The knife edge

Written By: - Date published: 11:00 am, March 2nd, 2011 - 42 comments
Categories: Economy - Tags: , , ,

To get enough oil for global demand requires expensive technologies, and expending more energy. If the price is too low those investments won’t be feasible, meaning not enough production. But too high and the world can’t afford it and we enter global recession. The ‘goldilocks’ in the middle is shrinking, to a knife edge. It’s the same story with food and metals.

Right now, the most expensive barrels of oil in the world are either from the Alberta oil sands or deepwater drilling – at around US$70-$90 a barrel. Obviously, the producers wouldn’t be extracting oil at such a massive cost if there was cheaper stuff to get at or the oil wasn’t needed to meet global demand. These most expensive sources of oil set a floor on the price that can only be lowered if demand reduces, as it did for a short time at the start of the Great Recession.

On the flipside, at some point the price of oil sends importing countries into recession. You can think of an increase in the oil price as a ‘tax’ on an importing company that flows out of the country for no additional benefit. With exporters sending something like 40 million barrels a day to importers, when the price rises by US$10 a barrel, as it did last week, that represents a US$400 million a day (US$146 billion a year) drain on those economies. That means people in importing countries have less to spend on other things and transport costs in those countries rise – paying more and getting less means entering a recession with inflation running hot, just as happened in 2008.

Most people say the point at which the oil price causes recession is somewhere above US$120 a barrel. I think its lower. Sure, oil hit US$147 in July 2008 during the last shock but the developed world was already in recession well before then. Most of the OECD countries, including New Zealand, entered recession in the first or second quarter of 2008, when oil prices were lower than they are now (and the economies were more resilient than they are now). I think the current prices are high enough to send the developed world back into recession if they last more than a couple of months.

The ‘goldilocks’ zone, where the price is not too cool to discourage needed production or too hot for economies to handle is a tiny range, between around US$80 a barrel and US$100 a barrel. As each cheap barrel of oil is used and has to be replaced with an expensive barrel, the floor on oil prices rises. With each price shock, the ability of economies to handle high prices weakens – to the point where the goldilocks zone doesn’t even exists and you need a long-term series of recessions to get demand down to a viable level. Arguably, we’re already at that point.

When it comes to food, though, the situation is worse. Most people aren’t able to cut their food intake. A food price shock doesn’t just equal global recession, it means starvation as the poorest are excluded from the market entirely while the rich can afford to continue feeding human-edible grain to livestock.

Again, the balance between production capacity at an affordable price and demand is razor thin and deteriorating. In seven of the last eleven years, the world’s annual grain harvest was less than annual grain consumption. In the past decade, 45 million tonnes more grains were consumed than produced, the first decade in the last five where the world ran down its reserves, rather than adding to them.

As for metals, the problem is the same story of the best already being gone. The densities ores have been exploited and, by a peculiar geological trait called the mineralogical barrier, ore densities don’t trail off nicely – there are dense ores that we can exploit and have exploited and there are extremely low-density ores that contain most of the planet’s metals and that would be too energy-intensive to exploit (especially with rising energy prices). At least metals can be recycled but world metal prices are skyrocketing nonetheless because there isn’t enough for new demand and rising living standards.

Ultimately, the technological solutions to these problems will require accessing solar and other renewable energy a lot more cheaply in vast quantities, and innovations in biotechnology and materials science. We don’t have those solutions yet but we do have the crisis. As a country, New Zealand can benefit both in terms of its own economic independence and as a world leader and exporter if it pours research funding into these areas. And that funding has to remain uninterrupted through a cycle of recessions. Because what we’re doing now can’t and won’t last.

42 comments on “The knife edge”

  1. RedLogix 1

    Marty,

    Top quality as usual. (I’ve no idea how you manage to keep up this level of output…:-)

    The Archdruid’s latest post is worth reading in conjuction.

    • Bored 1.1

      Agreed. For a good view of the economic impact go to Theautomaticearth.

      I watch the price of Brent Crude daily, its gone up from $90 to $116 in a fortnight with the unrest in the Middle East. If you get onto the New York Times you can also see the commodities prices for wheat etc. Grain has increased in price by 96% over the year.

      The stock markets have almost recovered tot he level of the peak prior to the “crash”, they are over stoked and not supported by any real productivity or profits sufficient to cover interest on the bail outs. Watch gold where the “safe” money is headed. It has the makings of another perfect storm. oil and grain prices will send them over the edge.

      • Draco T Bastard 1.1.1

        I watch the price of Brent Crude daily, its gone up from $90 to $116 in a fortnight with the unrest in the Middle East.

        psst, Lprent

      • The Economic Illiteracy Support Group 1.1.2

        I have to say, the “day of rage” on 11 March in Saudi Arabia has me concerned – not because the Saudi oil supply will suddenly be interrupted (it won’t be) but because the markets may well wake up to the implications of the knife edge that Marty describes.

        • Bright Red 1.1.2.1

          I think the market is well aware, and that’s why the price of oil rises at the slightest threat. I see WTI is over $100 today and Brent over $116.

          I wonder what Treasury’s budget modelling is based on…

          ah …. “Based on the average futures prices for WTI oil in early April 2010, the price of oil is
          assumed to rise to around US$91/barrel by the end of the forecast period [ie March 2014]”.

          http://www.treasury.govt.nz/budget/forecasts/befu2010/befu10-whole.pdf

  2. exit lane 2

    an excellent post Marty… you are hammering away at the oil-economy interface and good on you.

    Nobody in the 2 main parties or Act is listening, let alone formulating policies, and maybe they won’t until we need fuel rationing. Which will only be 10 years too late. But as more commentators expose this looming crisis, the more people will be able to take personal steps to mitigate the impact.

    Transition towns is a great start
    http://www.transitiontowns.org.nz/

    for a précis of Canadian economist and oil expert Jeff Rubin’s recent excellent article – check this out…

    http://oilshockhorrorprobe.blogspot.com/2011/03/oil-prices-were-rising-steeply-before.html

    or the whole thing..

    http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/why-saudi-arabia-can-no-longer-temper-oil-prices/article1918139/

    • M 2.1

      Thanks for the Jeff Rubin link exit lane as I always enjoy his delightfully phlegmatic delivery of the facts.

      Most people will only change when the price signals give them the boot up the butt that something’s amiss. As for the politicians they will not change until it’s patently obvious they cannot lie anymore.

      Many people have tried to warn governments over the years of our impending crises and I’m sure the politicians understand the situation but lack the moral courage to make the necessary announcement accompanied with a slew of proposed actions to aid transition to our much lower-energy lives.

      There seems to be two schools of thought on crashing: a slow crash which may be slightly gentler but would draw the misery out for longer or the short, sharp crash of around ten years which would more or less shock all but the most robust of people.

      Talking with a righty friend about PO has borne fruit in a way as a vegetable garden has been started even though I’m sure he remains quite sceptical, but if even in a roundabout way he’s getting ready for the future so much the better. As he has kids I’ve also said that I vote left because I don’t think that right-leaning governments generally have the welfare of future citizens high up on the list of their priorities re clean water, clean air and fecund soil.

  3. Jenny 3

    R is the third letter in the word P.E.R.I.L

    From the Peril Theses

    Resource depletion

    “Peak Everything”

    US ecologist Richard Heinberg88, a senior fellow at the Post Carbon Institute89, captured a spreading mood of anxiety in the title of his 2007 book Peak Everything: Waking Up to the Century of Declines.

    A deluge of research findings reveal that oil and gas,90 fresh water,91 at least eleven minerals (including lead, mercury, phosphate rock, potash and selenium)92 and other resources essential to industrial capitalism have either peaked or are close to doing so. Global coal production could peak within two decades.93

    Capitalism’s growth gene has spurred a reckless looting and spoilage of nature, particularly since the invention of the oil well drill 150 years ago. The world system could not allow sensible conservation measures to impede its insane plunder of the planet.

    Now the onset of a broad spectrum resource crisis is about to shove capitalist society hard up against the limits of capitalist growth. Probably the crunch will be first felt in soaring oil prices, triggering economic chaos and geopolitical shifts.

    Grant Morgan

    Can capitalism switch to renewables?

    While solar power and wind generation are expanding, sometimes rapidly as in China, nowhere do these energy sources get treated as anything more than useful auxiliaries to fossil fuels. None of the powerful states have plans to make true renewables their sole or main energy source in the foreseeable future. They are focused on cornering the world’s dwindling supplies of oil and gas.

    Global capitalism’s response to the energy crunch is as logically insane as its reaction to climate change. A technically feasible emergency programme of wind and solar energy construction cannot take priority because it would reduce profitability throughout the world economy.

    The accumulation cycle would be destabilised since net energy returns from these renewables are sometimes lower than fossil fuels, and unit costs often higher, while output consistency cannot be guaranteed.

    So global capitalism is trapped in a resource crisis of its own making, placing most people on the planet at serious risk.

    Grant Morgan

    So if capitalism can’t change, what are it’s other possible strategies?

    “War against all”

    If this energy crunch hits hard before capitalism has been replaced by a system of solidarity, then what? Then the outlook would be dire for billions of Earth’s citizens, especially those without wealth or in poor countries.

    Powerful states would squander finite resources in infinite wars to monopolise dwindling resources. Their war machines, powered by fossil fuels, would divert resources away from renewable energy projects. In the wake of military devastation and resource loss, famine and disease would stalk the planet. Under the slogan of saving “our way of life”, economies and societies would be militarised, undermining living standards and traditional liberties. To divert internal dissent and seize external resources, mainstream politicians would scapegoat “barbaric hordes” from “uncivilised lands”.

    Grant Morgan

  4. Jenny 4

    ” As a country, New Zealand can benefit both in terms of its own economic independence and as a world leader and exporter if it pours research funding into these areas. And that funding has to remain uninterrupted through a cycle of recessions. Because what we’re doing now can’t and won’t last.”

    MARTY G

    Marty, Was there ever any result from Rahui Katene’s call for cross party talks on peak oil?

    “Time for cross-party talks on peak oil”

    “President Obama’s statement today that the world is running out of places to drill oil, confirms the need for political parties in Aotearoa to start cross party talks on the global peak oil crisis”

    “The time has come for all political parties to come together and take action on what we are going to do about the global oil crisis and how it will affect this nation,”

    Rahui Katene
    Maori Party Energy, Climate Change Spokesperson
    Maori Party MP for Te Tai Tonga
    16 June 2010

    • Most politicians are a lousy bunch of lying bastards, the Maori Party are the best of a very bad bunch, which may not be saying much. But they tried.
      On my prompting at least Hone gave it a go.

      Need for Cross Party Commission on Peak Oil
      Thursday, 6 December 2007, 3:35 pm
      Press Release: The Maori Party

      Maori Party Repeats call for Cross Party Commission on Peak Oil

      Hone Harawira, Climate Change Spokesperson for the Maori Party

      Thursday 6 December 2007

      The Maori Party has today reiterated the call it made on 4 September 2005 to establish a cross-party parliamentary commission on peak oil.

      Right at this moment in London an All Party Parliamentary Group on Peak Oil and Gas and the All Party Parliamentary Climate Change Group are meeting to focus on the interaction between oil depletion and climate change and whether a combined solution can be developed said Hone Harawira, Climate Change Spokesperson for the Maori Party.

      Just prior to the 2005 elections, we issued a challenge to all parties that we work together to address the issues around oil shortages said Harawira.

      Our intention then as it is now is to reduce this countrys reliance on non-renewable energy sources – and to make that a priority issue for this Parliament said Harawira.

      It appears the Brits have picked up on this great idea and are now looking at cross-party solutions to address what they are describing as the twin crises of peak oil and climate change said Harawira.

      Listening to world experts such as Professor Richard Heinberg, the Maori Party understands that the Peak Oil period is here now; and given that a ten year planning phase is needed to strategise how to meet the challenges of Peak Oil – New Zealand is already ten years behind the eight ball” said Harawira.

      “The government is being incredibly short sighted by continuing with their position of Peak Oil hitting in 2030. It’s an immediate crisis that needs to be dealt with urgently or we all suffer the consequences – and given our huge reliance on oil and petrol, the consequences will be huge”.

      There’s a whole lot we can do – making a couple of phone calls before the hui to organise one carload going instead of three; building power walking into our means of travel and putting pressure on your council to increase public transport options; pumping up the tyres on the bike; replacing the petrol guzzling machine with the lean, mean model or even doing our homework and reading up on renewable energy sources (hydro, solar, wind, geothermal, waves) as substitutes for oil-gas in transport and industry said Harawira.

      I know that a lot of the marae up North are investing in the environmental future of Aotearoa and looking at ways to create alternative sources of energy said Harawira.

      We have to be calling on our brightest minds to look at ways that to encourage community transformation and political co-operation, as we come to grips with the challenge of depleting petroleum resources said Harawira.

      I came across a statement from Torsten Slock, an economist at Deutsche Bank which seemed to sum up the big three issues facing us here there are three sharks stalking the economy, the oil shark, the credit shark and the housing shark.

      Background

      The All Party Parliamentary Group on Peak Oil and Gas (APPGOPO) and the All Party Parliamentary Climate Change Group(APPCCG) are meeting in the Grand Committee Room, House of Commons, London on Wednesday 5th December; 7.00-8.30pm
      … (more info)
      (less info)

      • Oh and by the way that request was asked of the then Labour government … you know Pete and his mates

        captcha – corrupts

        • Colonial Viper 4.1.1.1

          Politicians will not do what they sense there is no support for or stomach for in the electorate. Period.

          Convince a half million NZ’ers that you are right then you’ll get action.

          Now if you haven’t understood that after all this time, you’re a fraking idiot.

  5. Back in 2002-3 Pete Hodgson and his mates (MED) were saying oil would be $20 – $25 a barrel out to 2025 ish, while ‘we’ were saying peak would be around 2005 and oil may not even be available by 2025 (well not for the average kiwi)
    Yet ‘The Standard’ looks at Pete as some kind honest perk busting god ?
    When will you people work out that all politicians are lying self centered bastards, much like most humans 😉
    It is way past time we woke up to reality …. like Christchurch will never be rebuilt, and most children alive today will not be after 2035 at best.
    Alas chucking children at our problems will only make the future worse, but then they say misery likes company.

    • Colonial Viper 5.1

      WTF. Get over yourself Mr Doomsday.

      Your attitude is as much a part of the problem of why peak oil is not discussed in NZ political circles, as the two dimensional analysts and economists who can’t see beyond OPEC’s own fictitious reporting and feed Ministers shit.

      • My anonymous friend the ‘attitude’ grew over maybe 8 years of bashing my head against societies wall of self induced ignorance, and the sadness of seeing so many friends having children.
        I gave it my best shot http://oilcrash.com/articles/struggle.htm
        I’m over it all now, just like poking fun at fools.
        Sorry moderator for over posting, I will ignore any more ignorant attacking posts.

        • mickysavage 5.1.1.1

          Pete believed that peak oil would occur but relied on US data and thought it would occur in 2035 or so. His reliance was obviously misplaced but your criticism of him is exceedingly harsh.

          Save your ammunition for those who despite a plethora of evidence to the contrary still refuse to accept that peak oil is happening.

          • neoleftie 5.1.1.1.1

            The peak of easily accessible oil is a reality but oil exploration and new technology advance for extraction is coming on stream and will stabalise prices once they reach a certain price bracket.

            • Colonial Viper 5.1.1.1.1.1

              and will stabalise prices once they reach a certain price bracket.

              Its likely to be a price bracket which will take almost everyone in Auckland off the roads.

              $260 to fill up a Sonata, Accord or Camry, appeal to anyone here?

              • neoleftie

                i will dig up from facts soon to support my claims but focused on chch at moment

            • Marty G 5.1.1.1.1.2

              no. that won’t happen. because you’re not going to get a price for this new oil that is low enough for the economy to afford it and expand.

              then, there’s the time lag-factor.

              when biological populations approaches a limit to growth you first see small but sudden dips and rises in population before the population finally smacks into the limit and crashes. this same rising volatility is seen in the oil market.

              Stability is not a feature of the future.

              • neoleftie

                When the market or other forces decides the price is too high, alternatives for fuel for transport will come in to play. Israel is just introducing battery exchange depots where electric battery cars can swop out the battery. Oil, once the price reaches a point where it’s uneconomic for common transport, will be used solely for other manufactured products. Once the market forces i.e private or state has changed the transport structure then supply and demand usage will cause the price to stabilise once we have take out the massive transport or energy demands for oil.

                • Marty G

                  alternatives are being developed but they are not available in anything like the needed scale at the needed price and won’t be for years. we’re talking serious capital investment here and that can’t happen overnight. Even getting new oil deposits producing using new tech is a decade-long proposition. The problem is now.

                  When the price is high it does encourage more expensive production and the development of expensive substitutes but simply creating new sources of too expensive energy is not a solution. High prices destroy demand, and do that by casting the world into recession.

                  • Colonial Viper

                    High prices destroy demand, and do that by casting the world into recession.

                    The new variable in this decade is the extraordinary rise of fuel demand from emerging superpowers.

                    There are hundreds of millions of new consumers in India and in China who want a new car.

                    And by jove they are going to get one, even as Americans and Europeans start leaving their vehicles at home.

  6. johm 6

    I’m one of those who were alerted to Peak Oil by R.A.’s leaflets in the 90s. I do find his style to be refreshingly lacking in Political Correctness. But to “win friends and (most importantly) influence people ” it’s important to not talk at or down at them, though this could develop as one becomes increasingly frustrated with people who don’t want to know!

  7. Afewknowthetruth 7

    I thought it was a good article till I read this: ‘Ultimately, the technological solutions to these problems will require accessing solar and other renewable energy a lot more cheaply in vast quantities, and innovations in biotechnology and materials science.’

    Obviously Marty G recognises we have a serious problem, but presumably he lacks the knowledge to understand that there are no solutions -well not at this late stage in the game, so the problem is really a predicament. (Research on EROI and embedded carbon will soon verify what I am saying).

    There are no ‘solutions’ that will alllow industrial civilisation to continue. The time for solutions was when the problem was first identified (1956) or when the geological analysis was vindicated (1971). In other words, if, as a society we were really going to deal with the oil predicament we needed to have made a start 40 years ago, when it was a problem, not a predicament: we needed to have started to wean oursleves off oil (and coal) long ago and be completely off it by now. And we needed to have limited population -a great taboo! None of that happened.

    No combinmation of so-called alteranatives can provide more than a tiny fraction of the energy needed to maintain the complex systems of this global industrial civilisation

    At this stage world population is twice what it was then, all the easy oil has been consumed in an orgy of idiotic consumption. We now are running out of numerous resources, and we are more dependent on oil than ever!

    I know that is not what people want to hear: they want to hear that we can innovate our way out of this predicament. It is not going to happen. It takes a lot of oil to produce a windmill, a dam, solar panels, copper cables, copper pipes etc., and ‘we’ have squandered it on ridiculous activities like tourism and motor racing. We couldn’t solve this one even if there was the poltical will to do so (which there isn’t).

    So, it’s game over. We’re off the cliff. Decades of ignoring warnings have a price. And we are about to pay it. We have only one way to go from here … down. In fact we are on the slippery already and the rate of fall will accelerate over the coming years. (By the way, peak per capita energy was around 1979 and has been falling ever since.)

    As for Robert Atack, I empathise with him. From 2003 to 2009 I made presentation after presentation to dozens of official bodies, including numerous councils: they all sat there like beached whales … and subsequently voted for yet more lunacy.

    It took me a while to realise it, but now I do: we live in a scientifically illiterate society in which most people are totally ignorant of the facts and have completely unjustified sense of entitlement; most politicians and councillors are ignorant fools and are simply there to work the system for their own benefit.

    We have the perfect perfact set-up for catastrophe: a general popluace that doesn’t want to know governed by controllers who don’t want to know. And we have corporate-controlled media that doesn’t want anyone to know the truth about any of the crucial issues of the times because that wouild be ‘bad for business’, business being the conversion of oil into carbon dioxide and water. And, of course, carbon dioxide emissions pose the biggest threat to continuation of life on this planet!

    I can see why Robert got so abrasive, being governed by ‘idiots’ and surrounded by ‘idiots’.

    • Jenny 7.1

      Afewknowthetruth says:

      “Obviously Marty G recognises we have a serious problem, but presumably he lacks the knowledge to understand that there are no solutions”

      Brain, so when you say “there are no solutions”, are you saying that we should do nothing?

      In face of the lack of action from the authorities, what in your opinion should we do?

      • Afewknowthetruth 7.1.1

        I am not saying we should do nothing. Obviously it makes sense to try to ‘wake people up’. But the track record on that agenda has been pretty dismal: people would rather ‘sleep’.

        I am saying there are no solutions that will maintain present living arrangements or present economic arrangements: they are predicated on using energy and resources at 100 times what the Earth can supply or cope with as pollution.

        The real solution is to prepare for the collaspe of civilisation. That could mean plant fruit trees and vegetables and get a wood stove etc. Or it could mean ‘run for the hills’. Each person’s solution depends on their circumstances.

    • Marty G 7.2

      “Obviously Marty G recognises we have a serious problem, but presumably he lacks the knowledge to understand that there are no solutions -well not at this late stage in the game, so the problem is really a predicament. ”

      I’m not arguing there’s not a crash coming. I’m saying there’s no point being the smart-arse on the Titanic saying ‘I could have told you we would hit that iceberg’.

      There are tech/social solutions. They’re not going to be here in time, but we will still need them in the future.

      • Afewknowthetruth 7.2.1

        ‘There are tech/social solutions’

        Such as?

        I do know I had a Horizon Book of Science in the 1960s, a bit like ‘Tomorrows World’, full of promises that never eventuated ….Moon bases, flights to Mars, hydrogen cells, electric cars, fusion reactors, solar cells, electricty so cheap they would bother to meter it.

        None of it happened, other than experimental or very small scale.

      • lprent 7.2.2

        I am afraid that A is correct. As a dedicated writer of code who works with engineering all of the time and a avid student of history and politics, I would say that you cannot rely on any tech or social solution that isn’t in the final phase of development – benefitting from the economies of scale. Everything prior to that point is vaporware and only suitable to investing more resources and lots of time in for a very questionable result.

    • Draco T Bastard 7.3

      There are no ‘solutions’ that will allow industrial civilisation to continue.

      This is incorrect. Industrial civilisation will continue but it will be less than what it is and probably won’t be global. We have enough power generation and other needed resources in NZ to continue it and there are other places around the globe that this is true – especially if full recycling is brought in. You most likely won’t have a car and you won’t be flying anywhere but a lot of which makes modern living comfortable (fridges, machine ripped timber, etc) will still be here.

      This isn’t to say that things will stay the same as they won’t. There’s no way that the present 7b people on Earth can be supported without abundant oil which we no longer have. The ME is presently collapsing and no amount of calls for democracy will change that. Egypt imports 40% of it’s food paid for through it’s export of oil – and it’s oil reserves are in decline. Such situations exist in most of the ME and so those countries populations are about to starve which will induce civil wars which will reduce oil exports reducing food…. As oil exports decrease other countries will follow the same path especially Europe and the US. The wars in Europe and the US may be less catastrophic than those elsewhere but they will happen. Throw in refugees from collapsing states looking to go somewhere that they can get some food and the picture isn’t looking pretty (why do you think I keep saying that NZ is going to have to close its borders with deadly force?).

      We have the perfect perfact set-up for catastrophe: a general popluace that doesn’t want to know governed by controllers who don’t want to know. And we have corporate-controlled media that doesn’t want anyone to know the truth about any of the crucial issues of the times because that wouild be ‘bad for business’, business being the conversion of oil into carbon dioxide and water. And, of course, carbon dioxide emissions pose the biggest threat to continuation of life on this planet!

      This I agree with. A lot of the populace and the politicians just don’t seem to want to admit to the existence of reality.

      • Deadly_NZ 7.3.1

        “(why do you think I keep saying that NZ is going to have to close its borders with deadly force?).” With what? a few scorpions and some buggered Skyhawks and a coupla frigates yep they may even get a shot off before they are blown to the weeds..

        better with the price of oil to stop our reliance on it and stoop building new wasteful motorways because what good are they going to be when NO ONE, except the very rich can afford to run their cars. At least our children will be able to look on Key’s Folly and shake their heads.

      • Afewknowthetruth 7.3.2

        ‘it will be less than what it is and probably won’t be global.’

        How do you think that might work? How will the ‘civilised’ keep out the hordes?

        Do not forget the fall of the Roman Empire. Once it’s over, it’s over. Some remnant may hang on for a while, but eventually it all goes down.

        • Draco T Bastard 7.3.2.1

          How do you think that might work? How will the ‘civilised’ keep out the hordes?

          Well, as far as NZ goes – I think a few thousand kilometres of open water will help.

          With what? a few scorpions and some buggered Skyhawks and a coupla frigates yep they may even get a shot off before they are blown to the weeds..

          We have time to build up a better defense force and to develop the necessary means of production here. Of course, the politicians aren’t listening – yet.

  8. Jenny 8

    A lot of the populace and the politicians just don’t seem to want to admit to the existence of reality.

    I don’t think this is the case.

    People’s perception of reality doesn’t just change by itself, people have to be convinced. This requires a political campaign of action. Which is at the moment sadly lacking.

    Just as the movement against apartheid sport in this country started with Tom Newnam and three other activists marching up the footpath of Queen Street giving out leaflets. Later setting up information stalls, calling public meetings, mounting protests. (All pretty thankless to begin with.) But eventually captured the heart and minds of millions of over half the population.

    At the moment politicians on both sides of the house and opinion formers in the media are being heavily lobbied by the polluters, particularly the roading lobby.

    Billions are being insanely thrown away on motorways and tunnels, which will soon be either congested and/or, soon after redundant. While public transport gets starved in it’s crib.

    At the same time large tracts of land on the Canterbury plains, better suited to cropping, are being converted to dairying with a resulting gigantic methane and nitrogen footprint. All on behalf of Fonterra’s astronomical profit taking.

    Solid energy is mining and exporting all the coal they can for the huge returns they can get from maintaining humanity’s carbon habit.

    Until a grass roots counter-lobby of concerned activists is built up, the public will be purposely kept in the dark by the those with a financial interest in pollution.

    • Afewknowthetruth 8.1

      You are quite right. Corporations are running the show (along with money-lenders). And most politicians are bought-and-paid-for lackeys.

      By and large it is the function of government to facilitate the agendas of corporations. It has been that way here since 1840. That is one of the many reasons why we will be driven off the cliff … oops we are already off the cliff and awaiting the fall, dancing in mid-air Wile E Coyote style.

      I suspect that is why some of the rats are starting to desert the sinking ship.

  9. johnm 9

    Let me be dramatic!!!……We have reached the end of growth and are at the turning point of our Global Civilisation: In terms of energy and resource availability it’s all downhill from here: Listen to Richard Heinberg:

    “But that’s all kind of academic.The reality is that the cheap oil is gone. And we’re seeing oil prices right now in the range of, well today $100+ a barrel historically a very high price.
    In effect, the oil price has become a limit to economic growth. Because if the economy starts to recover, then that drives oil prices higher. Every time we have high oil prices, really high oil prices, that undercuts economic activity.
    I would say that the oil price is essentially forming a cap on possible economic recovery at this point. That’s why I’m fairly confident in saying that we have reached the end of growth.

    So in answer to your question, it’s not one or the other. I think what we’re seeing is a profound economic crisis that will continue to unfold for the remainder of our lifetimes. This is not going to be over. We’re not talking about a single dip or a double dip. It’s not a Vee shaped recovery or a W shaped recovery.

    It’s a El shaped non-recovery. We’re in an new economic era from here on. And scarcity of resources and energy are absolutely instrumental in what’s brought us to this point.

    And how we handle our human relationship with the natural world, and how we handle also the redesign of our economy, the redesign of our economic system, our financial system, these things will determine whether we adapt to this new reality successfully or whether this really means the end of civilization as we know it.”

    Despite what economists believe the Planet is finite after all!

  10. johnm 10

    Further to the above:
    Now the Pie is going to decrease indefinitely you can be sure as is already happening that the rich and our predator capitalists will be seeking to expand their share of the existing Pie at the expense of less powerful groups in society by means of: Privatization, especially of Publicly owned assets( The likes of Key don’t even recognise the public good exists! They do not accept the basis of social democracy of the commonwealth of all people in the nation). Tax cuts rewarding the already rich and well off taking from those who do not have enough. Domination of the professions by the rich who can afford the best education—–Nact would privatize education if they can get away with it, Poorer people paying with vouchers for inferior funded schools while the rich supplement theirs with cash and go to superior schools. Plus the rich will be better able to support their kids through University! This garbage Ideology has come from the U$. Look at Wisconsin where the Republican rubbish there are trying against massive protests to strip away workers rights to collectively bargain and the rest, while giving to the rich with tax cuts (Robbing the Public sector) money they don’t need. The U$ is committing social suicide. John Key is our own rubbish republican along with his sidekick the gnome from epsom!

    • ZeeBop 10.1

      Pretty simple, one day everything stops, everyone ends up in a soup kitchen line because money is so out of whack to needs of the population the majority stop accepting it, i.e. going into work to be paid in 1/billionth of what Bill Gates earns every day when it easier just to grow vegies on the front lawn and get odd jobs, or standing in line at the govt soup line. A few years, a new currency ,all the old contracts ignored and we’re started exporting again, boom times for little green island in S.Pacific. Bring on the collapse, its boring explaining up and down to right wing zombies.

    • Colonial Viper 10.2

      The U$ is committing social suicide.

      Yeah I’ve been hearing more about this. The US Government and big business interests have really abandoned families and individuals to struggle on their own.

      The level of anxiety, anger, depression, fear, violence, child offences and incarcerations in the US is only going to go up form here.

  11. johnm 11

    OILQUAKE IN THE MIDDLE EAST: THE COLLAPSE OF THE OLD OIL ORDER
    by Michael T. Klare

    In other words, if one traces a reasonable trajectory from current developments in the Middle East, the handwriting is already on the wall. Since no other area is capable of replacing the Middle East as the world’s premier oil exporter, the oil economy will shrivel — and with it, the global economy as a whole.

    Consider the recent rise in the price of oil just a faint and early tremor heralding the oilquake to come. Oil won’t disappear from international markets, but in the coming decades it will never reach the volumes needed to satisfy projected world demand, which means that, sooner rather than later, scarcity will become the dominant market condition. Only the rapid development of alternative sources of energy and a dramatic reduction in oil consumption might spare the world the most severe economic repercussions.

    Refer link: http://www.commondreams.org/view/2011/03/03-7

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