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Reality Shock

Summary:
Urgency is needed, as society’s alarm bells aren’t working The most important charts of all Recent learnings on resilience relocation When a culture becomes desperate, it reacts desperately. No one wins. If you have not yet read Part 1: Getting Real About Green Energy, available free to all readers, please click here to read it first. I follow the markets ( or ““markets”” as I deridingly call them), very closely.  The reason I do is because most people are taking their cues from whether stocks have gone up or down. The stock market is now the main tool of persuasion used by the government and its Wall Street proxy agents to signal that “all is well” to the population. It’s been a long frustrating period of time.  For ten years now, going on eleven, the powers that be have used every

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Reality Shock
  • Urgency is needed, as society’s alarm bells aren’t working
  • The most important charts of all
  • Recent learnings on resilience relocation
  • When a culture becomes desperate, it reacts desperately. No one wins.

If you have not yet read Part 1: Getting Real About Green Energy, available free to all readers, please click here to read it first.

I follow the markets ( or ““markets”” as I deridingly call them), very closely.  The reason I do is because most people are taking their cues from whether stocks have gone up or down.

The stock market is now the main tool of persuasion used by the government and its Wall Street proxy agents to signal that “all is well” to the population.

It’s been a long frustrating period of time.  For ten years now, going on eleven, the powers that be have used every trick in the book (and some probably not in the book), to keep stocks elevated.  This has been a win-win for them; a pacified population and a massive concentration of wealth into their own pockets (or people related or known by them).

I truly wish we had an unpacified population.  One that would be willing to drop some very dangerous delusions and get on with aligning our actions with reality.  It’s time to freak out a bit.  Get serious.  Make different decisions and reorganize our priorities.

Away from consumption and towards regeneration.  Away from wars and death and towards positive solutions and life.

But as long as the ““market”” masters insist on keeping stocks elevated, we seem stuck in the mud.  Which means even as people allow themselves to be distracted and divided by trivial matters, reality grind on in the background.

The narrative goes like this; “Things will work themselves out, they always do.  Don’t be alarmed.  Look, people are getting rich in the markets, and that means things are going well.  Being an alarmist will only harm you.”

Meanwhile, the natives are growing restless, as that narrative is shredded by reality.

For example, to follow the Brexit drama, you’d think the worst thing in the world will be the possibility of a hit to the UK’s economic growth.  For many, they truly believe that.  Meanwhile, here’s some data from the UK:

Extinction Britain: Wildlife survey exposes shocking decline in animals

Oct 3, 2019

One in seven British species is threatened with extinction, according to a new report by the country’s main wildlife and conservation charities.

It shows there have been strong or moderate declines in 41% of all species since 1970.

The crisis is effecting favourites like the hedgehog, whose numbers are down 95% since the 1950s.

Turtle doves, meanwhile – famous from the Christmas song – are now one of Britain’s most endangered birds, with 98% gone in the last 50 years.

(Source)

A world without hedgehogs or turtle doves is a less beautiful and interesting place.  Over those same 50 years McDonalds has grown to some 1,250 locations in the UK.  Would it really be so terrible if the UK saw a bit of a resurgence in wildlife and a slower rate of growth in new McDonald’s shops?

According the current narrative of growth that would be a disaster.

Well, guess what folks?  There’s a disaster on the way.

The Most Important Charts Of Them All

Out of the many things I do, I feel it’s most important to keep a sharp focus on energy and its relationship to the economy.  Sadly, there aren’t many places (yet) that have a similar focus.

If you understand this the way I do, you’d share my urgency to create community and develop a resilient homestead.  My goal here is to nudge you towards action.  It’s also to nudge myself towards faster action too.  Hey, operating so far outside of the dominant narrative takes lots of guts and revisiting of one’s assumptions.

Energy is the most important variable of them all for any organism.  Have a surplus of it and you can grow or become more complex.  Have a deficit in energy and you cannot do anything but shrink, or simplify.

By far the most important source or type of energy of them all is oil.

Here’s another view of what the world is expecting with the International Energy Outlook (IEO performed by the EIA) showing steady growth in oil (Crude + Condensate = C+C) right on clear though 2050:

(Source)

The yellow dotted line is a model of oil’s possible path charted by Dennis Coyne over at Peakoilbarrel.com.  His assumptions are all put on public display and easily followed.  He assumes the world has 3,100 billion barrels of total recoverable oil.

The EIA simply tells us what it thinks, so I cannot evaluate how they got their blue line to go up like that, or why it wiggles so discretely as it trundles off into the future (suggesting some sort of precision).

The models could not be more starkly different.  One shows abundance as far as the eye can see.  The other calculates that oil (C+C) will peak somewhere around 2030 and then dwindle away towards nothing.

It bears repeating, oil gets more and more expensive to produce on the downslope of the curve.  So when you get to “the halfway point” it’s not like you’ve got 50% of the total left to burn.  In terms of energy returned and cost the best years are during the first half of the resource’s lifetime.

The blue line is compatible with steadily rising stock and bond markets, as each of those derives a huge amount of their current value from the idea that future growth will pay off the investments.

The yellow line is a world of hunger and difficulty and utterly incompatible with the current narrative of “all is well.”

I’ve marked up the chart a bit to make that point:

With the amount of oil in the blue line, we can do a lot.  In the world demarked by the yellow line, not very much is possible.  We’ll be lucky to preserve what we’ve got, including the current population.

All of our hopes and dreams rest upon the blue line being the truth.  The yellow line represents a place where those get crushed.

Let’s examine this dynamic a little more closely by looking at just the yellow line model. Lots jumps out and becomes obvious when we view this close up.  We’re going to look at 3 distinct phases, numbered on the chart below:

(Source)

Phase 1 (in black):  From 1950 to 1980 world oil output grew from 10 Mbd to 60 Mbd.  This is the phase that everyone remembers fondly.  A middle-class life was possible on a single salary.  Financialization hadn’t yet placed everyone in debt and CEOs were socially constrained from taking more than their fair share.

But it was the vast rise in surplus energy per capita that made the middle-class abundance even possible in the first place.  That six-fold increase in just 30 years explains, as much as anything, that golden era of rising prosperity.

Financialization wasn’t necessary – there was enough to go around for everyone and growth just came naturally.  As it always does for an organism wallowing about in an abundance of excess energy.

Phase 2 (in purple):  Uh oh.  Oil growth between 1980 and 2030 slowed to a relative crawl.  It only increases from 60 Mbd to around 90 Mbd.  That’s just a 50% increase over 50 years.  Ouch!

This period is marked by a rise in financialization as energy clueless and (increasingly) desperate politicians and central banker sought to stoke the easy growth of the prior decades mainly by throwing more and more debt, at ever lower rates of interest, into the system.

All they really got for their troubles was a hollowed-out middle class (40% of which cannot even raise $400 for an emergency) and a huge wealth gap.

While there are a lot of complicating factors to this story (taxes, regulatory capture, Citizen’s United, etc.) you can gather the broad outlines by simply observing that net energy per capita really slowed down during this period.  As it did, debts rose (as they had to) and the lower classes found the going tougher and rougher.

A subtle point here too is that the oil brought to market between 1950 and 1980 was all super high net energy stuff.  All new oil finds are smaller, deeper, and harder to get.  It’s lower net energy so even that 50% “growth” in oil supply from 1980 to 2030 is not the same as the stuff making up the prior 600% explosion.

Maintaining the illusion that “all is well” required more and more drastic efforts by the central bankers to pull consumption forward at any cost.  Now, here we are.

The desperation is palpable and unnerving.  Central bankers and their crony politicians are cutting rates and injecting liquidity in their efforts to prevent reality from intruding.

The simple truth is this; oil made everything possible. There’s no magic combination of liquidity injections or negative interest rates that can fix a lack of high net energy oil.  All that will happen is a slight delay followed by a worse correction when it cannot be pushed off any longer.

Phase 3 (in red):  This is where the trouble really begins.  What was once possible is no longer possible.  On the downslope of oil’s bonanza is a world of difficulty.  If we’d managed, collectively, to properly invest in the future, then it would be less difficult.

But rather than doing that, we pursed a very aggressive policy of “more of the same.”  More cars sold, more soils washed to sea, more aquifers run down to nothing, and more people crammed into megalopolises.

Investments in electrified mass transit were small to non-existent.  Zero public monies went to permaculture experiments or small farms dedicated to building soil.  A grid scalable and affordable battery solution remains a future dream.

Concrete with steel rebar continues to be poured, even as the prior concrete spalls and crumbles into worthlessness.  We’re even at the point in this story where sand is running out and in desperately short supply.

Sand! 

Shouldn’t running out of sand be some sort of a sign that we heed?

We have a complex economy.  Every complex system owes its complexity to energy flowing through it.  When our global economy has less energy flowing through it, it too will simplify.  Fewer things will be made and sold.  Fewer job classifications will exist.  What was once effortlessly possible, suddenly becomes very hard to accomplish.

While Venezuela is a story if grotesque mismanagement, it is also a story of catabolic collapse.  It’s what happens when a system no longer has the energy to sustain itself.  Venezuela’s problems are self-inflicted, but the rest of the world will join along on the downslope of fossil fuel energy.

Here’s a glimpse of a thoughtless future:

In Venezuela’s remote Orinoco Belt, theft used to happen in the dead of night to avoid the gaze of security cameras like the one that captured the scene near the town of El Tigre. Now, the cameras themselves have been stolen and oil is taken in broad daylight, much of it destined for auto repair shops in cities. Thieves take electric motors, transformers, heat-controlling devices, valves and especially valuable copper wiring – kilometers of the stuff.

The ravage of the industry extends throughout a society that came to depend on it. Near the Dacion oil fields, bony dogs played with scrawny, barefoot children. A man on the roadside said he hadn’t eaten since the previous night, 17 hours earlier.

“What you see in Venezuela today, the collapse of their oil fields and the oil industry in general, is worse than what you see in some war zones,” said Fernando Ferreira, director for geopolitical risk service at Rapidan Energy Group, a consultancy in the Washington area.  “Venezuelan oil production was wrecked by 20 years of asset seizures, widespread corruption and sanctions.”

(Source – Bloomberg – Oct 3, 2019)

Phase 3 is going to be hard, especially for people who are not prepared, and have not made any adjustments.

It’s also not that far away.  Ten years or so, which is practically the blink of an eye given the enormity of it all.

Circle Up!

Recently Evie and I held a gathering for 28 people in total who wanted to talk about Plan B locations and building resilient homesteads.  By far, the #1 interest of people was to belong to a community that took all of this seriously.

I’ll provide a much more detailed report on that gathering and the subsequent communications at a later point, but the highlights for me were how many people were interested in being a part of something meaningful, beautiful, and worthy of their time.

I am constantly nudging and reminding people to get busy.  None of this can or should be taken for granted.  Time is actually very short in this story considering how much ash to be done.

On October 2nd, 2019, I was surprised to see that one of the major financial commentators I follow (for his financial insights) announced that he had lost faith in the markets and was placing his bets on operating a small farm.

My point here is that once the center mass of people catch the same vibe, it’s going to be a lot more difficult (and expensive) to find a place to live with acreage, if that’s your thing.

It’s starting. Financial insiders like David Brady are getting it.  I figure it only accelerates from here.

Back to the meeting; we broke the conversation into several groupings, addressing the who/what/where/when/why/&how basics.

We’ve got poster boards full of ideas and ruminations.  The idea of forming an intentional residential community was universally daunting to everyone present – none of us have experience doing such a thing – but absolutely what we all wanted.

More study and inquiry will be necessary but the ball is rolling.  Will it be an intentional neighborhood?  An actual co-housing arrangement of some sort?  People living kinda-sorta near each other geographically with some sort of mutual aide and/or gatherings agreements?  All of the above?

One thing that really jumped out was how few people had any interest in merely surviving.  A large number of participants expressed the desire to live someplace that was as beautiful as it was functional.  People wanted to share the load, and not have to be responsible for every element of their resilience.

People committed to writing up their experiences and sending them to me this week.  They are rolling in, and I am positive that something excellent will result in terms of concrete actions taken.

Kudos here to all my readers who have already taken the steps to build their homesteads into resilient properties.  Some of you have done truly outstanding things and the common variables I hear repeated most often are (1) it was a lot of work and (2) no regrets at all!

Conclusion

Part I of this report laid out the math, social, and resource constraints that explain why a smooth transition to an alternative energy future is just not going to happen.

Instead of a future made of ‘more of the same’ (a lot more) we’re facing a future of less.  And that’s a good thing.

Lots of people, myself among them, are tired of our meaningless, isolated consumer culture.  We want more out of life, and we want our efforts to mean something, to ourselves and to others.

My role is to gather the supporting data, encourage you by word and deed, and use your support to carry the flag as far as I can.

While the complexity of what’s about to transpire is mind-boggling, the responses we can take are fairly straightforward and simple.

Use less.

Build soil.

Care for one  another.

Leave our small corner better off than when we first began tending it.

I’ll confess; the oil shock model scares me a little.  I am certain that a lot of people won’t go quietly into that good night and I worry about politicians going to war rather than doing what’s right.

I worry too about people who may react and behave badly when their hopes and dreams are dashed.  Some will probably become smash-and-grab experts, as always seems to be the case in all cultures when resources suddenly shrivel up.

But there’s nothing I can do about any of that except be as ready as I can be.  Given the healthy turn out and solid interest in a Plan B/Community response I know that Evie and I won’t be doing it alone.  We’ll have lots of company and that’s a wonderful thing.

If I could offer any additional encouragement, it’s simply this; there isn’t as much time as you think.  Even 20 years would barely be enough if starting from raw land.  Lots of experiments will have to be run.  Mistakes will be made.

In many respects we’re starting from scratch.  We might only have 10 years.  Or maybe 5.  Nobody knows.

What seems to be true is that humanity is in the early innings of a great transition.  Losing access to abundant energy will change more things that you or I can appreciate at this time.

We’re going to lose some things that we regret.  We’ll gain other things that we can’t believe we lived without for so long.

The future is barreling towards us at a furious pace.  The pace of change is accelerating.

~ Chris Martenson

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