Lecture 1 - The End of Growth

Peak Oil The End of Growth.:

Peak Oil The End of Growth. The future ain’t what it used to be!

Modern Industrial World:

Modern Industrial World Post agriculture Post discovery of coal Post discovery of oil This is the Modern Industrial World . This is Man’s Domain .

The Rest………..:

The Rest……….. The rest we call Environment !!!! It is out there somewhere…….

Fundamental law of Modern Industrial World.:

Fundamental law of Modern Industrial World. Not Gravity. Not Relativity. Not Quantum Mechanics.

Fundamental law of Modern Industrial World.:

Fundamental law of Modern Industrial World. Not Gravity. Not Relativity. Not Quantum Mechanics. It is Economics.

Fundamental law of Modern Industrial World.:

Fundamental law of Modern Industrial World. Not Gravity. Not Relativity. Not Quantum Mechanics. It is Economics. Key paradigm of economics – Growth. Quantitative Growth .

Money:

Money Money is a measure of Value.

Money:

Money Money is a measure of Value. But Money must grow.

Time value of Money:

Time value of Money Money is a measure of Value. But Money must grow. Rate of Growth ( P ) is a percentage. Money must grow at P % every year.

Time value of Money:

Time value of Money Money is a measure of Value. But Money must grow. Rate of Growth ( P ) is a percentage. Money must grow at P % every year. Year after year. Decade after decade……… Century after century………

Compounding & Doubling Time:

Compounding & Doubling Time T 2 = 70/P ‘P’ is fixed percentage of growth. Compounds over time. Doubles over time. T 2 is the time it takes to double. At 7% your capital doubles in 10 years. In a century it is 1024 times your capital. THIS IS GREAT ! I like it.

Exponential Growth.:

Exponential Growth.

CORRECTION: Laws of Modern Industrial World :

CORRECTION: Laws of Modern Industrial World Fundamental Law is ECONOMICS. Key paradigm of economics – GROWTH. BUT not merely Quantitative Growth .

CORRECTION: Laws of Modern Industrial World :

CORRECTION: Laws of Modern Industrial World Fundamental Law is ECONOMICS. Key paradigm of economics – GROWTH. BUT not merely Quantitative Growth. It means Exponential Quantitative Growth .

CORRECTION: Laws of Modern Industrial World :

CORRECTION: Laws of Modern Industrial World Fundamental Law is ECONOMICS. Key paradigm of economics – GROWTH. BUT not merely Quantitative Growth. It means Exponential Quantitative Growth . EVEN MORE Perpetual Exponential Quantitative Growth ( PEQG )

Recap: Insistence of Economics:

Recap: Insistence of Economics Money is good representation of value. Money has to increase over time. The growth has to compound . This means doubling – Great! This means exponential growth – Better! This has to go on forever ( PEQG) – Why Not?!

Recap: Insistence of Economics:

Recap: Insistence of Economics Money is good representation of value. Money has to increase over time. The growth has to compound . This means doubling – Great! This means exponential growth – Better! This has to go on forever ( PEQG) – Why Not?! There are enough resources to support this. There is enough energy to support this.

Recap: Insistence of Economics:

Recap: Insistence of Economics Money is good representation of value. Money has to increase over time. The growth has to compound . This means doubling – Great! This means exponential growth – Better! This has to go on forever ( PEQG) – Why Not?! There are enough resources to support this. There is enough energy to support this. For ever & ever & ever …….

The 3 E’s.:

The 3 E’s.

The Bad Girl.:

The Bad Girl.

All this possible because of…..:

All this possible because of….. Not ideas. Not resources. Not skill. Not management. Not technology.

Industrial World possible by Oil:

Industrial World possible by Oil OIL Not ideas. Not resources. Not skill. Not management. Not technology.

#1 - Industrial World RUNS on Oil.:

#1 - Industrial World RUNS on Oil. Transport Industry Agriculture Electricity Heating

#2 - Industrial World BUILT with oil.:

#2 - Industrial World BUILT with oil. Bitumen for roads. Plastics for everything Fertilizers for Food Production.

Some personal goodies from Oil.:

Some personal goodies from Oil. Ammonia, Anesthetics, Antihistamines, Artificial limbs, Artificial Turf, Antiseptics, Aspirin, Auto Parts, Awnings, Balloons, Ballpoint pens, Bandages, Beach Umbrellas, Boats, Cameras, Candles, Car Battery Cases, Carpets, Caulking, Combs, Cortisones, Cosmetics, Crayons, Credit Cards, Curtains, Deodorants, Detergents, Dice, Disposable Diapers, Dolls, Dyes, Eye Glasses, Electrical Wiring Insulation, Faucet Washers, Fishing Rods, Fishing Line, Fishing Lures, Food Preservatives, Food Packaging, Garden Hose, Glue, Hair Coloring, Hair Curlers, Hand Lotion, Hearing Aids, Heart Valves, Ink, Insect Repellant, Insecticides, Linoleum, Lip Stick, Milk Jugs, Nail Polish, Oil Filters, Panty Hose, Perfume, Petroleum Jelly, Rubber Cement, Rubbing Alcohol,  Shampoo, Shaving Cream, Shoes, Toothpaste, Trash Bags, Upholstery, Vitamin Capsules, Water Pipes, Yarn

42 of 6000 items from Oil.:

42 of 6000 items from Oil. One 42-gallon barrel of oil creates 19.4 gallons of gasoline. The rest (over half) is used to make things like: Solvents Diesel fuel Motor Oil Bearing Grease Ink Floor Wax Ballpoint Pens Football Cleats Upholstery Sweaters Boats Insecticides Bicycle Tires Sports Car Bodies Nail Polish Fishing lures Dresses Tires Golf Bags Perfumes Cassettes Dishwasher parts Tool Boxes Shoe Polish Motorcycle Helmet Caulking Petroleum Jelly Transparent Tape CD Player Faucet Washers Antiseptics Clothesline Curtains Food Preservatives Basketballs Soap Vitamin Capsules Antihistamines Purses Shoes Dashboards Cortisone Deodorant Footballs Putty Dyes Panty Hose Refrigerant Percolators Life Jackets Rubbing Alcohol Linings Skis TV Cabinets Shag Rugs Electrician's Tape Tool Racks Car Battery Cases Epoxy Paint Mops Slacks Insect Repellent Oil Filters Umbrellas Yarn Fertilizers Hair Coloring Roofing Toilet Seats Fishing Rods Lipstick Denture Adhesive Linoleum Ice Cube Trays Synthetic Rubber Speakers Plastic Wood Electric Blankets Glycerin Tennis Rackets Rubber Cement Fishing Boots Dice Nylon Rope Candles Trash Bags House Paint Water Pipes Hand Lotion Roller Skates Surf Boards Shampoo Wheels Paint Rollers Shower Curtains Guitar Strings Luggage Aspirin Safety Glasses Antifreeze Football Helmets Awnings Eyeglasses Clothes Toothbrushes Ice Chests Footballs Combs CD's & DVD's Paint Brushes Detergents Vaporizers Balloons Sun Glasses Tents Heart Valves Crayons Parachutes Telephones Enamel Pillows Dishes Cameras Anesthetics Artificial Turf Artificial limbs Bandages Dentures Model Cars Folding Doors Hair Curlers Cold cream Movie film Soft Contact lenses Drinking Cups Fan Belts Car Enamel Shaving Cream Ammonia Refrigerators Golf Balls Toothpaste Gasoline

#3 – Non-Renewable:

#3 – Non-Renewable Oil is Ancient Sunlight.

Oil is the Blood of Industrial Society:

Oil is the Blood of Industrial Society Runs the Modern Industrial World. It is the fabric of Modern Industrial World. It is irreplaceable in it’s very nature.

Oil is the Blood of Industrial Society:

Oil is the Blood of Industrial Society Runs the Modern Industrial World. It is the fabric of Modern Industrial World. It is irreplaceable in it’s very nature. So it better not get over !

Oil is the Blood of Industrial Society:

Oil is the Blood of Industrial Society Anyway I do worry…… how much is left ?

We are here….?:

We are here….?

Peak Oil:

Peak Oil The Future of a Modern Industrial Society in the face of Depletion of a key finite Energy Resource in the context of a Perpetual Exponential Quantitative Growth Paradigm.

Hubberts Curve - Theoretical:

Hubberts Curve - Theoretical

Hubberts Curve - Actual:

Hubberts Curve - Actual

Peak Status of 54 Oil Countries:

Peak Status of 54 Oil Countries Country Peak Prod. 2008 Prod. % Off Peak Peak Year United States 11297 7337 -35% 1970 Venezuela 3754 2566 -32% 1970 Libya 3357 1846 -45% 1970 Other Middle East 79 33 -58% 1970 Kuwait 3339 2784 -17% 1972 Iran 6060 4325 -29% 1974 Saudi Arabia 11114 10846 -2% 2005 / Growing Mexico 3824 3157 -17% 2004 Russian Federation 11484 9886 -14% 1987 *

Proof of reaching The Peak:

Proof of reaching The Peak Biggest Oil companies finally admit it. Output plateau as predicted at 85 mb /d since 2005. Despite Oil reaching $ 146/barrel OPEC could not increase. FINALLY: Look at the price ----- 

Significance of Peak for Oil.:

Significance of Peak for Oil. In a PEQG paradigm world Peak is paramount. The first half of oil is easier to get and cheap. The second half hard to reach and expensive . We will not reach a large part of second half ever. Oil Production per year will only decrease . Industrial Production can only shrink . Economy can only shrink post Peak.

In Short……:

In Short…… The End of Growth

In Short……:

In Short…… Financial markets will CRASH !

In Short……:

In Short…… The Future looks different.

In Short……:

In Short…… The End of Growth The Future ain’t what it used to be

I am not convinced.:

I am not convinced. Only Half Gone: we have lots of time. Find More Oil : we have done it in the past! Alternative Energy – oil independency. Efficiency : we will save energy. Technology: will as always find a way!

1. Only Half Gone.:

1. Only Half Gone. Put in a bacteria at 11pm It has the property to double every minute. 11:01 there are 2 11:02 there are 4 11:03 there are 8 bacteria

Full Glass at Midnight.:

Full Glass at Midnight. At what time was the glass half full?

One minute before Midnight.:

One minute before Midnight.

The Crazy Car:

The Crazy Car Imagine a car that consume more petrol the longer it runs………….. Heck that is crazy. I would never buy a car like that. SURPRISE: Our economy is BIG such car.

1. Finding more Oil:

1. Finding more Oil It is 1 minute before midnight – Half Gone. The glass is 50% full. Luckily we find 3 more glasses – ( 6 times more oil) How much more time do we have to fill all?

1 minute later…..:

1 minute later…..

2 minutes later…..:

2 minutes later…..

3 minutes later…..:

3 minutes later…..

False Oil Reserves of OPEC:

False Oil Reserves of OPEC

Oil Discovery & Production:

Oil Discovery & Production Gap between Peak Discovery and Peak Production – 44 Years

Some will always be out of reach?:

Some will always be out of reach? ERoEI must be greater than 1. We will not reach the last drop!!!

2. The Mirage of Alternative Energy:

2. The Mirage of Alternative Energy Bio Fuels: Solar Nuclear Wind Hydrogen Electricity Tar Sands Oil Shale Fuel Cells Ethanol

2. The Mirage of Alternative Energy:

2. The Mirage of Alternative Energy Bio Fuels: Solar Nuclear Wind Hydrogen Electricity Tar Sands Oil Shale Fuel Cells Ethanol

Concept of Energy Replaceability:

Concept of Energy Replaceability You cannot just replace one form of energy for another. Next time you are hungry and your fridge is empty try drinking a glass of motor fuel !

3. Paradox of Efficiency.:

3. Paradox of Efficiency. Every gadget for last 80 years has become more energy efficient. Question: Then how come gross energy consumption is always rising?

Concept of Embedded Energy:

Concept of Embedded Energy Honda makes a new hybrid that save 15% fuel Now calculate the energy/oil gone into making it. Does the extra energy used to make a new car justify the amount saved in running it? Like buying a new house because it has CFL bulbs.

4. The Illusion of Technology:

4. The Illusion of Technology Technology does not create energy. Technology is not a tool. Technology is a cumulative effect of: Ideas Resources Processes – machines Labour Energy

Putting it all together.:

Putting it all together. We live on a finite planet. Oil Depletion is a Geological Reality. Economic system demands Perpetual Exponential Quantitative Growth ( PEQG ). THAT IS INSANE no matter what the source of energy/resources. Was possible in first half of Oil reserves. Impossible in second half of Oil reserves.

What should we expect?:

What should we expect? Quantitative Growth is OVER! Economically the world is going to shrink . How we adapt - determines how Future pans out. DENIAL: Hard Landing ACCEPTANCE: Chance of Smooth Transition

Other Exponential Graphs:

Other Exponential Graphs

Solutions.:

Solutions. Understand and Accept the new Shrinkage Paradigm. Perpetual Exponential Quantitative Growth is No Good . Perpetual Exponential Quantitative Growth is Not GOD Given. Maybe Shrinkage is nature’s correction.

Solutions.:

Solutions. Understand and Accept the new Shrinkage Paradigm. Perpetual Exponential Quantitative Growth is No Good . Perpetual Exponential Quantitative Growth is Not GOD Given. Maybe Shrinkage is nature’s correction. Invite the Bad Girl back into the room.

The 3 E’s.:

The 3 E’s.

The 3 E’s:

The 3 E’s

The Future of Economy:

The Future of Economy

Imbalance:

Imbalance

The Future of Economy:

The Future of Economy

Conclusion.:

Conclusion. A Study of Economics as if Life mattered.

Extra Reading.:

Extra Reading. Visit our website Acres Wild Cheesemaking Farmstay www.acres-wild.com