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Welcome to the new normal

Written By: - Date published: 11:43 pm, February 14th, 2011 - 53 comments
Categories: climate change, energy, food, International - Tags: , , ,

Look at the international media these days and what do we see?

Oil prices rising – petrol is the most expensive it has ever been at this time of year suggesting it may break all-time records again when it rises to its normal yearly high-point during the northern summer. This is peak oil.

Extreme weather events – storms happen but massive storms do not usually occur in simultaneously or rapid succession all around the world. In the past few weeks we’ve seen once-in-a-century type snow storms in Europe, the US, South Korea at the same time as supposedly once-in-a-century flooding has hit Sri Lanka and Queensland, and an extremely active Pacific cyclone season driven by an intense La Nina. Our warmer atmosphere can now hold more water and contains more energy, making these storm events more frequent. There are other extreme climatic events – Russia is experiencing a bitterly cold winter after its record breaking summer while the lungs of the world, the Amazon rainforest, is actually adding to the world’s carbon emissions this year because shifting weather patterns have caused a record drought. This is climate change.

Food prices rising – those extreme weather events are often destroying food crops. Queensland and Russia are major wheat producers and the loss of their crops has driven up prices. The worse may be yet to come with severe drought expected for the world’s largest wheat producer – China. Once the world, if it chose, could call on surplus capacity to make up for crop failures. Now, there’s no spare capacity and more extreme events meaning savage price spikes. This is peak food.

Governments failing and falling – the weakest links breaking first.

Let’s look at the countries experiencing revolution and large-scale civil unrest – Tunisia, Egypt, Jordan, Yemen, and Algeria. What do these countries have in common apart from the fact they’re all Arab?

  • They’re poor, with large portions of the population in poverty and, so, spending most of their incomes on food and fuel, which makes them very susceptible to price shocks.
  • They’re importers of their stable food, wheat, which has dramatically increased in price.
  • They’re past peak domestic oil production, now mostly importers when they were formerly exporters. Once, high oil prices helped their economies, now it hurts them.
  • For several of them, western tourism is a major source of employment (12% of the Egyptian workforce), and now in decline due to Westerners’ falling incomes and rising costs of travel.

In Tunisia and Egypt, declining tourism and receipts from hydrocarbon exports meant the governments were unable to afford to increase subsidies to shield their populations from the price shocks. It was hunger and unemployment that drove the people to revolution. The people didn’t suddenly decide to overthrow leaders who had ruled them for 30 years for no reason. A man with a starving family quickly losses his fear of the state police.

Obviously, the new governments won’t be magically overcome these fundamental issues. They will be able, if they choose, to redistribute the wealth more fairly to placate the masses but there’s not going to be a solution to the underlying issues. While these revolts are, so far, limited to the Arab world that’s mainly a result of cultural links, the fundamental issues are universal and will be felt evermore severely in poor countries. So, I don’t think you’ll see a rich Arab country like Saudi Arabia having a revolt before other poor countries in Africa and Asia.

That’s to say, I think we’re seeing the first, already wobbly, dominoes falling but it’s not just an Arab world phenomena, all States are at risk to varying degrees. And new governments aren’t going to be able to fix climate change and peak oil any more than their predecessors, giving them immediate legitimacy problems which leads to the potential for countries to become failed states.

One other point to note, the UN has complained that its call for international aid donations in the wake of the Sri Lankan floods that displaced 1.2 million people went largely unanswered. $51 million was needed, just $8.4 million has been pledged. It seems the West already has its hands full with its own economic problems and the expense of trying (unsuccessfully) to deal by varied means with the failed states in Haiti, Somalia, Afghanistan, Iraq, and Pakistan.

This is what a future of peak oil and peak food looks like. The weakest states falling over first. The rich countries increasingly overburdened by their own problems and the magnitude of problems abroad not being able to intervene effectively, and the edges of the global nation-state system crumbling.

What do we do, as a country that can feed itself ten times over, as these man-made disasters wreak havoc – how do we both protect ourselves and carry out our duty to aid our fellow humans in need?

As a starting point, I would suggest that we would have much more freedom of action to help ourselves and others if a tiny elite didn’t control nearly all our country’s capital and extravagantly consume the lion’s share of our economic product.

53 comments on “Welcome to the new normal ”

  1. Colonial Viper 1

    I would add a couple of other things that each of those Arab countries have in common: an elite class holding concentrated power and wealth, glaring income inequality, masses of commoners disenfranchised from political society.

    Voices which were finally given franchise by the internet.

    • ZeeBop 1.1

      The great sideways shuffle has began, from the high point where the wealthy would self-justify their existence (their wealthy their owed) to the end point where the wealthy justify their existence by what they do (put food on the plate, make cutlery, deliver goods). So when investing please remember to count the number of times your money is handed over to others in the process, this will have a direct reflection on its return. Owning it beats supporting a financier class of fad economic fashion houses.

  2. johm 2

    Refer Richard Heinberg of http://www.postcarbon.org We are now in the post growth era, that is we can no longer grow our economies to absorb and eliminate problems.As soon as we start to grow oil prices will spike slamming us down with the free market constraint of scarcity:this term meaning total oil is declining,hence our economies will decline alongside. This is actually a historically momentous point of our history,we have been growing ever since Columbus discovered America 500 years ago.

  3. M 4

    The best thing anyone can do if they have spare cash is to invest in extra food staples like rice, flour, sugar and some canned goods. Peanut butter, if you’re not allergic, is the ultimate survival food containing protein and fat, can be eaten without cutlery, doesn’t require cooking and in a situation where you don’t want to be detected is a great advantage.

    • Marty G 4.1

      funnily enough, Glenn Beck suggests the same (and buying gold, which is stupid but he has interests in a monetary gold company).

      Actually, we don’t need to horde food above the normal disaster kits because we make heaps. What New Zealand needs is its own manufacturing base so we can maintain our productive capacity and consumer manufacturing with less dependency on an undependable world.

      • higherstandard 4.1.1

        “What New Zealand needs is its own manufacturing base so we can maintain our productive capacity”

        But let me guess to service that manufacturing base we’re not allowed to consider mining for raw materials or petroleum ?

        • Marty G

          we do mine and drill right now. The issue with Schedule 4 was whether you’re prepared to sacrifice even more most precious natural environments for it. And most Kiwis aren’t.

      • M 4.1.2

        Marty, I wouldn’t be able to store more than about three months’ worth because of one, the expense and two, the storage capacity and would be pissed off if there was mass spoilage for any reason. I think three months’ worth is a good hedge if only against wildly escalating prices because there is no spare capacity in my food budget which is $100 to $120 per week and that includes some gluten free foods as I have coeliac disease.

        I agree with you re our food situation, we are probably one of the few nations that could be self-sufficient in food but that could be threatened with producers who would want to earn top dollar in the international market – I haven’t forgotten the huge ramp up in the price of dairy goods and this is a group that allows some variation in my rather restricted diet.

        One of the greatest crimes every visited on our nation and workers was the off-shoring of our manufacturing and I often wonder how much useful machinery is rusting away or has been scrapped. To resurrect factories will require supreme effort, if at all possible, and massive expense which of course will be passed on to our citizenry (I hate the word consumer).

  4. higherstandard 5

    Fuel prices are high more due to speculation than peak oil, they are not the most expensive they’ve ever been at this time of year – your link is US only. I’m continually amazed how cheap oil at the pump in NZ is considering the supply chain and tax component.

    And as for peak foods – pah ! pah ! and double pah! the amount of food wastage in a single month in the developed countries could probably feed underdeveloped countries for a year it’s a international disgrace.

    • Bored 5.1

      True answers on oil and food prices and wastage…where you argument falls down is that you have not thought through what happens if you use these items efficiently and at an economic cost. Take oil, use it at a lower price, get some “growth” and end up with boom bust as capacity is reached and supply falters, price goes through the roof. Or food, feed the starving and they multiply, then you reach capacity and starvation.

      Pah pah wont cut the mustard, if you claim a higher standard start thinking at a less simplistic level.

      • higherstandard 5.1.1

        Luddite twat

        • Bored

          A higher standard argument I see. Very intellegent.

          PS The arguments I use are not Luddite in this case, they owe more to Hobbes and Mills. I suspect you dont read at a higher standard?

    • Rosy 5.2

      “And as for peak foods – pah ! pah ! and double pah! the amount of food wastage in a single month in the developed countries could probably feed underdeveloped countries for a year it’s a international disgrace”

      I don’t agree with you very often HS, but this is right on the button.

      I wouldn’t be too sure about the long-term future of farming here either unless we do something about soil degradation. It doesn’t even seem to be on anyone’s agenda – out of sight, out of mind.

    • Marty G 5.3

      “[oil is] not the most expensive they’ve ever been at this time of year – your link is US only”

      The US pays the world price for oil, just like we do. And our petrol price is higher than it has ever been for this time of year – 199.9 cents, previous record 170.9 cents in 2008 http://www.med.govt.nz/upload/65514/weekly-table.csv

      “And as for peak foods – pah ! pah ! and double pah! the amount of food wastage in a single month in the developed countries could probably feed underdeveloped countries for a year it’s a international disgrace”

      True and not a disproving of peak food. The same could be said of peak oil – with less waste we can get by with less but we’ll have to get by with less either way and I’m not going to assume that the waste will simply be magiced away, as you seem to be content to do.

    • Colonial Viper 5.4

      I’m continually amazed how cheap oil at the pump in NZ is considering the supply chain and tax component.

      lolz yeah that’s what I’ve been hearing everyone say when they spend $120 to fill up their tank. My, that was CHEAP, I wouldn’t mind paying that out again in a week! 😈

  5. Bored 6

    Unfortunately survivalism is not an option, we probably need to begin by having a good hard look at how countries have managed crisis of finance, supply and shortages. Godd examples are Cuba who face a food crisis when the Soviet union fell, and Argentina where the factories were reclaimed by the workers.

    In NZ we have enough capability to feed, clothe and warm everybody even using pre fossil fuel techniques, the biggest hurdle for us is how, as our economies shrink and collapse we structure our politico economic systems to provide a basic level that cushions the fall. One thing is certain, the more wealthy amongst us had better get used to the concept of a shared existance.

    • patriot_nz 6.1

      We currently have enough capacity to provide for all the New Zealanders here. I highly doubt we are going to be allowed to enjoy our sustainable paradise unmolested for very long though.

      In the short term our current treasonous government will cheerfully sell off our land and hydroelectricity. In the long term we are very likely to have everything taken off us by force.

      It is critical we change our government this year to one with a longer term vision, who will keep our sovereignty and our assets and start preparing for the post-peak world. We will also need to think hard about how to defend ourselves. Compulsory military training perhaps? Maybe look to emulate a country like Switzerland which also has a small population but is very much prepared to defend itself.

      • Colonial Viper 6.1.1

        Yeah, I personally think that running down the capabilities of our defence forces over time is a very bad idea.

        That Australian piss take on YouTube – NZ, 100% ours for the taking, is not that funny in a time when our neighbour is going to be heavily hit by peak oil, droughts and other climate extremes.

      • Draco T Bastard 6.1.2

        I highly doubt we are going to be allowed to enjoy our sustainable paradise unmolested for very long though.

        And we’ll probably have to close our borders to all comers, up to and including sinking incoming boats, within this decade.

        It is critical we change our government this year to one with a longer term vision, who will keep our sovereignty and our assets and start preparing for the post-peak world.

        Would be nice but I haven’t seen a party with these necessary policies yet.

        We will also need to think hard about how to defend ourselves. Compulsory military training perhaps?

        Probably needed within this decade.

        In the long term we are very likely to have everything taken off us by force.

        I suspect that will be more try to take it off us. We’re a long way from anywhere else and that puts in some serious logistical problems for any invasion force.

        • Colonial Viper

          This country has a metric shit-tonne of small arms floating about the place (over a million rifles, right? Anyone know the figures?)

          Still its nothing against a professional modern military.

          • lprent

            That is in the right order. About a rifle or shotgun for every fourth person these days. The actual figure seems to remain pretty constant over the decades, but the population increases. I also would be interested in looking at the current stats

          • Draco T Bastard

            Yeah, saw the stats on gun ownership a couple of years ago. Can’t remember the exact figures but at the time we actually had more guns per head of population than the US.

      • Rosy 6.1.3

        Patriot_NZ This argument doesn’t make sense to me.
        first – although we can feed ourselves it is not sustainable. Waterways problems make this obvious, soil depletion and reliance on artificial fertiliser are other indications
        second – peak oil and resources, if they reduce our ability to trade are the exact thing that the hordes if whoever will need to get here and take it off us. It can’t be both.
        third – military build up. If they can get here, they can take it off us, military build-up just means it will be a little nastier and we’ll need those very resources that are in short supply

        Not selling our land to overseas interests and cleaning up or farming methods are the way to improve our future prospects, whether there is financial collapse or not IMO. And as Bored says, looking at countries that have already had to deal with isolation and financial collapse

  6. Sanctuary 7

    Is it scarcity or speculation driving up prices?

    • Marty G 7.1

      both. speculation doesn’t arise out of nothing. ultimately, it is a bet that future market conditions will justify a higher price. speculative bubbles do form, where speculators are betting on future speculators betting even more but the foundation of speculation is real world supply and demand.

    • Bored 7.2

      Good place to start looking for answers on that question is http://theautomaticearth.blogspot.com/ where “Stoneleigh” gives some lucid arguments on how price and supply work. Basically yes there is speculation, but there are also underinvestment scenarios where when demand comes back supply fails….its a sort of exagerated up and down scenario.

      Also worth reading on this Greer http://thearchdruidreport.blogspot.com/ who talks about catabolic collapse of systems, much the same in that whilst the norm is contraction, it does not follow a smooth curve or trajectory. Again a bumpy ride.

      In short, only one thing is clear, that the supply of energy in the form of oil, food, raw materials etc on a finite planet has reached peak and demand exceeds availability, and supply is in decline. No amount of intellectual arguments about human resourcefulness, technology, systems etc can change that.

  7. joe90 8

    With Saudi oil reserves overestimated by up to 40% just how accurate are the figures supplied by the oil industry?.

    • Shane Gallagher 8.1

      The problem is that no-one really knows. There is a systemic problem with stated reserves in that the share price of any oil company is dependent on how much reserves it says it has. So if say Shell said it had only 10 years worth of reserves left then everyone would sell their shares and the company would collapse and leave it with no capital to explore new wells – so the companies exaggerate their reserve estimates.

      And there is no independent group of assessors – which when you think about it, is insane. However, the best independent assessments is that we are at peak oil right now (or at the best a few years off).

      • Colonial Viper 8.1.1

        So if say Shell said it had only 10 years worth of reserves left then everyone would sell their shares and the company would collapse and leave it with no capital to explore new wells –

        Unless all the major oil companies downgraded their reserves at the same time. Then all their share prices will go UP, as short term investors are not interested in a 10 year time frame, just whether or not the stock price will pop upwards tomorrow.

        And, its not a coincidence that oil company profits have been skyrocketing during a period of peak oil. Resource scarcity is good for resource company profits, not bad.

        • SPC

          Obviously there is a constraint on the amount of value of oil – its alternative energy equivalent value.

          As we develop more dual powered cars (ones with batteries) and have stations for charging these everywhere – this could be powered otherwise by CNG/LPG. A completely post oil age. This is a car maker issue.

          Until this point is reached – fuel from converting gas to synthetic petrol or methanol or coal shale etc is the final constraint on oil price. Of course this involves an oil company running down its reserves and instead of investing in new exploration, investing in this alternatrive supply instead.

          • Colonial Viper

            The hybrid CNG/LPG/electric/pure electric vehicle concept is interesting. However for that tech to be a viable alternative for a million NZ’ers, our total electricity generation capacity may have to be upgraded (costly) and we are also talking about tens of billions of dollars in brand new vehicles, charging and repair infrastructure etc. Not sure if this is truly a pure car maker issue.

            My other concern is – how much CNG/LPG does NZ have at current usage, let alone massively increased transport fuel usage. I was under the impression that we would be hard pressed to see our known gas reserves last 20-25 years.

            • Bored

              Apologies SPC and CV. I have already had a go at Lower Standard today who called me a Luddite so I will apologise in advance of rebuking people for techno faith. Reality is a hard task master, and whilst I don’t doubt that we can make higher and higher tech cars, widgets etc please get your head around the following:

              • the issue is not oil depletion : it is total available energy from all sources, and equally total resources to build and deploy these technologies. There is currently no equivalent energy source to fossil carbon, or to ever scale to the degree we use energy today.
              • a technology may use energy in doing its task: it also has an imbedded energy, i.e all of the input required from mining and transporting the raw materials, manufacturing, distributing the technology. We don’t have a lot of energy left to retool.
              • money…there is not a lot left to expend on alternatives, and there is going to be less. Money reflects the energy supply…and its going down.

              In short the whole concept that human resourcefulness, technology and market signals will save us is as perverse and misguided as believing in the Rapture.

              • Draco T Bastard

                money…there is not a lot left to expend on alternatives, and there is going to be less. Money reflects the energy supply…and its going down.

                There’s plenty of money – the printing presses are, after all, running over-time. Of course, this just means that there’s more money to represent decreasing physical resources.

                We really, really need to get away from the concept that money is a resource.

              • SPC

                bored, I was just outlining the alternative/associated energy development and investment that is occuring as the price of oil rises.

                As to the depletion of all carbon sourced energy – I am not sure this will occur or that pessimism is necessarily accurate.

                At some point a security reserve will be established to take care of some of the concerns you raise – so that industries that use carbon based products in manufacture of essential goods/including agriculture will be provided for. That may involve a global requirment for transport of goods (nuclear powered ships and or sails) and passengers by electricity (trains/cars/buses). That means investment on nuclear energy/wind turbines/tide turbines/solar etc) by those nations that would require this.

                Currently investment in nuclear is limited by the ability of power generation to come from cheaper coal or gas – if use of carbon for power generation in Kyoto/OECD nations was banned …

                Existing companies supply energy, they will have plans to maintain their business into the future – given the choice between investing profit (ability to borrow against the rising value of their oil reserves) in new exploration or investing in alternative energy (diversifying their existing networks to deliver them), they will probably (as oil price rises make alternatives profitable) do both – the extent to which more oil is discovered or a company is capable of delivering an alternative “fuel” the better its future will be.

                Power companies will make profits because there is a demand for power and if/because other companies have the same constraints on the source of their power, if there are profits and there is demand there will be power – because money will be supplied for the provision of an essential service (that is making a profit).

                Ultimately there is the constraint of fuel for nuclear power generation and otherwise there is the constraint of the any limit to exploitation of renewable energy sources, should there be no way to move to fusion successfully etc.

  8. ianmac 9

    Of course Jehova Witnesses have been predicted the End is Nigh for years and will be girding their lions and tigers for the Second Coming. Earthquakes, storms, unrest! All the harbingers of Doom. So repent you Sinners for your day of Reckoning is here, -or maybe just over there! Ah Ha!

  9. Lanthanide 10

    “while the lungs of the world, the Amazon rainforest”

    Actually phytoplankton in the oceans provide 50% of the world’s oxygen processing capability – equal to all other sources on the planet.

    This, of course, is just another reason why acidifying oceans from CO2 is bad.

  10. NX 11

    Governments failing and falling – the weakest links breaking first.

    Occam’s razor Marty. Maybe, oh, just maybe the people of these countries want democracy. And the accessibility of new technologies helps to make this happen.

    ^ but I guess this explanation doesn’t fit with your paranoid word view.

    • Colonial Viper 11.1

      Pretty sure occams razor is where you are supposed to seek the simplist explanation NX.

      ^ but I guess this explanation doesn’t fit with your paranoid word view.

      Which part in particular did you deem “paranoid”?

      I mean, skyrocketing food commodity prices are a matter of record, as are food shortages throughout developing nations.

      Paranoid means unfounded or delusional fears right? So being actually hungry is not being paranoid is it?

      • NX 11.1.1

        Please want democracy. Sounds pretty simple to me.

        • Colonial Viper

          Please want food / job . Sounds like that would win the cut in Occams razor.

          • NX

            From Wikipedia:

            “At times over a million people were protesting to demand the overthrow of the Egyptian President Hosni Mubarak, an end to corruption and police repression, and democratic reforms of the political system.”

            From me:

            Please want democracy. Sounds pretty simple to me.

            EDIT: Please = people :). Funny, I saw the mistake in your reply, but not in my own.

            • Colonial Viper

              Hmmmm…perhaps you missed the last few years in Egypt building up to this point? You know all the stuff Marty talked about in his post? And are just focusing on the big bang but not the long fuse?

              I’ll put it another way. Had Mubarak spread the wealth around a bit more, ensured a bit more economic prosperity and jobs, and limited mistreatment of citizens by security forces and officials – he would still be in power. Calls for democracy would be weaker because peoples’ lives day to day would be OK.

              In other words, he could’ve done with learning from China’s example of the last 20 years 🙂

              • NX

                Viper – to be honest I don’t have the knowledge or the brainpower to compare & contrast the political systems of China & Egypt & all the extenuating circumstances.

                And as for your theory:

                Had Mubarak spread the wealth around a bit more, ensured a bit more economic prosperity and jobs, and limited mistreatment of citizens by security forces and officials – he would still be in power.

                Once again, I can’t really critique you on this either.

                But what I do know is from the BBC.
                The guy was 82 years, & had been in power for 30 years. People wanted rid of him. And that makes sense to me. And Wikipedia, not Marty, has confirmed this.

                The desire for democracy isn’t necessarily dependant on living standards. It’s about the desire to have a say in the people who governor you. The people who make the rules.
                Surely, you of all people should be able to understand this given your dislike of the John Key administration.

                • Colonial Viper

                  I agree, they wanted Mubarak out, they were tired of the way he had ruled over them, and that became the focal point for everyone at the demonstrations.

                  • NX

                    So, you’re agreeing with me now..?

                    You’re being particularly confusing tonight Viper.

                    • Colonial Viper

                      Sorry I don’t mean to be.

                      Yes the protestors wanted Mubarak out. Yes they felt his rule was overbearing and authoritarian, yes high unemployment/corruption/political oppression/severe economic inequalities/food price hikes played a large part in generating anger over many many years.

                      As for democracy, I think its seen as an avenue to get rid of Mubarak and his cronies. So definitely viewed in a positive light. But it is an unknown system of government (most adults in Egypt have very limited experience of democracy).

                      I remain skeptical that wanting the adoption of a democratic system of government was first amongst a range of factors driving the Egyptian protests.

  11. alloverrover 12

    yes we have the new normal but the response from successive governments and oppositions has been sub-normal.

    see http://oilshockhorrorprobe.blogspot.com/2011/02/ostrich-like-denial-continues-over.html
    for a analysis of the extent of denial in NZ and discussion of some converging issues which all point to another oil-induced global financial crisis coming soon

  12. Zaphod Beeblebrox 13

    You’d think wheat might be a more useful crop to grow in NZ than dairy cows. People will need bread before they need to have their lattes.

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    2 days ago
  • Cost of Government Southern Response proactive package released
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    3 days ago
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    3 days ago
  • He Whenua Taurikura: New Zealand’s first Hui on Countering Terrorism and Violent Extremism
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  • Speech to inaugural Countering Terrorism Hui
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    3 days ago
  • Campaign shines a light on elder abuse
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    3 days ago
  • Farewelling sports administrator and philanthropist Sir Eion Edgar
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  • Government to apologise for Dawn Raids
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    4 days ago
  • Humanitarian support for Bangladesh and Myanmar
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  • Poroporoaki: Dame Georgina Kamiria Kirby
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  • Feedback sought on future of housing and urban development
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  • Clean car package to drive down emissions
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    5 days ago
  • Progress towards simpler process for changing sex on birth certificates
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  • Crown speeds up engagement with takutai moana applicants
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    6 days ago
  • Alcohol and Other Drug Treatment (AODT) Court opens
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  • EU and UK FTAs top of list for first ministerial trip since COVID-19
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  • Arihia Bennett to chair Royal Commission Ministerial Advisory Group
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  • Speech to the New Zealand Medical Association General Practitioners' Conference, Rotorua
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  • Karangahape Road upgrades are streets ahead
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  • Speech to APEC business event
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    1 week ago
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  • Pukemiro School to close
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  • Speech for Predator Free 2050 Conference
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