Perspectives on the Future

What exactly is doomed ?

Bob Lloyd Energy Studies

Cheer up Christchurch

If you think its bad here it is likely to get much worse

elsewhere

☺

What is not doomed? The future is not doomed, time

will not stop. The earth is not doomed, at

least not for a billion years or so. Humanity is probably not

doomed; even James Lovelock talks of a few breeding pairs surviving in Antarctica.

What may be doomed ? The world’s physical resources, especially energy

are reaching limits The existing biosphere is degrading Many people in fragile and marginal environments

are doomed: they are already dying Resource wars are dooming more people Many species are doomed: they are currently

becoming extinct at an alarming rate Many freshwater supplies are degrading Fertile soils are degrading Our economic system and world’s fixation on

growth, wealth and GDP are doomed: they cannot survive a declining world energy supply

In Doomsaying Timing is everything

Prominent doomers who got the timing wrong

Malthus ( 200 years ago)

Paul Erlich (v Julian Simon

Meadows et al Club of Rome report 1972

Physical Resources reaching limits (Energy)

Fossil fuels Oil Coal Gas

Nuclear Renewables can they save us?

Oil data to June 2011

Oil consumption is flat lining

Oil Drum 2011

IEA on Peak Oil 28th April 2011

Fatih Birol - Chief Economist IEA interviewed on Australian Television recently

Peak oil is not synchronous

Developing countries are generally still increasing consumption

Developed countries are static or decreasing

Increasing

Decreasing

OIL - Colin Campbell’s latest scenario puts peak oil (all liquids) at 2010:

GAS a decade later in 2020

OIL 2010

Colin’s EUR for conventional oil = 1.9T bbls All liquids 2.5T bbls

GAS 2020

What about coal?

There must be lots of coal everyone says so !

But coal reserve data is old and dated

A similar analysis to peak oil analysis was carried out by the German “Energy Watch Group” and they found peak coal could come as early as 2025 :albeit with a relatively flat plateau

2025

Padzek and Croft predict peak coal in 2011 using a multicycle Hubbert

analysis: Energy Policy 2010

More realistic study by Minqi Li University of Utah Predicts peak coal for China AND the ROW by 2027 – Oil Drum July 2011

What about Climate change?

The earth is warming and the culprit is CO2

Climate Change

Current June 2011 CO2 is 393.7 ppm

Safe levels

450ppm CO2e IPCC

Jim Hansen 350 ppm CO2

According to Jim Hansen the safe level of CO2 of 350 ppm is only possible if …

1. No coal used after 2030 All coal emissions halted in 19 years

2. No Unconventional Fossil Fuels Tar sands, Oil shale, Methane hydrates

3. Only conventional oil used NO Polar regions, Deep ocean, Pristine land, No deep ocean oil off NZ

Tipping points and runaway climate change once temperatures go above 2 o

C

Current effects Fires in Russia Floods in Australia, Pakistan,

China .... Tornados, Twisters and

Hurricanes in various places Famines in East Africa Droughts various

Back to energy:What about Nuclear?

(Presently 6% of world energy supply from around 450 reactors)

Maybe not

FUKUSHIMA 2011

What about Renewables

?

PV transition model for world electricity supply can solar replace

fossil fuels ?

Pessimistic and Optimistic embodied energy parameters for arrays ranging from 7000 MJ/m2 to 1750 MJ/m2

Solar radiation either mid European or southern European

Mineral resources needed cf world resources Costs ranging from $1/W to $4/W installed Limits of 10% of world electricity, flags % of

resources Land area limit of 1% of world land area or

1.5 million km2 cf area NZ 270,000 km2 Electricity growth rates ranging from BAU

(2.4% pa) through steady state to collapse situations

Conclusions from the model

The transition to renewables of our present world electricity supply is technically feasible

It would require considerable resources including up to 10% of world electricity supply pa to make the devices and around 10% of world GDP pa BUT

Material constraints would eventually prevail, however, if we want growth beyond the middle of this century

Energy and the economy Is oil money ?

History of oil and world GDP

GDP Data from Angus Maddison in constant US $

Ln world GDP and Ln world oil consumption

2.500

3.500

4.500

1940 1950 1960 1970 1980 1990 2000 2010 2020

GDP

OilSupply

GDP 4.65% pa

Oil 7.34% pa

Oil 1.6% pa

GDP 3.2% pa

1

3

2

4

Oil consumption is closely linked to world GDP

55

60

65

70

75

80

85

90

95

1980 1985 1990 1995 2000 2005 2010 2015

Oil

mill

ion

barr

els

per d

ay

4500

5000

5500

6000

6500

7000

7500

Squa

re ro

ot G

DP

1000

US$

Oil

sqrt GDP

Does this mean a decoupling of GDP from Oil consumption ??

World Debt and Coal consumption increasing

World Public Debt

0

5000

10000

15000

20000

25000

30000

35000

40000

45000

Bill

ion

US

$

Rest of World

AUSTRALIA

KOREA, REP. OF

MEXICO

NORWAY

RUSSIAN FEDERATION

AUSTRIA

TURKEY

GREECE

BELGIUM

NETHERLANDS

BRAZIL

INDIA

SPAIN

CANADA

CHINA

UNITED KINGDOM

FRANCE

ITALY

GERMANY

UNITED STATES

JAPAN

Data source "-Economist"

Gail the Actuary on Debt

See Gail Tvberg http://www.theoildrum.com/node/6191

Why we need growth? The world economy need growth to keep

people employed The financial system needs growth to pay

back debt and for interest payments The third world needs growth just to

survive

BUT continuous growth is physically impossible – 2.3% pa increase in energy use leads to the following:

Tom Murphy Oil Drum Madness Murphy exclaims!

Highly non linear effects Originate because the world financial

system is predicated on growth Including our fractional reserve banking

system Debt and interest Are all essentially a Ponzi scheme Once growth falters then the system is

liable to non linear contraction

UK Govt report obtained under FOIA June 2011

Report conclusions When considering the consequences of

peak oil, no everyday experiences and only few historical parallels are at hand. It is therefore difficult to imagine how significant the effects of being gradually deprived of one of our civilisation’s most important energy sources will be.

Psychological barriers cause indisputable facts to be blanked out and lead to almost instinctively refusing to look into this difficult subject in detail.

What will happen to oil prices ?

Sadad Al Husseini ASPO 2009 Denver “there is a ceiling to what the global economy can afford for energy. Roughly speaking, once you get to five to six percent of the global GDP being spent on oil, that’s about the ceiling”

Implications oil price cannot go much above US$120 / barrel

Linear v non linear interactions

Linear: Hirsh - oil declines at 1% pa transport declines at 1% pa. world GDP declines at 1% pa. Economists like linear interactions as they are more

tractable Highly Non linear: oil declines at 1% pa world

economy collapses as financial system cannot work with negative growth (Knightian, Taleb: Black Swans) Highly Non linear interactions needs systems

dynamics modelling and even then chaotic systems cannot easily be modelled

Back to NZ

Is NZ ready for Peak Oil ?

It will depend on whether the predominant outcomes are linear or non linear and on the rates of decline of oil production

1970 1975 1980 1985 1990 1995 2000 2005 2010 20150

50

100

150

200

250

300

NZ Oil Consumption

Pet

a Jo

ules

NZ Energy Data File 2011

2004 2005 2006 2007 2008 2009 20100.00

50.00

100.00

150.00

200.00

250.00

300.00

Recent NZ oil consumption

Cons

umpt

ion

PJ

But GDP has levelled off too

Scenarios for the future

Risk analysis: 4 scenarios

Optimistic: oil decline rate 0.6% pa until 2030

Pessimistic: oil decline rate 4% pa World economy reaction: linear World economy reaction: non linear

Linear 0.6% decrease pa Efficiency gains and transport

reorganization could mitigate crude oil declines with little adverse effects until around 2030 by which time either climate change difficulties or gas declines and coal peaking are likely to have triggered non linear responses.

Linear, 4% decrease pa

Efficiency gains could mitigate crude oil declines until around 2015 - 2020 depending on when the declines start. China and developing economies will be stressed by lack of petroleum supplies to fund further growth and the collapse of the world factory, among other problems, including climate change, are likely to trigger non linear responses elsewhere.

Highly Non linear, 0.6% decrease

Oil supply decline will trigger a slowdown in world economies and the world will move to a period of stagnating recession alternating with periods of recovery.

Evidence for this scenario has already appeared. What follows is likely to be a series of peaks and

downturns in the world economy as the non linear interaction unfolds and the world adjust to a declining oil supply.

Highly Non linear 4% decrease

A 4% oil supply decline per annum will trigger a run on the world stock markets triggering a substantial world depression necessitating a revision of the world monetary system.

Why have we let the world get to a situation whereby the inertia of the global system will make mitigation of these problems, in time to avert

an energy decline and an environmental catastrophe ,

difficult or impossible ?

WHY WHY?

I have explored possible reasons for this apparent insanity

Brain development : evolutionary deficits in the brain – Koestler – the growth delusion

It appears to me that: Our ability to solve complex problems such as

climate change and peak oil may be compromised by the structure of our brain - not allowing us to mitigate in a rational manner

Our recent belief in Growth parallels our longer term belief in Religion – they may tap into the same areas of the brain

Growth suits big business and through neuro-marketing this gives another level of reinforcement

In addition growth is needed by people in the third world for just for survival

Fossil fuels are profitable

The 800 billion tones of coal in the ground is worth around US$ 40 trillion at US$ 50/tonne

The remaining 800 billion barrels of oil is worth around US$ 64 trillion at US$80 per barrel.

Eric Fromm: The Sane Society 1956

Argued that society in mid 1950s was in fact insane The reasons he gave were:

War: 8000 conflicts between 1500BC and 1860AD average 2.4 per annum

Economy: Wars ,contribute to GDP, consumption and waste contributes, growth is paramount , NO emphasis on well being just on having more stuff

Media and advertising: population filled with mindless trivia “the cheapest trash and sadistic fantasies “

Since then Wars: Wikipedia count of conflicts since WWII is around

200 or 2.7 per annum . % killed, number killed increasing and now we have thermonuclear weapons , drones, cluster bombs, depleted uranium.

Economy: is now out of control Europe is on life support. Greece has just made a technical default. The US is deadlocked trying to raise its debt limit above 14.3 trillion US$

Media and advertising: the Murdoch circus has hit town and the culpability of the media in contributing to the insanity is finally being recognised . We now have neuromarketing targeted on children, 3D exceedingly violent computer games , mobile advertising etc.

I think the real question we have to answer is: Are people

actually capable of independent thought?

Can they resist the media, neuromarketing, the global advertising machine, the war machine, the growth economy and the mindless pursuit of more wealth and ever more stuff? AND

Can the rich decrease their consumption to allow the poor to increase theirs ?

Questions and discussion