kept it secret.

5)      There are no new large oil fields likely to be discovered in Saudi Arabia

6)      The Saudi’s are mining their oil in ways that Hubbert hadn’t anticipated. They’re using new technology, which depletes the oil sooner, which makes the decline rate steeper than what Hubbert and others calculated.

7)      We’ve used up the vast majority of the world’s high flow rate, high quality oil. We still have a lot of oil. But it’s heavy, gunky, dirty, sour, contaminated oil.  It doesn’t come out fast, and it’s very energy intensive to get out.

So not only do the Saudis probably have a lot less oil than they claim, but extraction could fall off precipitously due to poor management in the past and the use of new technology, which is depleting the oil sooner than it otherwise would have been.  Worse yet, what’s left is poor quality, difficult and expensive to refine oil that’s hard to get out.

Consequences of a decline in oil

When world oil production declines, all nations will be affected.  The major likely consequences are global depression and civil disorder as decline continues, starvation as agriculture is affected, and World War III over the remaining resources.  Wars have been fought over minerals throughout history.[11] Colin Campbell has written a global depletion protocol to try to prevent this from happening, but at this point most governments are not even aware of it, let alone trying to implement this plan.[12]

As time goes on, shortages will occur, triggered not only by declining oil supplies, refinery breakdowns, and hurricanes destroying oil infrastructure, but also from revolutions and terrorists blowing up oil refineries, pipelines, and oil tankers.

The USA is down to oil reserves that could power our country, at current rates of use, for four years.  This vast country, with limited train and mass transit systems, combined with massive dependence on vehicles to reach sprawling suburbs, makes the United States very vulnerable to oil shocks.

There are plans in place for rationing should shortages strike, [13] [14] and there is room for demand destruction.  The U.S. rationing plan calls for agriculture to take what it needs off the top.  After that other critical agencies will get what they need.  Anything left over will be distributed to everyone else.

Natural Gas Depletion

Natural gas heats over half of all American homes and provides twenty percent of our electricity.  Natural gas is also used to make plastics, chemicals, fabric, carpets, packaging, and many other products. It is the feedstock and energy source used to create nitrogen fertilizers that grow up to four times more food than could be grown otherwise.  It’s also used to refine oil and tar sands.[15]

North America will face the depletion of natural gas within the next decades.  Natural gas extraction has a much steeper rate of decline than oil – current annual new well decline is 31% and half of the natural gas needed in 2012 is going to come from fields that haven’t even been discovered yet.[16]  This problem is as serious as oil depletion.

Replacing fossil fuels with some other energy source

At one time, the Energy Returned on Energy Invested (EROI) for oil was at least 100 to 1.1   We are reaching the point where the EROI of oil will be 1 and no more drilling will take place.[17] It was while the EROI of oil was high that most of our current infrastructure was built.

Evidence suggests that the EROI of corn ethanol is less than one, which means it takes more energy to make than you get out of it – an energy sink.

Pimentel and Patzek have shown that it takes twenty seven to fifty seven percent more fossil fuel energy to create ethanol or biodiesel than you get in the energy returned.  Worse yet, this is done at a tremendous environmental cost, since biofuel crops harm soil structure and remove the nutrients, deplete groundwater, pollute water with pesticides, insecticides, and herbicides, cause eutrophication of water via nitrogen runoff, increase soil erosion, and contribute to air pollution and global warming at the ethanol plant and when burned in cars.[18]

Even if the highest claim of a net energy for ethanol of 1.67 were true, a much greater EROI than .67 is needed to run civilization.   The 1 in the 1.67 is needed just to make the ethanol.  An EROI of .67 has 150 times less energy than oil when we started building American infrastructure.

Charles A. S. Hall, who has been studying net energy for decades, believes that you’d need an EROI of at least 5 to run civilization, because you need to include the energy to make the machines, mitigate environmental damage, feed and house the workers, etc.[19]

For example, consider a windmill composed of steel and concrete.  A windmill farm in the Escalante desert, built to produce 5.55 TWh of power, would require 13.8 million pounds of aluminum, 2.8 trillion pounds of concrete, 639 billion pounds of steel, etc.  The wind farm would occupy over 189 square miles.[20]  Pacca & Horvath don’t give the capacity factor for these windmills, but an often used number is 30% (i.e. wind blows hard enough 30% of the time), so a 5.55 TWh wind farm might serve around 175,000 to 350,000 people, depending on the wind speed and how close people were to the windmills, since power is lost via transmission over long distances.

In 1992 such a wind farm would cost 200 million dollars, which doesn’t include labor and maintenance costs, and would serve less than one percent of the United States population.  It would cost over $200,000,000,000 to build enough windmills to generate electrical power for everyone (though of course, you couldn’t, since not all areas have enough wind).  With energy prices many times higher now than in 1992, the cost would be far more expensive.

After fossil fuels are gone, the windmills must be able to generate enough energy to maintain themselves and build new windmills, including all of the equipment used to mine the metal and concrete components, forge metal into blades and towers, and build the trucks and roads that enable windmills to be delivered to their sites.  Windmill energy must also provide the energy to build and maintain the electric grid and storage battery infrastructure, and all of the people involved in the process.  Any extra energy could now be used to run civilization.

It’s often said that once oil goes to “x” dollars a barrel, alternative energy will become economically viable.  But this will never happen, because the alternative energy infrastructure is built with fossil-fuel inputs, so alternative energy sources will always cost more than oil. To even talk about energy using dollar figures makes no sense — you can’t stuff dollar bills down your gas tank.

Energy can be reduced to physics, to the laws of thermodynamics and other rules that the Big Bang bequeathed our universe.  Oil has been a free lunch, one that nature spent hundreds of millions of years making, reducing 196,000 pounds of plant matter into one gallon of gasoline – pure, unadulterated solar power that no alternative energy source but fusion could possibly hope to replace.[21]  Oil is also incredibly easy to use, ship, and store.

The number of scientists who insist that alternative energies can substitute for fossil fuels, and ignore or deny the basic laws of physics and thermodynamics is frightening.  It’s reminiscent of Lysenkoism.

United States Infrastructure

While the EROI of oil was high, we built a vast infrastructure to deliver clean water, treat sewage, built roads, bridges, dams, and so on.

Any non-fossil fuel type of energy will have a great deal of work just maintaining the existing infrastructure.  The American Society of Civil Engineers gave the following grades to our infrastructure in 2005.[22]

Grade  Infrastructure Components

C+       Solid Waste

C         Bridges

C-        Rail

D+       Aviation                      Transit

D         Dams                           Energy             Hazardous Waste        Roads     Schools

D-        Drinking Water           Wastewater     Navigable Waterways

Consider just the drinking water infrastructure, the main reason our life spans have increased so much.[23] In this century, all of the 600,000 miles of pipes delivering clean water to homes will need to be replaced.  Every component of the water system is aging.  The energy required to replace or maintain thousands of treatment plants, pumping stations, reservoirs and dams over the next century is staggering.[24]

Useful Life Matrix

Clean Water  Years               Component

80–100         Collections

50         Treatment Plants – Concrete Structures

15- 25         Treatment Plants – Mechanical & Electrical

25    Force Mains

50          Pumping Stations – Concrete Structures

15          Pumping Stations – Mechanical & Electrical

90–100         Interceptors

Drinking Water

50- 80         Reservoirs & Dams

60- 70         Treatment Plants – Concrete Structures

15– 25         Treatment Plants – Mechanical & Electrical

65– 95         Trunk Mains

60- 70         Pumping Stations – Concrete Structures

25    Pumping Stations – Mechanical & Electrical

65- 95         Distribution

And consider the energy required to deliver the water.  According to Allan Hoffman,  “Energy is required to lift water from depth in aquifers, pump water through canals and pipes, control water flow and treat waste water, and desalinate brackish or sea water. Globally, commercial energy consumed for delivering water is more than 26 Quads, 7% of total world consumption”.[25]

The fragility of global trade and infrastructure

Science fiction movies used to scare us with out-of-control robots bent on world destruction.  If there’s a runaway robot now, it’s global corporations doing what’s best for the shareholder rather than the citizens and nations of the world.  Pensions have been looted, health care benefits taken away, taxes avoided, and regulations ignored.

Risks are being taken that could bring down the global financial system.

One of the risks to global trade is due large computer and electronic companies using the same outsourcers for similar components from the same region — even the same place – such as an industrial park in Hsinchu, Taiwan.  The risk is a single source of failure.

Microprocessors depend on electricity, electricity depends on microprocessors

Business interruptions can cost a fabrication plant 20-30 million dollars in lost revenue.  For instance, a plant that had a four-hour long electricity outage had to spend the next four days recalibrating their equipment, resulting in a $5 million dollar loss. Insurance companies have responded with huge deductibles and capped the loss amounts.[28]

As unexpected energy shortages and outages grow more common in the future, this will wreak havoc on microprocessor production.

The electric grid was originally designed for analog devices, which are much less vulnerable to momentary disturbances in electric power. But a nearly imperceptible one-second sag in voltage or other momentary disturbance at a semiconductor-fabrication plant producing microprocessors could ruin an entire 30-hour batch of chips, and possibly the equipment itself, (EPRI 2003).

Any device with a microprocessor is vulnerable to the slightest disruption of electricity. Billions of microprocessors have been incorporated into industrial sensors, home appliances, and other devices. These digital devices are highly sensitive to even the slightest disruption (an outage of a small fraction of a single cycle can disrupt performance), as well as to variations in power quality due to transients, harmonics, and voltage surges and sags. Another example from EPRI of possible consequences is if a microprocessor running a paint gun in an auto plant failed from an electrical disruption, it could destroy the finish on one or more cars, and disrupt part of the assembly process.

Today about 10% of total electrical demand in the United States feeds or is controlled by microprocessors. By 2020 this level is expected to reach 30% or more (EPRI, 2003).

Microprocessors are essential to the modern world

Billions of chips are created every year for a myriad of applications: in autos, airplanes, ATMs, air conditioners, calculators, cameras, cell phones, clocks, DVDs, machine tools, medical equipment, microwave ovens, office and industrial equipment, routers, security systems, thermostats, TVs, VCRs, washing machines – nearly all electrical devices.

So when an earthquake struck Taiwan in 1999, world markets were shaken. Willem Roelandts of Xilinx immediately knew this had the possibility of hurting the world economy.  “There is not an electronic product in the world that does not contain a Taiwanese component”, he said.

Even though the factories were fine, electrical and transportation systems weren’t, so production and delivery of components stopped, which caused assembly lines in the United States to halt as well.  Wall Street traders sold off electronic firms, especially Dell, HP, and Apple.

You wouldn’t think the United States would build microchip factories offshore in industries that were essential to its national and economic security.  But low wages are irresistible to corporations.  Also, many foreign countries are closer to sources of natural gas, which is declining at an alarming rate in North America.

According to Jack Gerard, president and CEO of the American Chemistry Council, “ “Natural gas is a raw material for compounds used in thousands of consumer products — from agriculture, telecommunications and automobiles to pharmaceuticals…and food packaging. More than 96 percent of all manufactured goods are directly touched by chemistry.  The industries that rely on chemistry together represent more than a quarter of the nation’s entire workforce. Unaffordable natural gas is driving away investment, crippling our manufacturing base, and reducing job opportunities. It is transferring to foreign countries the advanced research and technology desperately needed in order to compete on the world stage. In effect, our nation’s energy policy has become its de facto manufacturing and national-security policies as well.[26]

Industries also like to locate factories where environmental regulations are less stringent.

The chemicals used to create computer parts have resulted in 29 superfund sites in Silicon Valley, the most concentrated number of superfund spots in America.  At the Advanced Micro Devices superfund site in Sunnyvale, California, chemicals are in the groundwater and soil that can cause death, cancer, brain and central nervous system damage, leukemia, anemia, convulsions, nausea, unconsciousness.  The zinc and copper at this site are toxic to plants, ruining what were once some of the best orchards in the world.

The need to go where costs are lowest is driven by the enormous amount of money it takes to build a mega-size wafer fabrication plants — nearly ten billion dollars.[27]

Part of this amount is due to very high insurance costs.  In 1997, an Hsinchu Taiwan fabrication plant had a fire that caused $421 million dollars in smoke and water damage.

Outsourced products are delivered just-in-time to the factory assembly.   According to Barry C. Lynn, “Our corporations have built a global production system that is so complex, geared so tightly, and leveraged so finely, that a breakdown anywhere increasingly means a breakdown everywhere, much in the way that a small perturbation in the electricity grid in Ohio tripped the great North American blackout of August 2003”.[29]

Less major blows to assembly lines have come from strikes, SARS, fires, explosions, and manufacturing mistakes, such as the ones that resulted in Chiron’s failure to deliver half of the American flu vaccine.   Fortunately, the impacts so far have been temporary and regional. But it’s not hard to imagine events that could result in worldwide disruptions leading to a global depression.

Energy shortages for instance.  Already many businesses in the chemical, agricultural, steel, glass, and other industries have failed or are in pain from high natural gas prices in America.[30] [31] [32]  When enough key suppliers of infrastructure components fail, this will stop the downstream assembly line.  Suppliers might also go out of business because of economic failure in the manufacturing country, civil or regional wars, and extreme weather.

Despite the risk, single-sourcing occurs because cutting costs is how you stay in business, so the cheapest supplier wins the race to the bottom.  Corporations have gone cuckoo with outsourcing; letting suppliers located in potentially shaky political and economic countries hatch their nest eggs.

When the fledglings hatch they often fly on Fed Ex, which is so reliable it seems as if the supplier were on the other side of town instead of across the world.  But the airline industry is reeling from higher energy prices, so it’s possible that the intricate, just-in-time, high-speed aircraft delivery of electronic gear will shift to ships, a much slower, less predictable way to deliver cargo “just-in-time”.

Most products traded globally travel by sea.  Over 50,000 large ships carry 80 percent of the worlds’ cargo. Shipping faces critical challenges in the future.

Oil and LNG tankers are increasingly failing from corrosion. Over 2400 tankers split up or nearly did so from 1995 to 2001 according to the International Association of Independent Tanker Owners.[33]

Another hazard to shipping is piracy or terrorism. According to Gal Luft, executive director of the Institute for the Analysis of Global Security (IAGS), and Anne Korin, director of policy and strategic planning at IAGS and editor of Energy Security:[34]

  • The number of pirate attacks on ships has tripled in the past decade.  In 2003, there were 445 attacks. 92 seafarers were killed, and 359 assaulted and taken hostage, in 19 hijackings and 311 boardings.
  • Three-quarters of the globe is covered in water that is thinly policed.
  • Pirates are often trained fighters armed with automatic weapons, antitank missiles and grenades. Most of the world’s oil and gas is shipped through the world’s most piracy-infested waters.  Piracy is becoming a tactic of terrorists, who see it as a lucrative source of revenue. They’ve attacked tankers near Iraq, Nigeria, Saudi Arabia, and Yemen.
  • 60 percent of oil is shipped in 4,000 tankers passing through bottlenecks where they’re vulnerable to attack.  If a tanker were set on fire at one of these vulnerable points, the sea-lanes would be blocked.
  • Many shipping companies don’t report piracy lest their insurance premiums go up, but what is reported amounts to over 16 billion dollars per year.

Terrorism is affecting the worlds’ energy infrastructure. U.S. Energy Secretary Spencer Abraham has repeatedly warned that “terrorists are looking for opportunities to impact the world economy” by targeting energy infrastructure. Nigeria, Columbia, and Iraq have seen many attacks in the past few years.  There have been 282 attacks on oil infrastructure and personnel in Iraq from June 2003 to November 2005.[35]

Trading Partners

Trading partners matter.  Strategically, it’s probably not a great idea to partner with China because of their bloody history, economic booms and busts, and a landscape so environmentally devastated millions of Chinese are on the brink of starvation.

But it’s corporations that are now making strategic decisions about what’s best long-term for U.S. citizens based on how profitable next quarter will be.  The United States relationship with China began with Motorola, and Wal-Mart consummated the marriage.

China is on the verge of being unable to feed itself. More than 900 square miles of land degrade into desert every year while even larger areas are losing their productivity.[36]  The soils are becoming acidic and lifeless, making the crops vulnerable to fungal attacks. Worse yet, this shift has caused grain yields to fall by 20%.[37]

Water is growing scarce for farmers because cities usually win the rights to it. Aquifers are depleting and irrigation wells are drying up, forcing farmers to abandon their land.

According to Lester Brown of World Watch, “The cheap food of the last century may soon be history.  China will soon have to buy grain on the world market, and given their 150-billion trade surplus, will be competing with Americans for food, at a time when the USA is also losing cropland to aquifer depletion and soil erosion”.[38]

Much of the country is an environmental disaster.  The Gobi desert grew 20,000 square miles in five years and is now within 150 miles of Beijing.  This has been brought on by over-farming, over-grazing, and destruction of forests.  The dust from this desert is starting to affect the whole world, and contains arsenic, cadmium, and lead.[39]


We’ve become so linked to China economically that their frequent booms and bus could do the same to our economy.  Many industries have China to thank for their good times, especially shipping lines, which are hauling enormous amounts of oil, 150 million tons of iron ore, coal, and other raw materials to China, and bringing back finished goods like electronics, furniture, and clothing.

China has surpassed the United states in the market for cell phones and color TV’s, and is on their way to outdoing us in buying PC’s and soon, perhaps, energy.

There are almost 120 boys for each 100 girls being born in China, due to the one-child policy leading parents to prefer boys to girls.   Historically, this skewed ratio has meant big trouble, and one of the ways societies coped was by starting wars.

Women are being kidnapped and sold as brides. From 2001 to 2003 China’s police freed more than 42,000 kidnapped women and children.  And it’s only likely to get worse; one estimate puts the number of bachelors over the next decade at 40 million.

This could pose a threat to China’s stability according to Valerie Hudson and Andrea Den Boer, authors of “Security Implications of Asia’s Surplus Male Population”, which cites two Manchu Dynasty rebellions in areas that were disproportionately male.  They believe that young adult men unlikely to find wives are “much more prone to attempt to improve their situation through violent and criminal behavior in a strategy of coalitional aggression.”

Whether China dissolves in internal chaos, kicked off by hunger and unhappy bachelors, or explodes outward militarily as resources grow scarce, remains to be seen.  But given China’s violent history, it’s a sure bet there’s a conflagration ahead.[40]

Stephen LeBlanc, Harvard archeologist, believes that throughout most of history we have been engaged in constant battles.  When trying to find out why war was so prevalent, he assumed people were fighting for real reasons, and he discovered that the fights were always over scarce resources, usually food and often women.

He has evidence that we have never been able to control our population growth, which inevitably resulted in over exploitation of the environment, as far back in time as you go.

The consequence of over-exploitation is scarce resources, and that usually leads to war.

LeBlanc concludes: “Humans starve only when there are no other choices. One of those choices is to attempt to take either food, or food-producing land, from someone else. People do perceive resource stress before they are starving. If no state or central authority is there to stop them, they will fight before the situation gets hopeless”.[41]

Jared Diamond looks at the recent example of the Rwandan genocide in “Collapse”.  Although most people think this was an ethnic struggle between the majority Hutu and ruling Tutsi, that’s because most people understand the world in terms of ethnic conflict.

Since there were areas where Hutu killed Hutu, Diamond concludes that the real reason for the slaughter was for ecological reasons: “Look at the land: steep hills farmed right up to the crests, without any protective terracing; rivers thick with mud from erosion; extreme deforestation leading to irregular rainfall and famine; staggeringly high population densities; the exhaustion of the topsoil; falling per-capita food production. This was a society on the brink of ecological disaster, and if there is anything that is clear from the study of such societies it is that they inevitably descend into genocidal chaos”.

If LeBlanc and Diamond are correct about hunger resulting in battles, then we’re in for a rough time, as oil and natural gas grow scarcer.  Food, from planting, fertilizing, harvesting, and distribution, is utterly dependant upon fossil fuels in the United States.

How America handles a declining standard of living, given our addiction to comfort and super-sized meals, with over half of Americans owning guns, and 30,000 people killed with guns in 2002, [42] remains to be seen.

Continued global trade at current levels cannot be sustained as energy declines.  At some point global trade will lessen due to a combination of declining fossil fuels, piracy, terrorism, energy shocks, pandemics, natural disasters, political turmoil, global depression, and a shortage of large, non-oil based vessels.

Global trade will not disappear, since moving freight over water is very efficient, but there will be several discontinuities as declining energy forces us to roll backwards though history.

Most cargo is shipped on enormous container vessels that can be over 1100 feet long with ten thousand containers stacked many stories high.

The first discontinuity will come when we have to retrofit ships to run on coal, and set up coal stations and tenders all over the world.

The second discontinuity will occur when coal gets scarce and container ships are moved by wind power (if this is even possible), with liquid fossil fuel only used when entering and leaving ports.  A further step down will happen when it’s too energy-intensive to keep harbors dredged deep enough accommodate large container ships.  It’s already very tricky getting these large ships into port, a local pilot is brought in and complex computer systems are used to delicately park these gargantuan ships along the wharf.[43]

These huge ships would have to remain offshore and unloaded to smaller ships, if that is possible, since they weren’t designed for this.

The third discontinuity will come when containerization can no longer be supported due to lack of fuel and/or electricity for cranes, trucks, and trains.  Containerization revolutionized the amount of cargo and the swiftness with which it could be loaded and delivered from origin to destination by orders of magnitude over earlier forms of transportation.

The final discontinuity will come when ships need to be built from wood, because the remaining mineral ore is too low quality and energy-intensive to process, and when we can no longer recycle the rusted and dispersed iron and steel.

The Fragility of Microprocessors

I work in the computer industry as a systems architect/engineer.  My father got in on the ground floor, programming computers with wires before there were even punch cards.   As far as I could tell, his job was to draw squares, circles, and triangles and connect them with arrows.  I used to fill the flow charts in with crayons when I was younger.

I took an introductory course to find out what Dad had been doing, and was hooked.  I couldn’t believe you could get paid to solve intricate and interesting puzzles.  I abandoned my plans to get a PhD in molecular biology and started working at EDS.

I think computers are the most amazing achievement of mankind.  I especially like being in touch with family, friends, and new acquaintances from around the world with common interests.

The first computer, the ENIAC, built in 1940, took up 1500 square feet.  The same floor space now could contain 1.4 million microchips, each with orders of magnitude more computing power.  A car now has more computing power than the first lunar spacecraft.

Microchip fabrication [44] [45]

Creating a chip begins by cutting a thin 12 inch slice, called a wafer, from a 99.9999999% pure silicon crystal, one of the purest materials on earth.  Wafers require such a high degree of perfection that even a missing atom can cause unwanted current leakage and other problems in manufacturing later on.  This is the platform that about 5000 computer chips will be built on. Each chip will contain millions of transistors, capacitors, diodes, and resistors built by punching and filling in holes in more layers than a Queen’s wedding cake.

Cleanliness

Particles 500 times smaller than a human hair can cause defects in microchips. The more particles that get on a wafer, the greater the chance there is of a killer defect. Some particles are worse than others — a single grain of salt could ruin all the chips on a wafer.  Sodium can travel through layers even faster than stray bits of metal.  Particles that outright kill a chip are caught during the testing phase at the factory.  Sometimes only 20% make to the end.  The traveling particles are insidious, and can cause a chip to malfunction, perform poorly, or die later on (hopefully before your warranty expires).  Consumer reports recommends not even trying to repair a personal computer after four years, and in the two to four year range it’s a tossup whether to repair or buy a new one.

Typical city air has 5 million particles per cubic foot.  There are processes that require a maximum of 1 particle per square cubic foot.

People are among the worst offenders, as far as particle generation goes.  If you walk at a good clip, you emit 7.5 million particles per minute.  Even sitting still, you are still emitting particles.  A smoker is a particle-emitting dragon long after the cigarette, and a sneezing worker is even worse, a veritable Krakatoa.

City water is not pure enough to be used — it’s full of bacteria, minerals, particulates, and other junk.  To make city water clean enough requires many filters, UV-light, and other water treatments.  Some fabrication plants use millions of gallons of water a day, requiring a huge investment in water processing and delivery systems.

Microchip fabrication is primarily a chemical process, requiring ultra-clean 99.9999% chemicals and 99.9999999% gases.   About one in five steps use water or chemicals to clean the wafers or prepare their surface for the next layer.

Firemen practically need a chemical engineering degree to inspect and fight fires in a chip fabrication plant.   During a fire, they risk being exposed to volatile, flammable, or combustible solvents, and chemicals like arsine, used in chemical warfare.

The chips also require humidity to be just right.  If the humidity is too high, the wafers accumulate moisture, and the layers won’t stick.  Too dry and static electricity will suck particles out of the air and practically glue them to the surface, they’re so hard to remove.

So it shouldn’t surprise you that it costs over 3 billion dollars to build a clean room. The inside is composed of non-shedding materials, especially stainless steel. Floors have sticky mats to pull dirt off of operators’ shoes.  Pens, notebooks, tools, and mops – everything is built of material that sheds as few particles as possible, but even so, equipment particles cause a third of the contamination.

How chips are made

Wafers move from workstation to workstation and have different operations performed on them at each one.  Wafer fabrication for a chip might involve 450 processes with operations that overall take several thousand individual steps. The machines that make this all happen include high-temperature diffusion furnaces, wet cleaning stations, dry plasma etchers, ion implanters, rapid thermal processors, vacuum pumps, fast flow controllers, residual gas analyzers, plasma glow dischargers, vertical furnaces, optical pyrometers, etc.

If you were shrunk to chip size and tied to a wafer, you’d go through the car wash from hell.  You’ll be moved along by robotic wafer handlers from one machine to the next, where you’d be layered with different materials, centrifuged, electro-polished, dyed, scraped, heated to 1,800 F, ultrasonically agitated, sputtered, doped, hard baked, dipped in toxic chemical baths, irradiated, blasted with ultrasonic energy, spray-cleaned, dry-cleaned, scrubbed, micro-waved, x-rayed, shot with metal, etched, and probed.

At various points, the “Survivor” show comes on.  Chips are examined at an atomic level for defects, and their electrical functioning tested. They’re usually thrown out if anything is wrong, since most mistakes can’t be fixed.

There are many problems that can cause a chip to fail besides contamination. The wafer must be perfectly flat in structure and while it goes through the workstations.  If the wafer were 10,000 feet high, you’d see bumps or holes no higher than 2 inches – more than that and the layering is thrown off.   If the wrong step was performed after 3,841 correctly performed steps, the chip was under or overheated, the layer didn’t fully stick, was improperly aligned before the next layer was added, or a chemical misapplied, the chip is thrown out.  It’s amazing any chips make it out the door.

After your makeover, you’d emerge in a designer outfit composed of up to 25 layers embedded with millions of transistors, diodes, and resistors.  You’ll find yourself “best in show” at tattoo competitions and irresistible to Terminator fans.

The Case for collapse starting sooner than later

Jared Diamond lists five main factors for the collapse of civilization.[46]  All five are evident. The first two reasons, collapse from environmental reasons and climate change are so evident they require no further comment.

The third factor is not being able to adapt to new conditions.  Dmitry Orlov makes a good case for the eventual collapse in the United States being much harder than the recent collapse in the former Soviet Union due to our cultural weaknesses.[47] Ecologists believe that we needed to have started adapting to the decline of energy in the 1970’s by reducing our population and encouraging small family farms to get people back to the land.

The fourth reason for collapse is “relations with hostile neighbors”.  There is reason to believe sleeper Jihad cells lie in wait of an opportunity to blow up key pieces of infrastructure in America.  Russia, China, and Europe may unite against the U.S. to prevent America from taking the lions’ share of the remaining oil.

On the fifth factor, relations with friendly nation, Diamond said: “Almost all societies depend in part upon trade with neighboring friendly societies, and if one of those friendly societies itself runs into environmental problems and collapses, that collapse may then drag down their trade partners. It’s something that interests us today, given that we are dependent for oil upon imports from countries that have little political stability in fragile environments”.

Diamond’s “loss of trading partners” factor is another reason computers won’t survive PetroCollapse.  As global shipping, factories, and countries have a hard time keeping the lights on; computers will stop being made as supply chains break down.  If even one of the dozens of types of single-sourced equipment or pure chemical suppliers goes out of business, the assembly line stops.

Andrew Gould, CEO of Schlumberger, said of the oil decline that “An accurate average decline rate is hard to estimate, but an overall figure of 8% is not an unreasonable assumption”.[48]

Matt Simmons also believes that an 8% rate of decline is possible, given how Saudi Arabia’s fields were mismanaged, the use of technology to extract the oil sooner than it would have otherwise been pumped, other super giant oil fields having depleted rapidly after their peak, and the likelihood that Saudi oil reserves are probably half of what is reported.

The decline after peak might initially be low, buying a few years of time, but if it does reach 8% per year, world oil extraction would decline by almost half in eight years.   That is likely to lead to the collapse of civilization, because there is too little time to adapt.

Preservation of Knowledge

A project to preserve knowledge may be unable to continue in an unstable society beset with power outages, hunger, and crime. Once rationing and shortages begin, agriculture and other essential services will receive the most energy.   Scientists will be unemployed.  It is very likely that resource wars will erupt all over the globe, so the military will be taking a large portion of the dwindling energy resources as well. [49] [50] [51] [52] [53] [54] [55]

The time to begin is now, before we begin the inexorable retreat to wood as civilizations’ main energy source.

We’ve reached the point where we need to be concerned about the preservation of knowledge.  This cannot be done with computers, which are the least likely component of all to survive long-term, but this is the main plan for storing knowledge at institutions dedicated to this issue.

Computers are the top cards in the civilization house of cards.  Knock out any below and it all crumbles.  Computers have too many complex, energy intensive inputs and dependencies (Hawken, Shaw 2004, Shaw 2005, Boberg)

How can it be done?

We may be able to cannibalize computers for parts to keep some machines running, but eventually all the knowledge stored in computers will be unavailable.  By that time, most of the paper in library books will have decayed, become nesting material for rodents, or burned to heat homes.

Although archival paper and microfiche can last for five hundred years when kept at ideal temperatures and humidity, power outages will make it impossible to maintain them for that long.

It’s likely the unprecedented stable weather we’ve had the past ten thousand years will change, not only given the earth’s past history, but from our chemical alteration of the atmosphere.  While there may be initial global warming, that could change quickly to an ice age, or to extreme weather, with the climate warming and cooling so quickly that agriculture becomes tenuous (Cox).

If it is possible to etch words into metallic or other extremely durable substances, we ought to do it, not only for the coming dark ages, but to enable some knowledge to survive through future climate changes.

After all, we once put a disk on a space probe to explain humanity to potential aliens, why can’t we do that for our descendants?

Clearly not everything in print can or should be saved.  Priority should be given to information that would be useful to a society far simpler than ours.

We should leave our descendents with information they can use and be amazed by. We owe it to them.  It’s the least we could do considering we’ve driven so many species to extinction and left much of the land a toxic, deforested, desert.  If we can spend billions on microchip factories that are out-of-date within two years, surely we have the resources to save some useful knowledge and music for our descendants.

We need to find better materials than paper and clay tablets to preserve knowledge.  Someday there will be a new renaissance.

Maybe it’s as simple as converting Coca-cola factories from making soda cans to printing aluminum texts.

References



[1] Charles Hall, T. Pradeep, J. Hallock, Cutler Cleveland, M. Jefferson. 20 Nov 2003. Hydrocarbons and the Evolution of Human Culture   Nature 426, pp. 318–22.

[2] Robert L. Hirsch, SAIC, Roger Bezdek, MISI, Robert Wendling,  MISI. Feb  2005. Peaking of World Oil Production: Impacts, Mitigation, & Risk Management

[3] Standby Gasoline Rationing Plan. June 1980. U.S. Department of Energy Economic

Regulatory Administration, Office of Regulations and Emergency Planning

[4] M. Hoffert, et al. November 1, 2002. Advanced Technology Paths to Global  Climate Stability: Energy

for a Greenhouse Planet. Science, 298: 981-987.

[5] Garrett Hardin. 1995. Living Within Limits: Ecology, Economics, and Population Taboos. Oxford

University Press

[6] Transcript of Jimmy Carter televised speech April 18, 1977

http://www.pbs.org/wgbh/amex/carter/filmmore/ps_energy.html

[7] Vaclav Smil. 2000. Enriching the Earth: Fritz Haber, Carl Bosch, and the Transformation of World Food Production. MIT Press.

[8]  “It is clear, therefore, that by the transition to a complete breeder-reactor program before the initial

supply of uranium 235 is exhausted, very much larger supplies of energy can be made available than

now exist.  Failure to make this transition would constitute one of the major disasters in human

    history.” National Academy of Sciences.  1969.  Resources & Man. W.H.Freeman, San Francisco. 259.

[9] K. Deffeyes. 2001. Hubbert’s Peak: The Impending World Oil Shortage. Princeton University Press

[10] Matthew Simons. 2005. Twilight in the Desert: the coming Saudi Oil Shock and the World Economy.

Wiley

[11] W. Youngquist. 1997. Geodestinies: The Inevitable Control of Earth Resources over Nations &

Individuals National Book Co.   Chapter 3: Minerals and War, and Economic and Political Warfare

[12] The Rimini Protocol: an Oil Depletion Protocol ~ Heading Off Economic Chaos and Political Conflict

During the Second Half of the Age of Oil.  2005

[13] M. Wendling.  June 21, 2005 Britain Considers Energy Rationing to Meet KyotoObligations http://www.cnsnews.com

[14] International Energy Agency. Feb 28, 2005. Saving Oil in a Hurry: Measures for Rapid Demand

    Restraint in Transport

[15] J. Darley. 2004. High Noon for Natural Gas: The New Energy Crisis. Chelsea Green.

[16] Energy Information Agency. 2000. Accelerated Depletion: Assessing its Impacts on Domestic Oil and

Natural Gas Prices and Production and Peter Dea, CEO of WGR (Western Gas Resources), Nov 12,

2005  at the Denver ASPO conference, http://www.theoildrum.com/story/2005/11/12/0150/4833

[17] J. Boxell. Oct 10, 2004. Top oil groups fail to recoup exploration costs.  New York Times.

[18] David Pimentel and Tad W. Patzek. March 2005. Ethanol Production Using Corn, Switchgrass, and Wood; Biodiesel Production Using Soybean and Sunflower. Natural Resources Research, Vol. 14, No. 1

[19] Charles Hall. June 2004. The Myth of Sustainable Development: Personal Reflections on Energy, its Relation to Neoclassical Econimics, and Stanely Jevons. Journal of Energy Resources Technology, Vol 126 pp. 85-89

[20] S. Pacca, D. Horvath 2002 Greenhouse Gas Emissions from Building & Operating  Electric Power Plants

in the Upper Colorado River Basin.Environmental Science & Technology /Vol 36, # 14  3194-3200

[21] S. Kruglinski.  April 2004. What’s in a Gallon of Gas? Discover Vol. 25 No.04

[22] American Society of Civil Engineers Report Card for America’s Infrastructure.  2005.

http://www.asce.org/reportcard/2005/index.cfm

[23] L. Garrett. 2001. Betrayal of Trust: The Collapse of Global Public Health. Hyperion

[24] United States Environmental Protection Agency, Office of Water . 2002. The Clean Water and Drinking

    Water Infrastructure Gap Analysis.  (4606M) EPA-816-R-02-020 www.epa.gov/safewater

[25] A. R. Hoffman. Aug 13, 2004. Water and Energy Security. Institute for the Analysis of Global Security.

[26] J. Gerard. Nov 1, 2005. A vulnerable natural-gas supply The Washington Times http://www.washtimes.com/op-ed/20051031-090107-9287r.htm

[27] C. Skinner, G. Gettel. 1998. Solid State Technology. p. 48.

[28] R. Buys. 1998. Fire department participation on a fast track construction project for the semiconductor industry.  http://www.usfa.fema.gov/pdf/efop/efo28646.PDF

[29] Barry c. Lynn. 2005. End of the Line: The Rise and Coming Fall of the Global Corporation. Doubleday.

[30] Associated Press. Jul 02, 2004.  Oil prices raising costs of offshoots By Associated Press http://www.tdn.com/articles/2004/07/02/biz/news03.prt

[31] Forbes. May 24, 2004 Soaring energy prices dog rosy U.S. farm economy.

http://www.forbes.com/business/newswire/2004/05/24/rtr1382512.html

[32] Washington Post. March 17, 2004. Chemical Industry in Crisis: Natural Gas Prices Are Up, Factories Are Closing, And Jobs Are Vanishing

[33] R. Martin.  June 2002. Blame it on super-rust, a virulent form of corrosion that has destroyed hundreds of ships and could sink the oil industry. Wired. http://www.wired.com/wired/archive/10.06/superrust.html

[34] G. Luft, A. Korin. Nov/Dec 2004.  Terrorism Goes to Sea. Foreign Affairs. http://www.iags.org/fa2004.html

[35] Institute for the Analysis of Global Security. 2005. Iraq Pipeline Watch Attacks on Iraqi pipelines, oil installations, and oil personnel.  http://www.iags.org/iraqpipelinewatch.htm

[36] E. Eckholm. July 30, 2000. Chinese Farmers See New Desert Erode Their Way of Life. http://www.nytimes.com/library/world/asia/073000china-farmers.html

[37] New Scientist. Sep 18, 2004. China’s changing farms damaging soil and water.

http://www.newscientist.com/news/news.jsp?id=ns99996399

[38] L. Brown. Mar 10, 2004 China’s Shrinking Grain Harvest. How Its Growing Grain Imports Will Affect World Food Prices. http://www.earth-policy.org/Updates/Update36.htm

[39] H. French. Apr 14, 2002.  China’s Growing Deserts Are Suffocating Korea. New York Times.

[41] S. LeBlanc. 2003. Constant Battles: The Myth of the Peaceful, Noble Savage.  St. Martin’s Press

[42]National Center for Injury Prevention and Control. 2002. Firearm related mortality. http://webapp.cdc.gov/sasweb/ncipc/mortrate10_sy.html (select firearm)

[43] Sandra Dibble. Grounded Ship draws Curious. Tugboats are unable to free it; crowds line beach to

   watch. Dec 31, 2005. San Diego Union-Tribune.

[44] P. Van Zant. 2004. Microchip Fabrication, fifth edition. McGraw-Hill.

[45] M. Quirk, J. Serda. 2001. Semiconductor manufacturing technology. Prentice Hall.

[46] Jared Diamond. 2004. Collapse:  How Societies Choose to Fail or Succeed. Viking

[47] D. Orlov. 2005. Post-Soviet Lessons for a Post-American Century. From the Wilderness website.

[48] Andrew Gould. April 4, 2005. Howard Weil Energy Conference. New Orleans, Louisiana.

[49] Paul Roberts. June 28, 2004.  The Undeclared Oil War. Washington Post.

[50] M. Scully. Oct 1, 2004. The End of Easy Oil. Chronicle of Higher Education.

[51] G. Luft. Feb 3, 2004. U.S., China Are on Collision Course Over Oil.  Los Angeles Times.

[52] S. Glain.  Dec 20, 2004.  Yet Another Great Game:  Beijing’s aggressive petro-diplomacy in Africa has put it on a collision course with Washington.   Newsweek.

[53] James H. Kunstler. February 3, 2005.  Kunstler on China. http://www.kunstler.com/mags_diary12.html

[54] G. Gordon. Apr 3,2005. Recession, famine and war seen if demand outstrips supply Experts fear day when oil runs low. Sacramento Bee.

[55] Robert S. McNamara   May/Jun 2005   Apocalypse Soon.   Foreign Policy.

Boberg, Mark. Jun 28, 2000. PV. http://groups.yahoo.com/group/energyresources/message/1608

Cox, John D. 2005. Climate Crash: Abrupt Climate Change And What It Means For Our Future. Joseph Henry Press

EPRI (Electric Power Research Institute). 2003. Electricity Technology Roadmap: Meeting the Critical Challenges of the 21st Century: Summary and Synthesis. Palo Alto, Calif.: EPRI.

Hawken, P. et al.. 1999. Natural Capitalism. Earthscan Publications. Chapter 3: “Waste Not”, pages 49-50.http://www.bml.csiro.au/susnetnl/netwl49E.pdf 14-15

Shaw, Chris (a.k.a. Feral Metallurgist). July 12, 2004. Energy is the Donut, economics is the Hole.  Unknown News. http://www.unknownnews.net/040712a-fm.html

Shaw, Chris. Apr 26, 2005. Come on in — the quicksand’s fine.  My part in the oil crisis …  Unknown News. http://www.unknownnews.net/040712a-fm.html

Posted in Preservation of Knowledge | Comments Off on Peak Resources and the Preservation of Knowledge

Gardening – Grow Your Own Food

Best Home or small farm method

I’ve taken many gardening and permaculture classes, but by far the best way to grow your own food is explained in John Jeavons’ book “How to grow more vegetables And Fruits, Nuts, Berries, Grains and Other Crops Than You Ever Thought Possible on Less Land Than You Can Imagine”. I also recommend taking his biointensive workshop in Willits CA. Jeavons has you plant at least 60% of your garden plot with high-calorie potatoes, corn, beans, and grains.

Grow food with calories that doesn’t need refrigeration

This is essential because it won’t be long before refrigeration goes away as the grid gets less reliable. You will need to grow as much of your own food as possible, and try to have supplies of dried corn, beans, and above all wheat, which stores the longest – up to 25 years if properly stored. Grains are the basis of civilization because of this. It was very common to have a year or more of bad harvests. Anyone who could afford to stockpile enough grain to see them through these years of hardship stood a better chance of surviving until growing conditions were good again.

Any kind of seed, whether its wheat, beans, corn or whatever, is chock full of nutrition, because it has to have everything a baby plant needs. They’re full of vitamins, minerals, essential healthy oils, fiber, and can also have a good amount of protein.

You need to start using whole grains and legumes now, don’t wait to plant them. I wrote a book called Whole Grain Artisan Chips and Crackers to teach people how to use any kind of grain, nut, legume, or bean flour to make crackers, flatbreads, and chips. Besides being delicious and easy to make, crackers can last up to a year, so they’re a good emergency food, and I eat them as my go-to snack since they never go stale like bread. This is the most simple food you can make — just mix flour and water.  You don’t have to buy the book, my website www.wholegrainalice.com has videos and recipes.

Plant an orchard with nut and fruit trees

Hazelnut trees are a good choice (see Woody Agriculture – On the Road to a New Paradigm)

 

Posted in Farming & Ranching | Comments Off on Gardening – Grow Your Own Food

Human Nature is to blame

Many people have said this, as I run across examples in my archives I’ll add them to this post.

Catton would say that no one is to blame, overshoot and die-off is the fate of all species.

Ilargi at theautomaticearth:

“We have done exactly the same that any primitive life form would do when faced with a surplus, of food, energy, and in our case credit, cheap money. We spent it all as fast as we can. Lest less abundant times arrive. It’s an instinct, it comes from our more primitive brain segments, not our more “rational” frontal cortex. We’re …not more devious or malicious than more primitive life forms. It’s that we use our more advanced brains to help us execute the same devastation our primitive brain drives us to, but much much worse. That’s what makes us the most tragic species imaginable. We’ll fight each other, even our children, over the last few scraps falling off the table, and kill off everything in our path to get there. And when we’re done, we’ll find a way to rationalize to ourselves why we were right to do so. We can be aware of watching ourselves do what we do, but we can’t help ourselves from doing it. Most. Tragic. Species. Ever.

We are ready and willing to destroy our societies, and eventually our planet, over a few scraps falling off the big table, like a Mac Mansion, an iPod, an SUV, because that is who we really are. Because we can make ourselves believe those are not scraps, that we are indeed kings now, seated at the table, and heaven knows we have lived better than ancient kings of any age over the past decades.  And most of all because we are no good at all at planning long-term. We can pay into a pension plan, that seems long-term, but at the very same time we can’t figure out that if at some point there’s less new contributors than older ones, that plan must and will implode. We all will swear we love our children above anything in the world, and most would give their lives for their kids. And we honestly mean it when we say it. The reality, however, is that we leave our children with a world that is polluted beyond recognition, in which species disappear at a rate 1000 times faster than before, and in which everything we’ve trained our kids for is vanishing right before their eyes. Our “leaders” are psychopath lackeys of a long bankrupt financial system that uses its servants to gobble up the yet to be earned wealth of our progeny, and we just sit by and watch it happen”.

Posted in Who is to Blame? | Comments Off on Human Nature is to blame

Why our Capitalist Gene is pushing us to destruction

Why our Capitalist Gene is pushing us to destruction

Paul B. Farrell.   Feb 12, 2014. Marketwatch.

Yes, we’re all capitalists. Today 7.2 billion. Soon 10 billion humans, all with a Capitalist Gene that says “me first, climate later.” Human nature. Basic psychology, evolutionary biology, brain science. When the chips are down, our instinctual, fight-or-flight gut reaction for self-preservation wins. Protect yourself, your family.

Yes, you may want a sustainable planet for future generations. Maybe you drive a hybrid. Recycle. Eat organic. May you’re even on a crusade to save the planet or save civilization from eventual collapse. Save the environment from global-warming disasters: melting arctic glaciers, rain forests disappearing, urban smog, toxic pesticides, dying species, deserts killing farm lands, ozone burning, lost energy reserves, diseases, pandemics.

That’s capitalism at work. And we’re all capitalists. Soon we’ll pass a point of no return, with 10 billion on Planet Earth, unprepared, still demanding, burning energy, exhausting scarce resources, driven by our inner instinctual, me-first Capitalist Gene. Why? All warnings about climate change, global warming and environmental threats will never be as immediate and strong as our “daily bread” need, thirst and hunger pains, kids crying for a meal, a drink today.

Capitalist Gene drives us, whispering ‘me first, climate later’

The Capitalist Gene parallels what evolutionary biologist Richard Dawkins saw in his classic work, “The Selfish Gene,” the natural evolutionary process passing genes along. Personality traits from parent to child, to species, to future generations. The Capitalist Gene is in all humans, there before Adam Smith’s theories, before Keynes, before Alan Greenspan and Paul Ryan embraced Ayn Rand’s extreme capitalism, before Jack Bogle warned of “mutant capitalism” in his classic, “The Battle for the Soul of Capitalism.” The Capitalist Gene is in all humans, has been since the dawn of civilization.

When making economic decisions … when the capitalist brain chooses between saving and getting personally richer … between saving the environment or paying a new tax or losing a benefit or right, paying an extra fee … then the Capitalist Gene kicks in, and for most humans we’re biased toward short-term self-interest. Self-preservation today is our first priority.

The Capitalist Gene is our instinct for survival and instant gratification. It’s in our brains, our blood, our DNA structure, motivating our rational thinking process, while still hoping someone, somehow, somewhere will eventually solve all the world’s problems we created, will heal the world, someday, in the future, for future generations. While we take care of ourselves first. That’s capitalism.

Don’t believe me? That’s natural. You’re a capitalist, not some hard-core ideological climate-science denier. Skepticism is inherent in the capitalist mind-set, our brains, the collective conscience of all capitalists. Trust yourself.

Ready? So take a close look at the following profiles identifying the classic human Capitalist Gene in billions of capitalists across the world. See how many profiles fit America, the world’s 7.2 billion humans. How many are driven by our universal Capitalist Gene?

Now ask yourself: Who’s going to cut back. First? Voluntarily? Which nation, farmer, entrepreneur, logger in the Amazon? Who? Who will chose without being forced by some climate catastrophe, global war, pandemic, hunger, suffering in our competitive global capitalism arena? Read about a world of capitalists:

Big Oil Capitalists and Automobile Capitalists: An eternal love fest!

Not only do all humans need transportation, the automobile is a psychological status symbol. We have a deep love affair with our Mustang, Jaguar, Bentley. Want a better one next. There are more than 1 billion autos in the world, used by billions. America has 240 million. China 80 million. And Big Oil just keeps riding auto demand. A trillion dollars in annual revenues. Cutbacks? No way.

Consumer Capitalists: More is never enough

Rich, middle-class, poor, we all have a Capitalist Gene. 310 million Americans buy food, electronics, pay local taxes, drive the economy, make sure their kids get an education. Consumers want more money, goods, progress, a better future. Think about it, the American Dream is built on the Capitalist Gene, was deep in our collective conscience before the American Revolution. We want it all.

 

Retiree Capitalists: Save our Social Security first

Capitalism is fiercely competitive. AARP lobbyists fight for the best tax deals for 72 million boomers. Older folks are the fastest growing segment of global population, in America, China, throughout the world. All want security, earned entitlements, retirement nest eggs.

Worker Capitalists: Labor wants a bigger piece of the action

Wall Street, CEOs, shareholders and the Super Rich want to cut corporate taxes and workers benefits. While our capitalist economy favors the moneyed class, the inequality gap is widening, and like the Crash of 1929 will trigger a revolution and a new depression, with our working class demanding a broader share of capitalism’s rewards.

Food-stamp Capitalists: Below the poverty line, but upwardly mobile

“For the poor, ‘recovery’ is a mirage … Record 46M get food stamps,” headlined a USA Today special report. It’s worse today after a couple years: Capitalism is failing them, thanks to conservative obstructionists. Americans need jobs, income, new leaders creating policies so the 46 million get off food stamps, become consumer-capitalists driving a stronger economy.

Government Capitalists: Lobbyists, bureaucrats, politicians

Who really runs America? The 537 politicians elected to the White House, Senate and Congress? No. A bizarre network of 261,000 lobbyists, over 5,000 appointed bureaucrats, plus millions of civil servants, military, postal workers, state-government employees, teachers, police, firefighters, and private contractors. About 40 million labor-capitalists with personal interests in a continuing government payroll.

Hybrid Socialist-Capitalists Governments: China and developing nations

In “Every Nation for Itself: What Happens When No One Leads the World,” foreign policy expert Ian Bremmer illustrates how the Capitalist Gene drives sovereign nations into competition worldwide. The U.S. competes with China’s hybrid mix of capitalism, communism, socialist planning, state-owned banks, stock exchanges. Plus there’s fierce competition for global resources, like capital-rich/food-poor nations buying and hoarding worldwide agricultural lands for future domestic demands, depriving poor nations, setting up rebellions, wars, revolutions.

Philanthropic Capitalists: Balancing microcapitalists worldwide

Some philanthropists like Bill and Melinda Gates are actually encouraging capitalism among farmers in poor nations, where farming is the primary employment. New microcapitalists. Family planning and contraceptives are also freeing African farmers to increase incomes, tapping into the universal Capitalist Gene spirit of all farmers.

Silicon Valley Capitalists: Technology, entrepreneurs, private equity

A couple years ago MIT Technology Review asked “Why Can’t We Solve Big Problems?” The article made a strong point that leading technology minds are not only willing but also nurturing a new generation of entrepreneurs who will solve the tough challenges of the 21st century.

All the warnings about melting glaciers, rain forests vanishing, toxic urban smog, pesticides, dying species, farm lands becoming deserts, ozone burning, lost energy reserves, diseases, pandemics and so much more won’t matter much for capitalists in denial, when a crash, collapse, a massive wake-up call will be needed to knock some sense into our capitalist brains, maybe even jolt our Capitalist Gene into an evolutionary jump into a new dimension, collective rather than competitive … before it’s too late.

Paul B. Farrell is a MarketWatch columnist based in San Luis Obispo, Calif. Follow him on Twitter @MKTWFarrell.

 

Posted in Who is to Blame? | Comments Off on Why our Capitalist Gene is pushing us to destruction

Civilians caught in a war

[ It’s very likely that the U.S. will collapse hard post-peak with so little preparation, and if we all don’t shoot one another the paramilitaries, gangsters, mafias, and bandits will. Or loot or move into our homes. Here are some examples I found in these history books:

  1. Peter Englund’s “The Beauty and the Sorrow” (2011).
  2. Brian Hall. 1988. Stealing from a Deep Place. Travels in Southeastern Europe.
  3. Giles MacDonogh. 2007. After the Reich. The Brutal History of the Allied Occupation.

Alice Friedemann   www.energyskeptic.com  author of “When Trucks Stop Running: Energy and the Future of Transportation”, 2015, Springer and “Crunch! Whole Grain Artisan Chips and Crackers”. Podcasts: Practical Prepping, KunstlerCast 253, KunstlerCast278, Peak Prosperity , XX2 report ]

Homes

By 1945 over 1,800,000 German civilians died and 3,600,000 homes had been destroyed (20% of total), leaving 7.5 million homeless. After the war, another 16.5 million Germans were driven from their homes. Of these, about 2,250,000 died. Germany was so destroyed by bombs that towns often had few homes remaining. Occupying forces took the best homes over. Many Germans lived in ruins or holes in the ground, especially orphaned children.

WWI: armies take over homes of the wealthy. The Germans had to retreat from this Polish home, which the returning owner described as: everything was torn, smashed, ripped out, spilled, hurled around, knocked over and fouled. Every drawer pulled out, every wardrobe emptied.  The smell was indescribably awful. The library had been completely vandalized. The contents of all the shelves were emptied, the floor invisible beneath a layer of torn books and papers, all of it trampled by rough boots.”  Every dish and plate was hurled on the floor after they were used.  Jars that used to have jam, honey, and vegetables had been eaten and replaced with human excrement. They hadn’t found the food hidden in the sofa. Food could not be bought with money, potatoes and eggs were the most expensive.

Budapest, Hungary WWII: One woman had a large, opulent home that was one of the few still intact. It was taken over by 3 armies during the war: Hungarian, German, and Russian. All of the armies let the family live in the basement.

Isolated farm houses are vulnerable

German farms after WWII were robbed by Polish and Russian gangs

Roads are choked with fleeing Refugees

Most people don’t flee until it’s too late, they wait for the sounds of battle, because they don’t believe all the rumors flying about.

WWI Poland:   “the population was pouring out of the city in long files, men, women, children, dogs, cows, pigs, horses, and carts all mixed up in one grand mélange. On carts, on foot, on horseback. Everyone making shift to save himself. All of them carrying away what they could. Exhaustion, dust, sweat, panic was on every face, terrible dejection, pain, and suffering. Their eyes were frightened, their movements fearful: ghastly terror oppresses them. I lie sleepless at the side of the road and watch this infernal kaleidoscope. There are even retreating military wagons, routed infantry, lost cavalry

Rape

From tribal societies to the modern soldiers of today, rape and pillaging have always been a motivation. Women try to prevent this by looking unattractive – nuns used to cut off their noses in hopes invading Vikings wouldn’t rape them, committed suicide, or slept with high-level officers for protection and/or food.

Pillage

WWII Germany: Russians took booty of all kinds back to Russia as “repayment” — millions of tons of industrial machinery, sewing machines, art work, etc.

Black Markets

Germany after WWII: In urban areas, the black market thrived near rail road stations, as did prostitution and the homeless. Cigarettes were the main currency. Other popular items were soap, gum, butter, flour, coffee, chocolate, alcohol, wood, and oranges. Buyer beware: some tins had nothing but filth, goods might be rotten.

City dwellers go out to the country seeking food

WWII Germany: Special trains took town and city folk to country areas to trade with farmers, who preferred that over taking the risk of going to the city and having all of their produce stolen. If no farmers were around, city folk harvested the farmer’s crops and paid nothing for them. The Farmers didn’t trust money – you had to exchange useful goods. Farmers also converted their crops to alcohol.

WWI: Farmers told food at very high prices on the black Market. Townspeople were very much harmed by this since they had nowhere to grow their own food, so some of them broke into shops to get food.

Getting water during war outside the home

WWII Budapest: “People helped each other, shared their food, protected each other. Like going down for the water. Down in the streets, with the water bottles on our heads, we couldn’t tell where shots were coming from. Peole in the houses all down the hill would stick their heads out of windows and tell us which way to go or they’d tell us to wait, if the shooting was too bad for the moment”.

Coping with the Cold

Romania (1980s): Everything is rationed: the gas, electricity, oil. There is hardly any wood to burn. No one has fuel for their cars, so the roads are empty. My grandmother has no heat in her house some days, and on the coldest days she has to go to another house. She spends the winter with rags tied around her feet, her neck, her hands—and some days she just sits, all day, under a cover. She doesn’t leave it because she will lose her heat”.

 

 

Posted in Violence | Tagged | Comments Off on Civilians caught in a war

Global Bond Frenzy Raises Concerns

Global Bond Frenzy Raises Concerns

By LANDON THOMAS Jr. FEB. 19, 2014 New York Times.

Prospecting for oil in Brazil, manufacturing steel in Russia, erecting skyscrapers in China: Global bond investors have financed some of the grandest investment projects taken on by emerging economies in recent years.

But as growth falters in a number of developing nations, economists and regulators have become increasingly worried about the consequences of this borrowing frenzy and the risk that the mutual funds and hedge funds that have largely replaced more stable commercial banks as global financiers might all decide to rush for exits at the same time.

“It’s fair to say that the market got a little overexuberant,” said Scott A. Mather, the head of global portfolio management at the mutual fund giant Pimco. “Many years of private sector credit growth have created serious vulnerabilities.”

Analysts point out that compared to the Asian financial crisis in 1997, the borrowing binge this time is being funded largely by global bond investors and includes companies outside Asia as well. Unlike two decades ago, governments of developing countries have built up substantial foreign exchange reserves and are better able to weather any crisis. Still, fears remain that any panicky selling of Chinese, Russian or Brazilian bonds could turn into a financial rout. And over a longer stretch, the broader question is the potential effect from a closing of the once-welcoming global bond market to borrowers in regions of the world that have been driving growth in recent years.

The underlying problem, Mr. Mather said, is that bond investors with little or no experience in emerging markets piled in to pursue higher yields than they could get from safer government securities in the United States and elsewhere, snapping up the bond issues of companies with even riskier credit profiles.

The stampede has led to a so-called mirage of liquidity in which many investors may have been misled into thinking that selling the securities will be as easy as buying them was.

“The liquidity is much worse now than before the crisis,” Mr. Mather said.

Bonds Over Banks

In the five years since the Federal Reserve began taking extraordinary measures to stimulate the U.S. economy, emerging markets have relied more on global bond markets than banks to help finance their growth.

External debt of emerging market countries

IN THE 5 YEARS BEFORE QUANTITATIVE EASING (Sept. 30 ’03 – Sept. 30 ’08) Bank lending $1,097 Billion     Bond issuance = $432 billion   Total: $1,530

IN THE 5 YEARS AFTER QUANTITATIVE EASING (Sept. 30 ’08 – Sept. 30 ’13)

Bank lending $855 Billion     Bond issuance = $1,0e2 billion   Total: $1,898

its aggressive bond buying program, driving interest rates in the United States to lows not seen in decades, high-yielding international bonds issued by nongovernment emerging market borrowers have doubled.

Total bonds outstanding are now at a record high of $2 trillion, according to a new report by Merrill Lynch that warns of the consequences of this explosion in emerging market debt and the shift away from traditional bank loans.

Bond market veterans like Petrobras, the Brazilian energy concern that has issued close to $30 billion worth of foreign currency bonds in the last four years, are still leading the parade.

Petrobras is an investment-grade issuer; it issues bonds at relatively low interest rates because its oil and gas projects are considered to be ultrasecure.

But more worrisome are the high-yield or junk bonds, issued by, among others, steel companies in Russia and property developers in China. One particularly popular borrower has been Country Garden, a Chinese developer that has issued $4.2 billion in bonds since late 2009.

Most recently, in the autumn, the company raised $750 million by issuing seven-year bonds at an interest rate of 7.5 percent; the deal was so popular, bankers say, that it was oversubscribed by $18 billion. Like other risky bonds, Country Garden securities sold off aggressively in recent weeks, with the yield hitting 8.4 percent before regaining some strength in recent days.

As growth disappoints and profits suffer, some of these borrowers are defaulting on their debts. Among the largest defaults was the implosion of OGX, a Brazilian energy conglomerate that went bust recently; others include Mexican home builders and Kazakh banks.

“I think this is definitely coloring the expectations of investors,” said Richard Segal, an emerging market bond analyst at Jefferies in London.

Of late, the issue has received a public airing in Washington, after the Office of Financial Research, a newly created analytical body within the Treasury Department, came out with a report drawing attention to the lemminglike tendency of global asset managers to “crowd or herd into popular asset classes or securities regardless of the size or liquidity of those asset classes or securities.”

The report said that more than $1.5 trillion had flowed into bond funds in the last five years — far outpacing other segments like equities and money markets — and pointed out that large asset management entities such as Pimco, BlackRock, Capital Research and Fidelity had been the main beneficiaries of these inflows.

For a financial industry that already saw itself as over-regulated, the O.F.R. study came as a shock. The main trade group for asset managers, the Investment Company Institute, has aggressively contested the agency’s suggestion that too much exposure to risky emerging market bonds by American fund managers poses a broader financial risk.

By contrast, the agency’s decision to highlight this risk factor has drawn the support of several influential economists, including Hyun Song Shin, a financial economist at Princeton and the incoming head of research at the Bank for International Settlements, the idea factory based in Basel, Switzerland, catering to global central banks.

In a recent paper, Mr. Shin warned of the risks that prevail when bond investors, who traditionally have a shorter-term approach than commercial lenders, pile into and out of the same markets at the same time.

“We have never seen anything like this before,” he said. “It is unprecedented, and it is dangerous.”

Mr. Shin also worries that regulators, in pushing hard for big banks to increase their cash reserves, are missing the more critical issue: Aggressive borrowers in some of the larger emerging markets have been relying on fickle bond investors to fund their investments. And those investors are becoming nervous about their exposure to these economies, threatening to choke off the funding pipeline.

“It may not be an acute crisis,” Mr. Shin said. “But it will be slow and simmering and the impact on global growth will be damaging.”

Posted in Bond Market | Comments Off on Global Bond Frenzy Raises Concerns

Student loan crisis widens gap between rich and the rest

Student loan crisis widens gap between rich and the rest. Bill Zimmerman.   February 21, 2014.  San Francisco Chronicle.

Growing concern about wealth and income inequality overlooks a principal cause: the student loan crisis, which is much deeper than the $1.1 trillion owed and the tens of millions who owe it. Unnoticed are the astonishing profits banks have made from these loans and the impact those profits have had on redistributing wealth.

Since 2010, federal student loans have come from the Treasury instead of private banks (which previously made them with a federal guarantee) so the government now gets the interest rate profit that the banks once realized. In August, the Congressional Budget Office predicted that between 2013 and 2023, the government would make a shocking $184 billion in profits from its student loan program.

If expected governmental profits are that large over the next decade, it is logical that bank profits were as big in past decades. Interest rates were higher then, and the spread between them and the discount rate the banks had to pay to borrow money from the Federal Reserve was comparable to the future spread anticipated by the CBO. Thus, in the four decades before 2010, when the banks made federal loans, their profits must have been some multiple of $184 billion.

That doesn’t include profits from private student loans. When federal loans could no longer keep up with the expanding student population or snowballing college costs, the banks made millions of these private loans. They were not as numerous as the federal loans, but the interest rates were much higher.

Add to these profits a recent windfall. Following the recession, while the “too big to fail” banks got bailout money, the Fed also lowered its discount rate to 0.50 percent in 2009 and 0.75 percent in 2010. The banks gladly accepted these taxpayer-funded subsidies but continued to charge pre-recession interest rates, some as high as 8.5 percent, to their student loan clients.

Figuring conservatively, total bank profits must have been at least $500 billion and more likely $800 billion or more. This vast transfer of wealth came from student families with the greatest need. It was not an actual college expense, only the profit on their loans. Such a vast amount had to have played a significant role in generating our current wealth inequality.

That role continues.

Of the tens of millions still paying off student loans, many are underemployed and unable to make regular payments. Cut off from credit, they are stuck in a debtors’ prison without walls because laws passed in 1998 and 2005 prevent student loans, federal or private, from being discharged through bankruptcy. Meanwhile, no agency of government is even considering meaningful relief for these borrowers.

The Federal Reserve, the Treasury and numerous others have warned that this huge unsecured debt, much of which can never be repaid, creates dangers to the entire economy similar to those generated by housing debt in 2008.

Two reforms are needed:

Monthly payments on student loans should be a percentage of the borrower’s income, after essentials like food and housing are covered, instead of being fixed.

Interest rates on student loans should be nonprofit, which means equal to the Fed’s discount rate, currently 0.75 percent.

Government can adopt these reforms for the loans it makes and force the banks to do the same, retroactively, for all student loans still outstanding. While that would cost the banks billions, it would merely offset some of their past profits. Government used its emergency powers to seize the steel industry in 1952 and mandate wage and price controls in 1971, acts undertaken to prevent damage to the overall economy. Similarly aggressive action is now required to avert another debt-driven recession like 2008.

Over the past 40 years, conservative ideology has shifted the cost of college from the state to the student. Now, for the same reasons that government funds primary and secondary education, it must return to funding higher education. These two reforms can help move it in that direction.

Bill Zimmerman, a California political consultant, is the author of the e-book “The Student Loan Swindle: Why It Happened, Who Is to Blame, How the Victims Can Be Saved.” To comment, to go sfgate.com/submissions/#1

 

Posted in Debt | Comments Off on Student loan crisis widens gap between rich and the rest

Foreign Investment in Shale Gas is Drying Up

Jan. 2, 2014  For U.S. Drillers, the Days of Easy Money Are Over By Daniel Gilbert, Wall Street Journal.

Oil and Gas Companies Slash Spending as Foreign Investment Dries Up

Last year, 80 big energy companies in North America spent a combined $50.6 billion MORE than they brought in. That deficit was twice as high as in 2011, and four times as high as in 2010.  The same producers have dialed back through the first nine months of 2013, though they still spent about $18.7 billion more than their cash flow.

Since 2008, deep-pocketed foreign investors have subsidized the U.S. energy boom, as oil and gas companies spent far more money on leasing and drilling than they made selling crude and natural gas.

But the rivers of foreign cash are running dry for U.S. drillers. In 2013, international companies spent $3.4 billion for stakes in U.S. shale-rock formations, less than half of what they invested in 2012 and a tenth of their spending in 2011, according to data from IHS Herold, a research and consulting firm.

It is a sign of leaner times for the cash-hungry companies that have revived American energy output. The value of deals involving U.S. energy producers plunged 48% this year from 2012, to $47 billion, the first annual decline since 2008, according to an IHS report to be published Thursday.

So U.S. oil and gas producers have started to slash spending. “The days of easy money are over,” said Amy Myers Jaffe, executive director of energy and sustainability at the University of California-Davis. “The emphasis is going to be on lowering costs.”

Foreign cash helped cover the cost of the deep wells and heavy horsepower required to unlock oil and gas from shale and other dense rock in the U.S. The need for it has been acute: Last year, 80 big energy companies in North America spent a combined $50.6 billion more than they brought in from their operations, according to data from S&P Capital IQ. That deficit was twice as high as in 2011, and four times as high as in 2010.

The same producers have dialed back through the first nine months of 2013, though they still spent about $18.7 billion more than their cash flow.

U.S. and Canadian producers are “returning to spending within their means,” analysts at Sanford C. Bernstein wrote in a research note last week that analyzed spending patterns of 50 companies.

They are also turning to other investors, including private equity and the stock market, as overseas buyers lose their appetite for American energy projects. The shift has big implications for the oil and gas industry, analysts say, because Wall Street investors tend to be more sensitive to profits and stock prices, while foreign investors have historically been more focused on acquiring energy reserves and technology.

John Walker has seen this shift up close. The chief executive of closely held EnerVest Ltd. had courted big energy companies in Japan, Korea and China when he decided to sell vast holdings in Ohio’s Utica Shale.

But more than a year later, Houston-based EnerVest and its publicly traded arm, EV Energy Partners . . . LP, have sold only a portion of their Utica acreage for $284 million, well shy of the $6 billion Mr. Walker sought for all Utica interests. The buyer came not from Asia but Oklahoma: A new company backed by private equity and led by Aubrey McClendon, the former head of Chesapeake Energy Corp. . . .

“The whole market changed,” Mr. Walker said in a recent interview. Asian investors were interested in the company’s Utica Shale assets, he said, but very few bid. EnerVest has shifted gears, marketing the Utica properties in smaller packages to appeal to other energy companies with less cash on hand.

Mr. McClendon, who left Chesapeake in April, had raised $1.7 billion by October to launch American Energy Partners. His biggest backer was the Energy & Minerals Group, a private-equity firm.

Chronically low natural-gas prices have prompted international firms to cool on American shale, with some experiencing buyers’ remorse. Royal Dutch Shell . . . PLC in July concluded that its shale properties in North America were worth $2 billion less than it had estimated. A year earlier, BHP Billiton Ltd. . . . wrote down the value of its U.S. shale-gas fields by $2.8 billion.

In 2013 natural gas prices rebounded 26% to end the year at $4.23 per million British thermal units. But that increase come off near-historic lows. Natural gas prices sunk below $2 in 2012, the lowest level in a decade, as surging output across the U.S. and mild weather left a glut of the fuel. Prices rose last year as some power companies shifted to gas to reduce use of coal.

Some of the biggest financiers of the shale boom don’t expect the major Asian and European firms to reopen the spigot any time soon.

“They’re in digestion mode,” said Ralph Eads, vice chairman and global head of energy investment banking at Jefferies Group LLC. Still, he said, “as the foreign guys have withdrawn, we’ve seen a step-up in activity from private equity.”

Riverstone Holdings LLC, a private-equity giant focused on energy, said last month it would invest up to $300 million in closely held oil-and-gas producer Eagle Energy Exploration LLC. Riverstone has committed to invest about $25 billion globally, up from $20 billion a year ago.

The IPO market, too, remains a big source of financing for energy producers. Antero Resources Corp.’s . . . $1.6 billion public offering last month was the year’s fifth-biggest among U.S. listed firms. Combined, drillers that offered shares to the public on the New York Stock Exchange have netted $2.4 billion this year, the biggest haul in five years, according to figures from data-provider Dealogic.

 

Posted in Oil & Gas Fracked | Comments Off on Foreign Investment in Shale Gas is Drying Up

Financial system brought down by next oil shock

Erik Townsend. 6 January 2013. Why Peak Oil Threatens the International Monetary System. ASPO-USA

The U.S. Treasury bond market will most likely crash, and borrowing costs will skyrocket. Those increased borrowing costs will further exacerbate the fiscal deficit. Can you say self-reinforcing vicious cycle? Why didn’t the rest of the world abandon the dollar as the global reserve currency in reaction to the USA unilaterally reneging on gold convertibility in 1971? In my opinion, the best answer is simply “Because there was no clear alternative”. And to be sure, the unmatched power of the U.S.military had a lot to do with eliminating what might otherwise have been attractive alternatives for other nations.

After a few years of tense negotiations including the infamous oil embargo, the so-called petro-dollar business cycle was born. The Arabs would only accept dollars for their oil, and they would re-invest most of their profits in U.S. Treasury debt. In exchange for this concession, they would come under the protectorate of the U.S. military. Some might even go so far as to say that the U.S. government used the infamous Mafia tactic of making the Arabs an “offer they couldn’t refuse” – forcing oil producing nations to make financial concessions in exchange for “protection”.

With the Arabs now strongly incented to continue pricing the world’s most important commodity in U.S. dollars, the Bretton Woods system lived on. No longer constrained by the threat of a run on its bullion reserves, the U.S. kicked its already-entrenched practice of borrowing and spending beyond its means into high gear. For the past 42 years, the entire world has continued to conduct virtually all international trade in Dollars. This has forced China,Japan, and the oil exporting nations to buy and hold an enormous amount of U.S. Treasury debt. Exorbitant privilege is the key economic factor that allows the U.S.to run trillion dollar fiscal deficits without crashing the Treasury bond market. So far.

There’s a limit to how long this can last

But how long can this continue? The U.S. debt-to-GDP ratio now exceeds 100%, and the U.S. has literally doubled its national debt in the last 6 years alone. It stands to reason that eventually, other nations will lose faith in the dollar and start conducting business in some other currency. In fact, that’s already started to happen, and it’s perhaps the most important, under-reported economic news story in all of history.

Some examples…China and Brazil are now conducting international trade in their own currencies, as are Russia and China. Turkey and Iran are trading oil for gold, bypassing the dollar as a reserve currency. In that case, U.S. sanctions are a big part of the reason Iran can’t sell its oil in dollars. But I wonder if President Obama considered the undermining effect on exorbitant privilege when he imposed those sanctions. I fear that the present U.S. government doesn’t understand the importance of the dollar’s reserve currency role nearly as well as our leaders did in the 1970s.

The Biggest Risk We Face is a U.S. Bond and Currency Crisis

To be sure, Peak Oil in general represents a monumental risk to humanity because it’s literally impossible to feed all 7+ billion people on the planet without abundant energy to run our farming equipment and distribution infrastructure. But the risks stemming directly from declining energy production are not the most imposing, in my view.

Decline rates will be gradual at first, and it will be possible, even if unpopular, to curtail unnecessary energy consumption and give priority to life-sustaining uses for the available supply of liquid fuels. In my opinion, the greatest risks posed by Peak Oil are the consequential risks. These include resource wars between nations, hoarding of scarce resources, and so forth. Chief among these consequential risks is the possibility that the Peak Oil energy crisis will be the catalyst to cause a global financial system meltdown. In my opinion, the USA losing its reserve currency status is likely to be at the heart of such a meltdown.

A good rule of thumb is that if something is unsustainable and cannot continue forever, it will not continue forever. The present incarnation of the IMS, which affords the United States the exorbitant privilege of borrowing a seemingly limitless amount of its own currency from foreigners in order to finance its reckless habit of spending beyond its means with trillion-dollar fiscal deficits, is a perfect example of an unsustainable system that cannot continue forever.

But the bigger the ship, the longer it takes to change course. The IMS is the biggest financial ship in the sea, and miraculously, it has remained afloat for 42 years after the most fundamental justification for its existence (dollar-gold convertibility) was eliminated. How long do we have before the inevitable happens, and what will be the catalyst(s) to bring about fundamental change? Those are the key questions.

In my opinion, the greatest risk to global economic stability is a sovereign debt crisis destroying the value of the world’s reserve currency. In other words, a crash of the U.S. Treasury Bond market. I believe that the loss of reserve currency status is the most likely catalyst to bring about such a crisis.

The fact that the United States’ borrowing and spending habits are unsustainable has been a topic of public discussion for decades. Older readers will recall billionaire Ross Perot exclaiming in his deep Texas accent, “A national debt of five trillion dollars is simply not sustainable!” during his 1992 Presidential campaign. Mr. Perot was right when he said that 20 years ago, but the national debt has since more than tripled. The big crisis has yet to occur. How is this possible? I believe the answer is that because the U.S. dollar is the world’s reserve currency and is perceived by institutional investors around the globe to be the world’s safest currency, it enjoys a certain degree of immunity derived from widespread complacency.

But that immunity cannot last forever. The loss of reserve currency status will be the forcing function that begins a self-reinforcing vicious cycle that brings about a U.S. bond and currency crisis.While many analysts have opined that the USA cannot go on borrowing and spending forever, relatively few have made the connection to loss of reserve currency status as the forcing function to bring about a crisis.

We’re already seeing small leaks in the ship’s hull. China openly promoting the idea that the yuan should be asserted as an alternative global reserve currency would have been unthinkable a decade ago, but is happening today. Major international trade deals (such as China and Brazil) not being denominated in U.S. dollars would have been unthinkable a decade ago, but are happening today.

So we’re already seeing signs that the dollar’s exclusive claim on reserve currency status will be challenged. Remember, when the dollar loses reserve currency status, the U.S. loses exorbitant privilege. The deficit spending party will be over, and interest rates will explode to the upside. But to predict that this will happen right now simply because the system is unsustainable would be unwise. After all, by one important measure the system stopped making sense 42 years ago, but has somehow persisted nonetheless. The key question becomes, what will be the catalyst or proximal trigger that causes the USD to lose reserve currency status, igniting a U.S. Treasury Bond crisis?

The critical point to understand is that while the national debt has more than doubled, the U.S. Government’s cost of borrowing hasn’t increased at all. The reason is that interest rates are less than half what they were 10 years ago. Half the interest on twice as much principal equals the same monthly payment, so to speak. This is exactly the same trap that subprime mortgage borrowers fell into. First, money is borrowed at an artificially low interest rate. But eventually, the interest rate increases, and the cost of borrowing skyrockets. The USA is already running an unprecedented and unsustainable $1 trillion+ annual budget deficit. All it would take to double the already unsustainable deficit is for interest rates to rise to their historical norms.

This all comes back to exorbitant privilege. The only reason interest rates are so low is that the Federal Reserve is intentionally suppressing them to unprecedented low levels in an attempt to combat deflation and resuscitate the economy. The only reason the Fed has the ability to do this is that foreign lenders have an artificial need to hold dollar reserves because the USD is the global reserve currency. They would never accept such low interest rates otherwise. Loss of reserve currency status means loss of exorbitant privilege, and that in turn means the Fed would lose control of interest rates. The Fed might respond by printing even more dollars out of thin air to buy treasury bonds, but in absence of reserve currency status, doing that would cause a collapse of the dollar’s value against other currencies, making all the imported goods we now depend on unaffordable.

In summary, the U.S. Government has repeated the exact same mistake that got all those subprime mortgage borrowers into so much trouble. They are borrowing more money than they can afford to pay back, depending solely on “teaser rates” that won’t last. The U.S. Government’s average maturity of outstanding treasury debt is now barely more than 5 years. This is analogous to cash-out refinancing a 30-year fixed mortgage, replacing it with a much higher principal balance in a 3-year ARM that offers an initial teaser rate. At first, you get to borrow way more money for the same monthly payment. But eventually the rate is adjusted, and the borrower is unable to make the higher payments.

The Janszen Scenario

When it comes to evaluating the risk of a U.S. sovereign debt and currency crisis, most mainstream economists dismiss the possibility out of hand, citing the brilliant wisdom that “the authorities would never let such a thing happen”. These are the same people who were steadfastly convinced that housing prices would never crash in the United States because they never had before, and that Peak Oil is a myth because the shale gas boom solves everything (provided you don’t actually do the math).

At the opposite extreme are the bloggers on the Internet whom I refer to as the Hyperinflation Doom Squad. Their narrative generally goes something like this: Suddenly, when you least expect it, foreigners will wise up and realize that the U.S. national debt cannot be repaid in real terms, and then there will be a panic that results in a crash of the U.S. Treasury market, hyperinflation of the U.S. dollar, and declaration of martial law. This group almost always cites the hyperinflations of Zimbabwe and Argentina as “proof” of what’s going to happen in the USA any day now, but never so much as acknowledges the profound differences in circumstances between the USA and those countries. These folks deserve a little credit for having the right basic idea, but their analysis of what could actually happen simply isn’t credible when examined in detail.

Little-known economist Eric Janszen stands out as an exception. Janszen also happens to be the same guy who coined the phrase Peak Cheap Oil back in 2006, drawing an important distinction between the geological phenomenon of Hubbert’s Peak and the economic phenomenon which begins well before the actual peak, due to increasing marginal cost of production resulting from ever-increasing extraction technology complexity.

“But there’s no sign of inflation…” (Hint: It’s coming)

Janszen has put quite a bit of work into modeling what a U.S.bond and currency crisis would look like. He initially called this KaPoom Theory, because history shows that brief periods of marked deflation (the ‘Ka’) usually precede epic inflations (the ‘Poom’). He recently renamed this body of work The Janszen Scenario. Briefly summarized, Janszen’s view is that the U.S. has reached the point where excessive borrowing and fiscal irresponsibility will eventually cause a catastrophic currency and bond crisis. He believes that all that’s needed at this point is a proximal trigger, or catalyst, to bring about such an outcome. He thinks there are several potential triggers that could bring such a crisis about, and chief among the possibilities is the next Peak Cheap Oil price spike.

How Peak Oil could cause a Bond and Currency Crisis

There are several ways that an oil price spike could trigger a U.S. bond and currency crisis. Energy is an input cost to almost everything else in the economy, so higher oil prices are very inflationary. The Fed would be hard pressed to continue denying the adverse consequences of quantitative easing in a high inflation environment, and that alone could be the spark that leads to higher treasury yields. The resulting higher cost of borrowing to finance the national debt and fiscal deficit would be devastating to the United States.

A self-reinforcing vicious cycle could easily begin in reaction to oil price-induced inflation alone. But we must also consider how an oil price shock could lead to loss of USD reserve currency status, and therefore, loss of U.S. exorbitant privilege. In the 1970s, the USA represented 80% of the global oil market. Today we represent 20%, and demand growth is projected to come primarily from emerging economies. In other words, the rationale for oil producers to keep pricing their product in dollars has seriously deteriorated since the ‘70s. The more the global price of oil goes up, the more the U.S. will source oil from Canadian tar sands and other non-OPEC sources. That means less and less incentive for the OPEC nations to continue pricing their oil in dollars for all their non-U.S. customers.

Iran and Turkey have already begun transacting oil sales in gold rather than dollars. What if the other oil exporting nations wake up one morning and conclude “Hey, why are we selling our oil for dollars that might some day not be worth anything more than the paper they’re printed on?” Oil represents a huge percentage of international trade, so if oil stopped trading in dollars, that alone would be reason for most nations to reduce the very large dollar reserves they now hold. They would start selling their U.S. treasury bonds, and that could start the vicious cycle of higher interest rates and exploding borrowing costs for the U.S. Government. The precise details are hard to predict. The point is, the system is already precarious and vulnerable, and an oil price shock could easily detonate the time bomb that’s already been ticking away for more than two decades.

Let’s pretend the oil-independence hyperbole is true

But let’s just pretend for a moment that hyperbole is reality, and that the USA will achieve energy-independence in just a few years’ time. Now consider the consequences to the IMS. The oil-exporting nations would lose the USA as their primary export customer, and would no longer have an incentive to price their oil in dollars, or to maintain large dollar reserves. They would start selling off their U.S. treasury bonds, and pricing their oil in something other than dollars. Large oil importers like China and Japan would stop paying for oil in dollars, and would no longer need to maintain present levels of U.S. dollar reserves. So they too would start selling U.S. treasury bonds, pushing up U.S. interest rates in the process. Once again, we have the ingredients for a self-reinforcing vicious cycle of increasing U.S. interest rates causing U.S. Government borrowing costs to skyrocket.

Without the artificial demand for treasury debt created by exorbitant privilege, the U.S. would be unable to finance its federal budget deficit. The Federal Reserve might respond with even more money printing to monetize all the government’s borrowing needs, but without the international demand that results from the dollar’s reserve currency status, the dollar would crash in value relative to other currencies as a result of excessive monetization by the Fed. The resulting loss of principal value would cause even more international holders of U.S. Treasury debt to panic and sell their holdings. Once again, a self-reinforcing vicious cycle would develop, with consequences for the United States so catastrophic that the 2008 event would pale in contrast.

Rambo to the Rescue?

Let’s not forget that the USA enjoys virtually unchallenged global military hegemony. China is working hard to build out its “blue water navy”, including strategic ballistic missile nuclear submarine capability. But the USA is still top dog on the global power stage, and if the USA was willing to use its nuclear weapons, it could easily defeat any country on earth, except perhaps China and Russia.

While the use of nuclear weapons in an offensive capacity might seem unthinkable today, the USA has yet to endure significant economic hardship. $15/gallon gasoline from the next Peak Cheap Oil price shock coupled with 15% treasury yields and a government operating in crisis mode just to hold off systemic financial collapse in the face of rampant inflation would change the mood considerably.

All the USA has to do in order to secure an unlimited supply of $50/bbl imported oil is to threaten to nuke any country refusing to sell oil to the U.S. for that price. Unthinkable today, but in times of national crisis, morals are often the first thing to be forgotten. We like to tell ourselves that we would never allow economic hardship to cause us to lose our morals. But just look at the YouTube videos of riots at Wal-Mart over nothing more than contention over a limited supply of boxer shorts marked down 20% for Black Friday. What we’ll do in a true crisis that threatens our very way of life is anyone’s guess.

If faced with the choice between a Soviet-style economic collapse and abusing its military power, the USA just might resort to tactics previously thought unimaginable. Exactly what those tactics might be and how it would play out are unknowable. The point is, this is a very complex problem, and a wide array of factors including military capability will play a role in determining the ultimate outcome.

I certainly don’t mean to predict such an apocalyptic outcome. All I’m really trying to say is that the military hegemony of the USA will almost certainly play into the equation. Even if there is no actual military conflict, the ability of the U.S. to defeat almost any opponent will play into the negotiations, if nothing else.

Conclusion

The music hasn’t stopped quite yet, but when it does, this will end very, very badly. I’m pretty sure we’re on the last song, but I don’t know how long it has left to play.

Further Reading

Time Magazine’s overview of the Bretton Woods system at http://www.time.com/time/business/article/0,8599,1852254,00.html offers an excellent discussion which anyone can understand.

For those seeking a more detailed discussion, Iowa State University’s Professor E. Kwan Choi offers excellent course notes on the subject at http://www2.econ.iastate.edu/classes/econ355/choi/bre.htm.

Wikipedia also offers articles on both the Bretton Woods system and the actual conference held there in 1944.

Erik Townsend is a hedge fund manager based in Hong Kong.

 

 

 

 

Posted in Bond Market, Crash Coming Soon | Comments Off on Financial system brought down by next oil shock

Michael Dittmar, Institute of Particle Physics: Peak Uranium 2015

The End of Cheap Uranium

June 17, 2011. Michael Dittmar, Institute of Particle Physics,   Zurich, Switzerland Journal: Science of the Total Environment

This paper concludes that “the end of the cheap uranium supply will result in a chaotic phase-out scenario with price explosions, supply shortages and possible electricity shortages in many countries:
Some highlights from this paper:

Historic data from many countries demonstrate that on average no more than 50-70% of the uranium in a deposit could be mined.

An analysis of more recent data from Canada and Australia leads to a mining model with an average deposit extraction lifetime of 10±2 years. This simple model provides an accurate description of the extractable amount of uranium for the recent mining operations.

Using this model for all larger existing and planned uranium mines up to 2030, a global uranium mining peak of at most 58±4 ktons around the year 2015 is obtained.

Thereafter we predict that uranium mine production will decline to at most 54 ± 5 ktons by 2025 and, with the decline steepening, to at most 41 ± 5 ktons around 2030. These numbers are not even anywhere near the present global usage, about 68 ktons/year, and imply significant shortages over coming decades.

This amount will not be sufficient to fuel the existing and planned nuclear power plants during the next 10-20 years.

In fact, we find that it will be difficult to avoid supply shortages even under a slow 1%/year worldwide nuclear energy phase-out scenario up to 2025. We thus suggest that a worldwide nuclear energy phase-out is in order. If such a slow global phase-out is not voluntarily effected, the end of the present cheap uranium supply situation will be unavoidable. The result will be that some countries will simply be unable to afford sufficient uranium fuel at that point, which implies involuntary and perhaps chaotic nuclear phase-outs in those countries involving brownouts, blackouts, and worse.

Nuclear fission energy in industrial societies is often proposed as a long term replacement for the limited fossil fuel resources and as a solution to the environmental problems related to their use.

However, even 50 years after commercial nuclear fission power began, nuclear reactors produce less than 14% of the world’s electric energy, which itself makes only about 16% of our final energy demand [1].

More than 80% of the 440 nuclear power plants, with a capacity of 374 GWe [2], are operated in the richer OECD countries, where they produce about 21% of the annual electric energy [1]. The relatively small nuclear energy contribution today indicates that even a minor transition from fossil to nuclear fuel for generating electric energy over the next 20 to 30 years would require significant increases in the use of nuclear fuel.

Including the year 2010, a total of about 2.5 millions tons of uranium have been mined and about 2 million tons have been used for electric energy production. Most of the remaining 500 ktons are essentially under the control of the military in Russia and the USA.

The fact that essentially all of Europe’s required 21 ktons/year uranium, [7], must now be imported is worth noting since it demonstrates that uranium, like the fossil fuels, is a finite resource that does not somehow magically appear in greater quantities just because demand pushes its price higher. As with the fossil fuels, the mining data from Europe show that deposit depletion and production declines are unavoidable consequences of finite resources.

Uranium mining in 2010 in the USA and in South Africa provided 1.7 ktons and 0.6 ktons respectively[5], namely about 10% compared to their peak production at the beginning of the 1980’s when 16.8 ktons (USA) and more than 6 ktons/year (South Africa) were mined. in light of the fact that annual production has declined steeply to roughly 10% of the peak level that was achieved in the 1980s, the present RAR numbers do not appear to be realistic (472.1 ktons[7]).

History

Uranium mining between 1945 and 2005 can be divided into three periods. The first period (1945-1975) can be associated with the rush to fulfill the military uranium requirements during the nuclear arms race. An extraction peak of almost 50 ktons/year was achieved around the year 1959, after which mining declined to about 35 ktons/year between 1965-1975. About 750 ktons of uranium were extracted during that period. The second period (1975-1990) coincided with the time when many civilian nuclear power plants were planned and constructed. This period ended around the year 1990, when annual uranium requirements became larger than the annual extraction. During this period, uranium mining increased within a few years from 40 ktons to a production peak of almost 70 ktons/year around the years 1980/81. A production level of more than 60 ktons was maintained between 1978 and 1986 and a total of 1000 ktons were extracted between 1975 and 1990. During the third period (1990-2005) the construction of new nuclear power plants essentially stopped at a capacity of about 374 GWe, far below the original ambitious plans in many countries from the 1970’s. During this period and due to depletion and environmental reasons, uranium mining stopped in many productive regions and countries in Europe, Africa and North- America. Mining was reduced to an average of about 35 ktons/year, well below the uranium demand of 65 ktons/year, and a total of 500 ktons were mined. During the past five years about 250 ktons of uranium were produced and the fast rising contribution from Kazakhstan from 4.4 ktons in 2005 to almost 18 ktons in 2010 might be used as an indication that a new production period has started.

References
[1] Data about electric energy production in different countries and from the different sources
can be found at http://www.worldenergyoutlook.org/. For the OECD countries the
12
data are summarized on a monthly basis at http://www.iea.org/stats/surveys/mes.
pdf.
[2] Data about the world nuclear reactors and their performance are available at the PRIS,
the IAEA data base at http://www.iaea.org/programmes/a2/.
[3] The uranium requirements under the three WNA future scenarios, a slow growth of 1-2%
per year or a decline of -1%/year can be found at http://www.world-nuclear.org/info/
inf22.html.
[4] The press declaration for the publication of the 2009 edition of the Red Book contains a
warning statement about uranium shortages and can be found at http://www.nea.fr/
press/2010/2010-03.html.
[5] The reported uranium mining results from all countries and for the last few years including
2010 are summarized at http://www.world-nuclear.org/info/inf23.html.
[6] The 2006 review “Forty Years of Uranium Resources, Production and Demand in Perspective.
The Red Book Retrospective” can be found at OECD bookshop http://www.
oecdbookshop.org/oecd/display.asp?sf1=identifiers\&st1=9789264047662. A free
online version can be found via “Google books.”
[7] The latest 2009 edition of the Red Book from the IAEA and the NEA under
google books or at http://www.oecdbookshop.org/oecd/display.asp?lang=en\&sf1=
DI\&st1=5KMD4HVBSN41.
[8] The world distribution of uranium deposits from the IAEA database UDEPO can be found
at http://www-nfcis.iaea.org/UDEPO/UDEPOMain.asp. The 2009 status can be found
at the same site under IAEA-TECDOC-1629.
[9] Detailed reports about recent uranium mining in Canada and Australia and further references
can be found in the WNA documents http://www.world-nuclear.org/info/
inf49.html and http://www.world-nuclear.org/info/inf48.html respectively. Data
from individual deposits are also taken from http://www.world-nuclear.org/info/
inf49i_Canada_Uranium_Mining_Historya.html and [8].
[10] The detailed McArthur River Technical report from 2009 can be found at the website
of CAMECO, the main operator of the mine, under http://www.cameco.com/mining/
mcarthur_river/.
[11] The first quarter of 2011 results from the McArthur River mine are reported at http:
//www.cameco.com/media/news_releases/2011/?id=559.
[12] More details about plans for future uranium mines in Australia are given in http://www.
world-nuclear.org/info/inf48.html.
[13] The paper “An even bigger hole” from John Busby with many details about the Olympic
Dam project from 2007 with its 2010 update can be found at http://www.after-oil.
co.uk/evenbiggerhole.htm.
[14] See the statements from Vladimir Shkolnik, former energy minister and now Kazatomprom
at the beginning of April 2011 http://oldn.themoscowtimes.com/business/article/
kazakhstan-stockpiles-uranium-for-a-century/434615.html.
13
[15] The uranium mines in Kazakhstan and their target plateau production values are listed
at http://www.world-nuclear.org/info/inf89.html.
[16] The particularity about the Rossing mine are given in the 2009 report IAEA-TECDOC-
1629 page 45.
[17] Details about environmental problems related to the uranium mining in the area of Krasnokamensk
are reported in an article by Heinz H¨ogelsberger http://www.motherearth.
org/nuke/uranium/kras.htm.
[18] Details about uranium mining in Russia and further references can be found at http:
//www.world-nuclear.org/info/inf45a_Russia_nuclear_fuel_cycle.html.
[19] See the section about new mines in the Red Book 2009 [7] page 54 and the detailed country
reports at the WNA website http://www.world-nuclear.org/info/default.aspx.
[20] See http://www.world-nuclear.org/info/inf45.html.
[21] The WNA mining forecast estimate can be seen in the Figure at the end of the http:
//www.world-nuclear.org/info/inf22.html report.
[22] The EWG 06 uranium mining forecast can be found at http://www.energywatchgroup.
org/fileadmin/global/pdf/EWG_Report_Uranium_3-12-2006ms.

Posted in Nuclear Power Energy, Peak Uranium | Comments Off on Michael Dittmar, Institute of Particle Physics: Peak Uranium 2015