Our Future and the End of

the Oil Age: Building

Resilience in a ResourceConstrained World
Dmitry Orlov
March 25, 2010
Bristol Community College
University of Massachusetts, Dartmouth

Peak Oil Theory vs. Reality

Theory
Global oil production peaks
and declines gradually;
slow growth
Alternative and renewable
energy ramps up to
compensate
Challenging economic
environment, many social
and political problems

Reality
Massive spikes in oil prices
crash financial markets
and kill growth
No money for alternatives
or further oil exploration
and production
Financial, commercial,
political collapse followed
by something completely
different

HOPE: for an alien intervention?

Peak Oil models work well for individual countries. Prima
facie: most of USA peaked in 1970 (Alaska peaked later)
Individual countries compensate by importing oil from
countries that have not peaked yet
When the entire planet peaks, there is nobody left to import
from - except aliens from outer space, of course!
Industrial economies cannot grow without increasing fossil
fuel consumption (empirical result).
Without growth, debts go bad, economic and political
problems mount, and economies collapse

HOPE: for an alien intervention?

Without help from friendly space aliens, we won't have the
energy to power a gradual energy descent. It will be a cliff. The
right-hand side of this graph is pure science-fiction.

Scraping the bottom of the oil barrel

The new oil is not like the old oil:
Energy Returned on Energy Invested has gone from 100:1 to
10:1 and is heading down
We are using up the dregs: deep offshore, heavy/sour crude,
tar sands, arctic oil...
Oil consumers will run out of money before oil companies run
out of places to drill
The agony of the industrial age can be prolonged by
destroying what's left of the biosphere

Scraping the bottom of the oil barrel

Net Energy = Usable Acquired Energy / Energy Expended

...the bottom of somebody else's barrel

The US has to import over 2/3 of its transportation fuels
High oil prices mean extra revenue for oil exporters
Oil exporters invest that money in their domestic economy
Their domestic oil consumption increases
Consequently, there is less oil for them to export
Net exporters become net importers even while they are still
pumping some oil (just as the USA did in 1970).
Many oil importers end up left out in the cold
Oil importers who ride scooters and use kerosene lamps do
a lot better than oil importers who drive SUVs
This is not a contest for who can use the most oil
This is a contest for who can grow their economy using the
least amount of oil
We have already lost; let's regroup and try again

HOPE: for an alien intervention?

The aliens better bring us some money too...
High energy prices cut into personal budgets, making
individuals unable to service their debts
Banks are burdened with nonperforming loans, toxic assets,
foreclosed properties
Governments step in to bail out banks
Fractional reserve banking? Volcker: 12:1, Greenspan: 30:1,
Bernanke: infinity to 1
Economy continues to shrink, job losses mount, tax
revenues collapse
Who bails out the governments? Why, aliens from outer
space, of course!

Lifeblood transfusion?
"You see, the flow of credit is the lifeblood of our economy."
[Obama, State of the Union Speech, February 2009]
According to Treasury data, the long-term trend is that by
2015 an additional dollar of debt will produce 0 additional
GDP growth.
The short-term trend is that debt is rising rapidly as the
economy is continuing to shrink (so we may be there
already!)
The economic patient is hemorrhaging too fast for the
transfusion to work

More debt, anyone?

The Treasury borrows trillions from the Federal Reserve and
promises to repay this debt with even more debt
Everyone is supposed to believe that this activity is somehow
meaningful
Actually we are just writing ourselves IOU's and periodically
moving them from one pocket to another (not convincing)

Why can't this show go on?

A system that evolved in conditions of continuous growth of
material resources cannot shrink controllably
The key ingredient is confidence; once faith in the future is
lost, everyone's behavior changes radically
Everyone at the top already knows that this show cannot go
on and are (attempting to) plan accordingly, for themselves
The name of the game is "Keep the rest of them fooled for as
long as possible"
People are still paying down their mortgages, putting money
in their retirement accounts, etc.
Being fooled this way can make people very angry

The logic of diminishing returns

Joseph Tainter, in his Collapse of Complex Societies, pointed
out that social complexity increases until further investment
in complexity becomes counterproductive
He also pointed out that complex systems do not selfsimplify; they collapse catastrophically and are eventually
replaced with much simpler systems
Diminishing returns are observable and measurable
Diminishing returns cannot be explained using the internal
logic of the systems involved
The people involved in maintaining these systems struggle
along, but are eventually forced to give up

Examples of diminishing returns

Each additional dollar of debt causes the economy to shrink
even faster
Each additional dollar of defense spending makes the
country less safe
Each additional dollar spent on health care makes the
country sicker
Each additional dollar spent on education makes the people
more ignorant
Each additional dollar spent on the justice system increases
injustice
Each additional dollar spent on job creation increases
unemployment
Each additional dollar contributed to a political campaign
makes the people even more powerless

Escaping from diminishing returns

What can we do to avoid wasting our efforts on
perpetuating doomed systems? How do we construct
alternatives?
Lower your official exposure/profile
Decrease your environmental footprint and burn rate
Avoid financial arrangements and legal documents
Rely on personal connections and relationships
Avoid the mainstream, look for fertile margins, fringes, niches
Be hard to classify (use the SEP field to your advantage)

Reasonable expectations
Money will not be very common or useful (government
defaults, growing joblessness, savings wiped out or taxed
away, access to imports lost, etc.)
As the US loses ability to import 3/4 of transportation fuels,
economy will stall and population will become stranded
Political system will maintain appearances as long as
possible - "Proud and Purposeful Paralysis"
Many local authorities will fail (close police stations and fire
departments, stop supplying sewer, water and garbage
removal services)
Other local authorities will try to charge confiscatory rates,
and fail just a little bit later
Various officious busybodies will have a hard time figuring
out whose side they are on, and will probably need help

The Big Transition

BEFORE

AFTER

Cars and trucks

Municipal water supplies
Municipal sewage
Trash removal
Garbage removal
Fast food
Supermarkets
Hospitals
High Schools
Colleges
Office work

Bicycles, boats, 2 feet

Rainwater collection, wells
Composting toilets
Local junkyards, incinerators
Local compost piles
Community kitchens
Open-air markets
Local clinics
Home Schooling
Apprenticeships
Physical labor

The future is very unpopular

Each resident of North America employs the equivalent of 100
"energy slaves": services provided by machinery that runs on
fossil fuels. But emancipation is at hand!
People do not like to be persuaded by fact or logical argument
People like their comforts: cars, HVAC, etc.
People are seduced by TV, consumerism
Manual labor and farming are low-status activities
People lack the skills to lead a non-mechanized existence
It is almost impossible to convince people to do what will be
necessary - until it becomes necessary
It will be almost impossible to do what is necessary without a
significant amount of preparation
Those who take the trouble to prepare will be a tiny minority

The Pre-Collapse Checklist

Food
Water
Shelter
Lighting and communications
Medical care
Transportation
Security

These have to be provided

without access to savings
without a positive cash flow
without an official economy

Food
Enough food to feed a family can be grown on 2000-3000 sq.
feet (It takes a bit of practice to get this going.)
Some foodstuffs (cooking oil, grains, wine, coffee, chocolate)
need to be "imported" somehow
A lot of wild foods can be gathered (berries, mushrooms,
roots & shoots, nuts, [white] acorns
"Edible Forest Gardens" can be planted on public lands useful plants surrounded by thorny thickets
Community kitchens are more efficient than personal ones
Eliminate all food waste: chickens, rabbits, guinea pigs, carp,
catfish, crayfish - something out there will eat it all up
Nanny goats can provide milk for infants/children
Seasonal migration out to the land to grow food
Harvests have to be "floated out" (road transport expensive)

Water
Municipal water = bad risk
Flushing with potable water = insanity!
Many grades: drinking water, washing water, irrigation water,
gray water, "lively" water
Sewage is a very bad idea; composting much better
Roof rainwater collection, barrels, filters for drinking water
Swales dug into hillsides can boost groundwater
Hot water for washing: rocket stoves fed by brush piles
Passive irrigation systems instead of pumps and hoses
Runoff from disused parking lots and other structures can be
saved in cisterns
Flat roofs can be planted with sod to soak up water and keep
buildings cool
Proper placement of shade trees and evaporation pools can
make air conditioning unnecessary

Shelter
Single-family dwellings are no longer affordable for nuclear
families; single-family dwellings become extended-family
GULAGs where the residents eventually go insane
There is a lot of unused commercial real estate that will
belong to nobody in particular once all parties are bankrupt
There are a lot of unused shipping containers that are very
easy to customize for a wide variety of uses
Large structures are cheaper and easier to retrofit for off-grid
use than small ones
Transportation needs are much reduced if the entire town
relocates into the shopping mall and the office park
Basements of demolished suburban houses can be flooded
and used for aquaculture, or for tree nurseries, etc.
Freed-up land can be used for community agriculture

Lighting and Communication

Relying on the electric grid - a high-risk, high-cost
proposition.
Keeping the existing system running through "renewable"
means is not achievable, sustainable or renewable
Using wind/solar/micro-hydro to power to run AC appliances
is an expensive proposition - not affordable
All it takes is 100-200W of solar and/or wind to power a few
LED lights, radio, laptop, 2-way radio, cell phone charger,
etc. That's something that can be put together for a few
thousand dollars.
It's all made in China! Yikes! Get yours now! (Install it later.)
12V batteries, alternators and voltage regulators will come
from scrapped cars/trucks - then what? (Food for thought.)

Medical "care"
Stay healthy: eat little, mostly vegetables, avoid exercise, but
do some physical labor, sleep plenty and get lots of rest,
avoid stress, have a sense of humor
Avoid doctors and hospitals (they prescribe toxic drugs,
spread disease and deplete family savings)
Know how to treat/cure yourself and the people around you good hygiene, herbs, massage, rest & TLC
For serious medical needs, have a medical evacuation plan
in place - to a country with a functioning medical system
(Canada, Mexico, Cuba, Russia...)
Know when it's time for you to go (your life isn't worth half a
million to extend by a year or two, no matter who you are the country can't afford it)

Medical "care" - steer clear of fraud

Avoid American medical "care" if at all possible
Making a profit off of sick people is deeply unethical
Health is not insurable. If all houses burned down, there
would be no fire insurance. Nobody dies healthy.
Resist efforts to tie you to a "job" by the threat of cutting off
your access to medical "care"
Resist efforts to force you or your family into medical
bankruptcy through medical extortion
You have no choice of doctor who isn't an American doctor
and violates the Hippocratic oath by putting financial and
legal considerations ahead of what's good for the patient
And now, you have no choice but to buy federally mandated
private health insurance

Transportation
To recap: 2/3 of transportation fuels are imported, and these
entire 2/3 are going away
Daily trips to town by private motor-car will once again be
reserved for the aristocracy (chauffeur not included)
There is not much hope for continuation of air travel, air
freight or interstate trucking
Rail freight could actually be revived at very little cost (much
more cost-effective than road freight)
Water freight is supremely efficient, especially if by sail
Our harbors, bays, sounds, estuaries, rivers and canals are
our prime regional transportation assets
Many people will be delighted to once again be able to make
a living on the water

Security
One happy family: former military, former prisoners, former
police, former government spooks, plus some drug lords
An "online community" is a hacker's playground
Easy pickings: loners (armed or not), people who can be
tracked using their GPS cell phones and other gizmos
Hard nuts to crack: cohesive communities that deal face to
face and are electronically "dark"
Having a lot of witnesses about makes crime more difficult
A 24/7 watch/patrol is an excellent idea

Obvious ideas:
Surround yourself with people you know
Mistrust electronic communications
Cultivate friendships in places high and low

In conclusion
Many people can't be persuaded by either fact or reason.
Let's hope you are not one of them.
Running out the clock on our current living arrangement is a
bad idea: the longer you wait, the fewer options you will be
left with
A rather exciting time to be alive, wouldn't you say?